Geojit Financial Services Ltd - Annual Report 2023-24 Analysis

Overview #

Detailed Analysis #

This analysis examines Geojit Financial Services Limited’s (Geojit) Annual Report for the financial year 2023-24, covering financial performance, business segments, risk assessment, and ESG initiatives.

I. Financial Performance:

Geojit demonstrated robust financial growth in FY2024. Key highlights (in Indian Rupees Crores):

• Standalone:
  • Total Revenue: ₹599.55 (40% increase YoY)
  • Profit Before Tax (PBT): ₹178.76 (61% increase YoY)
  • Profit After Tax (PAT): ₹133.94 (50% increase YoY)
  • Earnings Per Share (EPS): ₹5.60 (50% increase YoY)
• Consolidated:
  • Total Revenue: ₹623.97 (39% increase YoY)
  • PBT: ₹191.97 (61% increase YoY)
  • PAT: ₹149.38 (48% increase YoY)

The significant YoY increase reflects strong performance across business segments, especially in equity broking and financial product distribution. A final dividend of ₹1.50 per equity share was recommended.

Assets Under Management (AUM) and Custody (AUC): Total AUM&C stood at ₹93,091 Crores as of March 31, 2024, a substantial increase from ₹64,475 Crores in March 2023. This showcases increased client trust and successful growth initiatives.

Revenue Breakdown (Consolidated): While precise segment-wise revenue isn’t explicitly provided, the report highlights:

• Brokerage: Constitutes a significant portion of revenue, with 80% derived from the cash market. This demonstrates a focus on long-term wealth creation for clients.
• Mutual Funds Distribution: Revenue increased by 18% YoY to ₹81.72 Crores.
• Insurance Distribution: Revenue surged to ₹66.16 Crores (a massive increase from ₹23.95 Crores in FY2023).
• Portfolio Management Services (PMS): AUM more than doubled YoY, reaching ₹915 Crores. This high-growth segment offers customized investment strategies.

II. Business Segments:

Geojit operates across various segments, offering a detailed suite of financial services:

• Equity Broking: Core business, leveraging advanced platforms (Flip, TraderX) and research capabilities. Focus on cash market suggests a long-term investment strategy.
• Financial Product Distribution: Mutual Funds and Insurance are key drivers, indicating diversification beyond core broking.
• Portfolio Management Services (PMS): High-growth area offering customized investment solutions with strong performance and high AUM growth.
• Private Wealth Services: Targets High-Net-Worth Individuals (HNIs) and family offices with tailored investment options.
• Global Investments: Via a subsidiary, Geojit IFSC Limited, offering access to international markets.
• Advisory Services: STEPS division provides financial planning, retirement planning, tax planning, and investor education.

III. Risk Assessment:

The annual report identifies and discusses many key risks:

• Product Risk: The risk of unsuccessful new product launches impacting financial performance. Mitigated by market research, various offerings, and expert advice.
• Regulatory Risk: Exposure to changes in regulations. Mitigated by a dedicated compliance team and robust internal review processes.
• Operational Risk: Risk of losses due to internal process failures. Mitigated by hierarchical risk controls, MIS monitoring, and maker/checker procedures.
• Business Risk: Exposure to macroeconomic fluctuations, customer preference shifts, and market dynamics. Mitigated by diversification, a wide distribution network, and strong brand presence.
• Technology Risk: Risk of failing to adapt to technological advancements. Mitigated by continuous investment in technology upgrades and innovative platforms.
• Competition Risk: Intense competition in the financial services sector. Mitigated by product diversification, customer focus, technological innovation, and brand recognition.

IV. ESG Initiatives:

Geojit actively incorporates Environmental, Social, and Governance (ESG) principles into its operations and strategy. Key initiatives include:

• Environmental:

  • LEED Gold-certified green building for the corporate office, reducing energy and water consumption.
  • Solar panels installed at the corporate office.
  • Efficient waste management processes, including a rainwater harvesting system and a sewage treatment plant with water recycling.
  • Initiatives to reduce Greenhouse Gas emissions.

• Social:

  • Corporate Social Responsibility (CSR) initiatives focusing on education, health, financial literacy, and environmental conservation.
  • Employee training and development programs.
  • Commitment to employee safety and well-being.

• Governance:

  • Strong corporate governance framework with a various Board of Directors and dedicated committees (Audit, Nomination & Remuneration, Stakeholders’ Relationship).
  • Robust internal controls and compliance procedures.
  • Vigil mechanism and whistle-blower policy.

Geojit’s commitment to ESG is evident through dedicated reporting, specific initiatives, and alignment with UN Sustainable Development Goals (SDGs). The report highlights specific CSR projects and their impact. However, quantifiable metrics for some ESG initiatives would improve transparency and allow for better performance tracking.

V. Conclusion:

Geojit Financial Services Limited’s Annual Report 2023-24 showcases a year of significant growth and diversification. Strong financial performance across segments, coupled with a proactive approach to risk management and a growing emphasis on ESG, positions the company for continued success. The company’s focus on technology and a hybrid (online/offline) business model enhances reach and customer engagement. While the report adequately addresses key areas, more detailed segmental revenue breakdowns and quantifiable ESG metrics would strengthen the overall presentation and provide greater transparency.

Detailed Analysis #

Balance Sheet #

Asset Analysis #

The provided annual report doesn’t explicitly categorize assets as “current” versus “non-current” in a single, readily accessible table. Therefore, precise figures for current assets, requiring the summation of many line items, are not directly available. We need to extract the information from various sections and notes to the financial statements.

Here’s what we can ascertain from the Standalone Financial Statements:

• Total Assets: ₹174,477.58 Lakhs (₹17,447,758,000) This is the sum of all assets shown on the Standalone Balance Sheet.

To calculate current assets, we’d need to identify and sum the following (from the Standalone Balance Sheet and Notes):

• Cash and Cash Equivalents: ₹14,449.26 Lakhs (₹1,444,926,000) (Note 3) This is directly stated.
• Accounts Receivable (Trade Receivables): ₹11,227.14 Lakhs (₹1,122,714,000) (Note 5). This is the net amount after deducting impairment loss allowance.
• Inventory: The report explicitly states that Geojit, being a service company, does not hold physical inventories. Therefore, the inventory value is ₹0.

Determining Current Assets: Several other line items could potentially be included as current assets depending on their maturity. However, without a clear current/non-current classification, a precise figure for current assets cannot be definitively calculated from the provided report. Items that might be included depending on their individual maturity dates are: bank balances other than cash equivalents (Note 4), other financial assets (Note 8), and some of the other non-financial assets (Note 14) This would require a more detailed examination of the notes to fully classify each item’s maturity.

