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					                                                                      Plot No. 4, Pune Infotech Park
                                                                      M.I. D. C. Hinjwadi, Taluka Mulshi
                                                                      Pune 411 027
NORTH AMERICA                                                         Tel: +91-20-2290 6000
USA - Geometric Software Solutions, Inc.                              Fax: +91-20-2293 2760
Merrimack
30 Daniel Webster Highway                                             No. 2/1, Ground Floor
Suite 4
Merrimack,NH 03054
Tel: +1-603-881 3633
                                                                      Embassy Icon Annex, Infantry Road
                                                                      Bangalore - 560 001
                                                                      Tel.: +91-80-5662 0200-03
                                                                                                                               the Power of Productive Partnerships
Fax: +1-603-881 3636                                                  Fax: +91-80-5662 0211

Detroit                                                               3DPLM Software Solutions Ltd.
1554, Hartland                                                        Plant-14, Pirojshanagar
Troy, MI 48083                                                        Vikhroli(East)
Tel: +1-248-703 2413                                                  Mumbai 400 079
Fax: +1-248-524 0221                                                  Tel: +91-22-5599 5100
                                                                           +91-22-5596 0800
EUROPE                                                                Fax: +91-22-5596 0891
GERMANY - Geometric Software Solutions Co. Ltd.
                                                                      SINGAPORE - Geometric Software Solutions Pte. Ltd.
Pfizer Strasse 2A
                                                                      78 Shenton Way #26-02
70184 Stuttgart
                                                                      Singapore 079120
Tel: +49-711-860 2080
                                                                      Tel: +65-9688 2913
Fax: +49-711-860 2081
                                                                      Fax: +65-6755 1971

ASIA-PACIFIC                                                          JAPAN - Branch, Geometric Software Solutions Pte. Ltd.
INDIA - Geometric Software Solutions Co. Ltd.                         Aoyama Lamia Bldg. 6F
(Head Quarters)                                                       5-1-3 Minami-Aoyama
Plant-14, Pirojshanagar                                               Minato-ku
Vikhroli(East)                                                        Tokyo 107-0062
Mumbai 400 079                                                        Tel: +81-3-5464 9902
Tel: +91-22-5596 0800                                                 Fax: +81-3-5464 9903
     +91-22-5599 5100
Fax: +91-22-5596 0891




                                                S o f t w a r e S o l u t i o n s

                                                                                                                                                               S o f t w a r e S o l u t i o n s
                                           Geometric Software Solutions Company Limited
                                           Regd Office: Plant 14, Pirojshanagar
                                           Vikhroli (East), Mumbai - 400 079, INDIA
                                           Tel: +91-22-5596 0800, Fax: +91-22-5596 0891                                         A SEI CMMi Level 5 Company   Annual Report 2003-2004
                                           E-mail: investor-relations@geometricsoftware.com

                                           www.geometricsoftware.com
Contents

                                                                                                                                                  Page Nos.

Board of Directors ..............................................................................................................................................2

Managing Director's Note................................................................................................................................3-5

Financial Highlights .........................................................................................................................................6-8

Profile of Software Developers...........................................................................................................................9

Business Update .........................................................................................................................................10-23

Year at a Glance...............................................................................................................................................24

Directors’ Report & Annexures....................................................................................................................25-38

Management Discussion and Analysis........................................................................................................39-43


FINANCIALS
Auditor's Report & Annexure to Auditor's Report ........................................................................................44-45

Balance Sheet, Profit & Loss Account, Cash Flow Statement & Schedules ...............................................46-65

Statement pursuant to Section 212 of the Companies Act, 1956 .....................................................................66

Ratio Analysis...................................................................................................................................................67

Annual Report of Geometric Software Solutions, Inc..................................................................................68-74

Annual Report of 3D PLM Software Solutions Ltd. .....................................................................................75-95

Annual Report of Geometric Software Solutions Pte. Ltd. ........................................................................96-105

Consolidated Financial Statements under the Companies Act, 1956 .....................................................106-123

Consolidated Financial Statements as per US GAAP.............................................................................124-140


Safe Harbour Provision
Certain statements in this report concerning our future growth prospects are forward-looking statements, which
involve a number of risks and uncertainties that could cause actual results to differ materially from those in such
forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited
to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in
IT services including those factors which may affect our cost advantage, wage increases in India, our ability to
attract and retain highly skilled professionals, time and cost overruns on fixed-price contracts, client
concentration, restrictions on immigration, our ability to manage our international marketing and sales
operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks,
liability for damages on our service contracts and product warranty, the success of the companies in which the
Company has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal
restrictions on acquiring companies outside India, and unauthorized use of our intellectual property and general
economic conditions affecting our industry. The Company may, from time to time, make additional written and oral
forward-looking statements and our reports to shareholders. The Company does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf of the Company.                                                                          1
                                                           Tenth Annual Report & Accounts
                                                      For the Year Ended 31st March, 2004                       Managing Director’s note to Shareholders

                                                                                                                                                                                      paragraph, we will have well and truly 'Crossed the
                                                                                                                                                                                      Chasm'*. However, in order to prepare for this journey,
                                                                                                                                                                                      your management has an integrated approach
                                                                                                                                                                                      comprised of the 5P's viz. PLM, People, Processes,
                                                                                                                                                                                      Partnerships, and Products. As the 5P's constitute the
                                                                                                                                                                                      most vital elements of our plans over the next three
                                                                                                                                                                                      years, I believe it is appropriate to dwell on what each
                                                                                                                                                                                      means in the overall context of building your Company
                                                                                                                                                                                      and executing its Mission, viz. “Customer Satisfaction
                                       Board of Directors                                                                                                                             through World Class PLM solutions Delivered with
                                                                                                                                                                                      Passion”

