Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their report on the business
and operations of the Company for the year ended March 31, 2015.
I. FINANCIAL STATEMENTS & RESULTS:
a. Financial Results: (Standalone)
The Company's operating performance during the year ended March 31,
2015 as compared to the previous year is summarized below:
(Rs. in Millions)
Current Year
Revenue from Operations and Other Income 4,167.95
Profit before Interest, Depreciation and Tax 1001.92
Less: Finance Costs (8.61)
Less: Depreciation and Amortization Expense (120.14)
Profit before Exceptional ltems and Taxes 873.17
Add: Exceptional Items -
Less:Tax adjustment in respect of earlier years (6.16)
Less: Tax Expense 135.57
Net Profit before Extraordinary Items 743.76
Add: Extraordinary Items and Prior Period Items -
Net Profit 743.76
Surplus brought forward 2,050.90
Profit available for Appropriation 2,794.66
APPROPRIATIONS
Proposed Dividend 161.59
Dividend Tax 32.79
Depreciation on assets whose remaining useful 1.05
life is nil, recognized in retained earning
Transfer To General Reserve 75.00
Reversal of excess provision for Dividend (20.60)
Distribution Tax of previous years
Surplus carried forward 2544.83
TOTAL 2794.66
Previous Year
Revenue from Operations and Other Income 4,099.76
Profit before Interest, Depreciation and Tax 825.43
Less: Finance Costs (3.46)
Less: Depreciation and Amortization Expense (127.54)
Profit before Exceptional ltems and Taxes 694.43
Add: Exceptional Items -
Less:Tax adjustment in respect of earlier years (4.69)
Less: Tax Expense 137.36
Net Profit before Extraordinary Items 561.77
Add: Extraordinary Items and Prior Period Items -
Net Profit 561.76
Surplus brought forward 1,675.19
Profit available for Appropriation 2,236.96
APPROPRIATIONS
Proposed Dividend 127.17
Dividend Tax 20.60
Depreciation on assets whose remaining useful
life is nil, recognized in retained earning
Transfer To General Reserve 56.50
Reversal of excess provision for Dividend (18.21)
Distribution Tax of previous years
Surplus carried forward 2,050.90
TOTAL 2,236.96
b. Financial Results: (Consolidated)
The Company's operating performance during the year ended March 31,
2015 as compared to the previous year is summarized below:
(Rs. in Millions)
Current Year
Revenue from Operations and Other Income 11,248.06
Profit before Interest, Depreciation and Tax 1,495.55
Less: Finance Costs 33.29
Less: Depreciation and Amortization Expense 302.74
Profit before tax 1,159.53
Less:Provisionfortax 392.12
Net Profit before Extraordinary Items 767.41
and Minority Interest
Net Profit before Minority Interest 767.41
Less: Minority Interest (215.81)
Net Profit 551.60
Surplus brought forward 2,602.52
Profit available for Appropriation 3,154.12
APPROPRIATIONS
Proposed Dividend 161.59
Dividend Tax 32.79
Transfer To General Reserve 105.16
Dividend Tax Paid By Subsidiary 45.90
Depreciation on assets whose remaining useful 1.75
life is nil, recognized in retained earning
Translation of reserves of non-integral -
foreign operations
Reversal of excess provision for Dividend (20.60)
Distribution Tax of previous years
Surplus carried forward 2827.53
TOTAL 3,154.12
Previous Year
Revenue from Operations and Other Income 11,091.59
Profit before Interest, Depreciation and Tax 1,399.36
Less: Finance Costs 34.77
Less: Depreciation and Amortization Expense 345.64
Profit before tax 1,018.96
Less:Provisionfortax 387.88
Net Profit before Extraordinary Items 631.09
and Minority Interest
Net Profit before Minority Interest 631.09
Less: Minority Interest (168.66)
Net Profit 462.43
Surplus brought forward 2,416.17
Profit available for Appropriation 2,878.60
APPROPRIATIONS
Proposed Dividend 127.16
Dividend Tax 20.60
Transfer To General Reserve 83.76
Dividend Tax Paid By Subsidiary 65.94
Depreciation on assets whose remaining useful
life is nil, recognized in retained earning
Translation of reserves of non-integral (3.18)
foreign operations
Reversal of excess provision for Dividend (18.21)
Distribution Tax of previous years
Surplus carried forward 2,602.52
TOTAL 2,878.60
c. Business Review / Operations:
The Industrial vertical market which we serve showed a lot of
uncertainty throughout the financial year. Our largest accounts
particularly from the off-highway equipment sector showed significant
slowdown in business. The Automotive industry stayed positive and we
saw trends sustaining in global engineering, driving a gradual increase
in demand for our key offerings in engineering and PLM IT. Our business
from the Aerospace industry continued on the expected growth path as
our three flagship customer groups renewed their faith in our
capabilities through long term contracts.
Operating revenues in rupee terms for the consolidated financials
increased from INR 10,954.52 Mn in FY14 to INR 11,053.01 Mn in FY15, a
growth of 1%. For the same period, profit-after-tax increased from INR
462.43 Mn in FY14 to INR 551.69 Mn in FY15, a growth of 19%.
The business segments of the Company - software services, engineering
services and products recorded the following trends in the year FY15:
* Software services contribution to the top line increased from 60% in
FY14 to 62% in FY15.
* Engineering services contribution to the top line decreased from 34 %
in FY14 to 31% in FY15.
* Products business contribution to the top line increased from 6% in
FY14 to 7% in FY15.
The Company's performance in the four regions in which we operate can
be summarized as follows:
* USA's share increased from 58% in FY14 to 59 % in FY15; a growth
of1%in absolute terms.
* Europe's share of revenue decreased from 32% in FY14 to 30% in FY15;
a de-growth of 2% in absolute terms which includes revenue of Geometric
GmbH for the full year.
* APAC's share increased from 4% in FY14 to 6% in FY15.
* India's share is flat at6%.
Europe continues to be our focus growth market with a positive demand
environment particularly for our software services. The business
environment in China continues to be very promising and we have made
good inroads resulting in the gradual increase of revenue contribution
from the region.
Trends in various customer segments that the Company caters to were as
follows:
* Direct Industrial: Segment share of business increased from 62.30% in
FY14 to 63.70% in FY15. In absolute terms, this segment recorded growth
of 1.9% over the previous year. (USD 115.10 Mn in FY15 Vs USD 113 Mn in
FY14)
* Strategic Partners: Segment share of business reduced from 2.72% in
FY14 to 2.2% in FY15; showing a reduction of 18.86 % in absolute terms.
(USD 4 Mn in FY15 Vs USD 4.93 Mn in FY14)
* Software ISVs: Segment share of business decreased from 34.98% in
FY14 to 34.10% in FY15. In absolute terms, this segment recorded
de-growth of 3.07% over the previous year. (USD 61.50 Mn in FY15 Vs USD
63.45 Mn in FY14)
In the coming financial year, our vertical organization with P&L
accountability and continued business development focus on hunting
accounts, will help us build closer customer relationships. Our
horizontal organization with bulk of the delivery capacity will ensure
the focus on innovation, quality and competency to build customer
intimacy and drive predictable revenue. Our investments in sales
transformation for value selling, in building differentiated offerings
intertwining our IP solutions and in bringing the focus to chase large
deals are poised to provide the right solutions for our accounts
globally.
d. Dividend:
The Directors recommend payment of dividend to the shareholders for the
year at the rate of Rs. 2.50 per Equity Share of Rs. 2 each, compared
to Rs. 2 dividend per Equity Share, paid last year.
e. Change in Registered Office:
During the year under review, the registered office of the Company was
shifted from "Unit No. 703-A, 7th Floor, B Wing, Reliable Tech
Park,Airoli, Navi Mumbai - 400708" to "Plant 11, 3rd Floor,
Pirojshanagar, Vikhroli (West), Mumbai 400079" within the State of
Maharashtra. The procedure of postal ballot was followed and the
special resolution for the same was passed on June 13, 2014.
f. Subsidiaries:
The Company has the following wholly-owned Subsidiary Companies:
a) GeometricAmericas,lnc.,USA
b) Geometric Asia Pacific Pte. Ltd., Singapore
c) Geometric Europe GmbH, Germany
The Company has the following other Subsidiary Companies:
a) 3D PLM Software Solutions Ltd., in which the Company holds 58%
stake.
b) 3D Global Services Pvt. Ltd. (A WOS of 3D PLM Software Solutions
Ltd., India w.e.f. November 19, 2014)
c) Geometric China Inc. (A WOS of Geometric Asia Pacific Pte. Ltd.,
Singapore)
d) Geometric Japan K.K. (A WOS of Geometric Asia Pacific Pte. Ltd.,
Singapore)
e) Geometric S.R.L., Romania (A WOS of Geometric Europe GmbH)
f) Geometric SAS, France (A WOS of Geometric Europe GmbH)
g) Geometric GmbH (A WOS of Geometric Europe GmbH, Germany)
Pursuant to the provisions of Section 136 of the Companies Act, 2013,
the Board has issued exemption from printing the complete financials of
the subsidiary companies in the Annual Report.
