Geojit Financial Services Ltd Directors Report.

To,

The Members,

Your Directors have pleasure in presenting their 26th Annual Report of the Company for the financial year ended March 31, 2020.

FINANCIAL HIGHLIGHTS

Particulars

Standalone

Consolidated

2019-20 2018-19 Change (%) 2019-20 2018-19 Change (%)
Total Revenue 286.88 285.42 00.51 306.37 309.77 -1.10
Total Expenditure 224.58 235.00 -04.44 232.26 244.46 -4.99
Profit before exceptional items and tax 62.30 50.41 23.59 74.11 65.31 13.47
Exceptional Item -10.20 -7.50 -36.00 -4.49 -7.50 -40.13
Total Tax Expenses 14.36 18.37 -21.83 18.72 27.85 -32.78
Share of Profit/(loss) in Associate - - - -0.32 -2.24 -85.71
Profit for the year 37.74 24.55 53.79 50.58 27.72 82.47
Total Other Comprehensive Income -0.09 0.15 -160.00 -0.02 0.22 -
Total Comprehensive Income 37.65 24.69 52.49 50.56 27.94 80.96

FINANCIAL HIGHLIGHTS OF SUBSIDIARIES

Company Name FY 2019-20 Total income FY 2019-20 Total Expense FY 2019-20 Profit / (Loss) for the year
Indian Subsidiaries
Geojit Technologies (P) Ltd. 25.34 10.52 10.52
Geojit Credits (P) Ltd 1.26 1.72 -0.46
Geojit Investment Services (P) Ltd 0.85 0.33 0.47
Geojit Techloan (P) Limited 0.07 0.05 0.003
Overseas Subsidiaries, Joint Ventures & Associates
Barjeel Geojit Financial Services LLC 7.44 6.22 1.22
Al-Oula Geojit Capital Company 0.01 1.50 -1.49
Qurum Business Group Geojit Securities LLC 2.15 2.36 -0.21
BBK Geojit Securities KSC 0.44 0.49 -0.05

Note :

1. Consolidation of Barjeel, Aloula and BBK Geojit is on "equity method". Therefore the consolidated profit / (loss) is directly adjusted to the carrying amount of investments in the books. (ie. The total income and total expense donot directly get consolidated. Only the share of GFSL in total gain / (loss) is consolidated into P&L.)

REVIEW OF PERFORMANCE

On a standalone basis, your Company has recorded a total income of Rs. 286.88 crores for the financial year ended 31st March, 2020. The profit before tax is Rs. 62.30 crores and the net profit after tax is Rs. 37.74 crores. Basic earnings per share work out to Rs. 1.58 compared to Rs. 1.03 in the previous year.

On a consolidated basis your company earned a total income of Rs. 306.37 crores for the financial year, profit before tax of Rs. 74.11 crores and a net profit of Rs. 50.58 crores.

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

DIVIDEND

The Board at their meeting held on 11th March, 2020 declared an interim dividend of Rs. 1.50/- per equity share for the financial year 2019-20.

CONSOLIDATED FINANCIAL STATEMENT

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.

STATE OF COMPANYS AFFAIRS AND OPERATIONS

The proactive and continuous efforts by the Company in terms of diversifying and de-risking business primarily into product distribution are helping to build a stable revenue franchise. Mutual fund and insurance distribution has opened a new source of revenue with the latter also providing protection against market volatility related shocks.

The Company has strengthened its digital focus as COVID-19 pandemic pose challenge of social distancing and reduced movement. Aadhar-based digital onboarding has been relaunched to enable customers easily onboard and transact from the safety of their homes. Mutual Fund reconciliation platform was automated. Further, to strengthen positioning as an advisory services company, portfolio analysis and financial planning applications were improved with enhanced features.

INCREASE IN SHARE CAPITAL

During the year under review, the paid up share capital of the Company increased from Rs. 23,82,95,401/- divided into 23,82,95,401 equity shares of Rs. 1/- each

to Rs. 23,82,99,760/- divided into 23,82,99,760 equity shares of Rs. 1/- each, consequent to the issue of 4359 equity shares to employees upon exercise of stock options under Employee Stock Option Plan-2010 of the Company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

As on 31st March, 2020, 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. 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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

I. Inductions

The following appointments were made during the year

• Mr. Sanjay M Kaul IAS as Non- Executive Director (nominee of Kerala State Industrial Development Corporation Limited) with effect from July 19, 2019

• Mr. James Varghese as Independent Director with effect from November 14, 2019.

• Mr. M G Rajamanickam IAS as Non- Executive Director (nominee of Kerala State Industrial Development Corporation Limited) with effect from December 12, 2019

• Mrs. Alice Geevarghese Vaidyan as Independent Director with effect from August 04, 2020

II. Re-appointments

As per the provisions of the Companies Act, 2013, Mr. A Balakrishnan, retires by rotation at the ensuing Annual General Meeting and being eligible seeks re-appointment. The Board recommends his re-appointment.