                                                                                                                                                                                      PLM
                                                                                                                                                                                      In the last three years Geometric has focused on the
                                                                                                                                                                                      PLM market. We believe, given our genesis this is an
                                                                                                                Manu Parpia                                                           appropriate approach. In our view, given the current
                                                                                                                Managing Director                                                     state of the Indian software industry, there are a few
                                                                                                                                                                                      viable strategies for success. The diagram below
                                                                                                                After a relatively slow start in the first quarter, we made
                                                                                                                                                                                      attempts to provide a simple pictorial depiction. The
                                                                                                                steady progress with a consolidated growth rate in
                                                                                                                                                                                      top layer represents the large Indian software
                                  J. N. Godrej              Manu Parpia                                         revenues of around 10% quarter on quarter. I believe
                                                        Managing Director
                                                                                                                                                                                      companies. Thus the 'top to tail' general services
                                   Chairman                                                                     our strategy of focusing on PLM (Product Lifecycle
                                                                                                                                                                                      space is already occupied by companies who have
                                                                                                                Management) while building a network of partnerships
                                                                                                                                                                                      built successful models and have achieved
                                                                                                                is paying off. Geometric is a recognized brand in the
                                                                                                                                                                                      economies of scale, their annual revenues approach
                                                                                                                PLM arena, one associated with a high level of skill
                                                                                                                                                                                      or exceed a billion dollars. Imitating them is not likely to
                                                                                                                and integrity. The developments this year reinforce my
                                                                                                                                                                                      be successful when one is one tenth or one-twentieth
                                                                                                                belief that we are well on our way to 'Cross the
                                                                                                                                                                                      their size. This then leaves only a few viable options
                                                                                                                Chasm'*.
                                                                                                                                                                                      viz. build and sell products; be a 'captive' supplier tied
                                                                                                                                                                                      through investment or a joint venture; or build a
                                                                                                                The rate of progress also further supports our belief
                                                                                                                                                                                      specialized practice. In a way Geometric has a unique
                                                                                                                that the target we set out in our AGM in 2002 viz. to
                                                                                                                                                                                      blend of the three: we build products and components,
                                                                                                                grow to a $100 million Company by FY 07, is within our
                                                                                                                                                                                      we have created a joint venture with Dassault
                                                                                                                grasp. The period ahead provides your Company with
                                                                                                                                                                                      Systemes and the theme through all our activities is
K. A. Palia         Frank Perna,Jr.           Marc Dulude          Abhay Havaldar      Anita Ramachandran       a unique opportunity. The 'India Brand' as a software
                                                                                                                                                                                      'We specialize in PLM'.
                                                                                                                destination has made its mark. An increasing number
                                                                                                                of companies throughout the world are acknowledging
                                         Company Secretary                                                      that India represents an attractive option for software
                                                                                                                development and services. The combination of skilled
                                        Mr. Rajkumar Bidawatka
                                                                                                                resources at a reasonable cost coupled with an                               Indian Software Industry - Changes
                                                 Auditors                                                       improving telecom infrastructure makes a compelling                       Based on size and capability software companies can be demarcated into the
                                                                                                                                                                                          large horizontal players catering to a wide range of industries and specialists
                                         Kalyaniwalla & Mistry                                                  driver.                                                                                     who cater to specific verticals or domains.
                                         Chartered Accountants
                                                                                                                To achieve a revenue objective of $100 million by '07,                                       Indian Software Space
                                                                                                                we need to grow at a CAGR of over 60% in the next                                         Horizontals - Space Occupied by top 5-6
                               Registrars & Share Transfer Agents                                               three years (in US Dollar terms). Furthermore, growth                                                    Companies
                                        Intime Spectrum Registry Ltd.                                           in revenue cannot come at the cost of profits and                                        Vertical
              C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup, Mumbai-400 078                                                                                                                 Players -
                 Tel: +91-22-5555 5454 / 2592 3837, Fax: +91-22-5555 5353 / 2567 2693
                                                                                                                dividends, all in the context of a rising rupee and a                                    Focused
                                                                                                                                                                                                                        Captive Centers
                                                                                                                                                                                                                          Either wholly       Product
                                                                                                                shortage of skilled manpower. Achieving these multi-                                    on specific
                                                                                                                                                                                                                           Owned or          Companies
                                                                                                                                                                                                        industries
                                                                                                                faceted objectives, while posing a major challenge, is                                      or           Joint Ventures
                                          Registered Office
                                                                                                                a strategic necessity. As the Indian software industry                                   domains
                     Plant 14, Pirojshanagar, Vikhroli (East), Mumbai-400 079, India
                             Tel: +91-22-5596 0800, Fax: +91-22-5596 0891                                       matures, there will inevitably be winners, losers and
                                                                                                                consequent consolidations. Critical mass will be one of
                                                                                                                the main criteria for continued success, enabling
                                                                                                                corporations to attract and retain both customers and
                                                                                                                                                                                      While we remain dedicated to our specialty PLM,
                                                                                                                people.
                                                                                                            2                                                                         we've recognized the need to address an even larger                                   3
                                                                                                                On achieving the objectives set out in the previous
                                                                                                                *Ref. to explanation in last 2 years Annual Report - Crossing the Chasm is a concept propagated by Geoffrey A. Moore in his book by the
                                                                                                                same name.
market. Failure to do so would constrict our growth and      On the other hand over the past twelve months our               Processes                                                     opportunity in India for a developer to help build a
therefore our ability to achieve the critical mass to        partners have seen that we mean it when we say we                                                                             world-class product in the PLM space.
'Cross the Chasm'*. Thus, since we went public in            'Work through our partners' and not try and go around           By 2007, we expect to have over 2,000 employees.
2000, we have added to the market we address almost          them. We are now making joint bids for significant              We plan to have at least three large locations viz.           In the past few years Products share of revenue has
every year by increasing our offering. In late 2000 we       projects with our partners and we see this trend                Pune, Bombay and Bangalore. In addition we will have          declined as we struggled to bring more predictability to
added PDM and Visualization to our specialty                 increasing. Thus our emphasis on transparency,                  to support employees at our customers' sites both in          our revenue streams. We believe this phase of
Geometry. Then in early 2002 we defined our                  integrity and consistency is helping us build a network         India and overseas. Thus from a company with                  consolidation is over. We are now entering a phase
partnership approach with a view to addressing the           of partnerships which I believe forms the foundation of         employees doing mostly programming in PLM located             where we need to strike out in new directions and
Industrial end-user; hitherto we addressed mainly            the bridge we have built in order to 'Cross the Chasm'*.        primarily in a single center, we will have become a           aggressively seek avenues to add value to our
PLM software companies. In April 2003 we decided to                                                                          Company with multi locations, dispersed staff and             customers. This year, in association with our long-
add Engineering Services capability by setting up a          People                                                          offering a diverse set of services in the PLM field, to       standing partner SolidWorks, we introduced e-
new center in Bangalore. In early 2004 we outlined                                                                           customers ranging from Software OEMs to large                 Drawings for Pro/Engineer and are adding more
plans to provide end-to-end PLM solutions by offering        The essence of Geometric is its people; their panache,          System Integrators.                                           formats to our offering. We have also begun to explore
customers the ability to outsource activities such as        their passion, their drive. We face a major challenge as                                                                      opportunities, in association with our partners, to build
'Help Desk' and Technical Support.                           we move forward. As I mentioned in an earlier                   There is no doubt in my mind that we will need to have        and market a series of connector based solutions
                                                             paragraph, Geometric's original focus was Geometry.             very strong processes to support such activity. Indeed        between differing CAD and PDM packages as well as
As a result of the additions to our portfolio we believe     We then added PDM and visualization thus covering               we recognized this need three years ago when we               other integrations. Such solutions, if successful, will
we have added significantly to the market addressable        all aspects related to PLM programming. We are now              decided to embark on benchmarking our development             enable us to offer our partners valuable competitive
by Geometric. Our calculations lead us to believe that       in the process of adding Engineering Services,                  processes. Two years ago we achieved CMMi level 3             advantage, while also building a service offering
the market we addressed with our offerings when we           Technical Support and even documentation. Each of               status and in March '04, thanks to the tremendous             around customization to meet individual customer
went public was less than $ 200 million. Today, with our     these is a related, yet different, discipline requiring a       efforts of our teams, we were certified as conforming to      needs.
end-to-end PLM approach we can address a market in           different approach. For example, Engineering                    Level 5, the highest achievable. But as I said earlier,
excess of $5 billion! This is important in the context of    Services does not require any significant                       development forms but one aspect of our offering. So          These 5 P's then form the fabric of our effort to
our goal of becoming a $100 million company, as we           programming skills, rather domain (automotive,                  we are committed to achieving ISO 9000 certification          successfully grow the Company while retaining its
can be confident the market we address is large              aerospace, etc.) knowledge is a major factor.                   for our Engineering Services offering.                        distinctive and unique nature.
enough to accommodate our objectives.                        Furthermore Engineering Services needs to be run in
                                                             two shifts to be cost effective, whereas in                     We need to ensure that the whole organization is              Other important matters such as the dividend policy,
Partnerships                                                 programming we have flexi time for attendance!                  aligned to our effort to build a $100 million profitable,     profitability and the issuance of bonus shares are laid
                                                             Similarly technical support may need to work at nights          sustainable and scalable business. To help us in this         out in the Directors Report attached. I hope the
Partnerships represent another unique aspect of how          so as to match the hours of its customers overseas.             endeavor, we have decided to use the Balanced Score           shareholders will be pleased with the performance of
Geometric addresses its market. In last year's report, I                                                                     Card (BSC) as a tool to help align the organization. We       the Company to date, the new dividend policy and the
spent considerable time explaining our approach in           Motivating employees with these diverse skills poses            have also commenced an exercise to get our HR                 commitment to an aggressive growth path.
this regard. In the last twelve months, I am pleased to      a new challenge to our management. We need to be                activities PCMM certified. We stress the importance of
report that our approach appears to be paying off.           able to show career paths, which are attractive to each         building processes in all our communications and              Finally, I'd like to thank my fellow Directors and all my
Initially partners were concerned about being                discipline and ensure that we attract and retain the            encourage employees to think beyond immediate                 colleagues for their support and encouragement. I
dependent on an overseas partner to meet the needs           best talent in each sphere. We need to do all this in a         actions. We are aware that excessive stress on                look forward to working together and building an
of their long time customers. Over the past twelve           manner that does not cause the 'programming core' of            process can cause the organization to degenerate into         enviable profitable enterprise with revenues of $100
months two major factors have served to address our          the Company to feel alienated because some                      bureaucracy, so we are emphasizing the need to use            million by 2007.
partners concerns.                                           adjustments have to be made. Fortunately these                  common sense and initiative through a set of rules
                                                             challenges are not atypical and are being faced by              called simply 'The Geometric Way'. The blend of
Our partners' customers, typically large industrial          other companies, so solutions do exist. We are                  processes and initiative will, in our collective view, help   Thank you once again.
users, have seen the need to use overseas resources          therefore employing consultants selectively to help us          us to scale Geometric while still retaining its essential
to cut their costs over the long term. End user              build a policy structure and framework.                         strengths that enable it to deliver cost effective PLM
customers are therefore demanding their long time                                                                            solutions with passion.
local suppliers to find ways to bring on board overseas      In our view there is going to be a shortage of skilled
resources while continuing to retain their in depth          staff in the PLM programming field. Thus while we               Products
knowledge of the end users processes and domains.            need to diversify our offering , we also need to ensure                                                                       Manu Parpia
This has forced our partners to seek means to either         we build skills in areas such as Engineering Services.                                                                        Managing Director
                                                                                                                             Geometric's key differentiator is its ability to develop
build an overseas capability or work with a partner that     Retention and nurturing of PLM programming talent is            and build products in the PLM space. This ability is why
will not compete with them. While building an overseas       a critical factor in our continued success. We have             leading software OEMs have approached Geometric
capability is an option that is theoretically open to all,   also embarked on a program to intensively train staff in        to undertake software development for them.
the ability to access and retain trained resources           up and coming PLM skill sets such as Dassault                   Products is a key value-add when we talk to partners
overseas in the specialized area of PLM is a non-trivial     Systemes CAA architecture and UGS PLM's                         about doing business together, for it can provide them
matter, even for very large firms.                           TeamCenter series.                                              with a unique value proposition. Finally Products helps
                                                                                                                             Geometric attract talent, as it provides the only
                                                                                                                         4                                                                                                                             5
                                             Financial Highlights (Consolidated)