A statement containing salient features, performance and financial
position of each of the subsidiaries, March 31, 2015 is attached and
marked as Annexure I (AOC-1) and forms part of this Report.
The entire set of subsidiary financials will be kept ready for
inspecfion at the registered office and the same will be displayed on
the Company's website, in accordance to the requirements of the Act.
Particulars of a newly incorporated company which has become subsidiary
of an existing subsidiary, during the year under review, are as under:
Name of the Company Relationship with the Company
3DGlobalServicesPvt.Ltd. Wholly owned subsidiary of
3D PLM Software Solutions Ltd,
subsidiary of the Company
Name of the Company Details of changes Date of change
3DGlobalServicesPvt.Ltd. Incorporatedduring Date of incorporation:
FY2014-15 November 19, 2014
The policy for determining material subsidiaries as approved may be
accessed on the Company's website at the link:
http://geometricglobal.com/wp-content/uploads/2014/11/Policy on
Material Subsidiaries.pdf
g. Transfer To Reserves:
The Board has recommended transfer of Rs. 105.16 Mn to the General
Reserve out of the amount available for appropriation and an amount of
Rs. 2,827.53 Mn is proposed to be carried forward to the Statement of
Profit and Loss.
h. Revision of Financial Statement:
There was no revision of the financial statements for the year under
review.
i. Public Deposits:
The Company has not accepted or renewed any deposit falling within the
purview of provisions of Sections 73 and 74 of the Companies Act 2013
("the Act"), read with the Companies (Acceptance of Deposit) Rules,
2014 during the year under review. Hence, the requirement for
furnishing of details of deposits which are not in compliance with the
Chapter V of the Act is not applicable.
j. Disclosures under Section 134(3)(l) of the Companies Act, 2013:
Except as disclosed elsewhere in this report, no material changes and
commitments which could affect the Company's financial position, have
occurred between the end of the financial year of the Company and date
of this report.
k. Disclosure of Internal Financial Controls:
The Internal Financial Controls with reference to financial statements
as designed and implemented by the Company are adequate. During the
year under review, no material or serious observation has been received
from the Internal Auditors of the Company for ineffecfiveness or
inadequacy of such controls.
l. Disclosure of Orders passed by Regulators or Courts or Tribunal:
No orders have been passed by any Regulator or Court or Tribunal which
can have impact on the going concern status and the Company's
operations in future.
m. Particular of Contracts or Arrangement with Related Parties:
Particulars of Contacts or Arrangement with related parties referred to
in Section 188(1) of the Companies Act, 2013, in the prescribed Form
AOC-2, have been furnished in Annexure II which forms part of this
Report.
The policy on dealing with Related Party Transactions is available on
http://geometricglobal.com/wp-content/uploads/2014/11/ Policy on
RPT.pdf.
n. Particulars of Loans, Guarantees and Investments:
Parficulars of loans, guarantees and investments covered under Section
186 of the Companies Act, 2013, are given in the notes to the financial
statements provided in this Annual Report.
o. Disclosure under Section 43(a)(ii) of the Companies Act, 2013:
The Company has not issued any shares with differential rights and
hence no information as per provisions of Section 43(a)(ii) of the Act
read with Rule 4(4) of the Companies (Share Capital and Debenture)
Rules, 2014 is furnished.
p. Disclosure under Section 54(1)(d) of the Companies Act, 2013:
The Company has not issued any sweat equity shares during the year
under review and hence no information as per provisions of Section
54(1)(d) of the Act read with Rule 8(13) of the Companies (Share
Capital and Debenture) Rules, 2014 is furnished.
q. Disclosure under Section 62(1)(b) of the Companies Act, 2013:
As per provisions of Section 62(1)(b) of the Act read with Rule 12(9)
of the Companies (Share Capital and Debenture) Rules, 2014 and other
applicable Regulations, details of equity shares issued under Employees
Stock Option Scheme during the financial year under review is furnished
in Annexure III attached herewith which forms part of this Report.
r. Disclosure under Section 67(3) of the Companies Act, 2013:
During the year under review, there were no instances of non-exercising
of voting rights in respect of shares purchased directly by employees
under a scheme pursuant to Section 67(3) of the Act read with Rule
16(4) of Companies (Share Capital and Debentures) Rules, 2014 and hence
no information in respect thereof is furnished.
II. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. Directors & Key Managerial Personnel:
In terms of Section 152 of the Companies Act, 2013, Dr. K. A. Palia
refires by rotation and being eligible, offer himself for re-
appointment at the ensuing Annual General Meeting.
In terms of Section 149 of the Companies Act, 2013, Mr. Marc Dulude,
Independent Director was appointed as Additional Director of the
Company on November 24, 2014 to hold office upto the date of ensuing
Annual General Meeting. The Company has received notices from
shareholders alongwith requisite deposits proposing the candidature of
Mr. Marc Dulude for appointment as Director in Independent capacity, at
the ensuing Annual General Meeting for a term of 5 (five) consecutive
years upto July 26, 2020.
In accordance with the provisions of the Act, none of the Independent
Directors is liable to retire by rotation.
Further to resignation of Mr. Arvind Kakar, Mr. Neeraj Dutt was
appointed as Key Managerial Person designated as Chief Financial
Officer of the Company w.e.f. May 6, 2014.
Further to resignation of Mr. Neeraj Dutt w.e.f February 6, 2015, Mr.
Shashank Patkar was appointed as Key Managerial Person designated as
Chief Financial Officer of the Company w.e.f February 9, 2015.
Pursuant to resignation of Ms. Maria Monserrate w.e.f September 1,
2014, Ms. Sunipa Ghosh was appointed as Key Managerial Person
designated as Company Secretary w.e.f. October 6, 2014.
b. Declaration by Independent Directors:
The Company has received declarations form all the Independent
Directors under Section 149(6) of the Companies Act, 2013 confirming
their independence vis-a-vis the Company.
III. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
a. Board Meetings:
The Board of Directors met five times during the financial year ended
March 31, 2015 in accordance with the provisions of the Companies Act,
2013 and rules made thereunder.
Board meetings were held on April 29, 2014, July 23, 2014, October 20,
2014, December 9, 2014 and January 28, 2015, with necessary quorum
present at all the meetings.
b. Directors Responsibility Statement:
The Board of Directors of the Company confirms that:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed alongwith proper explanation relating to
material departures;
b) the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company for the financial year ending on March 31, 2015 and of the
profit of the Company for the year ended on that period;
c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
d) the directors had prepared the annual accounts on a going concern
basis;
e) the directors, had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
c. Nomination and Remuneration Commitiee:
The Nomination and Remuneration Committee of Directors was constituted
by the Board of Directors of the Company in accordance with the
requirements of Section 178 of the Act.
The composition of the committee is as under:
1. Ms. Anita Ramachandran, Chairperson,
2. Mr. Jamshyd Godrej, Member
3. Mr.MilindSarwate,Memberand
4. Mr.AjayMehra,Member.
The Board has, in accordance with the provisions of sub-section (3) of
Section 178 of the Companies Act, 2013, formulated the policy setting
out the criteria for determining qualifications, positive attributes,
independence of a Director and policy relating to remuneration for
Directors, Key Managerial Personnel and other employees.
