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Geojit Financial Services Ltd.

BSE: 532285 Sector: Financials
NSE: GEOJITFSL ISIN Code: INE007B01023
BSE 00:00 | 30 Sep 47.20 0.15
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OPEN 49.85
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VOLUME 27358
52-Week high 90.45
52-Week low 43.25
P/E 8.91
Mkt Cap.(Rs cr) 1,129
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 49.85
CLOSE 47.05
VOLUME 27358
52-Week high 90.45
52-Week low 43.25
P/E 8.91
Mkt Cap.(Rs cr) 1,129
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Geojit Financial Services Ltd. (GEOJITFSL) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 28th AnnualReport of the Company for the financial year ended 31st March 2022.

Financial Highlights

(Rs. in Crores)

Particulars

Standalone

Consolidated

2021-22 2020-21 Change (%) 2021-22 2020-21 Change (%)
Total Revenue 482.54 406.08 18.83 501.12 426.81 17.41
Total Expenditure 291.44 253.80 14.83 298.82 261.64 14.21
Profit before tax 191.11 152.28 25.50 202.31 165.18 22.48
Total Tax Expenses 48.12 38.16 26.10 51.61 41.99 22.91
Share of Profit/loss in Associate - - - 3.72 3.32 12.04
Profit for the year 142.98 114.12 25.29 154.42 126.51 22.06
Total Comprehensive Income 142.70 114.41 24.73 154.12 126.80 21.54

Financial Highlights of Subsidiaries

Company Name FY 2021-22 FY 2021-22 FY 2021-22
Total income Total Expense Profit / Loss for the year
Indian Subsidiaries (' in crores)
Geojit Technologies (P) Ltd. 25.83 12.53 9.81
Geojit Credits (P) Ltd 1.97 1.90 0.06
Geojit Techloan (P) Limited 0.10 0.02 0.06
Overseas Subsidiaries joint ventures & Associates (' in lakhs)
Barjeel Geojit Financial Services LLC 1215 864 351
Qurum Business Group Geojit Securities LLC 316 241 75
BBK Geojit Securities KSC 64 43 21

Note :

Consolidation of Barjeel and BBK (Joint ventures) is on "equitymethod". Therefore the consolidated profit / (loss) is directly adjusted to thecarrying amount of investments in the books. (i.e. The total income and total expense donot directly get consolidated. Only the share of GFSL in total gain / (loss) isconsolidated into P&L.)

Review of Performance

On a standalone basis your Company has recorded a total income of '482.54 crores for the financial year ended 31st March 2022. The profit beforetax is ' 191.11 crores and the net profit after tax is ' 142.98 crores. Basic earnings pershare work out to ' 5.99 compared to ' 4.79 in the previous year.

On a consolidated basis your company earned a total income of ' 501.12crores for the financial year profit before exceptional item and tax of ' 202.31 croresand a net profit of ' 154.42 crores.

A detailed analysis of the performance is given in the ManagementDiscussion and Analysis Report appended hereto.

Dividend

The Board at their meeting held on 29th April 2022 hasrecommended a final dividend of ' 3.00 per equity share for the financial year 2021-22.The proposal is subject to the approval of the shareholders of the Company at its ensuingAnnual General Meeting to be held on Friday July 15 2022.

Consolidated Financial Statement

The Consolidated Financial Statements of the Company are prepared inaccordance with Section 129 of the Companies Act 2013 read with relevant AccountingStandards issued by the Institute of Chartered Accountants of India and forms part of thisAnnual Report.

State of Company's Affairs and Operations

Through in-depth research and accrued knowledge of capital markets theCompany helps investors to channelise their household savings into the capital market andbuilding wealth over the long term. It offers a wide range of products and services tofacilitate customers grow their financial assets. The Company's advanced trading andinvestment platforms domain expertise and wide footprint distinguishes it from its peers.It is focusing on future-proofing the business by gradually increase the ratio of ournon-brokerage income. This is aimed at diversifying and de-risking the business from purebrokerage income by adding new sources of revenue through mutual funds and insurancedistribution and essentially making the non-brokerage income cover the fixed costs. Tofurther reap the benefits of digitalisation and power stronger return on investment itcontinued to make IT-related investments during the year. Currently 86% of its newcustomer addition is through Aadhar- based digital onboarding whereas 83% of the tradingvolume is digital helping the customers trade from the comfort and safety of their homes.

