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Notes to Accounts of Geojit BNP Paribas Financial Services Ltd.

Mar 31, 2015

1. Exceptional item in the Statement of Profit and Loss of the previous year represents provision made for diminution in the value of non-current investments in two subsidiary companies pursuant to the substantial erosion in their networth as at that balance sheet date.

2. As at 31 March 2015, the Company has received Rs. 16,441/- as share application money towards 800 equity shares of the Company (Previous Year: Rs. Nil) at a premium of Rs. 19.55 per share (Previous Year: Rs. Nil). The share application money was received pursuant to the exercise of options granted to employees under the employee stock option plans and the Company is required to complete the allotment formalities by 28 May 2015 . The Company has sufficient authorised capital to cover the allotment of these shares. Pending allotment of shares, the amounts are maintained in a designated bank account and are not available for use by the Company.

3. Contingent Liabilities and Commitments (to the extent not provided for)

(i) Contingent Liabilities:

As at As at Particulars 31 March, 2015 31 March, 2014

(a) Claims against the company not acknowledged as debts :

- Legal suits filed against the Company Matters under arbitration 306,28,663 381,91,859

(b) Income tax demands, pending in appeal 781,47,128 1290,11,666

(c) Show cause notices from Service Tax department for which the Company has filed replies 30,71,169 35,88,197

(d) Service tax demands, pending in appeal 26,27,616 4,93,040

(e) Demand under Employees'' Provident Funds & Miscellaneous Provisions Act,1952 1937,65,220 1937,65,220

(f) Share in the contingent liabilities of Jointly Controlled Entities (Refer Note No.40) 61,16,889 58,52,556

Note: Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

4. Disclosure under Clause 32 of the Listing Agreements with the Stock Exchanges

Loans and advances in the nature of loans given to subsidiaries, associates and firms / companies in which directors are interested:

Note: Figures in bracket relate to the previous year.

5. Particulars of loans given, investment made, guarantee given, or security provided, and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient under Section 186(4) of Companies Act, 2013:

Note: The above disclosure excludes expenses incurred in Indian Rupees and remitted in foreign currency.

6. The Company has deposited the dividends payable to non-resident shareholders into their Rupee account with various banks in India and hence the disclosure of amounts remitted in foreign currency during the year to non-resident shareholders on account of dividend is not applicable.

7. Employee Benefit Plans

(i) Defined Contribution Plans - Provident Fund and Employee State Insurance

The Company makes Provident Fund and Employee State Insurance contributions for qualifying employees. Under the plans, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 3,150,168/- (Previous Year: Rs. 2,958,473/-) towards Provident Fund contributions and Rs. 5,847,651/- (Previous Year: Rs. 5,655,315/-) towards Employee State Insurance contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at the rates specified in the rules of the schemes.

(ii) Defined Benefit Plan - Gratuity

The Company provides gratuity benefit to its employees (included as part of ''Contribution to Provident and Other Funds'' in Note No. 23 Employee Benefit Expenses), which is funded with Life Insurance Corporation of India.

NA - Data is not available in the actuarial valuation report.

The expected rate of return on plan assets is determined after considering several applicable factors such as the composition of the plan assets, investment strategy, market scenario, etc.. In order to protect the capital and optimise returns within acceptable risk parameters, the plan assets are well diversified. The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

NA - Data is not available in the actuarial valuation report.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

8. The Company''s operations predominantly relate to one segment, viz., broking and financial services, which constitutes more than 75% of the total revenues / results / assets of all segments combined. Other operations of the Company do not individually constitute 10% or more of the total revenues or results or assets of the Company. Therefore, separate business segment information is not disclosed. Besides, the Company''s operations are located only in India and hence, separate secondary geographical segment information is not disclosed.

(B) Accounting of employee share based compensation cost:

The Company has adopted ''intrinsic value method'' for accounting employee share based compensation cost. Under the intrinsic value method, the difference between market price of the share on the date prior to grant date and the exercise price is considered as intrinsic value of options and expensed on straight-line basis over the vesting period as employee share based compensation cost. The details of costs accounted under the Employee Stock Option Plans are as follows:

Note: Previous year figures are given in brackets.

(C) Details of Fair Value Method of accounting for employee compensation cost using Black-Scholes Options Pricing Model are as follows:

Annualised volatility is computed using the high and low market price of the Company''s share over the one year period prior to the date of grant. It is assumed that employees would exercise the options immediately on vesting. The historical volatility of the Company''s share price is higher than the volatility considered above. However, the Company expects the volatility of its share price to reduce as it matures.