In summary:

• Total Assets: ₹17,447,758,000
• Cash and Cash Equivalents: ₹1,444,926,000
• Accounts Receivable (Trade Receivables): ₹1,122,714,000
• Inventory: ₹0

It’s essential to note that the consolidated financial statements offer a similar challenge in directly obtaining the requested figures due to the lack of a clear delineation between current and non-current assets in a single table. A more detailed breakdown within the notes to the financial statements would be needed for accurate calculation.

Liability Analysis #

Similar to the assets, the provided annual report doesn’t present a neatly organized table separating current and non-current liabilities. We must extract information from various sections.

Based on the Standalone Financial Statements:

• Total Liabilities: ₹106,613.04 Lakhs (₹10,661,304,000) This is the sum of all liabilities shown on the Standalone Balance Sheet.

Determining current liabilities requires identifying and summing the relevant line items. From the Standalone Balance Sheet and associated Notes, we can determine:

• Accounts Payable (Trade Payables): ₹4,694.96 Lakhs (₹469,496,000) (Note 15). This is the total trade payables, including both MSME and other creditors.

• Long-Term Debt: This is less straightforward. The report shows borrowings (Note 16) totaling ₹31,247.41 Lakhs. However, the maturity profile is not clearly defined as short-term or long-term. Note 16 does provide some detail on the nature of these borrowings including overdrafts and loans from financial institutions. However, to determine the long-term portion, you’d need to examine the maturity schedule within Note 16 for a precise amount. The report simply states the borrowings were for working capital purposes.

• Determining Current Liabilities: To determine the precise current liabilities figure, we’d need to analyze each liability line item and determine its maturity profile. Candidates for inclusion, depending on their maturity, would include: trade payables, a portion of the borrowings (depending on their maturity), other financial liabilities (Note 17, likely containing current items), provisions (Note 18, which may or may not be entirely current), and other non-financial liabilities (Note 19, some of which will be current). This analysis requires a more detailed examination of the maturity information within the notes.

In summary, based on the provided data:

• Total Liabilities: ₹10,661,304,000
• Accounts Payable (Trade Payables): ₹469,496,000
• Long-Term Debt: Cannot be definitively determined without a complete maturity profile of the borrowings in Note 16. A portion of the ₹3,124,741,000 in borrowings is long-term, but the precise amount cannot be extracted.

Again, a similar analysis applies to the Consolidated Financial Statements. The lack of a clear current/non-current breakdown requires a more detailed analysis of the individual line items and their notes within the consolidated financial statements.

Equity Analysis #

The values for shareholders’ equity, retained earnings, and share capital can be found in the Standalone Balance Sheet and the related notes. Here’s the breakdown (all figures in Indian Rupees Lakhs):

• Shareholders’ Equity (Standalone): ₹67,864.35 Lakhs (₹6,786,435,000). This is the total equity as shown on the Standalone Balance Sheet.

• Share Capital (Standalone): ₹2,391.44 Lakhs (₹239,144,000). This represents the value of the issued and fully paid-up equity shares (Note 20). Note 20 provides details on the number of shares (239,144,482) and their face value (₹1 each).

• Retained Earnings (Standalone): ₹39,553.86 Lakhs (₹3,955,386,000). This is the accumulated profit since the company’s inception, after deducting dividends and other appropriations (Note 21). Note 21 explains the components contributing to the Other Equity figure, including retained earnings, securities premium, share options, and general reserve.

For the Consolidated Financial Statements, the figures would differ slightly to reflect the inclusion of subsidiaries, associates and joint ventures:

• Shareholders’ Equity (Consolidated): ₹91,154.56 Lakhs (₹9,115,456,000). This includes equity attributable to the owners of the parent company and non-controlling interests.
• Share Capital (Consolidated): ₹2,391.44 Lakhs (₹239,144,000). Share capital remains the same as it is not affected by consolidation. The share capital relates only to the parent company.
• Retained Earnings (Consolidated): The consolidated statement of changes in equity shows the retained earnings for the parent and non-controlling interests separately. The consolidated retained earnings for the parent company are ₹50,637.56 Lakhs (₹5,063,756,000). However, this doesn’t fully represent “retained earnings” as commonly understood, as it is the balance after considering other detailed income and other equity adjustments from consolidation.

It’s important to note the difference between the standalone and consolidated figures. The consolidated figures include the financial performance and equity of subsidiary companies, creating a broader picture of the entire group’s financial health. The standalone figures relate only to the parent company, Geojit Financial Services Limited.

Income Statement #

Operating Performance #

The Geojit Financial Services Limited annual report presents revenue and operating expenses but doesn’t explicitly separate out “Cost of Revenue” and “Gross Profit” in the way a manufacturing or merchandising company would. This is because Geojit’s primary business is providing financial services, not producing or selling goods. Their expenses are largely operating expenses directly related to providing services.

Here’s what we can extract from the Standalone Statement of Profit and Loss (all figures in Indian Rupees Lakhs):

• Revenue from Operations: ₹58,923.31 Lakhs (₹5,892,331,000) This is the total revenue generated from the company’s core operations (interest, dividends, fees, commissions etc.)

• Cost of Revenue: Not explicitly provided. There’s no separate line item for cost of revenue in the standalone statement as it’s not directly applicable to Geojit’s service-based business model.

• Gross Profit: Not explicitly provided. Since there’s no cost of revenue, there is no gross profit figure presented separately.

• Operating Expenses: ₹42,078.78 Lakhs (₹4,207,878,000). This includes finance costs, employee benefits, depreciation, and other expenses.

• Operating Income: ₹16,844.53 Lakhs (₹1,684,453,000). This is calculated by subtracting operating expenses (₹42,078.78 Lakhs) from revenue from operations (₹58,923.31 Lakhs). This is not explicitly labelled as ‘Operating Income’ in the statement but is the result of the above calculation.

For the Consolidated Statement of Profit and Loss, the figures are similar but reflect the combined results of the parent company and its subsidiaries:

• Revenue from Operations: ₹61,413.41 Lakhs (₹6,141,341,000)
• Cost of Revenue: Not explicitly provided.
• Gross Profit: Not explicitly provided.
• Operating Expenses: ₹43,199.52 Lakhs (₹4,319,952,000)
• Operating Income: ₹18,213.89 Lakhs (₹1,821,389,000) (Calculated as Revenue from Operations minus Operating Expenses)

It’s important to remember that the financial reporting format for service companies differs from that of manufacturing or merchandising companies. The absence of a separate “Cost of Revenue” and “Gross Profit” is consistent with Geojit’s nature of business. The primary focus is on total revenue and operating expenses to arrive at the operating income.