                                          Revenue / PBT / PAT                                                                           Operating Profit As % to Operating Revenue
                 1,200                                                1,123.85                                              25%
                                                                                                                                                                          20.48%
                                                                                                                                                                                                   19.53%
                 1,000
                                                877.15                                                                      20%
                  800                                                                                                                    15.61%
Rs. In Million




                         662.87
                                                                                                                            15%
                  600

                  400                                                                                                       10%
                                                     208.29                  270.65
                                                                                      208.49
                              135.53                      170.54
                  200              128.55                                                                                    5%


                             2001 - 02              2002 - 03              2003 - 04                                         0%
                                      Revenue        P.B.T.      P.A.T.                                                                  2001 - 02                       2002 - 03                2003 - 04


                                     EPS Consolidated Rs.(Diluted)
                    45                                                                                                                              Break-up of Revenue by Region
                                                                             38.58
                    40                                                                                                     100%
                                                                                                                                  86%
                    35                                                                                                                                             71%
                                                         31.75                                                              80%                                                             68%
                    30




                                                                                                    % of Sales
                                  24.04                                                                                     60%
                    25
Rs.




                    20                                                                                                      40%
                                                                                                                                                                         25%                      20%
                    15
                                                                                                                            20%         11%
                    10                                                                                                                        3%                               2% 2%                    7% 5%
                                                                                                                                                     0%
                     5                                                                                                       0%
                                                                                                                                     2001 - 02                           2002 - 03                2003 - 04
                             2001 - 02              2002 - 03              2003 - 04                                                USA                   Europe             Asia Pacific         India



                                   Return On Net Worth ( RONW )                                                                               Contribution by Top 5 and 10 Clients
                 30%                                                                                                       100%
                                                     24.32%                 24.17%                                                            79%                              79%
                 25%                                                                                                                                                                                    80%



                                                                                                   Cumulative % of Sales
                              22.27%                                                                                        80%
                                                                                                                                    64%                              68%                      68%
                 20%
                                                                                                                            60%
                 15%
                                                                                                                            40%
                 10%
                                                                                                                            20%
                   5%
                                                                                                                             0%
                   0%                                                                                                                   2001 - 02                        2002 - 03                2003 - 04
                             2001 - 02              2002 - 03              2003 - 04                                                                         Top 5             Top 10
                                                                                               6                                                                                                                7
                                                                                                                                                  Profile of Software Developers

                            Geometric Software ( LHS )                                          Sensex ( LHS )                                                                    Break-up by Age
700                                                                                                                                    7000
                                                                                                                                                                                       35+             20-24
                                                                                                                                                                    30-34              5%              12%
600                                                                                                                                    6000                          24%                                                25-29
                                                                                                                                                                                                                        59%

500                                                                                                                                    5000


400                                                                                                                                    4000


300                                                                                                                                    3000


200                                                                                                                                    2000
                                                                                                                                                                              Break-up by Qualification
100                                                                                                                                    1000
                                                                                                                                                                                    Others MSC / MCA
                                                                                                                                                           BE / Btech                5%       3%               ME / Mtech / MS
  0                                                                                                                                    0                      66%                                                   26%




                                                                                                                                 Mar - 04
                                                                                                                      Feb - 04
                                                                                                           Jan - 04
                                                                                                Dec - 03
                                                                                     Nov - 03
                                                                          Oct - 03
                                                               Sep - 03
                                                    Aug - 03
                                         Jul - 03
                              Jun - 03
                 May - 03
      Apr - 03




                                                                                                                                                                         Number of Software Developers
                                                                                                                                                     800
                                                                                                                                                                                                                       710
                                                                                                                                                     700
                                                                                                                                                                                              566
                                                                                                                                                     600
                                                                                                                                                                        449
                                                                                                                                                     500

                                                                                                                                                     400

                                                                                                                                                     300

                                                                                                                                                     200

                                                                                                                                                     100

                                                                                                                                                       0

                                                                                                                                                                   2001-02                   2002-03                 2003-04
                                                                                                                                              8                                                                                  9
                                                                                      Business Update