(D) The impact on Basic and Diluted Earnings Per Share for the year, had the Company followed Fair Value Method of accounting for employee share based compensation cost is as follows:

9. Details of Company''s Interest In Joint Ventures

The Company has interest in the following jointly controlled entities:

10. The Company has contracted fund based and non-fund based (viz. bank guarantee) working capital facilities of Rs. 1,650,000,000/- (Previous Year: Rs. 300,000,000/-) and Rs. 1,670,000,000/- (Previous Year: Rs. 1,670,000,000/-) respectively from banks and a public limited company, which are secured by liens marked on fixed deposits / hypothecation of trade receivables / pledge of securities / counter guarantee of the Company. The balance outstanding in the fund based and non- fund based working capital facilities at the balance sheet date are Rs. Nil (Previous Year: Rs. 150,042,124/-) and Rs. 758,800,000/- (Previous Year: Rs. 910,800,000/-) respectively.

11. Details of assets under the Portfolio Management Scheme are as follows:

12. The Company may allot equity shares pursuant to the exercise by the employees of stock options granted between the balance sheet date and record date for payment of final dividend. These shares are eligible to receive the final dividend payable for the year ended 31 March 2015. Since the dividend amount payable on such shares cannot be ascertained at present, an appropriation will be made for the said amount in the next year''s financial statements. The appropriation for the dividend paid during the financial year on the shares allotted pursuant to exercise of options during the period between previous year''s balance sheet date and record date for the payment of final dividend for the previous year has been made in this financial statements.

13. Note on Corporate Social Responsibility expenditure under Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities issued by ICAI:

(a) Gross amount required to be spent by the Company during the year: Rs. 10,395,866/-.

(b) Amount spent during the year on:

(c) Related party transactions as per Accounting Standard 18 - Related Party Disclosures: Rs. Nil.

14. Previous year''s figures have been regrouped / reclassified wherever necessary to conform to the current year''s classification / disclosure.


Mar 31, 2014

1. Exceptional item represents provision made for diminution in the value of non-current investments in two subsidiary companies, pursuant to the substantial erosion in their net worth as at the balance sheet date.

2. contingent liabilities and commitments (to the extent not provided for)

(i) contingent liabilities:

As at As at Particulars 31 March, 2014 31 March, 2013 Rs. Rs.

(a) Claims against the company not acknowledged as debts : 38,191,859 105,231,631 – Legal suits fled against the Company / Matters under Arbitration

(b) Demand under ESI Act, 1948, pending in appeal - 603,612

(c) Income Tax demands, pending in appeal 129,011,666 238,934,251

(d) Service Tax demands (Show Cause Notices for which the Company has filed 3,588,197 3,632,939 replies)

(e) Service Tax demands, pending in appeal 493,040 448,298

(f) Demand under EPF & Miscellaneous Provisions Act 1952 193,765,220 -

Note: Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities.

(ii) commitments:

As at As at Particulars 31 March, 2014 31 March, 2013 Rs. Rs.

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for:

– Tangible assets 2,786,319 183,502

– Intangible assets - 785,059

(b) Uncalled liability on investments partly paid:

– Uncalled share capital in Aloula Geojit Brokerage Company, Saudi Arabia, a 1,304,520,000 1,217,790,000 jointly controlled entity (@ Saudi Riyal 7.50 per share on 11,200,000 shares)

3. The Company has deposited the dividends payable to non-resident shareholders into their Rupee account with various banks in India and hence the disclosure of amounts remitted in foreign currency during the year to non-resident shareholders on account of dividend is not applicable.

4. Employee Benefit Plans

(i) Defined Contribution Plans – Provident Fund and Employee State Insurance

The Company makes Provident Fund and Employee State Insurance contributions for qualifying employees. Under the plans, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 2,958,473/- (Year ended 31 March, 2013: Rs. 2,971,712/-) towards Provident Fund contributions and Rs. 5,655,315/- (Year ended 31 March, 2013: Rs. 7,703,101/-) towards Employee State Insurance contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan – gratuity

The Company provides gratuity benefit to its employees (included as part of ''Contribution to Provident and Other Funds'' in Note No. 24 Employee Benefit Expenses), which is funded with Life Insurance Corporation of India.

5. The Company''s operations predominantly relate to one segment, viz., broking and financial services, which constitutes more than 75% of the total revenues / results / assets of all segments combined. Other operations of the Company do not individually constitute 10% or more of the total revenues or results or assets of the Company. Therefore, separate business segment information is not disclosed. Besides, the Company''s operations are located only in India and hence, separate secondary geographical segment information is not disclosed.

