geojit bnp paribas financial services ltd Directors report

( in crores)

( in lakhs)

Note :

Consolidation of Barjeel, and BBK (Joint ventures) is on "equity method". Therefore the consolidated profit / (loss) is directly adjusted to the carrying amount of investments in the books. (i.e. The total income and total expense do not directly get consolidated. Only the share of GFSL in total gain / (loss) is consolidated into P&L.)

On a consolidated basis your company earned a total income of 447.63 crores for the financial year, profit before exceptional item and tax of 118.94 crores and a net profit of 100.96 crores.

On a standalone basis, your Company has recorded a total income of 427.79 crores for the financial year ended 31st March, 2023. The profit before exceptional item and tax is 110.78 crores and the net profit after tax is 89.56 crores. Basic earnings per share work out to 3.75 compared to 5.99 in the previous year.

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

The Board at their meeting held on 28^th April 2023 has recommended a final dividend of 1.50 per equity share for the financial year 2022-23. The proposal is subject to the approval of the shareholders of the Company at its ensuing Annual General Meeting to be held on Friday, July 14, 2023.

The Consolidated Financial Statements of the Company are prepared in accordance with Section 129 of the Companies Act, 2013 read with relevant Accounting Standards issued by the Institute of Chartered Accountants of India and forms part of this Annual Report.

Through in-depth research and accrued knowledge of capital markets, the Company helps investors channelise their savings into the capital market and build wealth over the long term. It offers a wide range of products and services to facilitate customers grow their financial assets. The Companys advanced trading and investment platforms, domain expertise and wide footprint distinguishes it from its peers. It is also focusing on non-cyclical business by gradually increasing the ratio of its non-brokerage income. To further reap the benefits digitalisation and power stronger return on investment, the Company continued to make IT-related investments during the year. Through its solutions, it aims to improve their onboarding experience and efficiently manage customer queries. Currently, 91% of its new customer addition is through digital onboarding, whereas 84% of the trading volume is done digitally, helping customers trade from the comfort and safety of their homes.

During the year under review, the paid-up share capital of the Company increased from 23,89,96,515/- divided into 23,89,96,515 equity shares of 1/- each to 23,90,92,702/- divided into 23,90,92,702 equity shares of 1/- each, consequent to the issue of 96,187 equity shares to employees upon exercise of stock options under Employee Stock Option Scheme-2016

& Employee Stock Option Scheme-2017 of the

Company.

As on 31^st March, 2023, following are the subsidiaries/ associates/joint ventures of the Company:

Subsidiaries: i. Geojit Credits Private Limited ii. Geojit Technologies Private Limited iii. Geojit Techloan Private Limited iv. Geojit IFSC Limited v. Geojit Investments Limited vi. Qurum Business Group Geojit Securities LLC

Joint Ventures: i. Barjeel Geojit Financial Services L.L.C ii. Aloula Geojit Capital Company (under process of liquidation)

Associates: i. BBK Geojit Securities KSC

M/s Geojit Investment Services Limited, which was a wholly-owned subsidiary of the Company ceased to be a subsidiary post the Merger by Absorption of Geojit Investment Services Limited with Geojit Financial Services Limited vide Honble NCLT order dated 16.03.2022 and as filed with Ministry of Corporate Affairs vide challan dated 26.04.2022.

Mr. Harikishore Subramanian IAS (DIN: was appointed as the Nominee Director of Kerala State Industrial Development Corporation Limited (KSIDC) on the Board of the Company with effect from August 05, 2022.

As per the provisions of the Companies Act, 2013,

Mr. A Balakrishnan (DIN: 00050016), retires by rotation at the ensuing Annual General Meeting and being eligible seeks re-appointment. The Board recommends his re-appointment.

Mr. M G Rajamanickam IAS (DIN: resigned as Nominee Director of KSIDC on the Board of the Company effective August 05, 2022.

The Board of Directors met 6 (six) times in the financial year 2022-23. The details of the Board meetings and the attendance of the Directors are provided in the

Corporate Governance Report.