Finance                                                       software OEMs is directly pursued; whereas we go                   assess returns and risks associated with investments          Business Partners
                                                              through our business partners when it comes to                     and expenditure incurred. Keeping costs under tight
                                                              purchases by end-user manufacturers. Currently, we                 control will help us deliver cost-effective PLM services.
                                                              are enhancing our revenue tracking systems to                      But rather than indulging in cost-cutting, we must
                                                              facilitate revenue visibility with regard to our offerings,        focus on sustainable cost management. This is where
                                                              our region distribution, and the offshore/onsite mix.              finance will play a key role, providing adequate
                                                                                                                                 information on costs vis-à-vis budgets, before costs
                                                              As one of the leading players in PLM, Geometric, on                are incurred.
                                                              one hand, has always been a target for recruitment by
                                                              other companies of our PLM resources. On the other                 One of our major tasks in the months ahead, is to
                                                              hand, we are witnessing an improved traction with our              review new proposals both for profitability and for
                                                              partners, with the result that the demand for our                  associated risks. The onus lies on finance to ensure
                                                              services and expertise is on the increase. To keep                 that the receivables are under control.
                                                              pace, we are consolidating our Manpower
                                                              Resources through a systematized recruitment,                      Integration of Finance and Operations
Shashank Patkar                                               training, and planning system that will forestall any                                                                            Rajiv Salkar
CFO                                                           possible revenue losses because of inadequate or                   Very often delivery managers are unaware, or have             VP-Business Partners
                                                              insufficient manpower resources.                                   inadequate information on the way they can control
                                                                                                                                 costs and contribute in improving project profitability. It
Achieving targets, improving margins                          Today, almost 80 per cent of our revenue comes from                will be our responsibility to actively involve ourselves      In 2002-03, we had established a model for creating
                                                              Geometric's top ten customers. This cannot continue                in explaining to delivery managers, factors affecting         partnerships across the globe. Last year, the objective
The target of USD 100 million by March 2007, makes            indefinitely, and so we are broadening our Customer                realization and margins for their respective projects,        was to increase the number of global partnerships and
for a challenging environment. It implies that as an          Base. This is not all. In order to serve our business              and helping them in improving the same.                       lay a foundation for increasing the depth and breadth
organization, Geometric is set to grow on multiple            partners better, we are streamlining our information                                                                             of these accounts, thus increasing penetration.
fronts, our offerings, our delivery mechanism and             gathering in terms of revenue generation, domain                   In the final analysis, we pledge to make every effort
locations, our manpower resources both in numbers             expertise, and Geometric offerings - used by or                    towards achieving some of the 'self-renewal' goals we         Partnerships - Core to Geometric's
and quality, and so on. This also implies implementing        available to each partner/customer. Simultaneously,                have set ourselves with a view not only to streamlining       Business Strategy
processes and practices designed to make our target           we are putting systems into place to help assess                   our own operations but also to reinventing ourselves
achievable.                                                   performance and needs of each partner/customer,                    so that we are able to serve our customers better. In         Geometric's business strategy has been to create a
                                                              and tailor our services to maximize revenue and                    the process, we are certain that this will contribute         network of partners across the globe to market its
Already we have put into motion four important                profitability from each of them.                                   towards our primary goal of achieving the targets we          products and services. Some of the main aspects of
procedures to facilitate this:                                                                                                   have set ourselves and also, improving our margins.           our partner network are as follows:
                                                              Over the next few months, our revenue mix from our
   Setting up systems for information visibility              offerings, from our onsite/offshore mix, from our                                                                                Global Presence
                                                              regions is all expected to change. As part of this
   Training managers to utilize and act on the
                                                              exercise, we are enhancing our systems to provide                                                                                Geometric's partnership with global players such as
   information
                                                              business managers easy, desktop access to data on                                                                                IBM, UGS PLM has enabled us to increase our reach
   Creating controls                                          Profitability and Cost structures, facilitating quicker                                                                          across the globe, thereby servicing worldwide
   Integrating finance and operations.                        and smarter commercial decisions.                                                                                                divisions of transnational companies.

Systems for Information Visibility                            Training Managers to utilize and act on the                                                                                      End-to-end Services
                                                              information
Information is like a vast reservoir, it's all there but it                                                                                                                                    Geometric has been careful in selecting partners who
needs to be harnessed by proper distillation. Only then       We expect even line managers to actively contribute in                                                                           provide complementing products and services,
can it be made accessible to as many people as                increasing margins by improving on estimation and                                                                                thereby providing comprehensive services to end-
possible allowing decision-making to percolate at             delivery processes using the right mix of people, and                                                                            customers.
various levels within the organization. That is our           to take active measures at their end to reduce attrition.
priority: ensuring accurate and relevant information is       We will provide desktop access of information                                                                                    Increased Product Business
easily available to others.                                   required to enable them to take better decisions within
                                                              their projects.                                                                                                                  Geometric's business strategy has been to provide
Making information more visible and, therefore,                                                                                                                                                products and services to the industrial customers
accessible also involves letting people know your             Create Controls                                                                                                                  through a single channel, thereby effectively reducing
source of revenue in other words, Revenue visibility.                                                                                                                                          the distribution cost.
Geometric’s revenues are a result of both direct and          While it is very creditable to focus on achieving targets,
indirect approach. For instance, our business with PLM        we must have adequate controls in place to
                                                                                                                            10                                                                                                                           11
Accelerated Growth at Reduced Sales /                       relationship we mean clearly defining goals and                  with our partners. The company has designated                Products Business Unit
Distribution Cost                                           objectives for both partners and commitment of time              Project Managers for strategic accounts to work
                                                            and resources to achieve the set goals. Geometric is             jointly with partners to provide technical inputs for pre-
Increased reach, market presence and end-to-end             confident that these strong partnerships will act as a           sales activities, thereby improving the partner's
services would lead to accelerated growth, which is the     catalyst for accelerated growth in the coming years.             chances of success.
key to Geometric's growth plan. The partner strategy is
aimed at effectively utilizing the partner sales force,     The partnership model has extended itself to build               Account Ownership
thereby reducing the overall sales cost.                    channels (value-added resellers) to market
                                                            Geometric’s products and technologies. Within a short            Geometric established clear policies on roles and
                                                            period of time, we have built a network of 20 value-             responsibilities. These were jointly demonstrated to
                                                            added resellers across the globe. Another important              end-customers, thereby clarifying any ambiguities in
                                                            factor last year was to sell products and services               the minds of partners and end-customers. This year
                                                            through established partnerships. This helped not only           Geometric successfully executed various projects
                                                            in strengthening the relationship but also in adding             using this model.
                                                            value to the partner's product portfolio.
                                                                                                                             Account Manager                                              Anil Risbud
                                                            For Engineering Services, we have forged                                                                                      VP - Products
                                                            partnerships with two major players, Modern                      The partnership model has various stakeholders, viz;
                                                            Engineering and Teccon, with whom we have                        sales force, project delivery teams of both
                                                            successfully completed pilot projects, and are working           organizations, senior management and end-customer            Geometric has always focused on generation of IPR
                                                            on long term assignments to service major auto and               management. The success of the project and the               through research and development of world-class
                                                            aerospace players in the US and Europe respectively.             relationship is in managing these stakeholders               technologies, toolkits, and OEM products for end-user
                                                            Geometric continues to seek new partners exclusively             efficiently for mutual benefits.                             markets. With the current scenario of increasing
                                                            focused on Engineering Design Services.                                                                                       manpower costs and the rupee continuing to
                                                                                                                             To tackle these complexities, the company has                appreciate, product focus will help Geometric in
                                                            Challenges in the Future                                         appointed a group of account managers whose sole             improving its competitiveness and profitability.
                                                                                                                             job is to manage dynamic multi location relationships
                                                            Though the partnership model offers numerous                     and to move them from opportunistic or tactical              The year that went by
                                                            benefits, it also poses a few challenges. Some of the            engagements to a strategic nature, thus increasing
Evolution of Partner Model                                  major challenges that need to be constantly                      both the business volume and predictability from such        During the last year, all product development activities
                                                            addressed are as follows:                                        partners. The account managers also act as a                 were clubbed under a new business unit, the Products
The partnerships can be classified into Opportunistic,                                                                       communication channel between sales and project              Business Unit (PBU). PBU's highlight of the year was
Tactical, or Strategic. Most of the partnerships start as   Common Objectives                                                delivery teams. This helps in accurate representation        the launch of eDrawings for Pro/ENGINEER®. This is
either opportunistic or tactical, based on a particular                                                                      of partner's expectations from Geometric thereby             Geometric's first foray into the world of end-user
project     requirement. The skill is to take this          Partnerships should be based on clearly defined goals            improving the chances of better expectation                  products. Geometric has licensed the basic
relationship towards strategic goals.                       that are understood by both the organizations and                management.                                                  eDrawings technology from SolidWorks with a view to
                                                            should be reviewed in accordance with changing                                                                                extend it to multiple CAD platforms. eDrawings is the
                                                            market dynamics for mutual benefits.                                                                                          first email enabled collaboration tool which helps in
                              te   gic                t                                                                                                                                   communication and collaboration of 2D & 3D CAD
                   al      ra                      en
                tic      St                    itm                                                                                                                                        data.
              ac                                            Customer Segmentation
             T                              mm
                                         Co
                                                            One of the most important aspects of managing
             tic                                                                                                                                                                          After the launch of eDrawings for Pro/ENGINEER®,
          nis                                               partnerships, customer segmentation requires
      rtu
    po                                                      following stringent rules to manage customer overlap                                                                          we plan to release eDrawings for additional CAD
  Op                                                                                                                                                                                      platforms in the coming year. Geometric has received
                                                            i.e. meticulous management of confidential
                                                            information of competing partners. Geometric has                                                                              encouraging response to this product and several
                                                            been able to establish credibility amongst various                                                                            renowned companies around the world have
                                                            competing partners, wherein the partners share                                                                                purchased eDrawings for Pro/ENGINEER®. Already,
                                                            critical client information necessary for preparing joint                                                                     we have signed more than 20 re-sellers worldwide for
                                                            proposals and bidding to the end-customer.                                                                                    the same.