6. A) Employee Stock Option Plans

(a) Employees Stock Option Plan 2007 for Key Employees (ESOP 2007):

The Company introduced Employees Stock Option Plan 2007 for Key Employees during the year 2007-08, under which options for 2,500,000 equity shares of Rs. 1/- each were granted to eligible senior management employees of the Company. The scheme was approved by the Shareholders through postal ballot on 5th December, 2007 and by the Compensation Committee of Directors on 12th October, 2007. The options vest over a period of 4 years, commencing from the end of the 4th year, in equal proportion (25% each) from the date of grant, viz., 10th December, 2007. The exercise period commence from the date of vesting and expires not later than 8 years from the date of grant, viz., 9th December, 2015. The exercise price is at 10% discount to the market price on the date prior to grant date. The Company had re-priced the options on 11th April, 2009 from Rs.59.90 to Rs.25.50 per option with the approval of the Compensation Committee and Shareholders.

(b) Employees Stock Option Plan 2010 – Tranche I (ESOP 2010-TR I):

During the year 2010-11, the Company introduced Employees Stock Option Plan 2010 (Tranche I) under which options for 2,786,795 equity shares of Rs. 1/- each were granted to eligible employees. The scheme was approved by the Shareholders at the Annual General Meeting held on 12th July, 2010 and by the Compensation Committee of Directors on 12th April, 2010. The options vested on 29th March, 2013, being the 2nd Anniversary from the date of grant, viz., 29th March, 2011. The exercise period commenced from the date of vesting and will expire not later than 4 years from the date of grant, viz., 28th March, 2015. The exercise price of the options granted is the same as the market price on the date prior to grant date and hence there is no intrinsic value for the options.

(c) Employees Stock Option Plan 2010 – Tranche II (ESOP 2010-TR II):

During the year 2012-13, the Company introduced Employees Stock Option Plan 2010 (Tranche II) under which options for 2,799,885 equity shares of Rs.1/- each were granted to eligible employees. The scheme was approved by the Shareholders at the Annual General Meeting held on 12th July, 2010 and by the Compensation Committee of Directors on 12th April, 2010. The options will vest on 11th July, 2014, which is the 2nd Anniversary from the date of grant, viz., 11th July, 2012. The exercise period commences from the date of vesting and will expire not later than 4 years from the date of grant, viz., 10th July, 2016. The exercise price of the options granted is the same as the market price on the date prior to grant date and hence there is no intrinsic value for the options.

(d) Employees Stock Option Plan 2010 – Tranche III (ESOP 2010-TR III):

During the current year, the Company introduced Employees Stock Option Plan 2010 (Tranche III) under which options for 2,799,991 equity shares of Rs.1/- each were granted to eligible employees. The scheme was approved by the Shareholders at the Annual General Meeting held on 12th July, 2010 and by the Compensation Committee of Directors on 12th April, 2010. The options will vest on 21st May, 2015, which is the 2nd Anniversary from the date of grant, viz., 21st May, 2013. The exercise period commences from the date of vesting and will expire not later than 4 years from the date of grant, viz., 20th May, 2017. The exercise price of the options granted is the same as the market price on the date prior to grant date and hence there is no intrinsic value for the options.

7. The Company has contracted fund based and non-fund based (viz. bank guarantee) working capital facilities of Rs. 300,000,000 (Previous Year: Rs. 300,000,000) and Rs. 1,670,000,000 (Previous Year: Rs. 1,670,000,000) respectively from banks, which are secured by liens marked on fixed deposits and hypothecation of trade receivables of the Company, both present and future, and counter guarantee of the Company. The balance outstanding in the fund based and non-fund based working capital facilities at the balance sheet date are Rs. 150,042,124/- (Previous Year: Rs. Nil) and Rs. 910,800,000/- (Previous Year: Rs. 713,700,000) respectively.

8. The Company may allot equity shares, pursuant to the exercise by the employees of any stock options granted, between the balance sheet date and record date for payment of final dividend. These shares are eligible to receive the final dividend payable for the year ended 31 March, 2014. Since the dividend amount payable on such shares cannot be ascertained at present, an appropriation will be made for the said amount in the next year''s financial statements. However, appropriation for the dividend paid during the financial year on the shares allotted pursuant to exercise of options during the period between previous year''s balance sheet date and record date for the payment of final dividend for the previous year has been made in this financial statements.

9. Previous year''s figures have been regrouped / reclassified wherever necessary to conform to the current year''s classification / disclosure


Mar 31, 2013

1. Corporate Information

Geojit BNP Paribas Financial Services Ltd. (''the Company'') had its origin in the year 1987 as partnership firm of Mr. C.J George and his associate. In the year 1994, the firm was converted into a Company with the objective of providing technically superior trading platform for the investor community in Kerala. Over the years, the Company has spread its operations across the country through branch and franchisee network. In 2007, BNP Paribas SA became a major shareholder in the Company and the present name was adopted in April 2009. The Company offers complete spectrum of financial services including online broking for equities, derivatives and currency futures, custody accounts, financial products distribution, portfolio management services, margin funding, etc. It has operations outside the country through subsidiary, associate and joint ventures in Oman, Kuwait, UAE and Saudi Arabia. The shares of the Company are listed in National Stock Exchange and Bombay Stock Exchange.