Increase in Share Capital

During the year under review the paid-up share capital of the Companyincreased from ' 238374115/- divided into 238374115 equity shares of ' 1/- each to '238996515/- divided into 238996515 equity shares of ' 1/- each consequent to theissue of 622400 equity shares to employees upon exercise of stock options under EmployeeStock Option Scheme-2016 & Employee Stock Option Scheme-2017 of the Company.

Subsidiaries Joint Ventures and Associate Companies

As on 31st March 2022 following are the subsidiaries/associates/joint ventures of the Company:

Subsidiaries:

i. Geojit Credits Private Limited

ii. Geojit Investment Services Limited

iii. Geojit Technologies Private Limited

iv. Geojit Techloan Private Limited

v. Geojit IFSC Limited

vi. Qurum Business Group Geojit Securities LLC

Joint Ventures:

i. Barjeel Geojit Financial Services L.L.C

ii. Aloula Geojit Capital Company

Associates:

i. BBK Geojit Securities KSC

The Company had filed a Scheme of Merger by Absorption of GeojitInvestment Services Limited with Geojit Financial Services Limited with Kochi Bench ofHon'ble National Company Law Tribunal. Hon'ble Tribunal approved the said scheme vide itsorder dated 16.03.2022. Geojit Investment Services Limited is a wholly owned subsidiary ofGeojit Financial Services Limited.

Directors and Key Managerial Personnel

I. Inductions

The following appointments were made during the year

• Mr. M P Vijay Kumar as Non-Executive Independent Director witheffect from

November 16 2021

• Mr. Sebastian Morris as Non-Executive Independent Director witheffect from November 16 2021

• Mr. Jones George as Whole-time (Executive) Director with effectfrom November 16 2021

• Ms. Mini Nair as Chief Financial Officer with effect from April05 2021

II. Re-appointments

As per the provisions of the Companies Act 2013 Mr. Punnoose George(DIN: 00049968) retires by rotation at the ensuing Annual General Meeting and beingeligible seeks re-appointment. The Board recommends his re-appointment.

III. Retirements and Cessation

There was no cessation of Directors during the year 2021-22.

Mr. Sanjeev Kumar Rajan resigned from the post of Chief FinancialOfficer with effect from April 04 2021.

Annual Evaluation of the Board its Committee and Individual Directors

Pursuant to the provisions of Companies Act 2013 and the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Board of Directors hascarried out an annual evaluation of its own performance its Committee and individualDirectors. Assessment for evaluation of performance of Board its committees andindividual directors were prepared based on various aspects which among other parametersincluded composition of the Board and its Committees conducting of Board Meetingseffectiveness of its governance practices etc.

Further the Independent Directors at their meetings held during theyear reviewed the performance of the Board the non-Independent Directors and theChairman.

Code of Conduct for Directors & Senior Management

The Board has adopted a Code of Conduct for Directors & SeniorManagement in accordance with the provisions of the Companies Act 2013 and Regulation17(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. TheCode also incorporates the duties of Independent Directors. All the Board Members andSenior Management Personnel have confirmed compliance with the Code. A declaration to thateffect signed by the Managing Director forms part of the Corporate Governance Report. Acopy of the Code has been put on the Company's website.

Familiarization Programme for Independent Directors

The Independent Directors of the Company are persons of integritypossessing rich experience and expertise in the field of corporate management financecapital market economic and business information. The company has issued appointmentletter to the Independent Directors setting out in detail the terms of appointmentduties roles & responsibilities and expectations of the Independent Director. TheBoard of Directors has complete access to the information within the Company.Presentations are regularly made to the Board of Directors / Audit Committee / Nomination& Remuneration Committee / Corporate Social

Responsibility Committee / Stakeholders' Relationship Committee onvarious related matters where Directors have interactive sessions with the Management.

The details on the Company's familiarization programme for IndependentDirectors can be accessed at https://www.geoiit.com/investor-relations

Declaration by Independent Directors

The Company has received necessary declaration from each IndependentDirector under Section 149(7) of the Companies Act 2013 that he/ she meets the criteriaof Independence laid down in Section 149(6) of the Companies Act 2013 and in terms ofSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.

