Geojit BNP Paribas Financial Services

The Directors are pleased to present their Report on the business and
 operations of your Company for the year ended 31st March 2008.
 
 PERFORMANCE HIGHLIGHTS
 
                    
 Particulars            2007-08   2006-07  
                                                Change
 Total Income          203.77       109.88        85%
 Profit Before Tax      71.74        31.67        127%
 Provision for Tax      23.51        10.62        121%
 Profit After Tax       48.23        21.05        129%
 Balance brought 
 forward from 
 previous year          30.35        18.34         -
 Profit available
 for appropriation      78.58        39.39         -
 Appropriations :
 Transfer to General 
 Reserve                 5.00         2.10         -
 Proposed Dividend 
 on equity shares       17.11         6.94         -
 (Including 
 Dividend Tax)
 Balance carried 
 to Balance Sheet       56.47        30.35         -
 
 REVIEW OF PERFORMANCE
 
 Your Company has recorded a total income of Rs.203.77 crore for the
 year ended 31 March 2008 compared to Rs. 109.88 crore in the previous
 year, demonstrating a robust growth of 85%. The Profit before tax grew
 by 126% to Rs.71.74 crore from Rs.31.67 crore in the previous year.
 After providing Rs.23.51 crore for tax, Net Profit is Rs.48.23 crore,
 an increase of 129% over the previous year. Basic earnings per share on
 the face value of Re.1 works out to Rs.2.31 compared to Rs.1.36 for the
 previous year.
 
 The Company continued with its strategy of geographic expansion by
 adding 50 new offices during the year.  At the end of the year the
 Company had national presence with 437 Offices.  The performance of the
 Company and its subsidiaries, its business activities has been
 comprehensively covered in the Management Discussion and Analysis
 Report.
 
 DIVIDEND
 
 Considering the good results, your Directors are pleased to recommend a
 dividend on equity shares @ 70% (total dividend in previous year 40%)
 for the financial year 2007-08. If approved by the shareholders at the
 Annual General Meeting, the dividend will absorb Rs.17.11 crore
 including dividend distribution tax.
 
 CAPITAL STRUCTURE
 
 The Board had reported in the last Annual Report the allotment of
 2,28,26,300 Warrants convertible into Equity Shares to BNP Paribas S.A.
 in the last year. The Warrants are still not exercised.
 
 CHANGE IN THE NAME OF THE COMPANY
 
 The Members of the Company had accorded the approval at the last Annual
 General Meeting to change the name of the Company to Geojit BNP
 Paribas Financial Services Limited subject to necessary statutory
 approvals,
 
 The name change could not be effected during the year as one of the
 conditions to be fulfilled was that BNP Paribas 5.A. shall hold not
 less than 33% of the issued and paid up equity share capital. Pending
 exercise of the convertible warrants, the shareholding of BNP Paribas
 S.A. as on 31st March 2008 is 27.18%.
 
 DIRECTORS
 
 Mr.P.C.Cyriac, an Independent Director on the Board resigned w.e.f. 04
 August 2007. Also KSIDC Limited appointed Mr. P.H. Kurian as its
 Nominee on the Board of the Company replacing Mr.Jiji Thomson w.e.f.
 05th January 2008. The Board of Directors places on record its sincere
 appreciation and gratitude for the valuable contribution made by
 Mr.P.C.Cyriac and Mr.Jiji Thomson during their tenure.
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Mr.Rakesh Jhunjhunwala and
 Mr.R.Bupathy retire by rotation and being eligible have offered
 themselves for re-appointment. The necessary disclosures as required
 under Clause 49 VI of the Listing Agreement entered into with the Stock
 Exchanges are provided in the Corporate Governance Report forming part
 of this Report as well as in the Notice of the ensuing Annual General
 Meeting being sent to the shareholders along with the Annual Report.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The Consolidated Financial Results represent those of Geojit Financial
 Services Limited, its wholly owned subsidiaries i.e., Geojit
 Commodities Limited and Geojit Financial Management Services Private
 Limited, a 51% subsidiary i.e., Geojit Credits Private Limited, its
 step down subsidiaries and its joint venture, Barjeel Geojit Securities
 L.L.C., prepared in accordance with the relevant accounting standards
 issued by the Institute of Chartered Accountants of India.
 
 Your Company has recorded a consolidated total income of Rs.239.73
 crore for the year ended 31st March 2008 as compared to Rs.136.09 crore
 in the previous financial year. Consolidated net profit after tax of
 the Group increased to Rs.58.66 crore from Rs.25.21 crore, an increase
 of 133% over the previous year.
 