Last year, Geometric was able to establish and              Communication
enhance relationships with five partners viz; UGS
PLM, Volvo IT, Cenit, Gedas, Modern Engineering,            We have successfully established clear
IBM, to name a few at a strategic level. By a strategic     communication channels and escalation procedures
                                                                                                                        12                                                                                                                           13
                                                                held at the prestigious Indian Institute of Science                        Another objective for the coming year is the               Delivery Unit
                                                                (IISc), Bangalore. Good progress has also been made                        introduction of products based on CATIA-V5. We have
                                                                in enhancing the Thickness Analyzer technology.                            created prototypes for the Geometric Utilities on
                                                                                                                                           CATIA V5. These are a set of CAD utilities that help
                                                                Geometric has realized the potential of technologies                       users save time, improve productivity and save costs.
                                                                that help integrate various PLM components.                                Discussions are on with partners for augmenting and
                                                                Integration of CAD and PDM (Product Data                                   launching these utilities for specific industries in the
                                                                Management) systems is one such area that holds                            coming year.
                                                                great future potential. A framework of software building
                                                                blocks has been developed at Geometric which will                          There will be an increasing focus on providing
                                                                allow rapid delivery of enterprise CAD/PDM                                 enterprise solutions based on technologies developed
                                                                integration solutions.                                                     by Geometric such as CAD/PDM integration
                                                                                                                                           technologies, CollabViewTM , 3DPartSearch, and
                                                                To provide a better focus for the R&D activities, a new                    Feature Recognition. We already made a beginning,
                                                                R&D group has been set up within Geometric. This                           by delivering a CAD/PDM integration solution last
                                                                group, which will work closely with the PBU, will start                    year. These solutions will be tailor-made and aimed at     Ajit Joshi
    eDrawings Professional for Pro/ENGINEER® : Measure design
                data with powerful measuring tools.             functioning from May 2004 onwards, and will focus on                       providing productivity improvements and cost savings       VP - Delivery
There was good progress on the technology front, too.           building new IPR.                                                          to end-customers.
PBU received a solutions order based on Feature
Recognition technology, where a well-known                      Future Outlook                                                             By following the strategy outlined above, we believe       Delivery unit was formed in October 2003, merging the
manufacturing company has decided to adopt Feature                                                                                         PBU can contribute significantly to Geometric's            delivery responsibility for projects (excluding products)
Recognition technology to automate its manufacturing            As a strategy for the future, we have identified end-                      growth and profitability in the coming years.              of the three business units, viz, Geometry, Information
process. The Sheet Metal Feature Recognition                    user products, enterprise products, and solutions as                                                                                  Management, and Collaborative Engineering into a
module was unveiled for the CATIA® V5 platform,                 the growth drivers for the PBU. In our endeavour, we                                                                                  single entity. This was done to realize Geometric's
during the year.                                                intend to leverage Geometric's strengths - our OEM                                                                                    vision of “Think PLM,” i.e. to have expertise of CAD,
                                                                relationships, our partner programme, range of                                                                                        CAM, CAE, PDM, Collaboration and Visualization
NestLib®, which is one of the earliest and most                 technology, and world-class talent.                                                                                                   under a single umbrella to enable us to deliver end-to-
successful technology offerings from Geometric, saw                                                                                                                                                   end PLM solutions to our customers.
continued adoption by the market. There were new                PBU will also focus on bringing to the market
orders for NestLib® licenses, coupled with renewal of           additional eDrawings-based products. Our vision is to                                                                                 Previously as a head of Information Management
AMC's by many of the existing customers.                        provide a multi-CAD collaboration and visualization                                                                                   Business Unit, my focus was to establish the company
                                                                platform for PLM users around the world.                                                                                              in PDM business. I feel we have been quite successful
A major CAD vendor adopted our Thickness Analyzer                                                                                                                                                     in this objective and today Geometric is indeed a well-
technology. A pilot order for 3DPartSearch technology           The extensive reseller channel set up for eDrawings                                                                                   recognized PDM service provider. Now in this new role
was received from a large manufacturing company.                will also help Geometric in evolving new product ideas                                                                                of VP-Delivery, my focus is to consolidate our
Both, 3DPartSearch as well as Thickness Analyzer                for the end-user market.                                                                                                              numerous offerings to provide innovative PLM
technologies are a result of our in-house research                                                                                                                                                    solutions to our customers.
effort.
                                                                                                                                                                                                      The way of life for this newly established Delivery Unit
                                                                                                                                                                                                      is most aptly captured in the Geometric's mission
An update on Research Activities                                                                                                                                                                      statement: Customer Satisfaction through World
                                                                                                                                                                                                      Class PLM Solutions Delivered with Passion; the
A major highlight of the year was Geometric being                                                                                                                                                     key words being customer satisfaction, world-class,
awarded an international patent for its flagship                                                                                                                                                      and passion.
technology, Feature Recognition (FR), thus becoming
one of the few Indian software companies to be
awarded a US Patent (No: 6,597,355 B1 for 'Hole                                                                                                                                                       Customer Satisfaction
Recognition' algorithms).
                                                                                                                                                                                                      The newly formed Delivery Unit is aligned to be
Other highlights of the year include further research on                                                                                                                                              customer-centric. Geometric has always boasted of
challenging problems such as fillet feature recognition                                                                                                                                               relationships with key software OEM customers. With
and suppression. Results of this effort will be                                                                                                                                                       our partnership strategy beginning to bear fruit, we
incorporated into the products based on Feature                                                                                                                                                       have a growing number of partners or non-OEM
Recognition. A research paper based on                                                                                                                                                                customers as well. The Delivery Unit is organized in
                                                                 CATIA V5 Utilities : Comparison of features between two CAD Models
3DPartSearch technology was accepted and                                                                                                                                                              such a manner, that each customer, whether OEM or
presented at the International Conference on PLM                                                                                                                                                      non-OEM, has a specific delivery manager associated
                                                                                                                                      14                                                                                                                          15
with it. This customer-facing delivery manager works                           offerings. By depth we mean provision of excellent                 the enterprise.                                        Productivity Services Group
closely with sales and relationship teams to cater to all                      expertise to develop customized, add on or integrated
                                                                                                                                                  Precast concrete design application.
the requirements of a specific customer.                                       complex applications on the above platforms.
                                                                                                                                                  Migration of Metaphase to Teamcenter Enterprise
Our customers today are spread across various                                  Geometric is now certified at CMMi level 5. While we
                                                                                                                                                  and its customization.
regions of North America, Europe, Asia Pacific, Japan                          are certainly proud of this achievement, we are also
and India. Delivery Unit has been successful in                                very clear that all this means nothing to us if our                PDM-CAD integrations.
handling the challenges of addressing different                                customers don't get benefitted directly by our quality
                                                                                                                                                  Customized assembly modeler and pre-post
cultures, languages, and technologies, while solving                           and productivity. We have key processes to measure
complex business problems of our customers.                                    and track the Project Performance Index (PPI) for                  processor for aircraft structural analysis.
                                                                               every project. PPI is a consolidated index for tracking
                                                                                                                                                  Development and enhancement of PLM
Below are some of our customer quotes, which are a                             schedule variance, effort variance, process
clear evidence of their satisfaction with our team.                            compliance, and customer satisfaction. We strive for               application modules.
                                                                               continuous improvement of PPI for each project.
                                                                                                                                                  Development of CAA V5 applications.
    “Geometric team has gone much beyond what is
    expected, has consistently demonstrated the                                                                                                   Development of an ACIS component for the CAE           Sandeep Kulkarni
    commitment to the date and makes things happen                                                                                                                                                       VP - PSG
                                                                                                                                                  application.
    inspite of the constraints of new resources coming
    on board, additional work and other unforeseen
    issues.”                                                                                                                                  Delivery with Passion                                      Productivity Services Group encompasses
    “Geometric shows very innovative ideas and was                                                                                                                                                       Information Systems, Process Engineering,
    able to manage very complex tasks. This was                                                                                               Geometric's key strength lies in its talented resource.    Corporate HR and Facilities Administration. I was
    possible because of the high skills of most of the                                                                                        For any Geometrician to possess high standards of          heading the Collaborative Engineering Business Unit
    project members !”                                                                                                                        technical excellence is a known fact. Employee             before this transition. One of the primary motives for
    “Everything that Geometric can do is recognized as                                                                                        relationship function, hence, forms a vital part of        this shift was to get a sharper customer and business
    the highest level of technology.”                                                                                                         Delivery Unit. This function helps us in providing         focus in PSG.
    “I don't think I speak (just) for myself when I say that                   Having an exclusive focus on PLM for the past 20               required focus on employees and their concerns and
    both organizations have become a family with a                             years has its own advantages. Geometric's                      accordingly takes proactive measures to keep them          We started off with calling this group of functions as
    common goal of producing a product that has the                            knowledgebase is second to none. We have                       motivated.                                                 "Productivity Services Group" instead of 'Central
    opportunity to radically change an industry.”                              knowledge sharing forums like project manager's                                                                           Services' and defined its mission as - "We strive for
    “I have reviewed the evaluation of Geometric's                             forum, development management forum, QA forum,                 Looking Ahead                                              your productivity", i.e. to provide cost-effective and
    performance. Overall, we have been very pleased                            etc, which inculcate sharing best practices and                                                                           quality services to internal customers to enhance their
    and believe that in future projects, we will continue                      continuous improvement in our processes and                                                                               productivity and help them focus on business.
                                                                                                                                              As explained we have a diverse set of satisfied
    to improve our abilities to work even more                                 practices. Of course, having our own technologies
                                                                                                                                              customers, ability to provide world-class solutions and    The focus area for PSG is "People" and "Processes.”
    effectively together.”                                                     makes us a truly unique provider of innovative
                                                                                                                                              deliverance of these solutions with passion. Where do
                                                                               solutions to our customers.
                                                                                                                                              we go from here? Well, clearly one of our key
World-class PLM Solutions                                                                                                                     challenges is to scale up while maintaining all of the     Processes
                                                                               Some of the interesting projects executed in the past
                                                                                                                                              above. On one hand, PLM problems are getting more
                                                                               year:                                                                                                                     From a 'process' perspective the company has made
Geometric takes pride, not just delivering solutions, but                                                                                     and more complex due to its adoption at an enterprise-
ensuring these are indeed world-class. This by no                                                                                             wide level. On the other hand, building PLM skills to      significant progress. The company was assessed at
means is an easy task. Geometric's knowledgebase                                   VPM to Teamcenter Engineering Migration.                   tackle such problems is no quick process. Delivery         CMMi level 5 for product development and software
today encompasses all major CAD systems like                                                                                                  Unit is working closely with Center of Excellence to       solutions development services on March 2, 2004.
                                                                                   Migration of CATIA V4 application to CATIA V5.                                                                        With this rating Geometric becomes one of the very
CATIA, I-DEAS, UG-NX, Pro/ENGINEER®,                                                                                                          ensure we scale up to meet this demand. Secondly,
SolidWorks, Solid Edge, AutoCAD and Inventor as well                               Customization of the machining library for stone           with our partnerships getting stronger we have             few PLM companies in the world to achieve CMMi
as all major PDM systems like Teamcenter Enterprise,                                                                                          numerous challenging opportunities coming our way.         level 5, which is the highest level an organization can
                                                                                   and glass cutting industry.                                                                                           attain in the CMMi framework, and implies that
Teamcenter Engineering, eMatrix, ENOVIA,                                                                                                      This means every project is critical and we must do it
SmarTeam and Windchill. This forms the breadth of our                              Intelligent analysis of moving images inside a             right the first time. Finally, we need to continue to      business processes are continuously optimizing. We
                                                                                                                                              maintain Geometric as a home to brilliant minds,           plan to ensure we retain this high level of process
                                                                                   video stream.                                                                                                         quality through annual audits by an external agency.
                                                                                                                                              which is the very core of our success. I'm truly excited
                                                                                   Personalized orthodontic application.                      by the unique and enviable position the company is in      For our Engineering Services Division, we will apply
                                                                                                                                              today to take advantage of the growing PLM                 for an ISO certification this year.
                                                                                   Plot utility development on CATIA V5.
                                                                                                                                              marketplace, and am eagerly looking forward to
                                                                                   Curve modification algorithm development.                  another exciting year of our journey toward the $ 100
                                                                                                                                              million goal.
                                                                                   Integration of multiple PLM applications across