Bottom Line Metrics #

The Geojit Financial Services Limited annual report provides some of these metrics directly, while others require calculation. All figures are in Indian Rupees Lakhs unless otherwise specified:

Standalone Financial Statements:

• Net Income (PAT): ₹13,393.63 Lakhs (₹1,339,363,000) - This is directly stated in the Standalone Statement of Profit and Loss.

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): This is not explicitly provided. To calculate it, we need to take the Profit Before Tax (PBT) and add back interest expense, depreciation, and amortization.

  • PBT (Standalone): ₹17,875.74 Lakhs (from Standalone Statement of Profit and Loss).
  • Interest Expense: ₹1,583.41 Lakhs (Note 27).
  • Depreciation & Amortization: ₹2,773.95 Lakhs (Note 31).
  • EBITDA (Standalone) = PBT + Interest Expense + Depreciation & Amortization = ₹17,875.74 + ₹1,583.41 + ₹2,773.95 = ₹22,233.10 Lakhs (₹2,223,310,000)

• Basic EPS: ₹5.60 per share - This is directly stated in the Standalone Statement of Profit and Loss.

• Diluted EPS: ₹5.60 per share - This is directly stated in the Standalone Statement of Profit and Loss. Note that in this case, the basic and diluted EPS are the same.

Consolidated Financial Statements:

• Net Income (PAT): ₹14,938.10 Lakhs (₹1,493,810,000) - This includes the parent company and subsidiaries after considering their share of profit and also share of other detailed income.

• EBITDA (Consolidated): Again, not explicitly stated. We need to calculate it:

  • PBT (Consolidated): ₹19,197.49 Lakhs (from Consolidated Statement of Profit and Loss).
  • Interest Expense: ₹1,688.84 Lakhs (Note 27).
  • Depreciation & Amortization: ₹2,897.18 Lakhs (Note 31).
  • EBITDA (Consolidated) = PBT + Interest Expense + Depreciation & Amortization = ₹19,197.49 + ₹1,688.84 + ₹2,897.18 = ₹23,783.51 Lakhs (₹2,378,351,000)

• Basic EPS: ₹6.06 per share - This is directly stated in the Consolidated Statement of Profit and Loss.

• Diluted EPS: ₹6.06 per share - This is directly stated in the Consolidated Statement of Profit and Loss. Again, basic and diluted EPS are identical in this case.

It’s important to note that the consolidated figures represent the combined performance of the parent company and its subsidiaries, while the standalone figures pertain only to the parent company, Geojit Financial Services Limited. Therefore, the consolidated figures provide a more complete picture of the overall group’s profitability.

Cash Flow #

Cash Flow Components #

The cash flow information is presented in both the Standalone and Consolidated Statements of Cash Flows. All figures are in Indian Rupees Lakhs.

Standalone Statement of Cash Flows:

• Net Cash from Operating Activities: (₹8,900.33 Lakhs) This is a negative value, indicating that the company used more cash than it generated from its core operations during the year.

• Net Cash Used in Investing Activities: (₹1,339.07 Lakhs) This negative figure shows a net outflow of cash related to investments. This includes purchases of property, plant, and equipment, as well as investments in subsidiaries and other securities.

• Net Cash from Financing Activities: ₹17,315.92 Lakhs. This positive amount reflects a net inflow of cash from financing activities. This likely includes borrowings and proceeds from issuing equity shares, offset by dividend payments.

Consolidated Statement of Cash Flows:

• Net Cash from Operating Activities: (₹12,405.19 Lakhs). This is also negative, indicating a net use of cash in operating activities for the consolidated group.

• Net Cash Used in Investing Activities: (₹1,476.24 Lakhs). This negative figure reflects a net cash outflow for investments within the consolidated group.

• Net Cash from Financing Activities: ₹20,982.62 Lakhs. This shows a net inflow of cash from financing activities in the consolidated group.

Reconciliation:

The difference between the standalone and consolidated cash flows stems from the inclusion of the subsidiaries, associates, and joint ventures in the consolidated figures. Consolidated statements reflect the combined cash flows of all entities within the group, while standalone statements only reflect the cash flows of the parent company, Geojit Financial Services Limited.

Interpretation:

The negative operating cash flows in both standalone and consolidated statements warrant further investigation. While the significant positive financing cash flows suggest the company is actively raising funds, negative operating cash flows could indicate challenges in managing working capital or converting sales into cash efficiently. Further analysis of the notes to the financial statements is needed to understand the underlying drivers of this negative operating cash flow. The investing activities show net outflows indicating investments in assets. The financing activities show significant inflows implying considerable fund raising.

The discrepancies between the standalone and consolidated statements highlight the impact of subsidiaries on the overall group’s cash flow position. A detailed review of each subsidiary’s performance and cash flow contribution would be necessary for a thorough understanding.

Cash Flow Metrics #

The Geojit Financial Services Limited annual report doesn’t directly provide a “Free Cash Flow” figure. Free cash flow (FCF) is a calculated metric, not a standard line item on the financial statements. It represents the cash a company generates after accounting for capital expenditures (CapEx) and other necessary business investments.

We can, however, extract data to calculate a version of FCF and obtain values for CapEx and dividends paid:

Standalone Statement of Cash Flows:

• Capital Expenditure (CapEx): ₹1,704.96 Lakhs (₹170,496,000). This is the amount spent on purchasing property, plant, and equipment (Note 10, “Capital work in progress”) net of proceeds from sales.

• Dividends Paid: ₹3,589.97 Lakhs (₹358,997,000). This is explicitly shown in the Standalone Statement of Cash Flows.

• Free Cash Flow (Standalone - Approximation): To approximate free cash flow, we can subtract capital expenditures from net cash from operating activities.

  • Net cash from operating activities (Standalone): (₹8,900.33 Lakhs)
  • CapEx (Standalone): (₹1,704.96 Lakhs)
  • Approximated FCF (Standalone) = (₹8,900.33) - (₹1,704.96) = (₹10,605.29 Lakhs) (₹-1,060,529,000). This is negative, indicating that the company’s operating cash flow was insufficient to cover capital expenditures.

Consolidated Statement of Cash Flows:

• Capital Expenditure (CapEx): ₹1,937.08 Lakhs (₹193,708,000). This is the consolidated amount, including CapEx from the parent and subsidiaries, after considering the sale of assets.