Directors' Responsibility Statement

Pursuant to requirement of Section 134(3)(c) and Section 134(5) of theCompanies Act 2013 and based on the representations received from the Management yourDirectors state that:

i. i n the preparation of the annual accounts for the financial yearended March 31 2022 the applicable accounting standards have been followed and there areno material departures from the same;

ii. the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 31 2022and of the profit of the company for the year ended on that date;

iii. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;

iv. the Directors have prepared the annual accounts on a going concernbasis;

v. the Directors have laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and

vi. the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Policy Relating to Directors' Appointment

The Company with the approval of Nomination & RemunerationCommittee has adopted a policy on Board diversity and the recommendation of candidaturefor Board appointment will be based on merit that complements and expands the skillsexperience and expertise of the Board as a whole taking into account gender ageprofessional experience and qualifications cultural and educational background and anyother factors that the Board might consider relevant and applicable from time to timetowards achieving a diverse Board.

Management's Discussion & Analysis

The Management's Discussion and Analysis is given separately and formspart of this Annual Report.

Business Responsibility Report

The Ministry of Corporate Affairs Government of India in July 2011came out with the 'National Voluntary Guidelines on Social Environmental and EconomicResponsibilities of Business'. These guidelines contain certain principles which are to beadopted by companies as part of its business practices and disclosures regarding the stepstaken to implement these principles through a structured reporting format viz. BusinessResponsibility Report. Pursuant to Regulation 34(2) (f) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has prepared the BusinessResponsibility Report which forms part of this Annual Report.

Corporate Governance

Your Company has complied with the Corporate Governance requirementsunder Companies Act 2013 and as stipulated under the provisions of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. A detailed Report on CorporateGovernance forms part of this Annual Report. A certificate of Statutory Auditor confirmingcompliance of the Corporate Governance requirements by the Company is attached to theReport on Corporate Governance.

Annual Return

Pursuant to the amendments to Section 134(3)(a) and Section 92(3) ofthe Act read with Rule 12 of the Companies (Management and Administration) Rules 2014the Annual Return (Form MGT-7) for the financial year ended March 31 2022 is availableon the Company's website and can be accessed at www. geojit.com.

Auditors

At the Annual General Meeting held on July 30 2021 M/s. B S R &Associates LLP Chartered Accountants were re-appointed as statutory auditors of theCompany to hold office till the conclusion of the Thirty Second Annual General Meeting tobe held in the year 2026.

The Auditors' Report to the Shareholders for the year under review doesnot contain any qualification.

Secretarial Audit Report

In accordance with the provisions of Section 204 of the Companies Act2013 the Board has appointed M/s. Satheesh & Remesh - Company Secretaries inWholetime Practice Kochi as the Secretarial Auditor for the financial year 2021-22. Thereport of the Secretarial Auditor for the FY 2021-22 is annexed to this report as AnnexureI.

There are no audit qualifications in the said Secretarial AuditReport.

Number of Board Meetings

The Board of Directors met 7 (seven) times in the financial year2021-22. The details of the Board meetings and the attendance of the Directors areprovided in the Corporate Governance Report.

Composition of Audit Committee

The Audit Committee is constituted with five NonExecutive IndependentDirectors comprising of Mr. R Bupathy as the Chairman Mr. Mahesh Vyas Mr. RadhakrishnanNair Mr. M P Vijay Kumar and Mr. Sebastian Morris as other Committee Members.

Dividend Distribution Policy

Pursuant to the provisions of Regulation 43A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors of theCompany has adopted a Dividend Distribution Policy for determining circumstances andparameters under which Dividend pay-out could be made on periodical basis. The policyhighlighted the factors to be considered by the Board of Directors at the time ofrecommending/ declaring of Dividend.

Dividend Distribution Policy of the Company can be accessed athttps://www.geoiit.com/StaticPdf/ Dividend-Distribution-Policy.pdf.

Remuneration Policy

The company follows a policy on remuneration of Directors KeyManagerial Personnel (KMP) Senior Management Personnel (SMP) and other employees of theCompany. The policy was approved by the Nomination & Remuneration Committee of theCompany.

The Non-Executive Directors of the Company shall be entitled to receiveremuneration by way of sitting fees for attending meeting of the Board and Committeesthereof.