III. Retirements and Cessations

Dr. Sharmila Mary Joseph IAS and Mr. Sanjay M Kaul IAS (nominees of Kerala State Industrial Development Corporation Limited) resigned as Non-Executive Directors of the Company effective July 19, 2019 and December 12, 2019 respectively.

Mrs. Mohana Raj Nair ceased to be a Non-Executive Independent Director of the Company w.e.f February 02, 2020 due to death.

ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEE AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of Companies Act, 2013 and the SEBI (Listing Obligation & 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 composition of the Board and its Committees, conducting of Board Meetings, effectiveness of its governance practices 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.

CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGEMENT

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.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

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 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 http://www.geoiit.com/pdfs/ FAMILIARIZATIONPROGRAMMEFORINDEPENDEN TDIRECTORS.pdf.

DECLARATION BY INDEPENDENT DIRECTORS

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 Obligation & Disclosure Requirements) Regulations, 2015.

DIRECTORS RESPONSIBILITY STATEMENT

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. i n the preparation of the annual accounts for the financial year ended March 31, 2020, 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, 2020 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.

POLICY RELATING TO DIRECTORS APPOINTMENT

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.

MANAGEMENTS DISCUSSION & ANALYSIS

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

CORPORATE GOVERNANCE

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 is given as Annexure I to this Report. A certificate of Statutory Auditor confirming compliance of the Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

EXTRACT OF ANNUAL RETURN

The extract of the Annual return in Form MGT - 9 is given as Annexure II to this Report.

AUDITORS

At the Annual General Meeting held on August 04, 2016, M/s. B S R & Associates LLP, Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the Twenty Seventh Annual General Meeting to be held in the year 2021.

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

SECRETARIAL AUDIT REPORT

In accordance with the provisions of Section 204 of the Companies Act, 2013, the Board has appointed M/s. Satheesh & Remesh - Company Secretaries in Wholetime Practice, Kochi as the Secretarial Auditor for the financial year 2019-20. The report of the Secretarial

Auditor for the FY 2019-20 is annexed to this report as Annexure III.

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

NUMBER OF BOARD MEETINGS

The Board of Directors met 5 (five) times in the financial year 2019-20. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee is constituted with three NonExecutive Independent Directors comprising of Mr. R Bupathy as the Chairman, Mr. Radhakrishnan Nair and Mr. Mahesh Vyas as other Committee Members.

REMUNERATION POLICY

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.qeoiit.com/pdfs/Remuneration-Policv. pdf.

RISK MANAGEMENT POLICY

Risks are an integral part of business and it is imperative to manage these risks at acceptable levels in order to achieve business obiectives. 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. An Internal 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.

WHISTLE BLOWER POLICY & VIGIL MECHANISM

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. 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 http://www.geojit. com/pdfs/VIGIL MECHANISM%20 %20Final%20 Draft Revised.pdf

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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 the Section 135 read with Schedule VII of the Companies Act 2013. The Annual Report on CSR activities is annexed herewith and marked as Annexure IV to this report. The CSR Policy of the company is available on website of the company at https://www. geoiit.com/pdfs/CSR Policy 17-5-2018.pdf

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has zero tolerance for sexual harassment at work place 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 there under.

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 work place.

Your Directors further state that during the year under review, there was 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 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.

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 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.

RELATED PARTY TRANSACTIONS

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 V.

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.

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Companys head office is an energy efficient building consuming 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.

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.

Today, almost 60 percent of the Companys clients trade online and over 40 percent buy and sell mutual funds using its online trading platforms and mobile apps. The latest updates on our online platforms and apps give investors a more powerful trading experience.

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

HUMAN RESOURCES

As a service Company, the Companys operations are heavily dependent on qualified and competent personnel. As on March 31, 2020, the Company had 2031 employees on its rolls. Your Company takes significant effort in training all employees at various levels.

PARTICULARS OF EMPLOYEES

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 VII to this Report.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company presently has two Employee Stock Option Schemes viz,, ESOS 2016 and ESOS 2017. The Nomination & Remuneration Committee at its meetings held during the year granted 1,59,691 options under ESOS 2016 and 90,000 options under ESOS 2017. The Board of Directors of the Company has allotted 4,359 equity shares of .1/- each under ESOS 2010 Scheme to its employees who exercised the stock options on various dates at various exercise prices in accordance with the terms and conditions of ESOS. The ESOS 2010 Scheme has expired in June 2019

The aforesaid ESOS schemes are in compliance with SEBI (Share Based Employees Benefits Scheme) Regulations, 2014 and the details are attached as Annexure VIII to this report and also available on our website and can be accessed at https://www.geoiit. com/pdfs/ESOSDisclosure.pdf

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF

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.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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.

GENERAL

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. Details relating to deposits covered under Chapter V of the Companies Act 2013.

b. Issue of equity shares with differential right as to dividend, voting or otherwise.

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

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operation in future.

ACKNOWLEDGEMENTS

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, BNP Paribas S A, Kerala State Industrial Development

Corporation Limited, our clients and business partners. 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.

For and on behalf of the Board of Directors

Place : Kochi Sd/-
Date: 04.08.2020 Chairman