• Dividends Paid: ₹3,589.97 Lakhs (₹358,997,000). This amount is for dividends paid by the parent company, and doesn’t include dividends paid by any subsidiaries.

• Free Cash Flow (Consolidated - Approximation):

  • Net cash from operating activities (Consolidated): (₹12,405.19 Lakhs)
  • CapEx (Consolidated): (₹1,937.08 Lakhs)
  • Approximated FCF (Consolidated) = (₹12,405.19) - (₹1,937.08) = (₹14,342.27 Lakhs) (₹-1,434,227,000). This is also negative, indicating that the consolidated group’s operating cash flow was not sufficient to cover its capital expenditures.

Important Considerations:

• FCF Calculation: The FCF calculation above is a simplified approximation. A more precise calculation would include other factors like changes in working capital (which are already partially considered in the net operating cash flow), debt repayments, and other significant cash outflows related to business investments.
• Dividend Payments: The dividend paid figure shown only considers the dividends paid by the parent company. A truly consolidated dividend would consider dividends paid by subsidiaries as well.
• Negative FCF: The negative FCF in both cases suggests the company is investing heavily in growth and/or is facing challenges in generating sufficient operating cash flow to self-fund its capital expenditures. This is not necessarily negative, but it highlights the company’s reliance on external financing.

Without a more detailed reconciliation of cash flows and further information within the notes, a truly precise free cash flow cannot be calculated from the provided data. However, the approximations given provide a reasonable estimate of the magnitude of these key financial metrics.

Financial Ratios #

Profitability Ratios #

Calculating profitability ratios requires using data from Geojit Financial Services Limited’s financial statements. Remember that because Geojit is a service-based company, some ratios might not be directly comparable to those of manufacturing or merchandising businesses. Also, the report doesn’t explicitly define “Cost of Revenue” which would be used in a Gross Margin calculation for a goods-based business. We’ll work with the available data and clearly state any limitations. All figures are in Indian Rupees Lakhs.

Standalone Financial Statements:

• Revenue: ₹58,923.31 Lakhs
• Operating Expenses: ₹42,078.78 Lakhs
• Profit Before Tax (PBT): ₹17,875.74 Lakhs
• Profit After Tax (PAT): ₹13,393.63 Lakhs
• Total Assets: ₹174,477.58 Lakhs
• Shareholders’ Equity: ₹67,864.35 Lakhs

Profitability Ratios (Standalone):

• Gross Margin: Not calculable. A gross margin calculation requires subtracting the cost of revenue from revenue, but the cost of revenue is not explicitly stated in the standalone financial statements.

• Operating Margin: (Operating Income / Revenue) * 100 = (₹16,844.53 / ₹58,923.31) * 100 = 28.6% Note: Operating income is calculated as Revenue from Operations less Operating Expenses.

• Net Profit Margin: (Net Income / Revenue) * 100 = (₹13,393.63 / ₹58,923.31) * 100 = 22.7%

• Return on Equity (ROE): (Net Income / Shareholders’ Equity) * 100 = (₹13,393.63 / ₹67,864.35) * 100 = 19.7%

• Return on Assets (ROA): (Net Income / Total Assets) * 100 = (₹13,393.63 / ₹174,477.58) * 100 = 7.7%

Consolidated Financial Statements:

• Revenue: ₹61,413.41 Lakhs
• Operating Expenses: ₹43,199.52 Lakhs
• Profit Before Tax (PBT): ₹19,197.49 Lakhs
• Profit After Tax (PAT): ₹14,938.10 Lakhs
• Total Assets: ₹202,029.15 Lakhs
• Shareholders’ Equity: ₹91,154.56 Lakhs (Attributable to owners of the parent)

Profitability Ratios (Consolidated):

• Gross Margin: Not calculable (same reasoning as standalone).

• Operating Margin: (Operating Income / Revenue) * 100 = (₹18,213.89 / ₹61,413.41) * 100 = 29.6%

• Net Profit Margin: (Net Income / Revenue) * 100 = (₹14,938.10 / ₹61,413.41) * 100 = 24.3%

• Return on Equity (ROE): (Net Income / Shareholders’ Equity) * 100 = (₹14,938.10 / ₹83,177.04) * 100 = 18.0% (Note: using equity attributable to owners of the parent company for a more comparable ROE to the standalone).

• Return on Assets (ROA): (Net Income / Total Assets) * 100 = (₹14,938.10 / ₹202,029.15) * 100 = 7.4%

Important Note: The lack of a “Cost of Revenue” prevents the calculation of Gross Margin. This is a typical characteristic of service-based businesses like Geojit. The other ratios provide valuable insights into the profitability and efficiency of the company. The consolidated ratios provide a broader perspective including the performance of subsidiaries. The ROE calculation in the consolidated statement uses the equity attributable to the owners of the parent company for better comparability with the standalone ROE.

Liquidity Ratios #

Calculating liquidity ratios requires data from Geojit Financial Services Limited’s balance sheet. However, as previously noted, the report doesn’t explicitly separate current assets and current liabilities in a single, easily accessible table. We need to carefully examine the balance sheet and related notes to make reasonable estimations. All figures are in Indian Rupees Lakhs. Because we are approximating, and the report itself does not clearly define current vs non-current, we will use the figures from the standalone balance sheet.

Standalone Balance Sheet Data (Approximations):

To calculate liquidity ratios accurately, we need precise figures for current assets and current liabilities. The report does not provide this in a single, clear table. We must make approximations based on the provided information.

• Current Assets (Approximation): This would require a detailed review of each asset line item’s maturity, which is not fully described in the report. A reasonable approximation could include: cash and cash equivalents (₹14,449.26 Lakhs), bank balances (₹71,726.20 Lakhs – although some portion may be long-term depending on maturity), trade receivables (₹11,227.14 Lakhs), other financial assets (at least some portion likely current, although this needs detailed analysis from Note 8), and some portion of the other non-financial assets (Note 14). Therefore, a reasonable, though not perfectly precise, estimate is likely in the range of ₹100,000 Lakhs (₹10 Billion) and ₹110,000 Lakhs (₹11 Billion). We will assume ₹105,000 Lakhs for our calculations.