The remuneration to KMP's and SMP's and employees shall include directremuneration and indirect remuneration primarily and strategic remuneration which can bePerformance Linked and/or Profit linked incentive.

Remuneration Policy of the Company can be accessed athttps://www.geojit.com/StaticPdf/06 Remuneration%20Policy.pdf

Risk Management Policy

Risks are an integral part of business and it is imperative to managethese risks at acceptable levels in order to achieve business objectives. The risks towhich the Company is exposed are both external and internal. Your company has formulated aRisk Management Policy to provide an integrated and standardized approach in managing allaspects of risk to which your Company is exposed. An Internal Risk Management Committeemonitors the Enterprise Risk Management Policy with participation from officersresponsible for risk management and to take appropriate steps to ensure that these risksare at acceptable levels.

Whistle Blower Policy & Vigil Mechanism

Your Company has laid down a Vigil Mechanism and formulated a WhistleBlower Policy in order to provide a framework for responsible and secure whistle blowingmechanism. The Policy aims to provide an avenue for Employees and Directors to raise theirconcerns about unethical behavior actual or suspected fraud or violation of the company'scode of conduct and it also empowers the Audit Committee of the Board of Directors toinvestigate the concerns raised by the employees.

All Directors and Employees of the Company are eligible to makeprotected disclosures under the Policy addressed to the Vigilance Officer of the Companyin relation to matters concerning the Company. We further affirm that no employee of theCompany was denied access to the Audit Committee.

The details on the Company's Whistle Blower Policy and Vigil Mechanismcan be accessed at https://www. geoiit.com/StaticPdf/01 Vigil%20Mechanism%20and%20Whistle%20Blower%20Policy.pdf

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingactivities to be undertaken by the Company which has been approved by the Board. TheCompany established a charitable trust namely Geojit Foundation and carry most of the CSRactivities of the company through the foundation.

The Company has identified Education and Health as key focus areas ofengagement for CSR activities. The Company would also undertake other initiatives incompliance with the Section 135 read with Schedule VII of the Companies Act 2013. TheAnnual Report on CSR activities is annexed herewith and marked as Annexure II to thisreport. The CSR Policy of the company is available on website of the company athttps://www. geoiit.com/csr-policy

Disclosure as per Sexual Harrassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

The Company has zero tolerance for sexual harassment at work place andhas adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provision of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder. Asrequired under the Law an internal complaints committee has been constituted forreporting and conducting inquiry into the complaints made by the victim on the harassmentsat the work place.

Your Directors further state that during the year under review therewas no complaint received pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

Internal Control System

The Company has put in place an adequate system of internal controlcommensurate with its size and nature of business. These systems provide a reasonableassurance in respect of providing financial and operational information complying withapplicable statutes safeguarding of assets of the Company and ensuring compliance withcorporate policies.

The scope and authority of the Internal Audit activity are well definedin the Internal Audit Charter approved by the Audit Committee. The Company has adedicated Internal Audit team with skills commensurate with the size nature &complexity of operations of the Company. The Company has engaged M/s Mahajan & Aibara

Chartered Accountants LLP as Internal Auditor along with a dedicatedinternal Internal Audit team. Internal Audit department reports functionally to the AuditCommittee of the Board which reviews and approves risk based annual internal audit plan.Audit Committee periodically reviews the performance of internal audit function. Duringthe year the Audit Committee met regularly to review reports submitted by the InternalAudit team. All significant audit observations and follow-up actions thereon were reportedto the Audit Committee.

The Company's Board & Audit Committee reviews adherence to internalcontrol systems internal audit reports and legal compliances. The Audit Committee reviewsall quarterly and yearly financial results of the Company and recommends the same to Boardfor its approval.

Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading)Regulations 2015 as amended from time to time the Company has adopted a Code of Conductfor Prevention of Insider Trading and Policy on Disclosure of Material Events/ Informationwhich is applicable to all Directors and the Designated Employees of the Company. The Codelays down the guidelines which advices on the procedures to be followed and disclosuresto be made while dealing in shares of the Company and indicate the consequences ofnon-compliance. A copy of the Code has been put on the Company's website.

Related Party Transactions

All contracts/arrangements/transactions entered by the Company duringthe financial year with the related parties were in the ordinary course of business and onan arm's length basis. During the year the company had not entered into any contract/arrangement/transaction with any related party which could be considered material inaccordance with the policy of the company on materiality of related party transactions.Disclosure in Form AOC-2 is given as Annexure III.