Delivery Heads : (L to R) Ajit Joshi, Nikunj Desai, Anand Joshi, Satyamurthy                                                             16                                                                                                                        17
People                                                        the company. It focuses on automating the processes          Center Of Excellence (COE)                                where an employee undergoes intensive training for
                                                              through the usage of enterprise-wide tools, and                                                                        around two months duration. These are some of the
Ours is a people-centric business and one of the first        providing infrastructure for corporate knowledge                                                                       proactive steps taken by COE to link its operations with
tasks that PSG undertook was the revamp of the                base.                                                                                                                  the business needs of the organization. COE is also
existing Performance and Competency Measurement                                                                                                                                      working out plans of utilizing new techniques like
System (PCMS). PCMS will evolve into the "Career              Last year, we inaugurated our second facility,                                                                         e-Learning, training portals to enhance its offerings
Path Model" that defines a framework for roles,               'Pyramid' in Pune, and another in Bangalore to house                                                                   and provide flexibility to employees.
responsibilities, career planning, and the underlying         our Engineering Services Division. Our Mumbai office
processes for structural changes in the organization.         will also move to a different plant within the Godrej                                                                  Fresh engineers recruited at Geometric undergo three
We believe that clearly articulating career paths for         premises affording room for further expansion.                                                                         months’ fresher training, before they are deployed on
employees and proactively managing their careers will                                                                                                                                projects/assignments. Fresher training programmes
help us address the attrition challenge.                                                                                                                                             cover training on programming skills, software
                                                              Measurement                                                                                                            development lifecycles, Geometry fundamentals, PLM
Going forward, we will be benchmarking our people                                                                                                                                    basics, and project specific trainings. Management
                                                              At the core of our implementation strategy is the
practices with the "Hewitt" Best Employer Survey, and                                                                                                                                Competency Development programmes are
                                                              Balanced Score Card, which is being deployed across
will strive to gain recognition as 'One of the Best                                                                        Hemant Gadgil                                             organized for employees identified to take higher
                                                              the organization. For the PSG and its functions, a
Employers' in the near future.                                                                                             VP - COE                                                  levels of responsibilities, which guide them to
                                                              scorecard aligned with the corporate scorecard is
                                                                                                                                                                                     understand the demands of such positions as well as
                                                              being evolved, and will be used to drive performance
A number of communication initiatives were also                                                                                                                                      prepare them for such roles. In that parlance, equal
                                                              of this group.
launched which were well received by the employees.                                                                        This is the maiden year for COE, formed on October 1,     consideration is given to non-technical programmes
".connect" - a weekly email based newsletter - was                                                                         2003. COE is institutionalized to facilitate skill        vis-à-vis technical programmes at Geometric.
started to disseminate information about various                                                                           enhancements of employees and provide new
events viz; business wins, corporate achievements,                                                                         technology training opportunities to enable employees     Recruitment
key decisions, customer update etc, to all employees                                                                       to brace new roles and challenges these roles present.
in the organization. Other initiatives included lunch and                                                                  To ensure timely resource management and give it a        With its niche area of operations, recruitment has
chat meetings with the Managing Director, quarterly                                                                        focused business oriented approach, some of the           always been focused on domain experts. Talented
open house sessions and monthly manager's                                                                                  traditional HR and operational functions have been        engineers, developers, managers, who have excellent
communication meetings, which have been quite                                                                              shifted to Center of Excellence. Few senior delivery      academic and proven track records, constitute our
effective. I believe that such initiatives go a long way in                                                                managers have moved to Center of Excellence to            workforce. Most of our employees are from premier
defining the culture of an organization, and at PSG we                                                                     bring business and technical focus to the resource        engineering institutes in India viz; Indian Institute of
intend to focus on them.                                                                                                   management and skill building process.                    Technologies (IIT), Indian Institute of Science, and
                                                                                                                                                                                     Regional Engineering Colleges.
                                                                                                                           The main functions of COE include Training,
Infrastructure                                                                                                             Recruitment, Resource Management, and                     Resource Management
                                                                                                                           Library/Knowledge Management.
It has also been the endeavour of PSG to ensure that                                                                                                                                 Resource Management function includes competency
the support infrastructure and environment is top class.                                                                   Training                                                  need analysis of resource pool, recommendation of
                                                                                                                                                                                     training programmes, and allocation to internal
In terms of our IT infrastructure, we have implemented                                                                     Regular training programmes are organized for             projects. COE operates on an online resource indent
high-speed connectivity solutions between our offices                                                                      employees to enhance their skills and expertise in        system to manage the resource requirements of
and customer locations, since it is imperative for our IT                                                                  technical as well as non-technical aspects of             various functions. Resource indents are placed
systems to be closely integrated with those of our                                                                         operations. Various Competency Building                   through this online system, specifying skill set
customers to ensure smooth flow of operations in the                                                                       Programmes (CBP) have been initiated for building         requirements and expectations from the role.
client - ODC set-up.                                                                                                       specialized competencies in specific domains. The         Accordingly, the resource manager does competency
                                                                                                                           training calendar is designed, based on the inputs        mapping of resources from the resource pool, and
PSG has also added two new functions: Travel and                                                                           provided by the sales forecast and accordingly training   matching skill resources are allocated to the indenting
Onsite Desk (TOS), and Tools, Automation and                                                                               programmes are drawn based on the business needs          functions. This is driven by a rolling sales forecast for
Knowledgebase (TAK). TOS will help the employees                                                                           identified by the sales and relationship managers.        three months.
achieve a smooth transition from offshore to onsite and                                                                    These are comprehensive training programmes
vice versa, when they return after completion of
projects. TAK is chartered with the responsibility of
evolving and implementing the e-business strategy of