Note 2: Contingent Liabilities and Commitments (to the extent not provided for)

(i) Contingent Liabilities:

Particulars Year Ended Year Ended 31 March, 2013 31 March, 2012

(a) Claims against the company not acknowledged as debts :

- Legal suits filed against the Company / Matters under Arbitration 105,231,631 37,247,848

(b) Demand under ESI Act, 1948, pending in appeal 603,612 603,612

(c) Income Tax demands, pending in appeal 238,934,251 238,024,801

(d) Service Tax demands (Show Cause Notices for which the company has filed replies) 3,632,939 -

(e) Service Tax demands, pending in appeal 448,298 448,298

3. The Company has deposited the dividends payable to non-resident shareholders into their Rupee account with various banks in India and hence the disclosure of amounts remitted in foreign currency during the year to non-resident shareholders on account of dividend is not applicable.

4. Employee Benefit Plans

(i) Defined Contribution Plans- Provident Fund and Employee State Insurance Scheme:

The Company makes Provident Fund and Employee State Insurance contributions, which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 2,971,712/- (Year ended 31 March, 2012: Rs. 3,291,471/-) towards Provident Fund contributions and Rs. 7,703,101/- (Year ended 31 March, 2012: Rs. 9,044,038/-) towards Employee State Insurance contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(ii) Defined Benefit Plan - Gratuity:

The Company provides gratuity benefit to its employees, which is funded with Life Insurance Corporation of India.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

5. The Company''s operations predominantly relate to one segment, viz., broking and financial services, which constitutes more than 75% of the total revenues / results / assets of all segments combined. Other activities which are not related to the main business of broking and financial services do not individually constitute 10% or more of the total revenues or results or assets of the Company. Therefore, separate business segment information is not disclosed. Besides, the Company''s operations are located only in India and hence, separate secondary geographical segment information is not disclosed.

6. A) Employee Stock Option Plans:

(a) Employee Stock Option Plan - 2005 (ESOP-2005 (Reissue-1)):

During 2007-08, the Company had issued options for 950,500 equity shares of Rs. 1/- each to eligible permanent employees and an independent non-executive director, who is not a promoter of the Company and its Subsidiaries. The issue of options was approved by the Shareholders through postal ballot on 5th December 2007 and by the Compensation Committee of Directors on 12th October 2007. The options vested over a period of 4 years from the date of grant, viz., 10th December 2007, in the proportion specified in the scheme. The exercise period commenced from the date of vesting and expired on 9th December 2012. The exercise price was computed by giving discounts, based on the grade of the employees as well as fixed amounts, to the market price on the date prior to grant date. The Company had re-priced the options on 11th April 2009 from Rs.65.36 to Rs.25.50 per option with the approval of the Compensation Committee and Shareholders.

(b) Employees Stock Option Plan 2007 for Key Employees (ESOP 2007):

The Company introduced Employees Stock Option Plan 2007 for Key Employees during the year 2007-08, under which options for 2,500,000 equity shares of Rs.1/- each were granted to eligible senior management employees of the Company. The scheme was approved by the Shareholders through postal ballot on 5th December 2007 and by the Compensation Committee of Directors on 12th October 2007. The options vest over a period of 7 years from the date of grant, viz., 10th December 2007, in the proportion specified in the scheme. The exercise period commence from the date of vesting and expires not later than 8 years from the date of grant, viz., 09th December 2015. The exercise price is at 10% discount to the market price on the date prior to grant date. The Company had re-priced the options on 11th April 2009 from Rs.59.90 to Rs.25.50 per option with the approval of the Compensation Committee and Shareholders.

(c) Employees Stock Option Plan 2010 - Tranche I:

During 2010-11, the Company introduced Employees Stock Option Plan 2010 (Tranche I) under which options for 2,786,795 equity shares of Rs.1/- each were granted to eligible employees. The scheme was approved by the Shareholders at the Annual General Meeting held on 12th July 2010 and by the Compensation Committee of Directors on 12th April 2010. The options vested on 28th March 2013, being the 2nd Anniversary from the date of grant, viz., 29th March 2011.The exercise period commences from the date of vesting and will expire not later than 4 years from the date of vesting, viz., 28th March 2017. The exercise price of the options granted is the same as the market price on the date prior to grant date and hence there is no intrinsic value for the options.