Terms of reference and objectives of the Nomination and Remuneration
Policy of the Company are stated in the Corporate Governance Report
annexed to the Report as Annexure IV.
d. Audit Committee:
The Company has an Audit Committee consisting of five non-executive
Directors, viz Mr. Milind Sarwate-Chairman, Dr. K A Palia, Dr. Richard
Riff, Ms. Anita Ramachandran and Mr. Ajay Mehra. The books of accounts
have been duly reviewed by the Audit Committee.
The scope and terms of reference of the Audit Committee have been
amended in accordance with the Act and the Listing Agreement entered
into with the Stock Exchanges, as set out in the Audit Committee
Charter.
During the year under review, the Board of Directors of the Company had
accepted all the recommendations.
e. Stakeholders Relationship Committee:
The constitution, roles and responsibilities of the Stakeholder's
Relationship Committee, comprising of Mr. Jamshyd Godrej, Mr. Manu
Parpia and Dr. Kyamas Palia are in accordance with the provisions of
Section 178 of the Companies Act, 2013.
Mr. Jamshyd Godrej is the Chairman and the Company Secretary acts as
the Secretary of the Stakeholders' Relationship Committee.
f. Vigil Mechanism Policy for the Directors and Employees:
The Board of Directors of the Company has, pursuant to the provisions
of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the
Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil
Mechanism Policy" for Directors and employees of the Company to provide
a mechanism which ensures adequate safeguards to employees and
Directors from any victimization on raising of concerns of any
violations of legal or regulatory requirements, incorrect or
misrepresentation of any, financial statements and reports, etc.
The employees of the Company have the right/option to report their
concern/grievance to the Chairman of the Audit Committee. The Company
is committed to adhere to the highest standards of ethical, moral and
legal conduct of business operations.
g. Risk Management Policy:
The Board of Directors of the Company has designed Risk Management
Policy and Guidelines to avoid events, situations or circumstances
which may lead to negative consequences on the Company's businesses,
and define a structured approach to manage various business
uncertainties and to enable arriving at the right decisions pertaining
to all business divisions and corporate functions. Key business risks
and the suggested mitigation mechanism are considered in the
annual/strategic business plans and in periodic management reviews.
h. Corporate Social Responsibility Policy:
As per the provisions of Section 135 of the Act read with Companies
(Corporate Social Responsibility Policy) Rules, 2014, the Board of
Directors has constituted a Corporate Social Responsibility (CSR)
Committee as under:
1) Mr. Milind Sarwate, Independent Director
2) Mr. Ajay Mehra, Independent Director
3) Mr. Manu Parpia, Managing Director & CEO
The Board of Directors of the Company has approved CSR Policy based on
the recommendation of the CSR Committee. The Company has initiated
activities in accordance with the said Policy, the details of which
have been prescribed in Annexure V.
The CSR Policy of the Company is available on the Company's web-site
and can be accessed in the link provided here in below:
http://geometricglobal.com/investors/Corporate-Social-Responsibility
The Company could not spend the prescribed amount towards CSR during FY
2014-15 as the CSR activities of the Company are being planned out so
as to ensure the optimum utilization of the funds.
i. Annual Evaluation of Directors, Committee and Board and
Familiarisation programme for Independent Directors and Board:
Notes on the manner for evaluation of performance of the Board and
individual Directors and familiarization programme for Independent
Directors and the Board are included in the Corporate Governance Report
which is Annexure IV to the Report of the Board of Directors.
j. Internal Control Systems:
Adequate internal control systems commensurate with the nature of the
Company's business and size and complexity of its operations are in
place has been operating satisfactorily. Internal control systems
comprising of policies and procedures are designed to ensure reliability
of financial reporting, timely feedback on achievement of operational
and strategic goals, compliance with policies, procedure, applicable
laws and regulations, and that all assets and resources are acquired
economically, used efficiently and adequately protected.
k. Disclosure under Section 197(12) of the Companies Act, 2013 and
Other Disclosures as per Rule 5 of Companies (Appointment &
Remuneration) Rules, 2014:
The ratio of the remuneration of each Director to the median
remuneration of the employees of the Company for the financial year
under review has been marked as Annexure VI.
l. Payment of Remuneration / Commission to Directors from Holding Or
Subsidiary Companies:
The Company does not have a holding company. The managerial personnel
i.e. Managing Director and Whole time Directors of the Company are not
in receipt of remuneration/commission from any subsidiary of the
Company.
IV. AUDITORS AND REPORTS
The matters related to Auditors and their Reports for the year ended
March 31, 2015 are as under:
a. Observations of Statutory Auditors on Accounts:
The observations made by the Statutory Auditors in their report for the
financial year ended March 31, 2015 read with the explanatory notes
therein are self-explanatory and therefore, do not call for any further
explanation or comments from the Board under Section 134(3) of the
Companies Act, 2013.
b. Secretarial Audit report:
Pursuant to provisions of Section 204 read with Section 134(3) of the
Companies Act.
Secretarial Audit Report issued by Rathi and Associates, Practicing
Company Secretaries, in Form MR-3 for the financial year 2014-15 forms
part of this Report and has been attached as Annexure VII.
c. AUDITORS:
The casual vacancy caused by the resignation of M/s. Kalyaniwalla &
Mistry, Chartered Accountants, Statutory Auditors of the Company, was
filled up by the Board of Directors by appointing M/s. BSR & Co. LLP,
Chartered Accountants as Statutory Auditors of the Company on June 16,
2015 fill the conclusion of the 21st Annual General Meeting.
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the Companies (Audit and Auditors) Rules, 2014, M/s. BSR & Co.
LLP, Chartered Accountants, the Statutory Auditors of the Company have
been recommended by the Audit Committee and the Board of Directors for
a term of 5 years from the conclusion of the 21st Annual General
Meeting fill the conclusion of the 26th Annual General Meeting.
The consent of the Auditors along with certificate under Section 139 of
the Act have been obtained from the Auditors to the effect that their
appointment, if made, shall be in accordance with the prescribed
conditions and that they are eligible to hold the office of Auditors of
the Company.
Necessary resolution for appointment of M/s. BSR & Co. LLP, Chartered
Accountants, as StatutoryAuditors is included in the Notice of AGM for
seeking approval of members.
V. OTHER DISCLOSURES
Other disclosures as per provisions of Section 134 of the Act read with
Companies (Accounts) Rules, 2014 are furnished as under:
a. Extract of Annual Return:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act,
2013, Extract of the Annual Return for the financial year ended March
31, 2015 made under the provisions of Section 92(3) of the Act is
attached as Annexure VIII which forms part of this Report.
b. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo:
The particulars as required under the provisions of Section 134(3) (m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014 in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo etc. are furnished in
Annexure IX which forms part of this Report.
c. Corporate Governance:
As required under the Listing Agreement with Stock Exchange a report on
Corporate Governance is given in the Annexure IV to this Report.
d. Management Discussion Analysis:
As required under the Listing Agreement with Stock Exchange a
Management Discussion and Analysis report is given in the Annexure X to
this Report.
e. Whistle Blower Policy:
The Company has adopted the Whistle Blower mechanism for director and
employees to report the concerns about the unethical behavior, actual
and suspected fraud, or violation of the Company's Code of Conduct. The
Whistle Blower Policy is attached as Annexure XI which forms part of
this Report.
f. Sexual harassment:
The Company has adopted a policy on prevention, prohibition and
redressal of sexual harassment at workplace and has also established
local committees, as stipulated by The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules
thereunder. During the year under review, no complaints in relation to
such harassment at workplace have been reported.
VI. ACKNOWLEDGEMENT AND APPRECIATION
The Directors gratefully acknowledge the contribution made by the
employees towards the success of the Company. The Directors are also
thankful for the co-operation, support and assistances received from
the Customers, Banks, Investors, Central and State Government
departments and local authorities.