The Audit Committee is constituted with five Non- Executive Independent Directors comprising of Mr. R Bupathy as the Chairman, Mr. Radhakrishnan Nair, Mr. Mahesh Vyas, Mr. M P Vijay Kumar and Mr. Sebastian Morris as other Committee Members.

Pursuant to the provisions of Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors has carried out an annual evaluation of its own performance, its

Committee and individual Directors. Assessment for evaluation of performance of Board, its committees and individual directors were prepared based on various aspects, which among other parameters, included competency, experience and diversity of Board members, effectiveness of its governance practices, conducting of meetings etc.

Further the Independent Directors, at their meetings held during the year, reviewed the performance of the Board, the non-Independent Directors and the

Chairman.

The Board has adopted a Code of Conduct for Directors & Senior Management in accordance with the provisions of the Companies Act, 2013 and Regulation 17(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Code also incorporates the duties of Independent Directors. All the Board Members and Senior Management Personnel have confirmed compliance with the Code. A declaration to that effect signed by the Managing Director forms part of the Corporate Governance Report. A copy of the Code has been put on the Companys website.

The Independent Directors of the Company are persons of integrity, possessing rich experience and expertise in the field of corporate management, finance, capital market, economic and business information. The company has issued appointment letter to the Independent Directors setting out in detail, the terms of appointment, duties, roles & responsibilities and expectations of the Independent Director. The Board 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/ Enterprise Risk Management Committee/ Management Committee on various related matters, where Directors have interactive sessions with the Management.

The details on the Companys familiarization programme for Independent Directors can be accessed at https://www.geojit.com/investor-relations

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013 that he/ she meets the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and in terms of SEBI (Listing Obligations & Disclosure Requirements)

Regulations, 2015.

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

i. in the preparation of the annual accounts for the financialyear ended March 31, 2023, the applicable accounting standards have been followed and there are no material departures from the same;

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,

2023 and of the profit of the company for the year ended on that date;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the

Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

v. the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

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

The Company with the approval of Nomination & Remuneration Committee has adopted a policy on Board diversity and the recommendation of candidature for Board appointment will be based on merit that complements and expands the skills, experience and expertise of the Board as a whole, taking into account gender, age, professional experience and qualifications, cultural and educational background, and any other factors that the Board might consider relevant and applicable from time to time towards achieving a diverse Board.

The Managements Discussion and Analysis is given separately and forms part of this Annual Report.

In terms of amendment to regulation 34(2)(f) of LODR Regulations vide Gazette notification no. SEBI/LAD NRO/GN/2021/22 dated May 05, 2021, a new reporting requirement has been introduced with respect to the ESG parameters called the Business Responsibility and Sustainability Report (BRSR). This report seeks disclosures from the listed entities on their performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct (NGBRCs).

The Business Responsibility and Sustainability Report is given separately and forms part of this Annual Report.

Your Company has complied with the Corporate Governance requirements under Companies Act, 2013 and as stipulated under the provisions of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015. A detailed Report on Corporate

Governance forms part of this Annual Report. A certificate of Statutory Auditor confirming compliance of the Corporate Governance requirements by the Company is attached to the Report on Corporate

Governance.

Pursuant to the amendments to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return (Form MGT-7) for the financial year ended March 31, 2023, is available on the Companys website and can be accessed at www.geojit.com.

In accordance with the provisions of Section 204 of the Companies Act, 2013, the Board has appointed M/s. Satheesh & Remesh - Company Secretaries in Whole-time Practice, Kochi as the Secretarial Auditor for the financial year 2022-23. The report of the Secretarial Corporate Overview Auditor for the FY 2022-23 is annexed to this report as

There are no audit qualifications, in the said Secretarial Audit Report.

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

The Auditors Report to the Shareholders for the year under review does not contain any qualification.

Details of Frauds reported by Auditors: Financial Statements

There were no frauds reported by the Statutory Auditors under provisions of Section 143(12) of the Companies Act, 2013 and rules made thereunder.

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 and rules made thereunder are not applicable to the Company during the period ended 31^st March, 2023.