(d) Employees Stock Option Plan 2010 - Tranche II:

During the year, the Company introduced Employees Stock Option Plan 2010 (Tranche II) under which options for 2,799,885 equity shares of Rs.1/- each were granted to eligible employees. The scheme was approved by the Shareholders at the Annual General Meeting held on 12th July 2010 and by the Compensation Committee of Directors on 12th April 2010. The options will vest on the 2nd Anniversary from the date of grant, viz., 11thJuly 2012.The exercise period commences from the date of vesting and will expire not later than 4 years from the date of vesting, viz., 10th July 2018. The exercise price of the options granted is the same as the market price on the date prior to grant date and hence there is no intrinsic value for the options.

7. The Company has contracted fund based and non-fund based (viz. bank guarantee) working capital facilities of Rs. 30 crores (Previous Year: Rs. 30 crores) and Rs. 167 crores (Previous Year: Rs. 167 crores) respectively from banks, which are secured by a lien on fixed deposits and hypothecation of trade receivables of the Company, both present and future, and counter guarantee of the Company. The balance outstanding in the fund based and non-fund based working capital facilities at the balance sheet date are Rs. Nil (Previous Year: Rs. Nil) and Rs. 71.37 crores (Previous Year: Rs. 121.38 crores) respectively.

8. The Company may allot shares between the balance sheet date and record date for the declaration of dividend pursuant to the exercise of any employee stock options. These shares will be eligible for full dividend for the year ended 31 March, 2013, if approved at the ensuing Annual General Meeting. Dividend relating to these shares has not been recorded in the current year and will be considered in the appropriation for the next year. However, current year appropriation includes dividend paid on options exercised upto the record date for dividend declaration during the current year.

9. Previous year''s figures have been regrouped / reclassified wherever necessary to conform to the current year''s classification / disclosure.


Mar 31, 2012

(i) Rights attached to equity shares:

The Company has issued only one class of equity shares having a face value of Rs 1 per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recommended for distribution to equity shareholders is Rs 0.75 (31 March 2011: Rs 0.75).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(ii) As at 31 March, 2012, 5,065,358 equity shares (As at 31 March, 2011: 5,686,906 equity shares) of Rs1 each are reserved towards outstanding employee stock options granted. (Refer Note 38)

(iii) The Company has issued total of 5,458,720 shares (31 March, 2011: 5,458,720 shares) during the period of five years immediately preceding the reporting date on exercise of options granted under the Employee Stock Option Plan (ESOP) wherein part consideration was received in the form of employee services.

(a) This represents amounts due from clients withheld by a stock exchange pending completion of investigation by Securities Exchange Board of India (SEBI) on those transactions. SEBI is expected to issue the release order in favour of the company in the near future and hence no provision is considered necessary at this stage.

Notes:

(i) Balances with banks include deposits amounting to Rs 2,447,699/- (As at 31 March, 2011 Rs 629,432,655/-) which have an original maturity of more than 12 months.

(ii) Balance with Banks in Deposit Accounts include Rs 433,318,791/- (As at 31 March, 2011: Rs 372,581,849/-) maintained as security margin for guarantees issued by banks in favour of Stock Exchanges and working capital facility provided by a bank.

(iii) Balance with Banks in Deposit Accounts include Rs 432,620,363/- (As at 31 March, 2011: Rs 515,249,666) for which fixed deposit receipts are kept in the safe custody of two banks for availing temporary overdrafts. The balance outstanding in the temporary overdraft facility as at the balance sheet date is Rs Nil (Previous Year: Rs Nil).

1. Contingent Liabilities and Commitments (To the Extent Not Provided For)

(i) Contingent Liabilities:

Particulars As at As at 31 March, 2012 31 March, 2011

(a) Claims against the company not acknowledged as debts:

- Legal suits filed against the Company/Matters under Arbitration 37,851,460 35,668,403

(b) Income Tax demands, pending in appeal 238,024,801 72,572,892

(c) Service Tax demands, pending in appeal 448,298 448,298

2 The Company has deposited the dividends payable to non-resident shareholders into their Rupee account with various banks in India and hence the disclosure of amounts remitted in foreign currency during the year to non-resident shareholders on account of dividend is not applicable.

3. Employee Benefit Plans (i) Defined Contribution Plan - Provident Fund:

The Company makes Provident Fund contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised during the year Rs 3,291,471/- (Year ended 31 March, 2011: Rs 3,503,406/-) towards Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to this plan by the Company is at rates specified in the rules of the scheme.

4. The Company's operations predominantly relate to one segment, viz., broking and financial services, which constitutes more than 75% of the total revenues/results/assets of all segments combined. Other activities which are not related to the main business of broking and financial services do not individually constitute 10% or more of the total revenues or results or assets of the Company. Therefore, separate business segment information is not disclosed. Besides, the Company's operations are located only in India and hence, separate secondary geographical segment information is not disclosed.