                                                                                                                      18                                                                                                                         19
Library and Knowledge Management                     Typical challenges we face are sourcing personnel        Sales                                                       products and technology front, we have successfully
                                                     who possess specialized domain expertise and                                                                         executed major software product development orders,
COE manages the technical library and facilitates    managing the dynamically changing resource pool.                                                                     and supplied technology to seven major PLM software
knowledge management initiatives at Geometric. The   COE addresses these challenges by conducting                                                                         development partners.
library is equipped with technical and management    specialized Competency Building Programmes
books, periodicals, and journals including e-        (CBP), defining internal projects for skill                                                                          Increasing Sales Effectiveness
magazines for information/knowledge enhancement      enhancements, cross-functional coordination and
that keeps them updated on latest developments in    planning, and forecasting - thus building cross-
technology.                                          functional expertise.                                                                                                With increasing momentum in the PLM industry,
                                                                                                                                                                          strong network of partners as well as end-customers,
                                                                                                                                                                          the sales team is gearing to capitalize on these
                                                                                                                                                                          favourable market conditions. To this end, increasing
                                                                                                                                                                          sales effectiveness is going to be a major thrust area.
                                                                                                                                                                          To achieve this objective, a full-fledged back office
                                                                                                                                                                          sales support system has been put in place for demand
                                                                                                              Kalidas Surapaneni                                          generation, CRM administration, planning, and
                                                                                                              VP - Sales                                                  monitoring specific marketing and event campaigns.
                                                                                                                                                                          The whole plan is to facilitate the sales team to focus on
                                                                                                                                                                          what they do best viz, close orders. A senior marketing
                                                                                                                                                                          executive heads this function.
                                                                                                              Consolidation of relationships, replicating earlier
                                                                                                              successes and increasing sales effectiveness were
                                                                                                              the goals set for the Sales team for the year 2003-04.      Looking Ahead - 2004-05
                                                                                                              We have accomplished our mission, and see a wider
                                                                                                              scope for increasing business in the PLM market.            The sales team has identified 20 key accounts that
                                                                                                                                                                          have the potential to deliver sustained revenues year
                                                                                                              Consolidation of Relationships                              on year. Working with our partners, we are identifying
                                                                                                                                                                          the specific services and technology opportunities that
                                                                                                                                                                          will competitively differentiate the Geometric portfolio
                                                                                                              The Geometric partner programme is designed to              in these key accounts. This sales effort will be backed
                                                                                                              build a selective and securely aligned team of close-       by aggressive marketing campaigns to generate
                                                                                                              knit relationships with global leaders in the PLM           pull/demand within these key accounts.
                                                                                                              space, with the objective to offer superlative
                                                                                                              technology and industry expertise to provide value-
                                                                                                              added services to end-customers.

                                                                                                              The challenge for the sales team though was handling
                                                                                                              multiple relationships in joint marketing bids, that
                                                                                                              resulted in complex sales cycles. Working closely with
                                                                                                              multiple partners to provide value-added services to
                                                                                                              customers, we have realized that collaboration is the
                                                                                                              cornerstone for achieving success. I am pleased to
                                                                                                              mention that all leading global PLM services players
                                                                                                              now consider us as the Preferred PLM Partner.