 SUBSIDIARY COMPANIES ft JOINT VENTURES
 
 For the Financial Year ended 31 March 2008, the Companys subsidiaries,
 on an aggregate basis, have significantly improved on their financial
 performance and profitability.
 
 Geojit Commodities Limited, a wholly owned subsidiary engaged in the
 business of commodity broking recorded a revenue of Rs. 19.16 crore
 (previous year Rs.23.90 crore). It recorded a Profit After Tax of
 Rs.3.93 crore (Previous year Rs.4.57 crore). The Company is a member of
 National Commodities and Derivatives Exchange of India Limited, Multi
 Commodities Exchange of India Limited and National Multi Commodities
 Exchange of India Limited.
 
 Geojit Credits Private Limited, a Non Banking Financial Company,
 registered with RBI became a 51% subsidiary of the Company during the
 year. The total revenue of Geojit Credits Private Limited increased to
 Rs.5.20 crore frcm Rs.3.00 crore in the previous period, a growth of
 73%. The Profit After Tax increased by 56% from Rs. 1.62 crore to
 Rs.2.53 crore in the current period.
 
 The revenue of Geojit Technologies Private Limited, a step down
 subsidiary engaged in software development and services, grew by 93% to
 Rs.3.76 crore from Rs.1.95 crore in the previous year. The Company
 recorded a net profit after tax of Rs.90.10 lakh in the previous year.
 Another step down subsidiary, Geojit Financial Distribution Private
 Limited engaged in insurance referrals has recorded a net profit of
 Rs.62.03 lakh, an increase of 89% over the previous year.
 
 The Audited Statement of Accounts for the period ended 31st March 2008
 of these subsidiaries together with the Report of Directors and
 Auditors are attached as required by the provisions of section 212 of
 the Companies Act, 1956.  Barjeel Geojit Securities LLC, a joint
 venture in Dubai returned excellent performance and has recorded a Net
 Profit of AED 129.90 lakh (Previous year AED 51.79 lakh), an increase
 of 150% over the previous year.
 
 NEW DEVELOPMENTS
 
 Geojit Financial Management Services Private Limited, which was a
 subsidiary of Geojit Commodities Limited has now become a direct
 subsidiary of the Company. This Company intends to invest in a joint
 venture with BNP Paribas for commencing institutional brokerage in
 India. The Company expected to start operations during the year.
 
 During the year, the Company has invested an amount of Rs.30.19 crore
 in Al-Oula Geojit Brokerage Company, the joint venture in Saudi Arabia
 with Aljohar Group, to subscribe for 28°/o of the paid up equity share
 capital of SR 100 Million. This Company has received the final license
 from Ministry of Commerce and Industry and Capital Market Authority of
 Saudi Arabia. This Company intends to provide domestic retail stock
 broking operations and distribution of Indian Capital Market products
 to NRIs in Saudi Arabia and is expected to commence operations during
 the year.
 
 The Company has plans to invest in a new joint venture with the
 existing joint venture in Dubai, Barjeel Geojit Securities LLC, for
 taking membership in Dubai Financial Market. This will enable the
 Company to have some share in the local Capital Market operations in
 the Dubai Financial Market. The proposal is in its very early stage.
 
 INSURANCE
 
 The properties of the Company are adequately insured. The Company has
 also taken Brokers Indemnity Insurance to cover the exposure arising
 from operations.
 
 FIXED DEPOSITS
 
 Your company has not accepted any fixed deposits from the public. As
 such, no amount of principle or interest is outstanding as of the
 balance sheet date.
 
 HUMAN RESOURCES
 
 As a service company, the Companys operations are heavily dependent on
 qualified and competent personnel.  The shareholders may be aware of
 the demand supply imbalance in Indian human resources scene as a result
 of rapid economic growth witnessed in the recent past. The Company was
 able to meet its expansion plans by adding 946 employees even under
 such difficult circumstances. As on 31st March 2008, the Company has a
 total head count of 3142. Your Company takes significant effort in
 training all employees at various levels and conducted 503 training
 programmes during the year, which covered 8485 participants.
 