• Current Liabilities (Approximation): Similarly, a careful assessment of the maturity profile of each liability is necessary, for which the information in this report is insufficient. A reasonable approximation would include trade payables (₹4,694.96 Lakhs), a portion of the borrowings (Note 16 – a significant portion is likely current given the working capital nature of the borrowings), other financial liabilities (Note 17 – likely containing mostly current items), and a portion of other non-financial liabilities (Note 19). An approximate value here might also be in the range of ₹50,000 Lakhs (₹5 Billion) and ₹60,000 Lakhs (₹6 Billion). For calculation purposes, we’ll assume ₹55,000 Lakhs.

Liquidity Ratios (Standalone - Approximations):

Using the approximated values above:

• Current Ratio: (Current Assets / Current Liabilities) = (₹105,000 / ₹55,000) = 1.91

• Quick Ratio: (Current Assets - Inventory / Current Liabilities) = (₹105,000 - ₹0 / ₹55,000) = 1.91 (Inventory is zero for Geojit)

• Cash Ratio: (Cash and Cash Equivalents / Current Liabilities) = (₹14,449.26 / ₹55,000) = 0.26

Consolidated Financial Statements:

Due to the lack of clear current asset and current liability categorization in the Consolidated Balance Sheet, we cannot reliably calculate the consolidated liquidity ratios. Similar approximations as above would be needed based on detailed analysis of maturities which is not possible based on the data provided.

Important Considerations:

• Approximations: The liquidity ratios calculated above are approximations due to the limited information regarding the precise composition of current assets and current liabilities presented in the financial statements. A more precise calculation requires a detailed breakdown by maturity from notes to financial statements.
• Industry Context: These ratios should be compared to industry averages and competitor benchmarks to get a better perspective on Geojit’s liquidity position. The high current and quick ratios could indicate a strong short-term liquidity. The low cash ratio, however, highlights the relatively lower amount of cash on hand compared to current liabilities.

Without a detailed breakdown of the maturity of assets and liabilities, these calculations are approximations. The true liquidity ratios for both standalone and consolidated financial statements can only be accurately calculated using the more precise maturity information described in the notes to the financial statements.

Efficiency Ratios #

Calculating efficiency ratios requires data from Geojit Financial Services Limited’s income statement and balance sheet. Again, we encounter limitations because the report doesn’t always present data in a format directly suitable for standard efficiency ratio calculations for a service business. All figures are in Indian Rupees Lakhs. We will use the standalone figures for these calculations.

Standalone Financial Statement Data:

• Revenue: ₹58,923.31 Lakhs
• Total Assets: ₹174,477.58 Lakhs
• Accounts Receivable (Net): ₹11,227.14 Lakhs (after impairment allowance)
• Inventory: ₹0 (Geojit doesn’t hold physical inventory)

Efficiency Ratios (Standalone):

• Asset Turnover: (Revenue / Total Assets) = (₹58,923.31 / ₹174,477.58) = 0.34 This ratio indicates the efficiency with which Geojit utilizes its assets to generate revenue. A value of 0.34 suggests that for every ₹1 of assets, the company generated ₹0.34 in revenue.

• Inventory Turnover: Not applicable. Geojit doesn’t have inventory as it is a financial services company.

• Receivables Turnover: (Revenue / Average Net Receivables) = (₹58,923.31 / [(₹10,566.62 + ₹9,679.16)/2]) = (₹58,923.31 / ₹10,122.89) = 5.82 This is an approximation, calculated using the beginning and ending net accounts receivable. The receivables turnover ratio indicates how efficiently Geojit collects its receivables. A turnover of 5.82 suggests that the company collected its receivables approximately 5.82 times during the year.

Consolidated Financial Statements:

Calculating consolidated efficiency ratios presents similar challenges as with the standalone statements. The report doesn’t explicitly provide all the required data in the format needed for a straightforward calculation of the consolidated figures. Using total revenue and total assets for the consolidated figures:

• Asset Turnover (Consolidated - Approximation): (Consolidated Revenue/Total Assets) = (₹61,413.41 / ₹202,029.15) = 0.30

• Inventory Turnover (Consolidated): Not applicable (same as standalone).

• Receivables Turnover (Consolidated): Requires the average consolidated net receivables for precise calculation. This cannot be directly determined from the report. An approximation would be needed, potentially using the year-end consolidated trade receivables.

Important Considerations:

• Approximations: The standalone calculation of receivables turnover uses a simple average of beginning and ending receivables, which may not be perfectly accurate. For a more precise calculation, a detailed breakdown of receivables throughout the year would be needed.
• Industry Comparison: These ratios must be compared to industry benchmarks and those of competitors to determine Geojit’s efficiency relative to the market. The asset turnover ratio is relatively low. Whether this is a cause for concern or reflective of the industry should be assessed by comparing it to similar organizations. The high receivables turnover suggests that the company collects its money quite quickly. Again, this needs to be compared to competitors and to expectations based on industry norms.
• Consolidated Data Limitations: The absence of specific data points and the need for estimations makes calculating precise consolidated efficiency ratios challenging using the provided data.

The calculations made above are subject to the limitations of data availability in the report. More detailed financial information within the notes to the financial statements would be needed for more precise calculations and a robust financial analysis.

Leverage Ratios #

Calculating use ratios requires data from Geojit Financial Services Limited’s balance sheet and income statement. As before, we have limitations due to the lack of a clear separation of short-term and long-term debt in the report. We will use the standalone financial statements for calculations, stating limitations clearly. All figures are in Indian Rupees Lakhs.

Standalone Balance Sheet Data:

• Total Liabilities: ₹106,613.04 Lakhs
• Total Shareholders’ Equity: ₹67,864.35 Lakhs
• Total Assets: ₹174,477.58 Lakhs
• Borrowings: ₹31,247.41 Lakhs (Note 16). Note that the provided data does not fully distinguish between short-term and long-term portions of the borrowings.

Standalone Income Statement Data:

• Profit Before Interest and Taxes (PBIT): To calculate the interest coverage ratio, we will assume PBIT to be the profit before tax (PBT) from the standalone financial statement, plus the interest expense. Therefore PBIT would be ₹17,875.74 + ₹1,583.41 = ₹19,459.15 Lakhs.
• Interest Expense: ₹1,583.41 Lakhs (Note 27).

Leverage Ratios (Standalone - Approximations):

• Debt-to-Equity Ratio: (Total Liabilities / Shareholders’ Equity) = (₹106,613.04 / ₹67,864.35) = 1.57 This indicates that for every ₹1 of equity, the company has ₹1.57 of debt.

• Debt-to-Assets Ratio: (Total Liabilities / Total Assets) = (₹106,613.04 / ₹174,477.58) = 0.61 This shows that 61% of the company’s assets are financed by debt.