On behalf of the Board of Directors
sd/- sd/-
J.N. Godrej(DIN - 00076250) Manu Parpia (DIN - 00118333)
Chairman Managing Director and CEO
Place: Mumbai
Date: April 27, 2015
CIN : L72200MH1994PLC077342
Reg. Office : Plant 11, 3rd Floor, Pirojshanagar,
Vikhroli (West), Mumbai-400079
Tel No. : 91.22.6705 6500
Fax No. : 91.22.67056891
E-Mail : [email protected]
Website : www.geometricglobbal.com
Mar 31, 2013
The Directors have pleasure in presenting their report on the business
and operations of the Company for the year ended March 31, 2013.
IA. FINANCIAL RESULTS: (STANDALONE)
The Company''s operating performance during the year ended March 31,
2013 as compared to the previous year is summarized below:
(Rs. in Millions)
Current Year Previous Year
Revenue from Operations and Other Income 3,691.54 3,055.33
Profit before Interest, Depreciation
and Tax 564.04 366.84
Less : Finance Costs (2.70) (3.91)
Less : Depreciation and Amortization Expense (123.55) (88.76)
Profit before exceptional Items and Taxes 437.79 274.17
Add: Exceptional Items 6.12 243.94
Less : Tax adjustment in respect of
earlier years (3.35) (7.48)
Less : Tax Expense 103.06 113.61
Net profit before extraordinary Items 344.20 411.98
Add: Extraordinary Items and Prior
Period Items - -
Profit For The Period 344.20 411.98
Surplus brought forward 1,479.63 1,213.40
Profit available for Appropriations 1,823.83 1,625.38
Appropriations
Final Dividend 107.24 100.44
Dividend Tax 18.21 16.27
Transfer To General Reserve 34.42 41.20
Reversal of excess provision for dividend
distribution tax of previous years (11.23) (12.15)
Surplus carried forward 1,675.19 1,479.63
TOTAL 1,823.83 1,625.38
IB. FINANCIAL RESULTS: (CONSOLIDATED)
The Company''s operating performance during the year ended March 31,
2013 as compared to the previous year is summarized below:
(Rs. in Millions)
Current Year Previous Year
Revenue from Operations and Other Income 10,321.97 8,241.76
Profit before Interest, Depreciation
and Tax 1,609.37 1,309.62
Less : Finance Costs 35.57 24.83
Less : Depreciation and Amortization Expense 329.40 269.66
Profit before tax 1,244.40 1,015.13
Less : Provision for tax 376.85 278.05
Net profit before Extraordinary Items
and Minority Interest 867.55 737.08
Add: Extraordinary Items - (3.82)
Net Profit before Minority Interest 867.55 733.26
Less: Minority Interest (180.09) (141.68)
Net Profit 687.47 591.58
Surplus brought forward 1,926.44 1,604.32
Profit available for Appropriations 2,613.91 2,195.89
Appropriations
Proposed Dividend 107.24 100.44
Dividend Tax 18.21 16.27
Transfer To General Reserve 60.81 41.48
Corporate Dividend Tax Paid By Subsidiary 19.39 19.61
Translation of reserves of non-integral
foreign operations 3.32 -
Reversal of excess provision for dividend
distribution tax of previous years (11.23) (12.15)
Adjustments on Acquisition of Subsidiary - 103.80
Surplus carried forward 2,416.17 1,926.44
TOTAL 2,613.91 2,195.89
2. DIVIDEND:
The Directors recommend payment of dividend to the shareholders for the
year at the rate of Rs. 1.70 per Equity Share of Rs. 2 each, compared
to Rs. 1.60 dividend per Equity Share, paid last year.
3. BUSINESS REVIEW:
Part of the major markets that we serve showed a lot of uncertainty in
the second half of the financial year, particularly the off-highway
equipment manufacturing industry and Europe geography. Automotive
industry, positively recovering from the global recession, saw demand
returning in global engineering resulting in a gradual increase in
demand for our key offerings in engineering and PLM IT. Aerospace also
showed promise though from a small base.
The consolidated revenues for FY13 increased from USD 136.47 Mn in FY
12 to USD 167.51 Mn, a growth of 22.7%. Operating revenues in rupee
terms also increased from INR 8,078.9 Mn in FY 12 to INR 10,203.6 Mn in
FY 13, a growth of 26.3%. For the same period, profit-after-tax
increased from INR 591.6 Mn to INR 687.5 Mn (after adjustment for
extraordinary items), a growth of 16.21%.
The business segments of the Company - software services, engineering
services, products and embedded systems recorded the following trends
in the year FY13:
- Software services contribution to the top line decreased from
55.45% in FY12 to 55.20% in FY13.
- Engineering services contribution to the top line decreased from
39.30 % in FY12 to 39.02 % in FY13.
- Products business contribution to the top line increased from 5.3%
in FY12 to 5.7% in FY13.
The Company''s performance in the four regions in which we operate can
be summarized as follows:
- USA''s share decreased from 71.3% in FY12 to 65.10% in FY13; a
growth of 8% in absolute terms.
- Europe''s share of revenue increased from 18.4% in FY12 to 23.89% in
FY13; almost two-fold growth in absolute terms which includes revenue
consolidated on account of acquisition of 3cap.
- APAC''s share increased from 4.2% in FY12 to 4.53% in FY13.
- India''s share increased from 6.10% in FY12 to 6.48% in FY13.
These numbers reflect the positive demand environment in Europe and
investments in India which continue to be our growth markets.
Trends in various customer segments that the Company caters to were as
follows:
- Direct Industrial: Segment share of business Increased from 60.7%
in FY12 to 61.94% in FY13. In absolute terms, this segment recorded a
growth of 13.82 % over the previous year. (USD 109.62 Mn in FY13 Vs USD
96.31 Mn in FY12)
- Strategic Partners: Segment share of business reduced from 6.8% in
FY12 to 5.18% in FY13; showing a reduction of 14.51% in absolute terms.
(USD 9.04 Mn in FY13 Vs USD 10.72 Mn in FY12)
- Software ISVs: Segment share of business Increased from 32.6% in
FY12 to 32.88% in FY13. In absolute terms, this segment recorded a
growth of 12.62 % over the previous year. (USD 58.20 Mn in FY13 Vs USD
51.68 Mn in FY12)
In the coming financial year, our vertical organization and segregated
business development focus on farming and hunting accounts will help us
build closer customer relationships. Our investments in embedded
systems, new IP based solutions with partners and our consulting
capabilities are poised to provide comprehensive solutions for our
identified accounts globally. We expect better growth coming from
Europe, especially in PLM IT over the next year.
4. INVESTMENTS
During the year, the Company has subscribed to equity shares with no
par value of Geometric Europe GmbH aggregating to Euro 2.5 Million,
with a view to infuse funds in that Company.
5. DIRECTORS:
In terms of Article 131 of the Articles of Association of the Company,
Mr. J.N. Godrej and Ms. Anita Ramachandran retire by rotation and being
eligible, offer themselves for re-appointment at the ensuing Annual
General Meeting. Mr. Manu Parpia has been re-appointed as Managing
Director & CEO of the Company with effect from April 8, 2013, subject
to the approval of the Members of the Company at the ensuing Annual
General Meeting.
6. AUDITORS
M/s. Kalyaniwalla & Mistry, Chartered Accountants, Statutory Auditors
of the Company, retire on the conclusion of the ensuing Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment.
7. AUDIT COMMITTEE
The Company has an Audit Committee consisting of four non-executive
Directors of the Company, viz. Mr. Milind Sarwate - Chairman, Dr. K.A.
Palia, Dr. Richard Riff and Ms. Anita Ramachandran. The accounts have
been duly reviewed by the Audit Committee.
8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars as prescribed under Section 217(1) (e) of the Companies
Act, 1956, read with Companies (Disclosures of Particulars in the
Report of Board of Directors) Rules, 1988 are set out in the Annexure
"A" to this Report.