Pursuant to the provisions of Regulation 43A of the

SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, the Board of Directors of the Company has adopted a Dividend Distribution Policy for determining circumstances and parameters under which Dividend pay-out could be made on periodical basis. The policy highlighted the factors to be considered by the Board of Directors at the time of recommending/ declaring of Dividend.

Dividend Distribution Policy of the Company can be accessed at https://www.geojit.com/StaticPdf/ Dividend-Distribution-Policy.pdf.

The company follows a policy on remuneration of

Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees of the Company. The policy was approved by the Nomination & Remuneration Committee of the

Company.

The Non-Executive Directors of the Company shall be entitled to receive remuneration by way of sitting fees for attending meeting of the Board and Committees thereof.

The remuneration to KMPs and SMPs and employees shall include direct remuneration and indirect remuneration primarily and strategic remuneration which can be performance linked and/or profit linked incentive.

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

Risks are an integral part of business and it is imperative to manage these risks at acceptable levels in order to achieve business objectives. The risks to which the Company is exposed are both external and internal. Your company has formulated a Risk Management Policy to provide an integrated and standardized approach in managing all aspects of risk to which your Company is exposed. A Board-level Risk Management Committee monitors the Enterprise Risk Management Policy with participation from officers responsible for risk management and to take appropriate steps to ensure that these risks are at acceptable levels.

Your Company has laid down a Vigil Mechanism and formulated a Whistle Blower Policy in order to provide a framework for responsible and secure whistle blowing mechanism. The Policy aims to provide an avenue for Employees and Directors to raise their concerns about unethical behavior, actual or suspected fraud or violation of the companys code of conduct and it also empowers the Audit Committee of the Board of Directors to investigate the concerns raised by the employees.

All Directors and Employees of the Company are eligible to make protected disclosures under the Policy addressed to the Vigilance Officer of the Company in relation to matters concerning the Company. The company consistently educate stakeholders about the policy, ensuring a regular and systematic dissemination of information. We further affirm that, no employee of the Company was denied access to the Audit

Committee.

The details on the Companys Whistle Blower Policy and Vigil Mechanism can be accessed at https://www. geojit.com/StaticPdf/01_Vigil%20Mechanism%20 and%20Whistle%20Blower%20Policy.pdf

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

The Company has identified Education and Health as key focus areas of engagement for CSR activities. The Company would also undertake other initiatives in compliance with Section 135 read with Schedule

VII of the Companies Act 2013. The Annual Report on CSR activities is annexed herewith and marked as Annexure II to this report. The CSR Policy is available on website of the company at https://www.geojit.com/ csr-policy.

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provision of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.

The Company conducts regular training programs to ensure ongoing education and awareness regarding prevention of sexual harassment in the workplace. As required under the Law, an internal complaints committee has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassments at the workplace.

Your Directors further state that during the year under review, there was one complaint received and redressed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act

2013.

The Company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies.

The scope and authority of the Internal Audit activity are well defined in the Internal Audit Charter, approved by the Audit Committee. The Company has a dedicated Internal Audit team with skills commensurate with the size, nature & complexity of operations of the Company. Internal Audit department reports functionally to the Audit Committee of the Board which reviews and approves risk based annual internal audit plan. Audit Committee periodically reviews the performance of internal audit function. During the year, the Audit Committee met regularly to review reports submitted by the Internal Audit department. All significant audit observations and follow-up actions thereon were reported to the Audit Committee.

The Companys Board & Audit Committee reviews adherence to internal control systems, internal audit reports and legal compliances. The Audit Committee reviews all quarterly and yearly financial results of the Company and recommends the same to Board for its approval.

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 Conduct for Prevention of Insider Trading and Policy on Disclosure of Material Events/ Information which is applicable to all Directors and the Designated Employees of the Company. The Code lays down the guidelines, which advices on the procedures to be followed and disclosures to be made while dealing in shares of the Company and indicate the consequences of non-compliance. A copy of the Code has been put on the Companys website.

All contracts/arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on an arms length basis. During the year the company had not entered into any contract/ arrangement/transaction with any related party which could be considered material in accordance 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 dealing with related party transactions as approved by the Board may be accessed on the Companys website at https://www.geojit.com/StaticPdf/GFSL%20-%20 Corporate Overview Final%20approved%20RTP%20Policy.pdf.