• Interest Coverage Ratio: (PBIT / Interest Expense) = (₹19,459.15 / ₹1,583.41) = 12.3 This suggests that the company’s earnings before interest and taxes are 12.3 times greater than its interest expense, indicating a strong ability to cover interest payments.

Consolidated Financial Statements:

Calculating consolidated use ratios presents similar challenges. The lack of a clear current/non-current breakdown of liabilities makes it difficult to obtain the correct figures to create these ratios. Further, a detailed analysis of the financial statements of the subsidiaries would be necessary to get the correct numbers. Therefore, precise consolidated use ratios cannot be calculated from the report’s consolidated financial statement data alone.

Important Considerations:

• Short-term vs. Long-term Debt: The calculations above use total borrowings without distinguishing between short-term and long-term debt. A more refined analysis would separate these, leading to potentially different use ratios. The report’s lack of a clear breakdown limits the accuracy of the calculations.
• Off-Balance Sheet Financing: The reported figures may not fully reflect all financing arrangements. The report should be checked for any off-balance sheet financing which may affect the use ratios.
• Industry Comparison: These ratios should be compared to industry averages and competitor benchmarks for context. The high debt-to-equity ratio may signal a higher reliance on debt financing compared to equity, which warrants comparison to the industry standards. The high interest coverage ratio suggests good ability to service debt.

The calculations above are subject to the limitations of the available data in the report. The use of total borrowings in place of long term debt is an approximation that may or may not reflect the true use position of Geojit Financial Services Limited. More detailed financial information would be needed for a complete and precise use analysis.

Market Analysis #

Market Metrics #

To calculate these market-based ratios, we need information that is not directly available within the annual report itself. The annual report provides financial data, but market-based ratios require real-time market data, such as the current share price and the number of outstanding shares. I cannot access real-time information from external sources.

However, I can explain how these ratios are calculated and what information you need to calculate them yourself:

Required Information (Not in the Report):

• Current Market Price per Share: The current trading price of Geojit’s shares on the relevant stock exchange (NSE or BSE). This fluctuates constantly.
• Number of Outstanding Shares: The total number of Geojit’s shares currently in circulation. This number can be found on the stock exchange website.
• Annual Earnings per Share (EPS): This is provided in the annual report (both basic and diluted). Remember to use the appropriate EPS figure (basic or diluted) depending on which PE ratio you’re calculating.
• Book Value per Share: This requires dividing the total shareholders’ equity by the number of outstanding shares. The total shareholders’ equity is found in the annual report’s balance sheet.
• Annual Dividend per Share: This is the annual dividend declared by the company per share (also available in the annual report).

Ratio Calculations:

• Market Capitalization (Market Cap): (Current Market Price per Share) * (Number of Outstanding Shares)

• Price-to-Earnings Ratio (PE Ratio): (Current Market Price per Share) / (Annual EPS)

• Price-to-Book Ratio (PB Ratio): (Current Market Price per Share) / (Book Value per Share)

• Dividend Yield: (Annual Dividend per Share) / (Current Market Price per Share) * 100

• Dividend Payout Ratio: (Annual Dividend per Share) / (Annual EPS) * 100

Where to Find the Missing Data:

You can find the current market price per share and the number of outstanding shares on the websites of the National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE), where Geojit’s shares are listed. Look for the company’s stock quote page.

Using the Report’s Data:

The annual report provides the necessary data for the Annual EPS and the Book Value per Share. You can use these values in the PE and PB ratio calculations once you have the current market price per share. The annual dividend per share is also given in the report, allowing you to compute the dividend yield and payout ratio once you obtain the current market price.

In short: I can provide the formulas; you’ll need to obtain the current market data to complete the calculations.

Business Analysis #

Segment Analysis #

Geojit Financial Services Limited’s annual report doesn’t provide a fully detailed breakdown of segment information in the way a company with clearly defined product lines might. The report offers an overview of the main business activities but lacks granular data on revenue, growth rates, and market share for each segment. Therefore, a precise analysis based on the report alone is impossible. However, I can offer a structured overview based on the available information. Note that any percentages mentioned are estimates based on the textual descriptions provided and the total reported revenue, and may not be precise.

Business Segments:

Limitations of the Data:

The provided annual report offers a high-level view of the business segments but lacks the detailed financial and market share data needed for a complete quantitative analysis. The revenue percentages, operating margins, and growth rates presented in the table above are estimates and may not reflect precise values due to the limitations of the available information. Geojit would need to provide a detailed segmental reporting which would include the granular data and better define its segments to support a more precise analysis.

Risk Management #

Risk Assessment #

Geojit’s annual report identifies many key risk factors, although it doesn’t always explicitly categorize them or quantify the likelihood and impact severity using a standardized framework. We can, however, organize the risks based on their nature and discuss the mitigation strategies and trends. Note that the likelihood and impact severity are subjective assessments based on the information in the report, and more rigorous risk assessment methodologies would provide more quantitative analysis.

Key Risk Factors:

Mitigation Strategies and Trends:

Geojit employs various mitigation strategies, including robust IT infrastructure, risk management systems, compliance programs, and diversification. However, the report’s qualitative description makes a thorough trend analysis difficult without precise quantification of likelihood and impact across various risk factors. The report is mostly qualitative in nature and more quantitative data is needed to support risk assessment and trend analysis.

Strategic Overview #

Management Assessment #

Geojit Financial Services Limited’s annual report highlights many key strategies, competitive advantages, market conditions, challenges, and opportunities. However, the report presents this information more qualitatively than quantitatively. Here’s a summary based on the report’s text:

I. Key Strategies:

• Technology-Driven Growth: Geojit emphasizes leveraging technology to improve operational efficiency, improve customer experience, and expand its service offerings. This includes investments in advanced trading platforms, digital financial solutions, and data analytics.

• Product Diversification: The company aims to reduce reliance on cyclical brokerage income by expanding into higher-margin and less volatile segments, such as mutual fund distribution, insurance distribution, portfolio management services, and private wealth management.

• Enhanced Customer Experience: A focus on providing superior customer service through multiple channels (online, mobile, and physical branches), personalized advice, and investor education initiatives.

• Expansion into New Markets: Geojit is actively pursuing international expansion, especially in the Middle East, through strategic partnerships and joint ventures.

II. Competitive Advantages:

• Established Brand and Track Record: Geojit’s long history (established in 1987) and strong brand recognition provide a significant competitive advantage.

• Hybrid Business Model: The combination of online and offline channels (physical branches alongside digital platforms) provides broader reach and caters to various customer preferences.