9. SUBSIDIARIES
The Company has the following wholly-owned Subsidiary Companies:
a) Geometric Americas, Inc., USA
b) Geometric Asia Pacific Pte. Ltd., Singapore
c) Geometric Europe GmbH, Germany
The Company has the following other Subsidiary Companies:
a) 3D PLM Software Solutions Ltd., in which the Company holds 58%
stake.
b) Geometric S.R.L., Romania (A WOS of Geometric Americas, Inc.)
c) Geometric SAS, France (A WOS of Geometric Americas, Inc.)
d) Geometric China Inc. (A WOS of Geometric Asia Pacific Pte. Ltd.,
Singapore)
e) Geometric Japan K.K. (A WOS of Geometric Asia Pacific Pte. Ltd.,
Singapore)
f) 3cap technologies GmbH (A WOS of Geometric Europe GmbH, Germany
w.e.f January 1, 2013)
During the year, Geometric Europe GmbH has acquired 100% stake in 3Cap
Technologies GmbH, a company specialized in automotive and embedded
systems located in Germany, for a total consideration of Euro 11 Mn.
The Company has initiated the transfer of its operations in France and
Romania to Geometric Europe GmbH w.e.f. April 1, 2013 and the
formalities are in progress.
As required under Section 212 of the Companies Act, 1956, the
subsidiaries'' statements of accounts for the year ended March 31, 2013
are attached to the Balance Sheet.
10. PARTICULARS OF EMPLOYEES:
As required by the provisions of Section 217 (2A) of the Companies Act,
1956, as amended, read with Companies (Particulars of Employees) Rules,
1975, the names and other particulars of the employees are set out in
the Annexure ''B'' to this Report.
11. STOCK OPTIONS:
The disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given
in the Annexure "C" to this report.
The Board of Directors of the Company at their meeting held on April
29, 2013, approved introduction of a new Stock Option Schemes titled
ESOP Scheme 2013 - Directors'' and ''ESOP Scheme 2013 - Employees'' for
issuance of upto 0.30 Mn and 31.50 Mn Options to the Directors and
Employees of the Company (including its subsidiaries) respectively. The
Scheme is subject to approval of the Members at the forthcoming Annual
General Meeting.
12. CORPORATE GOVERNANCE:
As required under the Listing Agreement with Stock Exchange a report on
Corporate Governance is given in the Annexure "D" to this report.
13. EMPLOYEE RELATIONS:
The Company continued to have cordial relations with its employees.
14. DIRECTORS'' RESPONSIBILITY STATEMENT:
As required under Section 217(2AA) of the Companies Act, 1956, the
Directors based on the representation received from the Operating
Management, and after due enquiry confirm;
(i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there has been no material
departure;
(ii) that the selected accounting policies were applied consistently
and the Directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2013 and of the profit of the Company for
the year ended on that date;
(iii) that proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(iv) that the annual accounts have been prepared on a going concern
basis.
15. ACKNOWLEDGEMENT:
The Directors gratefully acknowledge the contribution made by the
employees towards the success of the Company. The Directors are also
thankful for the co-operation, support and assistances received from
the Customers, Banks, Investors, Central and State Government
departments and local authorities.
On behalf of the Board of Directors
J.N. Godrej
Chairman
Place: Mumbai
Date: April 29, 2013
Mar 31, 2012
The Directors have pleasure in presenting their report on the business
and operations of the Company for the year ended March 31, 2012.
IA. FINANCIAL RESULTS: (STANDALONE)
The Company's operating performance (standalone) during the year ended
March 31, 2012 as compared to the previous year is summarized below:
(Rs in Millions)
Current Year Previous Year
Sale and Other Income 3,055.33 2,519.67
Profit before Interest, Depreciation
and Tax 366.84 319.15
Less:lnterest and Finance Charges (3.91) (6.14)
Less: Depreciation (88.76) (79.91)
Profit before Taxes 274.17 233.10
Add: Exceptional Items 243.94 -
Less: Tax adjustment in respect of
earlier years (7.48) (1.28)
Less: Provision for Taxes 113.61 11.31
Net Profit before Extraordinary Items
and Minority Interest 411.98 223.07
Add: Extraordinary Items and Prior
Period Items - -
Net Profit 411.98 223.07
Surplus brought forward 1,213.40 1,098.03
Profit available for Appropriation 1,625.38 1,321.10
Appropriations
Proposed Dividend 100.44 74.91
Dividend Tax 16.27 10.39
Transfer To General Reserve 41.20 22.40
Reversal of excess provision for
dividend distribution tax of previous years (12.15) -
Surplus carried forward 1,479.63 1,213.40
Total 1,625.38 1,321.10
IB. FINANCIAL RESULTS: (CONSOLIDATED)
The Company's operating performance (consolidated) during the year
ended March 31, 2012 as compared to the previous year is summarized
below:
(Rs in Millions)
Current Year Previous Year
Sale and Other Income 8,241.76 6,229.11
Profit before Interest, Depreciation
and Tax 1,309.78 946.52
Less: Interest and Finance Charges 24.83 9.87
Less: Depreciation 269.66 235.46
Profit before Taxes 1,015.29 701.19
Less: Provision for Taxes 278.21 17.12
Net Profit before Extraordinary
Items and Minority Interest 737.08 684.07
Add: Extraordinary Items (3.82) (0.53)
Net Profit before Minority Interest 733.26 683.54
Less: Minority Interest (141.68) (108.33)
Net Profit 591.58 575.21
Surplus brought forward 1,604.32 1,201.94
Profit available for Appropriation 2,195.89 1,777.15
Appropriations
Proposed Dividend 100.44 74.91
Dividend Tax 4.11 10.39
Transfer To General Reserve 41.49 61.90
Corporate Dividend Tax Paid by Subsidiary 19.61 25.63
Adjustments on Acquisition of Subsidiary 103.80 -
Surplus carried forward 1,926.44 1,604.32
Total 2,195.89 1,777.15
2. DIVIDEND:
The Directors recommend payment of dividend to the shareholders for the
year at the rate ofRs 1.60 per Equity Share of Rs 2 each, compared to Rs
1.20 dividend per Equity Share, paid last year.
3. BUSINESS REVIEW:
The good growth witnessed on both standalone and consolidated results
for the financial year 2011-12 (FY12) has reinforced our conviction in
the major markets that we serve. The industry, positively recovering
from the global recession, took future oriented decisions that
increased the demand for our services and solutions.
The consolidated revenues for FY12 increased from USD 136.47 mn in FY11
to USD 167.51 mn, a growth of 22.7%. Revenues in rupee terms also
increased from INR 6206.1 mn in FY 11 to INR 8078.9 mn in FY 12, a
growth of 30.2%. For the same period, profit-after-tax increased from
INR 575.2 mn to INR 591.6 mn (after adjustment for extraordinary
items), a growth of 2.8%. Lower growth in profit-after-tax compared to
the growth in operating revenue, is mainly due to tax on sale of asset
of INR 66 mn and higher effective tax rate in FY12 at 20.9% compared to
2.4% in FY11.
The three business segments of the Company - software services,
engineering services and products recorded the following trends in the
year FY12:
- Software services contribution to the top line decreased from 56.9%
in FY11 to 55.2% in FY12.
- Engineering services contribution to the top line increased from
36.7 % in FY11 to 39.5 % in FY12.
- Products business contribution to the top line decreased from 6.4%
in FY11 to 5.3% in FY12.
The Company's performance in the four regions in which we operate can
be summarized as follows:
- USA's share moved from 67% in FY11 to 71.3% in FY12; a growth of
30.5% in absolute terms.
- Europe's share of revenue decreased from 21.7% in FY11 to 18.4% in
FY12; a de-growth of 4.4% in absolute terms.
- APAC's share decreased from 5.3% in FY11 to 4.2% in FY12.
- India's share increased from 5.9% in FY11 to 6.1% in FY12.
These numbers reflect the positive demand environment in North America
and growing investments in India which continue to be our growth
markets.
Trends in various customer segments that the Company caters to were as
follows:
- Direct Industrial: Segment share of business reduced from 61.2% in
FY11 to 60.7% in FY12. In absolute terms, this segment recorded a
growth of 23.2% over the previous year. (USD 96.31 mn in FY12 Vs 78.14
mn in FY11)
- Strategic Partners: Segment share of business reduced from 7.6% in
FY11 to 6.8% in FY12; still showing a growth of 11.1% in absolute
terms. (USD 10.72 mn in FY12 Vs 9.65 mn in FY11)
- Software ISVs: Segment share of business increased from 31.3% in
FY11 to 32.6% in FY12. In absolute terms, this segment recorded a
growth of 29.2% over the previous year. (USD 51.68 mn in FY12 Vs 39.99
mn in FY11).