 SOCIAL RESPONSIBILITY
 
 As a responsible corporate citizen, Corporate Social Responsibility is
 an integral part of your Companys organisational vision. The Company
 has been actively involved in supporting various social organisations
 for the welfare activities undertaken by them as briefly summarised
 below -
 
 * In addition to two panchaya the identified for support under the
 Community Aided Sponsorship Program, a third panchayath was added in
 the current year. Steps were taken to provide lighting and sanitation
 for the families of students who are identified for the projects. This
 has benefited 342 number of students.
 
 * Partnered with the Ernakulam District Administration in providing
 support to inmates of District General Hospital.
 
 * The Company also sponsored sports and sportspersons including young
 Grand Master in Chess, Mr.G.N.Gopal,
 
 The Company continued with financial literacy programmes for students
 which was reported in the last year.  2984 such programmes were
 conducted in 894 educational institutions covering 1,45,000 students
 during the year. BNP ParibasAMS Division awarded the Financial
 Literacy Campaign of Geojit with theSpirit of Innovation Award.
 
 ESOP
 
 During the year some employees of the Company have exercised part of
 their stock options granted under the Employees Stock Option Plan 2005
 (ESOP 2005) and the Compensation Committee of the Board of Directors of
 the Company has allotted 3,46,830 equity shares of the Company of the
 face value of Re.1 each on 12th April 2008 to those who exercised the
 stock options till 05 April 2008 at various exercise prices in
 accordance with the terms and conditions of the ESOP.
 
 Your Company has granted 25,00,000 stock options during the financial
 year to key employees of the Company under the SchemeESOP 2007 for Key
 Employees. Also a total of 9,50,500 stock options, which were expired
 under the ESOP 2005 Scheme were reissued to a director and employees of
 the Company & its subsidiaries under ESOP 2005 (Reissue - I) after
 obtaining the approval of the Members through Postal Ballot.  Details
 of the equity shares issued under ESOP, as also the disclosures in
 compliance with clause 12 of the SEBI (Employees Stock Options Scheme
 and Employees Stock Purchase Scheme) Guidelines, 1999 are set our in
 Annexure to this Report.
 
 PARTICULARS OF EMPLOYEES
 
 Information as per Section 217 (2A) of the Companies Act, 1956, read
 with the Companies (Particulars of employees) Rules, 1975 are set out
 in Annexure II to this Report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act, 1956, your
 Directors confirm having :
 
 a) followed in preparation of the Annual Accounts, the applicable
 standards with proper explanation relating to material departures,
 where applicable;
 
 b) selected such accounting policies and applied them consistently and
 made judgements and estimates that are reasonable and prudent so as to
 give a true and fair view of the state of affairs of your Company at
 the end of the financial year and of the profit of your Company for
 that period;
 
 c) taken proper and sufficient care for the maintenance of adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956 for safeguarding the assets of your Company and for
 preventing and detecting fraud and other irregularities; and
 
 d) prepared the Annual Accounts on a going concern basis.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The Company has nothing to report in respect of information on
 conservation of energy and technology absorption as required under
 section 217(1) of the Companies Act, 1956 read with Companies
 (Disclosures of Particulars in the Report of Board of Directors) Rules,
 1988 since the Company is not engaged in manufacturing or processing
 business. The details regarding foreign exchange earnings and outgo are
 given as Annexure III to this report.
 
 CORPORATE GOVERNANCE
 
 Your Company has complied with the Corporate Governance norms as
 stipulated under the provisions of the Listing Agreement entered into
 with the Stock Exchanges. A detailed Report on Corporate Governance is
 given as Annexure IV 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.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 A detailed review of operations, performance and future outlook of the
 Company is given separately under the head Management Discussion and
 Analysis Report appended hereto.
 
 AUDITORS
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants were appointed as
 statutory auditors of your company to conduct the audit of accounts for
 the year ended 31 March 2008. Their term of appointment expires at the
 conclusion of the forthcoming Annual General Meeting. Your Directors
 have proposed them for reappointment at the forthcoming AGM.
 
 ACKNOWLEDGEMENTS
 
 Your Directors are grateful for the co-operation and unstined support
 from Reserve Bank of India and our bankers, Securities and Exchange
 Board of India, Stock Exchanges & other Regulatory authorities, State
 Government and Central Government, BNP Paribas, KSIDC, our clients and
 business partners. We look forward to receiving their continued support
 and encouragement. The Board of Directors wishes to express its
 gratitude and record its sincere appreciation of the dedicated efforts
 and commitment of all the employees. 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                                         A.P. Kurian
 Date   : 23rd May, 2008                                  Chairman