Your Directors draw attention of the members to Note 41 to the financial statement, which sets out related party disclosures.

The Companys head office is an energy efficient building consuming about 25 percent less energy and over 40 percent less water than conventional buildings of similar size. The company also ensures optimized and efficient energy management in all its offices, located across India. With the implementation of its digital initiatives the company has also substantially reduced its paper consumption. Financial Statements

The company has always leveraged technological innovations to improve its operational efficiency to satisfy and retain its customer base. Keeping in line with SEBI guidelines, the company has been automating the customer on-boarding process. This has enabled the Company to reduce time-consuming activities and complexity of physical on-boarding of clients.

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

As a service Company, the Companys operations are heavily dependent on qualified and competent personnel. As on 31st March 2023, the total strength of the Companys permanent employees stood at 2,198 excluding trainees, casual & contract staff. Your Company takes significant effort in training all employees at various levels.

Particulars of employees covered by the provisions of Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as

Annexure V to this Report.

In accordance with the provisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of remuneration of top ten employees who have drawn remuneration not less than the limits specified in the Rules are available with the Company and in terms of provisions of Section 136(1) of the Act, this report is being sent to the members without this detail and any member desirous of obtaining information may write to the Company and the same shall be provided through electronic mode till the date of the ensuing

Annual General Meeting.

The Company presently has two Employee Stock Option Schemes viz, ESOS 2016 and ESOS 2017. The Board of Directors of the Company has allotted total 96,187 equity shares of 1/- each under ESOS 2016 and ESOS 2017 to its employees who exercised the stock options on various dates at various exercise prices in accordance with the terms and conditions of ESOS.

During the year under review, the Company has not amended the terms of stock options granted under ESOS 2016 and ESOS 2017.

The existing Schemes ESOS 2016 and ESOS 2017 are in compliance with the Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the

Companies Act, 2013.

Details with respect to Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on our website and can be accessed at https://www.geojit.com/ StaticPdf/ESOS%20Disclosure_AR2022-23.pdf

Pursuant to the provisions of Section 124 of the

Companies Act, 2013, money transferred to the Unpaid Dividend Account of the Company and which has remained unpaid or unclaimed for a period of seven years from the date of transfer has been transferred by the Company to the Investor Education and Protection Fund ("IEPF") established by the Central Government pursuant to Section 125 of the said Act.

The Company holds a Demat Unclaimed Suspense Account with Geojit Financial Services Limited for holding the unclaimed shares of the Company.

The Company does not accept deposits from the public as specified under Chapter V of the Companies Act

2013.

Loans, guarantees and investments covered under

Section 186 of the Companies Act, 2013 forms part of the notes to the financial statements provided in this

Annual Report.

No material changes and commitments have occurred during the year 2022-23 or between the end of the financial year of the Company to the date of the report which affect the financial position of the Company.

There is no change in the nature of business carried on by the Company. The Company has not changed the class of business in which the Company has an interest.

There have been no significant and material orders passed by the regulators, courts and tribunals impacting the going concern status of the Companys operations in future.

No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year is not applicable.

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

The Company has complied with the Secretarial Standards on Board Meetings (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the ICSI.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review. a. Issue of equity shares with differential right as to dividend, voting or otherwise. b. Issue of shares (including sweat equity shares) to employees of the company under any scheme save and except ESOS referred to in this report.

Your Directors wish to acknowledge the valuable guidance and assistance received from Securities and Exchange Board of India, Stock Exchanges, Commodity Exchanges, Depositories & other Regulatory Authorities, Kerala State Industrial Development Corporation Limited, our clients and business partners. We extend our sincere appreciation to Mr. M G Rajamanickam IAS for his invaluable contributions during his tenure, as he retired within the past year. We look forward to receiving their continued support and encouragement. The Board of Directors wishes to extend their thanks and appreciation and express their gratitude for the continuing commitment and dedication of employees at all levels. The Directors are thankful to the esteemed shareholders for their support and the confidence reposed in the Company.

Sd/-

Place : Kochi Chairman Date: 28.04.2023 DIN: 00022911