• Technology and Innovation: Geojit’s early adoption and continuous investment in technology, especially its proprietary trading platforms, provide a competitive edge.

• Strong Research Capabilities: The company’s in-house research team offers valuable investment insights and recommendations to clients.

• Experienced Team: A skilled workforce provides clients with expertise and tailored solutions.

III. Market Conditions:

• Growth of Indian Capital Markets: The report highlights significant growth in the Indian equity markets (Nifty index increase) and increasing participation of retail investors. This presents a favorable environment for Geojit’s expansion.

• Rise of Fintech: The report emphasizes the growing adoption of digital financial services in India, creating both opportunities and challenges for traditional financial players.

• Increased Financial Literacy: Growing awareness among Indian investors is boosting demand for financial advisory and investment management services.

• Global Economic Uncertainty: Geojit notes global challenges such as high borrowing costs, fiscal support withdrawal, and geopolitical tensions, which can impact investor sentiment and market volatility.

IV. Challenges:

• Intense Competition: The Indian financial services sector is highly competitive, with many established players and new fintech entrants.

• Regulatory Changes: The frequent changes in regulations by SEBI and RBI pose challenges for compliance and operational efficiency.

• Cybersecurity Risks: The increasing sophistication of cyber threats necessitates ongoing investments in security infrastructure and measures.

• Attracting and Retaining Talent: Competition for skilled employees in the financial services sector is intense.

V. Opportunities:

• Growing Retail Investor Base: The expansion of the retail investor base in India presents significant opportunities for growth in broking, financial product distribution, and advisory services.

• Untapped Potential in Tier 2 and 3 Cities: There’s considerable potential to expand into less-penetrated markets beyond Tier-1 cities.

• Demand for Sophisticated Investment Solutions: Growing demand for portfolio management, private wealth management, and global investment options.

• Technological Innovation: Geojit can use technology to create new products and services, improve efficiency, and gain a competitive edge.

• International Expansion: The Middle East presents a significant market opportunity for Geojit.

Management’s Perspective:

Management’s overall perspective is optimistic, highlighting Geojit’s position to benefit from the growth of the Indian capital markets and the increasing demand for financial services. The company’s strategic focus on technology, product diversification, and customer experience is presented as key to navigating challenges and capitalizing on opportunities. However, the report acknowledges potential risks such as increased competition, regulatory changes, and macroeconomic uncertainty. A more quantitative presentation of strategic goals, market share ambitions, and expected future growth would strengthen the overall strategy discussion.

ESG Ratings #

The Geojit Financial Services Limited annual report does not include ESG ratings from external rating agencies. The report details the company’s ESG initiatives and policies extensively, but it doesn’t provide any scores or ratings from organizations like MSCI, Sustainalytics, Refinitiv, or others. To find ESG ratings for Geojit, you would need to consult the databases of these rating agencies directly.

ESG Initiatives #

Geojit Financial Services Limited’s annual report details its ESG (Environmental, Social, and Governance) initiatives, although it doesn’t always quantify the impact in a standardized, easily comparable manner. Here’s a summary based on the report:

I. Environmental Initiatives:

• Green Building: Geojit’s corporate office is a LEED Gold-certified green building, designed for energy and water efficiency. This demonstrates a commitment to reducing its environmental footprint from the outset.

• Energy Conservation: The company employs many energy-saving measures:

  • Optimal use of air conditioning.
  • Transition to electric vehicles with charging points for employees.
  • Adoption of cloud-based storage to reduce energy consumption in data centers.
  • Installation of solar panels to reduce reliance on the electricity grid.

• Water Conservation: Initiatives include:

  • Rainwater harvesting system.
  • Sewage treatment plant with water recycling capabilities.
  • Efficient plumbing to reuse treated wastewater.

• Waste Management: Geojit emphasizes waste segregation, recycling, and responsible e-waste disposal through certified vendors. They utilize organic waste converters to process organic waste.

• Paper Reduction: Digitization of processes and documents aims to reduce paper consumption.

II. Carbon Footprint:

The report provides data on Scope 1 and Scope 2 emissions, but not Scope 3.

• Scope 1 Emissions: 49.76 metric tons of CO2 equivalent in FY2024.
• Scope 2 Emissions: 2731 metric tons of CO2 equivalent in FY2024.
• Scope 3 Emissions: Not provided.

The report highlights a reduction in energy intensity (energy consumption per rupee of turnover), but lacks a detailed assessment of the total carbon footprint across all scopes.

III. Social Initiatives:

Geojit’s social initiatives are primarily conducted through its Corporate Social Responsibility (CSR) activities and its charitable trust, Geojit Foundation. Key areas of focus include:

• Education: Providing educational support to underprivileged children and promoting financial literacy through various programs.
• Health: Supporting community health programs and providing financial assistance for medical treatments.
• Social Inclusion: Focusing on projects that benefit marginalized and vulnerable communities.
• Livelihood Enhancement: Supporting initiatives that create employment opportunities, especially for women.

The report highlights many specific projects under these categories, but lacks aggregated metrics for overall social impact assessment. The impact of many projects is still under way.

IV. Governance Practices:

• Board Diversity: Geojit has a various Board of Directors, including a significant number of independent directors.

• Board Committees: Dedicated committees (Audit, Nomination & Remuneration, Stakeholders’ Relationship, and CSR) ensure effective oversight of various aspects of the business.

• Internal Controls: Robust internal control systems, regular audits, and compliance procedures aim to mitigate risks and ensure ethical conduct.

• Whistleblower Policy: A mechanism is in place to receive and investigate complaints regarding unethical behavior or misconduct.

• Risk Management: A formal risk management framework is in place to identify, assess, and mitigate risks across the organization.

V. Sustainability Goals:

The annual report does not explicitly define long-term sustainability goals with specific targets and timelines. While the report outlines various ESG initiatives, the lack of concrete, measurable, achievable, relevant, and time-bound (SMART) goals limits the ability to assess the company’s overall sustainability performance and progress towards specific environmental and social targets. Although the company is committed towards improving its ESG performance and has set parameters to achieve the same, the company needs to set concrete, measurable, achievable, relevant and time-bound (SMART) goals with specific targets and time lines to be able to better assess the company’s sustainability performance and progress towards specific environmental and social targets.

In summary, Geojit demonstrates a commitment to ESG through many initiatives. However, a more robust and quantified reporting framework, including clear sustainability goals with specific targets and timelines, would significantly improve the transparency and allow for better evaluation of its overall ESG performance. More detailed metrics on the social and environmental impact of its initiatives would further strengthen the ESG reporting.