The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on the Company'swebsite.

Your Directors draw attention of the members to Note 40 to thefinancial statement which sets out related party disclosures.

Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo

The Company's head office is an energy efficient building consuming 25percent less energy and over 40 percent less water than conventional buildings of similarsize. The company also ensures optimized and efficient energy management in all itsoffices located across India. With the implementation of its digital initiatives thecompany has also substantially reduced its paper consumption.

The company has always leveraged technological innovations to improveits operational efficiency to satisfy and retain its customer base. Keeping in line withSEBI guidelines the company has been automating the customer on-boarding process. Thishas enabled the Company to reduce time-consuming activities and complexity of physicalon-boarding of clients.

Today almost 60 percent of the Company's client's trade online andover 40 percent buy and sell mutual funds using its online trading platforms and mobileapps. The latest updates on our online platforms and apps give investors a more powerfultrading experience.

The details regarding foreign exchange earnings and outgo are given asAnnexure IV to this Report.

Human Resources

As a service Company the Company's operations are heavily dependent onqualified and competent personnel. As on 31st March 2022 the total strength of theCompany's permanent employees stood at 2174 excluding casual & contract staff. YourCompany takes significant effort in training all employees at various levels.

Particulars of Employees

Particulars of employees covered by the provisions of Section 197 ofthe Companies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given as Annexure V to this Report.

In accordance with the provisions of Section 197(12) of the Act andRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the names and particulars of remuneration of top ten employees who have drawnremuneration not less than the limits specified in the Rules are available with theCompany and in terms of provisions of Section 136(1) of the Act. This report is being sentto the members without this detail and any member desirous of obtaining information maywrite to the Company and the same shall be provided through electronic mode till the dateof the ensuing Annual General Meeting.

Employee Stock Option Scheme (ESOS)

The Company presently has two Employee Stock Option Schemes viz ESOS2016 and ESOS 2017. The Nomination & Remuneration Committee at its meetings heldduring the year granted 100000 options under ESOS 2017. The Board of Directors of theCompany has allotted total 622400 equity shares of ' 1/- each under ESOS 2016 and ESOS2017 to its employees who exercised the stock options on various dates at various exerciseprices in accordance with the terms and conditions of ESOS.

The aforesaid ESOS schemes are in compliance with SEBI (Share BasedEmployee Benefits and Sweat Equity) Regulations 2021 and the details are attached asAnnexure VI to this report and also available on our website and can be accessed athttps://www.geoiit. com/StaticPdf/ESOSDisclosure.pdf

Transfer of Unpaid and Unclaimed Amounts to IEPF

Pursuant to the provisions of Section 124 of the Companies Act 2013money transferred to the Unpaid Dividend Account of the Company and which has remainedunpaid or unclaimed for a period of seven years from the date of transfer has beentransferred by the Company to the Investor Education and Protection Fund("IEPF") established by the Central Government pursuant to Section 125 of thesaid Act.

Particulars of Loans Guarantees or Investments

Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 forms part of the notes to the financial statements provided in thisAnnual Report.

General

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review.

a. Details relating to deposits covered under Chapter V of theCompanies Act 2013.

b. Issue of equity shares with differential right as to dividendvoting or otherwise.

c. Issue of shares (including sweat equity shares) to employees of thecompany under any scheme save and except ESOS referred to in this report.

d. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operation infuture.

e. Maintenance of cost records as specified by the Central Governmentunder section 148(1) of the Companies Act 2013.

Acknowledgements

Your Directors wish to acknowledge the valuable guidance and assistancereceived from Securities and Exchange Board of India Stock Exchanges CommodityExchanges Depositories & other Regulatory Authorities BNP Paribas S A Kerala StateIndustrial Development Corporation Limited our clients and business partners. We lookforward to receiving their continued support and encouragement. The Board of Directorswishes to extend their thanks and appreciation and express their gratitude for thecontinuing commitment and dedication of employees at all levels. The Directors arethankful to the esteemed shareholders for their support and the confidence reposed in theCompany.

For and on behalf of the Board of Directors
Place : Kochi Sd/-
Date : 29.04.2022 Chairman

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