In the coming financial year, we will strengthen our differentiated
offerings with consulting capabilities to provide comprehensive
solutions for our customers' needs and focus to grow our identified key
and important accounts globally.
4. INVESTMENTS
During the year, the Company has subscribed to 432 common stock with no
par value of Geometric Americas Inc. aggregating to USD 10 million,
with a view to infuse funds in that Company.
5. DIRECTORS:
Mr. Parth Gandhi, a nominee of ICICI Venture Funds Management Company,
resigned w.ef. July 25, 2011 and Mr. K.S. Jangbahadur was appointed in
his place. Mr. K. S. Jangbahadur resigned w.e.f. August 29, 2011.
In terms of Article 131 of the Articles of Association of the Company,
Dr. Kyamas Palia and Mr. Ajay Mehra retire by rotation and being
eligible, offer themselves for re-appointment at the ensuing Annual
General Meeting.
6. AUDITORS
M/s. Kalyaniwalla & Mistry, Chartered Accountants, Statutory Auditors
of the Company, retire on the conclusion of the ensuing Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment.
7. AUDIT COMMITTEE
The Company has an Audit Committee consisting of four Non-Executive
Directors of the Company, viz. Mr. Milind Sarwate - Chairman, Dr. K. A.
Palia, Dr. Richard Riff and Ms. Anita Ramachandran. The accounts have
been duly reviewed by the Audit Committee.
8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars as prescribed under Section 217(1) (e) of the Companies
Act, 1956, read with Companies (Disclosures of Particulars in the
Report of Board of Directors) Rules, 1988 are set out in the Annexure
"A" to this Report.
9. SUBSIDIARIES:
The Company has the following wholly-owned Subsidiary Companies:
a) Geometric Americas, Inc., USA
b) Geometric Asia Pacific Pte. Ltd., Singapore
c) Geometric Europe GmbH, Germany
The Company has the following other Subsidiary Companies:
a) 3D PLM Software Solutions Ltd., in which the Company holds 58% stake
(w.e.f July 1, 2011).
b) Delmia Solutions Pvt. Ltd. (A WOS of 3D PLM Software Solutions Ltd.,
w.e.f. July 1, 2011)
c) Geometric S.R.L., Romania (A WOS of Geometric Americas, Inc.)
d) Geometric SAS France (A WOS of Geometric Americas, Inc.)
e) Geometric China Inc. (A WOS of Geometric Asia Pacific Pte. Ltd.,
Singapore)
f) Geometric Japan K.K. (A WOS of Geometric Asia Pacific Pte. Ltd.,
Singapore w.e.f. April 1, 2011)
The Boards of 3D PLM Software Solutions Limited ('3DPLM') and Delmia
Solutions Private Limited ('DSPL') have approved the merger of DSPL
with 3D PLM subject to requisite approvals.
As required under Section 212 of the Companies Act, 1956, the
subsidiaries' statements of accounts for the year ended March 31, 2012
are attached to the Balance Sheet.
10. PARTICULARS OF EMPLOYEES:
As required by the provisions of Section 217 (2A) of the Companies Act,
1956, as amended, read with Companies (Particulars of Employees) Rules,
1975, the names and other particulars of the employees are set out in
the Annexure 'B' to this Report.
11. STOCK OPTIONS:
The disclosures required to be made under SEBI (Employee Stock option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given
in the Annexure "C" to this report.
12. CORPORATE GOVERNANCE:
As required under the Listing Agreement with Stock Exchange a report on
Corporate Governance is given in the Annexure "D" to this report.
13. EMPLOYEE RELATIONS:
The Company continued to have cordial relations with its employees.
14. DIRECTORS' RESPONSIBILITY STATEMENT:
As required under Section 217(2AA) of the Companies Act, 1956, the
Directors based on the representation received from the Operating
Management, and after due enquiry confirm;
(i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there has been no material
departure;
(ii) that the selected accounting policies were applied consistently
and the Directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2012 and of the profit of the Company for
the year ended on that date;
(iii) that proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(iv) that the annual accounts have been prepared on a going concern
basis.
15. ACKNOWLEDGMENT:
The Directors gratefully acknowledge the contribution made by the
employees towards the success of the Company. The Directors are also
thankful for the co- operation, support and assistances received from
the Customers, Banks, Investors, Central and State Government
departments and local authorities.
On behalf of the Board of Directors
J.N. Godrej
Chairman
Place: Mumbai
Date: May 25, 2012
Mar 31, 2011
The Members
The Directors have pleasure in presenting their report on the business
and operations of the Company for the year ended March 31, 2011.
1A. FINANCIAL RESULTS: (STANDALONE)
The Company's operating performance (standalone) during the year ended
March 31, 2011 as compared to the previous year is summarized below:
(Rs. in Millions)
Current Year Previous Year
Sales and Other Income 2,519.67 2,209.86
Profit before Interest, Depreciation
and Tax 319.15 236.92
Less: Interest and Finance Charges (6.14) (6.39)
Less: Depreciation (79.91) (80.43)
Profit before Taxes 233.10 150.10
Less: Tax adjustment in respect of
earlier years (1.28) -
Less: Provision for Taxes 11.31 10.61
Net Profit before Extraordinary Items
and Minority Interest 223.07 139.49
Add: Extra ordinary Items & Prior
Period Items - (3.13)
Net Profit 223.07 136.36
Surplus brought forward 1,098.03 1,052.96
Profit available for Appropriation 1,321.10 1,189.32
Appropriations
Proposed Dividend 74.91 68.33
Dividend Tax 10.39 9.32
Transfer to General Reserve 22.40 13.65
Surplus Carried Forward 1,213.40 1,098.03
Total 1,321.10 1,189.33
IB. FINANCIAL RESULTS: (CONSOLIDATED)
The Company's operating performance (consolidated) during the year
ended March 31, 2011 as compared to the previous year is summarized
below:
(Rs. in Millions)
Current Year Previous Year
Sales and Other Income 6229.11 5,143.60
Profit before Interest, Depreciation
and Tax 946.52 865.02
Less interest and Finance Charges 9.87 33.25
Less: Depreciation 235.46 231.52
Profit before Taxes 701.19 600.25
Less Provision for Taxes 17.12 4.05
Net Profit before Extraordinary Items
and Minority Interest 684.07 596.20
Add: Extra ordinary Items (0.53) (2.19)
Net Profit before Minority Interest 683.54 594.01
Less: Minority Interest (108.33) (127.40)
Net Profit 575.21 466.61
Surplus brought forward 1,201.94 861.84
Profit available for Appropriation 1,777.15 1,328.45
Appropriations
Proposed Dividend 74.91 68.33
Dividend Tax 10.39 11.50
Transfer to General Reserve 61.90 43.40
Corporate Dividend Tax Paid by Subsidiary 25.63 3.28
Surplus Carried Forward 1,604.32 1,201.94
Total 1,777.15 1,328.45
2. DIVIDEND:
The Directors recommend payment of dividend to the shareholders for the
year at the rate of? 1.20 per Equity Share of Rs. 2 each, compared to
Rs. 1.10 including a special dividend of Rs. 0.30 per Equity Share,
paid last year.
3. BUSINESS REVIEW:
The financial year 2010-11 was a good year in which we saw an increased
demand for our services and solutions as our major markets slowly but
surely recovered from the effects of the global recession. The
consolidated revenues for year ended FY11 increased from USD 108.12 mn
in FY10 to USD 136.47 mn, a growth of 26.2%. Revenues in rupee terms
also increased from INR 511.56 Cr in FY10 to INR 620.61 Cr in FY11, a
growth of 21.3% impacted due to the appreciation of the rupee by 3.9%.
For the same period, profit after tax increased from INR 46.66 Cr to
INR 57.52 Cr (after adjustment for extraordinary items). A significant
contributor to this increase was differential in forex gain compared to
the last year which is INR 19.61 crores in FY11 as against the
lossoflNR1.97croresinFY10.