Additional Information #

Operational Metrics #

The Geojit Financial Services Limited annual report provides the employee count but doesn’t explicitly state a separate “R&D Expenditure” figure. This is understandable given that Geojit is primarily a financial services company, and its research and development efforts are likely integrated into its operations rather than being a distinct, separately budgeted line item.

• Employee Count (Standalone): 2,568 permanent employees as of March 31, 2024 (excluding trainees, casual, and contract staff). The consolidated figure is not given.

• R&D Expenditure: Not explicitly provided as a separate line item in either the standalone or consolidated financial statements. The report mentions investments in its in-house research team (for PMS, Smart Portfolios, etc.) and significant investments in IT infrastructure to improve customer interfaces, regulatory compliance, and operational efficiency. However, these investments are not broken out separately as R&D spending. Any research-related expense is likely included within other operating expenses and the IT investments in the financial statements.

To obtain a more precise estimate of research and development expenditure, you’d need to examine the detailed notes to the financial statements, looking for expenses related to research, development, and technological enhancements, which are not easily extractable from the report provided.

Key Events #

The Geojit Financial Services Limited annual report mentions many significant events during the fiscal year 2023-24, although it doesn’t provide a detailed, chronologically ordered list. Here are the key events identified, categorized for clarity:

I. Business Development and Strategy:

• Sale of Securities Business: The company initiated the process of transferring its securities business to its wholly-owned subsidiary, Geojit Investments Limited, through a “slump sale.” This was approved by the board and shareholders and necessary approvals from stock exchanges were obtained. This signifies a major restructuring to comply with regulations.

• Expansion of Private Wealth Services: The company strengthened its Private Wealth division to cater to the growing number of high-net-worth individuals (HNIs) in India. They hired senior resources to tap this high-growth opportunity.

• Investment in Technology: Significant investments were made in technology to improve operational efficiency, customer experience, and compliance with enhanced regulatory requirements. The report mentions new digital loan products.

• Focus on Non-Brokerage Income: Geojit emphasized increasing non-brokerage income streams (Mutual Funds, Insurance) to reduce reliance on the more cyclical brokerage business.

II. Corporate Governance:

• Retirement and Reappointments: The report details the retirement of some directors and the reappointment or appointment of others, ensuring the continuity of the Board.

• Postal Ballot: The company successfully conducted a postal ballot to obtain shareholder approval for resolutions including the transfer of securities business and the re-appointment of key management personnel.

III. Financial Performance:

• Strong Financial Results: The report highlights significant year-over-year growth in revenue, profit before tax, and profit after tax, reflecting the overall success of the company’s operations.

• Increased AUM and AUC: Substantial growth in Assets Under Management and Custody, indicating increased client trust and business expansion.

IV. Other:

• ESG Initiatives: The report details many new environmental, social, and governance (ESG) initiatives, showcasing the company’s commitment to sustainability.

• Inclusion in JP Morgan’s Global Bond Index: India’s inclusion in this index potentially increased foreign investor interest.

This is not an exhaustive list, but rather highlights the most prominent events as mentioned in the annual report. A more detailed account would require further information beyond what is presented in the annual report. The report mainly focuses on the financial performance and strategic initiatives rather than providing a detailed chronological account of all business happenings.

Audit Information #

The auditor’s opinion and key accounting policies are detailed in the annual report’s financial statement section. Here’s a summary:

I. Auditor’s Opinion:

The independent auditor, B S R & Associates LLP, issued an unqualified (clean) opinion on both the standalone and consolidated financial statements of Geojit Financial Services Limited for the year ended March 31, 2024. This means the auditors found the financial statements to be presented fairly, in accordance with Indian Generally Accepted Accounting Principles (IGAAP), and free from material misstatements.

The audit reports included a section on “Key Audit Matters,” focusing on the assessment of the company’s IT systems and controls. The auditors’ testing found no material weaknesses in the controls related to financial reporting. The auditors also issued separate reports on the adequacy and operating effectiveness of internal financial controls, expressing an unqualified opinion on both standalone and consolidated internal controls.

II. Key Accounting Policies:

The annual report details many key accounting policies used in preparing the financial statements. These policies are applied consistently across the standalone and consolidated statements, except where changes are required by new or revised accounting standards. Key policies include:

• Basis of Preparation: The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) as notified under Section 133 of the Companies Act, 2013.

• Basis of Measurement: Generally, the historical cost basis is used, except for certain items (investments, liabilities for equity-settled share-based payments, and net defined benefit liabilities) which are measured at fair value.

• Revenue Recognition: Revenue recognition adheres to Ind AS 115 “Revenue from Contracts with Customers.” Brokerage income is recognized on the trade date, while income from other services is recognized based on the completion of performance obligations.

• Property, Plant, and Equipment (PP&E) and Intangible Assets: PP&E and intangible assets are carried at cost less accumulated depreciation/amortization and impairment losses. The report specifies depreciation methods (primarily straight-line) and useful lives for various asset classes.

• Financial Instruments: The company classifies financial assets and liabilities based on Ind AS 109 “Financial Instruments,” using various measurement categories (amortized cost, fair value through other detailed income, fair value through profit or loss) depending on the business model and contractual terms. The report explains the methods used to measure fair value.

• Employee Benefits: The report details the accounting for short-term and long-term employee benefits (provident fund, gratuity, compensated absences), including the use of actuarial valuations.

• Borrowing Costs: Directly attributable borrowing costs related to the acquisition of qualifying assets are capitalized, while others are expensed.

• Foreign Currency Transactions: The report describes the methods used for translating foreign currency transactions and balances.

• Leases: The Group’s accounting for leases adheres to Ind AS 116, recognizing a right-of-use asset and a lease liability for most lease arrangements.

• Income Tax: The report details the treatment of current and deferred tax, including the recognition of deferred tax assets and liabilities.

• Impairment of Assets: The report details the methods for assessing and recognizing impairment losses for financial and non-financial assets.

• Provisions: The report explains the criteria for recognizing provisions, using management estimates.

• Contingent Liabilities and Assets: The report details how contingent liabilities and assets are recognized and disclosed.

• Earnings Per Share: The calculation method for basic and diluted earnings per share is described.

These key accounting policies are essential for understanding the preparation and presentation of Geojit’s financial statements. The consistent application of these policies, as confirmed by the unqualified auditor’s opinion, builds confidence in the reliability of the reported financial information. However, a full understanding would require a detailed review of each individual policy and its application as described in the notes to the financial statements.