5. A) Employee Stock Option Plan

(a) Employee Stock Option Plan - 2005 (ES0P-2005 (Reissue-1)):

During 2007-08, the Company had issued options for 950,500 equity shares of Rs 1/- each to eligible permanent employees and an independent non-executive director, whose is not a promoter, of the Company and its Subsidiaries. The issue of options was approved by the Shareholders through postal ballot on 5th December 2007 and by the Compensation Committee of Directors on 12th October 2007. The options vests over a period of 4 years from the date of grant, viz., 10th December 2007, in the proportion specified in the scheme. The exercise period commenced from the date of vesting and will expire not later than 5 years from the date of grant, viz., 09th December 2012. The exercise price in the case of employees and directors has been computed by giving discounts, based on the grade of the employees and of fixed amount respectively, to the market price on the date prior to grant date. The Company had repriced the options on 11th April 2009 from Rs65.36 to Rs25.50 per option with the approval of the Compensation Committee and Shareholders.

(b) Employees Stock Option Plan 2007 for Key Employees (ESOP 2007):

The Company introduced Employees Stock Option Plan 2007 for Key Employees during the year 2007-08, under which options for 2,500,000 equity shares of Rs 1/- each were granted to eligible senior management employees of the Company. The scheme was approved by the Shareholders through postal ballot on 5th December 2007 and by the Compensation Committee of Directors on 12th October 2007. The options will vest over a period of 7 years from the date of grant, viz., 10th December 2007, in the proportion specified in the scheme. The exercise period commenced from the date of vesting and will expire not later than 8 years from the date of grant, viz., 09th December 2015. The exercise price is at 10% discount to the market price on the date prior to grant date. The Company had repriced the options on 11th April 2009 from Rs59.90 to Rs25.50 per option with the approval of the Compensation Committee and Shareholders.

(c) Employees Stock Option Plan 2010 (ESOP 2010):

During the previous year, the Company introduced Employees Stock Option Plan 2010 under which options for 2,786,795 equity shares of Rs 1/- each were granted to eligible employees. The scheme was approved by the Shareholders at the Annual General Meeting held on 12th July 2010 and by the Compensation Committee of Directors on 12th April 2010. The options will vest on the expiry of 2nd Anniversary from the date of grant, viz., 29th March 2011. The exercise period commences from the date of vesting and will expire not later than 4 years from the date of grant, viz., 28th March 2017. The exercise price of the options granted is the same as the market price on the date prior to grant date and hence there is no intrinsic value for the options, which has to be amortised over the vesting period.

B) Accounting of employee share based compensation cost:

The Company has adopted intrinsic value method for accounting employee share based compensation cost. Under the intrinsic value method, the difference between market price of the share on the grant date or as near thereto and exercise price is considered as intrinsic value of options and amortised on straight-line basis over the vesting period as employee share based compensation cost. The details of costs accounted under the Employee Stock Option Plans are as follows:

Annualised volatility is computed using the high and low market price of the Company's share over the one year period prior to the date of grant. It is assumed that employees would exercise the options immediately on vesting. The historical volatility of the Company's share price is higher than the volatility considered above. However, the Company expects the volatility of its share price to reduce as it matures.

E) The impact on Basic and Diluted Earnings Per Share for the year, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs(0.03) and Rs(0.03) respectively (Previous Year: Rs(0.13) and Rs (0.13) respectively).

6. The Company has contracted fund based and non-fund based (viz. bank guarantee) working capital facilities of Rs 30 crore (Previous Year: Rs 30 crore) and Rs 167 crore (Previous Year: Rs 65 crore) respectively from banks, which are secured by a lien of Fixed Deposit and charge on the Trade Receivables of the Company, both present and future, and counter guarantee of the Company. The balance outstanding in the fund based and non-fund based working capital facilities at the balance sheet date are Rs Nil (Previous Year: Rs Nil) and Rs 121.38 crore (Previous Year: Rs 65 crore) respectively.

7. The Company may allot shares between the balance sheet date and record date for the declaration of dividend pursuant to the exercise of any employee stock options. These shares will be eligible for full dividend for the year ended 31 March, 2012, if approved at the ensuing Annual General Meeting. Dividend relating to these shares has not been recorded in the current year and will be considered in the appropriation for the next year. However, current year appropriation includes dividend paid on options exercised upto the record date for dividend declaration during the current year.

8. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2010

1. Contingent Liability:

Particulars Asat31.03.2010(Rs.) Asat31.03 .2009(Rs.) Claims against the Company not acknowledged as debts: Legal suits filed against the Company / Matters under Arbitration 28,216,882 19,002,192 Income tax demands, pending in appeal 18,340,301 18,813,214 Service tax demands, pending in appeal 448,2981 448,298

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances): Rs.260,981,090/- (Previous Year: Rs.3,954,773/-).