The three business segments of the Company - software services,
engineering services and products recorded the following trends in the
year FY11:
- Software services contribution to the top line decreased from 64.3%
in FY10 to 56.9% in FY11. In absolute terms, this business increased
by 11.7% over the previous year.
- Engineering services contribution to the top line increased from
28.4% in FY10 to 36.7 % in FY11. In absolute terms, the Engineering
services increased by 63.1% over the previous year.
- Products business contribution to the top line decreased from
7.3% in FY10 to 6.4% in FY11. In absolute terms, the products
business increased by 10.1% over the previous year.
- The Company's performance in the four regions in which we operate
can be summarized as follows:
- USA's share moved from 63.3% in FY10 to 72.6% in FY11; a growth of
44.8% in absolute terms.
- Europe's share of revenue decreased from 26.2% in FY10 to 16% in
FY11; a de-growth of 23.2% in absolute terms.
- APAC's share increased from 4.7% in FY10 to 5.6% in FY11.
- India's share increased from 5.8% in FY10 to 5.9% in FY11.
These numbers reflect the positive demand environment.
Trends in various vertical segments that the Company caters to were as
follows:
- Software ISV & Partners: Segment share of business reduced from
47.6% in FY10 to 38% in FYll; still showing a growth of 1.8%
in absolute terms.
- Automotive: Segment share of business increased from 32.5% in
FY10 to 34% in FYll. In absolute terms, this segment recorded a growth
of 33.6% over the previous year. (USD 43.48 mn in FYll Vs 32.54 mn
in FY10)
- Agricultural and Construction Equipment: Segment
share of business increased at 14.3% in FYll compared to 10.8% in FY10.
In absolute terms, this segment recorded a growth of 68.9% over the
previous year. (USD 18.30 mn in FYll Vs 10.84 mn in FY10)
- Industrial and Marine Engineering: Segment share
of business increased from 5.3% in FY10 to 7.5% in FYll. In absolute
terms, this segment recorded a year-on-year growth of 80%. (USD 9.52 mn
in FYll Vs 5.29 mn in FY10).
In the coming financial year, while the demand for our services remain
high, our approach will be to repackage our offerings into solutions
that meet our customers' needs.
4. DIRECTORS:
Mr. Parth Gandhi, a nominee of ICICI Venture Funds Management Company
Limited was appointed as an Additional Director with effect from
October 22, 2010. Mr. Gandhi holds office until the date of the
Annual General Meeting. Your Board recommends his appointment as
a Director of the Company.
Mr. Ravishankar G., Managing Director & CEO of the Company resigned
from office with effect from April 8, 2011. The Board places on
record its appreciation to Mr. Ravishankar G. for producing record
profits in FYll. Mr. Manu Parpia has been appointed as Managing
Director & CEO of the Company with effect from April 8, 2011,
subject to the approval of the members of the Company at the ensuing
Annual General Meeting.
In terms of Article 131 of the Articles of Association of the Company,
Mr. Milind Sarwate and Dr. Richard Riff retire by rotation and being
eligible, offer themselves for re-appointment at the ensuing Annual
General Meeting.
5. AUDITORS
M/s. Kalyaniwalla & Mistry, Chartered Accountants, Statutory Auditors
of the Company, retire on the conclusion of the ensuing Annual General
Meeting of the Company and being eligible,offer themselves for
re-appointment.
6. AUDIT COMMITTEE
The Company has an Audit Committee consisting of four non-executive
Directors of the Company, viz Mr. Milind Sarwate - Chairman,
Dr. K A Palia, Dr. Richard Riff and Ms. Anita Ramachandran. The
accounts have been duly reviewed by the Audit Committee.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars as prescribed under Section 217(1) (e) of the Companies
Act, 1956, read with Companies (Disclosures of Particulars in the
Report of Board of Directors) Rules, 1988 are set out in the Annexure
"A" to this Report.
8. SUBSIDIARIES
The Company has the following wholly-owned Subsidiary Companies:
a) Geometric Americas Inc., USA
b) Geometric Asia Pacific Pte. Ltd., Singapore
c) Geometric Europe GmbH, Germany
The Company has the following other Subsidiary Companies:
a) 3D PLM Software Solutions Ltd., in which the Company holds 70%
stake.
b) Geometric S.R.L., Romania (A WOS of Geometric Americas Inc., USA)
c) Geometric SAS France (A WOS of Geometric Americas Inc., USA)
d) Geometric China Inc. (A WOS of Geometric Asia Pacific Pte. Ltd.,
Singapore)
e) Geometric Japan K.K. (A WOS of Geometric Asia Pacific Pte. Ltd,
Singapore w.e.f. April 1,2011)
The Hon'ble High Court of Judicature at Bombay has, by its Order dated
April 8, 2011, sanctioned the Scheme of Amalgamation of Somero
Enterprises Inc. with 3D PLM Software Solutions Ltd., a subsidiary of
the Company.
As required under Section 212 of the Companies Act, 1956, the
subsidiaries' statements of accounts for the year ended March 31, 2011
are attached to the Balance Sheet.
9. PARTICULARS OF EMPLOYEES:
As required by the provisions of Section 217(2A) of the Companies Act,
1956, as amended, read with Companies (Particulars of Employees) Rules,
1975, the names and other particulars of the employees are set out in
the Annexure 'B' to this Report.
10. STOCK OPTIONS:
The disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given
in the Annexure "C" to this Report.
The Board of Directors of the Company at their meeting held on April
25, 2011, approved introduction of a new Employee Stock Option Scheme
titled 'ESOP Scheme-2011' for issuance of upto 1.8 Million Options to
the senior management of the Company and its subsidiaries. The Scheme
is subject to approval of the Members at the forthcoming Annual General
Meeting.
11. CORPORATE GOVERNANCE:
As required under the Listing Agreement with Stock Exchanges a report
on Corporate Governance is given in the Annexure "D" to this report.
12. EMPLOYEE RELATIONS:
The Company continued to have cordial relations with its employees.
13. DIRECTORS' RESPONSIBILITY STATEMENT:
As required under Section 217(2AA) of the Companies Act, 1956, the
Directors based on the representation received from the Operating
Management, and after due enquiry confirm;
(i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there has been no material
departure;
(ii) that the selected accounting policies were applied consistently
and the Directors made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2011 and of the profit of the Company for
the period ended on that date;
(iii) that proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(iv) that the annual accounts have been prepared on a going concern
basis.
14. ACKNOWLEDGEMENT:
The Directors gratefully acknowledge the contribution made by the
employees towards the success of the Company. The Directors are also
thankful for the co- operation, support and assistances received from
the Customers, Banks, Investors, Central and State Government
departments and local authorities.
On behalf of the Board of Directors
J.N.Godrej
Chairman
Place: Mumbai
Date: April 25, 2011
Mar 31, 2010
The Directors have pleasure in presenting their report on the business
and operations of the Company for the year ended March 31, 2010.
1A. Financial Results: (Standalone)
The Companys operating performance (standalone) during the year ended
March 31, 2010 as compared to the previous year is summarized below:
(Rupees in Millions)
Current Year Previous Year
Sale and Other Income 2,210.42 2,453.85
Profit before Interest, Depreciation and
Tax 234.57 116.55
Less: Interest and Finance Charges 4.03 10.58
Less: Depreciation 80.43 96.58
Profit before Taxes 150.11 9.40
Less : Tax adjustment in respect of
earlier years - -
Less: Provision for Taxes 10.61 3.48
Net Profit before Extraordinary Items and
Minority Interest 139.5 5.92
Add: Extraordinary Items and Prior Period
Items (3.13) 424.22
Net Profit 136.37 430.15
Surplus brought forward 1,052.96 1,257.98
Residual Dividend for previous year - (0.01)
Corporate Dividend Tax thereon - -
Profit available for Appropriation 1,189.33 1,688.12
Appropriations
Proposed Dividend 68.33 49.69
Dividend Tax 9.32 3.86
Transfer To Investment Reorganization Reserve - 538.51
Transfer To General Reserve 13.65 43.10
Surplus Carried Forward 1,098.03 1,052.96
Total 1,189.33 1,688.12
2. DIVIDEND:
The Directors recommend payment of dividend to the shareholders for the
year at the rate of Rs. 1.10 per Equity Share of Rs. 2 each, the same
as last years dividend at the rate of Rs. 0.80 per Equity Share plus a
special dividend at the rate of Rs. 0.30 per Equity Share. The
Directors believe that in view of the future prospects of the Company,
the significant cash accumulations with the Company and the fact that
the Company is celebrating its 15th year since inception, it was
appropriate to increase the dividend in the form of a special dividend
of 15%, together with the same dividend of 40% as per the previous
year.