3. (a) Employee Stock Option Plan - 2005 (ESOP-2005):

The Company introduced Employee Stock Option Plan-2005 (ESOP-2005) during 2005-06, under which options for 6,989,400 equity shares of Re.1/- each were granted to eligible permanent employees and non-executive directors, including independent directors but excluding promoters, of the Company and its Subsidiaries. The scheme was approved by the Shareholders at the Extra-ordinary General Meeting held on 7th March 2006 and by the Compensation Committee of Directors on 7th March 2006. The options will vest over a period of 4 years from the date of grant, viz., 7th March 2006, as follows:

The exercise period commences from the date of vesting and will expire not later than 5 years from the date of grant, viz., 6th March 2011. The exercise price has been computed by giving discounts, based on the grade and number of years of service rendered by the employees and directors, to the market price on the date prior to grant date.

The Company has adopted intrinsic value method for accounting employee share based compensation cost. Under the intrinsic value method, the difference between market price of the share on the grant date or as near thereto and exercise price is considered as intrinsic value of options and amortised on straight-line basis over the vesting period as employee share based compensation cost.

The intrinsic value of 6,989,400 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of four years net of actual forfeiture upto the balance sheet date is Rs.11,027,018/- (Previous Year: Rs. 11,195,621/-) and the proportionate amount amortised during the year is Rs.809,050/- (Previous Year: Rs. 2,091,469/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.6,549,205/- (Previous Year: Rs.16,847,469/-).

The fair values were calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.19.86, weighted average exercise price as per above, volatility in the market price (of the Companys share over the one year prior to the date of grant) of 199% (computed with reference to the one year high and low of the market price), dividend yield of 1.76%, contractual life of two to four years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Companys life, is higher than the volatility of 199% considered above and the Company expects the volatility of its share price to reduce as it matures.

(b) Employee Stock Option Plan -2005 (ESOP-2005 (Reissue-1)):

During 2007-08, the Company reissued options for 950,500 equity shares of Re. 1/- each to eligible permanent employees and an independent non-executive director, whose is not a promoter, of the Company and its Subsidiaries, forfeited out of Employee Stock Option Plan - 2005 (ESOP-2005) on resignation of employees. The reissue of options forfeited was approved by the Shareholders through postal ballot, whose result was declared on 5th December 2007, and by the Compensation Committee at its meeting held on 12th October 2007. The options will vest over a period of 4 years from the date of grant, viz., 10th December 2007, as follows:

The exercise period commences from the date of vesting and will expire not later than 5 years from the date of

grant, viz., 09th December 2012. The exercise price in the case of employees and directors has been computed by giving discounts, based on the grade of the employees and of fixed amount respectively, to the market price on the date prior to grant date.

The Company has adopted intrinsic value method for accounting employee share based compensation cost.

Under the intrinsic value method, the difference between market price of the share on the grant date or as near thereto and exercise price is considered as intrinsic value of options and amortised on straight-line basis over the vesting period as employee share based compensation cost.

The intrinsic value of 950,500 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of four years net of expected forfeiture @ 20% per annum (Previous Year: 20% per annum), is Rs.565,176/- (Previous Year: Rs.587,850/-) and the proportionate amount amortised during the year is Rs.157,325/- (Previous Year: Rs.178,027/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.9,399,002/- (Previous Year: Rs.7,146,277/-).

The fair values were calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.66.55, weighted average exercise price as per (b) above, volatility in the market price (of the Companys share over the one year prior to the date of grant) of 170% (computed with reference to the one year high and low of the market price), dividend yield of 0.60%, contractual life of two to four years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Companys life, is higher than the volatility of 170% considered above and the Company expects the volatility of its share price to reduce as it matures. (c) Employees Stock Option Plan 2007 for Key Employees:

The Company introduced Employees Stock Option 2007 for Key Employees Plan (ESOP-2007 for Key Employees) during the year 2007-08, under which options for 2,500,000 equity shares of Re. 1/- each were granted to eligible senior management employees of the Company. The scheme was approved by the Shareholders through postal ballot, whose result was declared on 5th December 2007, and by the Compensation Committee of Directors on 12th October 2007. The options will vest over a period of 7 years from the date of grant, viz., 10th December 2007, as follows:

The exercise period commences from the date of vesting and will expire not later than 8 years from the date of grant, viz., 09th December 2015. The exercise price is at 10% discount to the market price on the date prior to grant date.

The Company has adopted intrinsic value method for accounting employee share based compensation cost. Under the intrinsic value method, the difference between market price of the share on the grant date or as near thereto and exercise price is considered as intrinsic value of options and amortised on straight-line basis over the vesting period as employee share based compensation cost.

The intrinsic value of 2,500,000 options granted by the Company (i.e., the difference between market price on date of grant and exercise price), to be amortised on straight-line basis over the vesting period of seven years net of expected forfeiture of zero % per annum, is Rs.16,625,000/- (Previous Year: Rs.16,625,000/-) and the proportionate amount amortised during the year is Rs.3,156,771/- (Previous Year: Rs.3,156,771/-). The additional charge to Profit and Loss Account, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.26,024,486/- (Previous Year: Rs.26,024,486/-).

Further disclosures on ESOP-2007 for Key Employees are given below:

The estimated weighted average fair value of each stock option is Rs.61.67. The fair value was calculated using Black-Scholes Options Pricing Model. The model inputs were the share price at grant date of Rs.66.55, weighted average exercise price as above, volatility in the market price of the Companys share over the one year prior to the date of grant of 170% (computed with reference to the one year high and low of the market price), dividend yield of 0.60%, contractual life of 4 to 7 years, as the case may be, and a risk-free interest rate of 7%. It is assumed that employees would exercise the options immediately on vesting. The historical volatility, including the early years of the Companys life, is higher than the volatility of 170% considered above and the Company expects the volatility of its share price to reduce as it matures.

The impact on Basic and Diluted Earnings Per Share for the year, had the Company followed Fair Value Method of accounting for ESOP compensation cost, is Rs.(0.19) and Rs.(0.19) respectively (Previous Year: Rs.(0.24) and Rs. (0.23) respectively).

4. The Company has contracted fund based and non-fund based (viz. bank guarantee) working capital facilities of Rs.300,000,000/- (Previous Year: Rs.50,000,000/-) and Rs.510,000,000/- (Previous Year: Rs.575,000,000/-) respectively from a bank, which are secured by a charge on the current assets of the Company, both present and future, and counter guarantee of the Company. The balance outstanding in the fund based and non-fund based working capital facilities are Rs. Nil (Previous Year: Rs. Nil) and Rs.487,575,000/- (Previous Year: Rs.390,000,000/-) respectively at the balance sheet date

5. The amount of unclaimed dividends lying in separate bank accounts as at the balance sheet date is Rs.2,732,861/- (Previous Year: Rs.2,608,347/-). There is no amount due and outstanding as at the balance sheet date to be credited to the Investor Education and Protection Fund.

6. Notes on Cash Flow Statement:

a) The Cash Flow Statement has been prepared using the indirect method specified in Accounting Standard - 3 "Cash Flow Statements".

b) Cash and cash equivalents at the balance sheet date include unclaimed dividends lying in separate bank accounts amounting to Rs. 2,732,861/- (Previous year: Rs. 2,608,347/-), not available for use by the Company.

c) The closing cash and cash equivalents excludes fixed deposits amounting to Rs.751,133,956/- (Previous Year: Rs.513,895,096/-), which is considered as part of investing activity by the Company.

7. Employee Benefits:

The details of benefits provided by the Company to its employees during the year are as follows:

I. Defined Contribution Plan - Provident Fund:

During the year, the Company has recognised the employers contribution to Employees Provident Fund Organisation amounting to Rs.3,573,049/- (Previous Year: Rs.3,827,962/-) in the Profit and Loss Account, included under the head Contribution to Provident & Other Funds in Schedule 14v-,Employee Costs.

II. State Plans:

(a) Employers contribution to Employees State Insurance Scheme.

(b) Employers contribution to Employees Pension Scheme, 1995.

During the year, the Company has recognised the following amounts in the Profit and Loss Account, included in Schedule 14 - Employee Costs:

8. The Company may allot shares between the balance sheet date and record date for the declaration of dividend pursuant to the exercise of any employee stock options. These shares will be eligible for full dividend for the year ended 31st March 2010, if approved at the ensuing Annual General Meeting. Dividend relating to these shares has not been recorded in the current year and will be considered in the appropriation for the next year. However, current year appropriation includes dividend paid on options exercised upto the record date for dividend declaration during the current year.

9. The Companys operations predominantly relate to one segment, viz., broking and financial services, which constitutes more than 75% of the total revenues / results / assets of all segments combined. Other activities which are not related to the main business of broking and financial services do not individually constitute 10% or more of the total revenues or results or assets of the Company. Therefore, separate business segment information is not disclosed. Besides, the Companys operations are located only in India and hence, separate secondary geographical segment information is not disclosed.

10. The Company had changed its name to Geojit BNP Paribas Financial Services Limited w.e.f. 1st April 2009, which was approved by the Registrar of Companies, Kerala.

11. Previous years figures have been regrouped / reclassified wherever necessary to conform to current years classification.

 
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