3. BUSINESS REVIEW:
The Financial Year 2009-10 was a challenging year as we had to adapt
quickly to the changing economic scenario. The Company had to take
some tough decisions to strike a balance in order to maintain the
pillars of growth for the economic turnaround, while focusing on
improving productivity and quality to serve the customers more
efficiently than ever before.
The consolidated revenues for year ended FY10 declined from USD 129.47
mn to USD 108.12 mn, a decline of 16.5 %. However, revenues in rupee
terms declined from INR 598.07 Crores to INR 511.56 Crores, a decline
of 14.5 % on back of a favourable dollar to rupee exchange rate. For
the same period, profit-after-tax increased from INR 6.88 Crores to INR
46.67 Crores (after adjustment for extraordinary items). A significant
contributor to this increase was differential in forex loss compared to
the last year which dropped from INR 48.36 crores in FY09 to INR 1.97
crores in FY10.
The three business segments of the Company - software services,
engineering services and products recorded the following trends in the
year FY10:
- Software services contribution to the top-line increased from 60.30%
in FY09 to 64.25%. In absolute terms, this business decreased by 11%
over the previous year.
- Engineering services contribution to the top line decreased from 33%
in FY09 to 28.42% in FY10. This was on account of conscious efforts to
get out of loss making contracts in the US as also focused efforts at
retaining only the offshorable contracts.
- Products business contribution to the top-line increased from 6.7% in
FY09 to 7.3% in FY10. Although, in absolute terms, the products
business decreased by 9.6% over the previous year.
- The Companys performance in the four regions in which we operate can
be summarized as follows:
USAs share moved from 67.1% in FY09 to 62.9% in FY10; remaining flat
in absolute terms. - Europes share of revenue increased from 22.5% in
FY09 to 26.5% in FY10.
- APACs share dropped from 6.7% in FY09 to
4.8% in FY10.
Indias share rose from 3.7% in FY09 to 5.7%
in FY10. These numbers reflect the effect of the economic slowdown
that has hit the US first and the auto industry specifically.
Trends in various vertical segments that the Company caters to were as
follows:
- Software ISV& Partners: Segment share of business reduced marginally
from 47.71% in FY09 to 47.1% in FY10; remained flat in absolute terms.
- Automotive: Segment share of business increased from 31.5% in FY09 to
32.5% in FY10. In absolute terms, this segment recorded a de-growth of
14.3% over the previous year. (USD 32.58 mn in FY10 Vs USD 38.02 mn in
FY09).
- Agricultural and Construction Equipment: Segment share of business is
almost flat at 10.8% in FY10 compared to 11% in FY09. In absolute
terms, this segment recorded a de-growth of 18.1% over the previous
year. (USD 10.84 mn in FY10 Vs USD 13.23 mn in FY09).
- Industrial and Marine Engineering: Segment share of business
increased from 4.6% in FY09 to 5.3% in FY10. In absolute terms, this
segment recorded a year-on-year de-growth of 4.3%. (USD 5.29 mn in FY10
Vs USD 5.53 mn in FY09).
During the year, the Company saw increasing traction in the apparel,
oil & gas and aerospace industry, clearly indicating the impact of
diversification and efforts to reduce dependence on the auto industry.
4. INVESTMENTS:
We had initiated the process of subsidiary restructuring with the
objective of having single legal entity in each of the Geographies.
This will help in consolidation and optimization of the administrative
costs. As part of this process:
We merged Geometric Americas Inc., and Geometric Engineering Inc.,
(formerly Modern Enginnering, Inc.) to form Geometric Americas Inc., in
2008. Geometric China, a subsidiary of Geometric Engineering Inc., was
taken over by Geometric APAC in 2008. Effective April 1, 2009, we
regrouped the shareholdings to make Geometric Technologies, Inc. a 100%
subsidiary of Geometric Limited. Geometric Americas Inc., is a 100%
subsidiary of Geometric Technologies, Inc., as a results any
loss/profits in the US businesses can be offset between the 100% owned
subsidiary and parent (between Geometric Technologies, Inc and
Geometric Americas, Inc).
On April 1, 2010 Geometric Technologies, Inc. merged with Geometric
Americas, Inc. and the merged entity is renamed as Geometric Americas,
Inc. As a result we have one subsidiary in the US to consolidate
operations.
5. DIRECTORS:
In terms of Article 131 of the Articles of Association of the Company,
Mr. Manu Parpia and Ms. Anita Ramachandran retire by rotation and being
eligible, offer themselves for re-appointment at the ensuing Annual
General Meeting.
6. AUDITORS:
M/s. Kalyaniwalla & Mistry, Chartered Accountants, Statutory Auditors
of the Company, retire on the conclusion of the ensuing Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment.
7. AUDIT COMMITTEE
The Company has an Audit Committee consisting of four Non-Executive
Directors of the Company, viz. Mr. Milind Sarwate - Chairman, Dr. K A
Palia, Dr. Richard Riff and Ms. Anita Ramachandran. The accounts have
been duly reviewed by the Audit Committee.
8. CONSERVATIONOFENERGYJECHNOLOGYABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars as prescribed under Section 217(1) (e) of the Companies
Act, 1956, read with Companies (Disclosures of Particulars in the
Report of Board of Directors) Rules, 1988 are set out in the Annexure
"A" to this Report.
9. SUBSIDIARIES:
The Company has the following wholly-owned Subsidiary Companies:
a) Geometric Technologies, Inc., USA
b) Geometric Asia Pacific Pte. Ltd., Singapore
c) Geometric Europe GmbH, Germany
The Company has the following other Subsidiary Companies:
a) 3D PLM Software Solutions Ltd., in which the Company holds 70%
stake.
b) Geometric Americas, Inc. (A WOS of Geometric Technologies, Inc.)
c) Geometric S.R.L., Romania (A WOS of Geometric Americas, Inc.)
d) Geometric SAS, France (A WOS of Geometric Americas, Inc.)
e) Geometric China Inc. (A WOS of Geometric Asia Pacific Pte. Ltd.,)
As required under Section 212 of the Companies Act, 1956, the
subsidiaries statements of accounts for the year ended March 31, 2010
are attached to the Balance Sheet.
10. PARTICULARS OF EMPLOYEES:
As required by the provisions of Section 217 (2A) of the Companies Act,
1956, as amended, read with Companies (Particulars of Employees) Rules,
1975, the names and other particulars of the employees are set out in
the Annexure B to this Report.
11. STOCK OPTIONS:
The disclosures required to be made under SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given
in the Annexure "C" to this report.
12. CORPORATE GOVERNANCE:
As required under the Listing Agreement with Stock Exchange a report on
Corporate Governance is given in the Annexure "D" to this report.
13. EMPLOYEE RELATIONS:
The Company continued to have cordial relations with its employees.
14. DIRECTORS RESPONSIBILITY STATEMENT:
As required under Section 217(2AA) of the Companies Act, 1956, the
Directors based on the representation received from the Operating
Management, and after due enquiry confirm;
(i) that in the preparation of the annual accounts, the applicable
accountingstandards have been followed and there has been no material
departure;
(ii) that the selected accounting policies were applied consistently
and the Directors made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2010 and of the profit of the Company for
the period ended on that date;
(iii) that proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(iv) that the annual accounts have been prepared on a going concern
basis.
15. ACKNOWLEDGEMENT:
The Directors gratefully acknowledge the contribution made by the
employees towards the success of the Company. The Directors are also
thankful for the co-operation, support and assistances received from
the customers, banks, investors, Central and State Government
departments and local authorities.
On behalf of the Board of Directors
J.N. Godrej
Chairman
Place: Mumbai
Date: April 26, 2010