                                                                                                              Replicating Earlier Successes

                                                                                                              The sales team has successfully replicated the earlier
                                                                                                              successes of the previous year in the automotive and
                                                                                                              aerospace sectors. Geometric's strategic investments
                                                                                                              in building an excellent automotive practice has paid
                                                                                                              off significantly in the last three quarters, and we have
                                                                                                              secured prestigious PLM technology customization
                                                                                                              and implementation orders from six major automotive
                                                                                                              OEMs, and are poised to secure a few more strategic
                                                                                                              projects in this sector in the near future. On the
                                                                                                         20                                                                                                                            21
Note from Engineering                                                 leveraging existing customers for lateral growth in            3D PLM                                                       formed a ‘best practices’ group known as GRIP, for
                                                                      PLM services. Geometric could quickly leverage its                                                                          the Industrialization team. We also have started
Services Division                                                     existing relationships with Volvo IT, FITSI, and                                                                            offering services in areas of development around
                                                                      SolidWorks. To further leverage the increasing                                                                              CATIA, courseware development, and data
Engineering Services Division (ESD) at Geometric                      demand for engineering services, ESD plans to offer to                                                                      migration. 3D PLM has been involved in certain key
has emerged from incubation last year to the forefront,               partners a wide range of engineering services by                                                                            projects of Enovia brand leading to a ramp up in
serving customers in tool design support, corporate                   advocating Global Design Centers as a one-stop shop.                                                                        personnel and hardware resources.
standard part databases, reverse engineering and                      The objective of such a centre is to complement
migration of legacy data. Investments in infrastructure,              capacity, improve quality and meet the product                                                                              Future Outlook
with a new dedicated engineering services facility in                 development needs of end-customers.
Bangalore, hardware and recruitment ramp up,                                                                                                                                                      Creating a strong product culture that encourages
ensures ESD a position of strength to serve customers                 GDCs specialize in Product Design Support, Tooling                                                                          development of our areas of expertise, which will
in automotive, aerospace, and consumer goods.                         Design Support and Engineering Data Services to                                                                             prove to be a true value-add in our services to DS.
                                                                      provide a full spectrum of services in CAD/CAM/CAE,
There could not have been a better time for these                     simulation and manufacturing process development.
investments; a report released by A T Kearney in                      However, the best synergies come from Geometric’s              B. R. Lanka
September 2003, which polled automotive executives                    ability to deploy its expertise and knowledge in               COO - 3D PLM
in North America, stated that India was the preferred                 developing these PLM technologies and tools to
offshore destination for technical services (24% of                   improve productivity and quality. The rich practice
respondents) - which included CAD/CAM/CAE, and                        experience of our workforce in various domain areas            The Mission
the benefits identified went far beyond the obvious                   ensure high quality services are delivered from the
savings in costs. Quality emerged as one of the                       GDCs.                                                          3D PLM's objective is to accelerate introduction of
leading perceived benefits as were increased capacity                                                                                Dassault Systemes (DS) brands in the marketplace.
and technical competence. Large industrial                                                                                           The key focus areas have been: meeting recruitment
                                                                      Looking forward, Geometric is marketing GDC
organizations are poised to leverage the next off-                                                                                   targets, setting up processes to ensure
                                                                      services to large multinational industrial
shoring wave in ITES, where Engineering Services                                                                                     IT/environment issues are addressed, inculcating a
                                                                      manufacturers through its network of partners. As              product culture and focus on ensuring 3D PLM's return
forms one of the effective business processes that                    operations expand, Geometric will continue to look for
lends itself to easy outsourcing.                                                                                                    on investment maintains an upward trend across all
                                                                      focused niche partners to deliver high quality, product        brands.
                                                                      design support services from the GDCs.
Geometric has the right investments in place while
                                                                                                                                     The Progress
 Dedicated Engineering Design Support Services                                                                                       It has been two years since the commencement of 3D
   Product Design Support                                                                                                            PLM's operations, and this year we have seen 3D
   Tooling & Process Design Support                                                                                                  evolve more as an extension of DS development
   Engineering Data Services                                                                                                         team, than just being a contractor for some of its
                                                                                                                                     development work. The brands supported are: CATIA,
                                                                                Product Design Support
                                                                                                                                     Enovia, SolidWorks, Spatial, PLM Infrastructure.
  Contact via Onsite presence, Dedicated                                        Modeling                                             There has been an increase in the activities
  VPNs, Telephone, Email/Web                                                    Design Verification                                  associated with product development, particularly in
                                                                                Value Engineering
                                                                                Manufacturing process                                the areas of maintenance (customer support),
                                       Partners:                                Design Detailing &                                   documentation, tech support, in addition to
                                     Manufacturing                              Completion
                                                                                                         Engineering                 development, and QA/Industrialization activities. A
                                                                                                         Data Services               significant portion of industrialization effort of certain
                                                                                                         2D TO 3D Migration          DS products are undertaken in 3D PLM. We have
                                                        Partners:                      GDC               Legacy Conversion
                   Client                            Total Design &                                      Customization
                                                     Manufacturing                                       Creation of
                                                                                                         Standard Part libs
                                                                                Tooling Design Support
                                                                                Tool Design
                                             Partners:                          Process Design Support
                                           Design Houses                        Process Sheets
                                                                                ECNs




                                                                                                                                22                                                                                                                      23
                                                                            The Year at a Glance


                                                                                   in Rs. Million, except per share data

                                                  Unconsolidated                  Consolidated

Particulars                             Current    Previous                  Current      Previous
                                         Year        Year          Growth     Year          Year           Growth

For the year

  Operating Revenue                      636.72      590.72         7.79%    1,060.27       841.16           26.05%

  Total Revenue                          734.45      638.40        15.05%    1,123.85       877.15           28.13%

  Export Revenue                         582.03      574.80         1.26%    1,005.58       825.24           21.85%

  Profit Before Tax                      187.39       148.13       26.51%      270.65        208.29          29.94%
  Profit Before Tax as a                25.51%       23.20%                   24.08%        23.75%
  percentage of Total Revenue

  Profit After Tax                       166.60       133.62       24.68%     208.49        170.54           22.25%

  Profit After Tax as a                 22.68%       20.93%                   18.55%        19.44%
  percentage of total revenue

  PAT as a percentage of average        20.74%       19.69%                   24.17%        24.32%
    Net worth

  Earnings per share
  (Par Value Rs. 10 each, fully paid)

    Basic                                 31.16        25.32       23.06%      39.00          32.32          20.67%

    Diluted                               30.83        24.88       23.92%      38.58          31.75          21.50%

  Dividend per share                       5.50         4.00        37.5%

  Dividend amount                         33.81        23.93        41.3%
  (including tax thereon)

  Average Net Worth                      803.35       678.61       18.38%     862.64        701.15           23.03%

At the end of the year
  Total Assets                           908.22      776.33        16.99%    1,016.88       834.39           21.87%

  Fixed Assets (Net)                     465.43       294.19       58.21%     577.05        356.51           61.86%

  Cash and cash equivalents               37.18        23.45       58.53%      52.90          58.46           -9.50%

  Total Debt                                  –        30.09        -100%          –          30.09           -100%

  Net Worth                              879.97       726.72       21.09%     957.56        767.73           24.73%

  Equity                                  54.49        53.03        2.77%      54.49          53.03            2.77%




                                                                                                                           24
Directors’ Report To The Members
                                                                                      Geometric Software Solutions Co. Ltd.


The Directors have pleasure in presenting their report on the business and operations of the Company for the year ended
March 31, 2004.

1A. FINANCIAL RESULTS (Unconsolidated):
    The Company’s operating performance (unconsolidated) during the year ended March 31, 2004 as compared to
    the previous year, is summarised below:
                                                                                      Current                  Previous
                                                                                        Year                       Year
                                                                                      Rupees                    Rupees
    Sales and Other Income                                                       734,452,644               638,397,692
    Gross Profit before Depreciation                                             232,841,656               193,345,234
    Depreciation                                                                  45,451,141                 45,218,604
    Profit Before Tax                                                            187,390,515               148,126,630
    Extraordinary Items (net)                                                                -                  587,792
    Provision for Taxes                                                           20,791,166                 13,917,509
    Profit After Taxes                                                           166,599,349               133,621,329
    Balance brought forward                                                      551,318,022               456,625,276
    Profit available for appropriation                                           717,917,371               590,246,605
    Appropriations:
    Proposed Dividend                                                             29,971,574                 21,210,932
    Corporate Dividend Tax                                                          3,840,110                 2,717,651
    Transfer to General Reserves                                                  17,000,000                 15,000,000
    Surplus carried forward                                                      667,105,687               551,318,022
                                                                                 717,917,371               590,246,605

1B. FINANCIAL RESULTS (CONSOLIDATED):
    The Company’s operating performance (consolidated) during the year ended March 31, 2004 as compared to the
    previous year, is summarised below:
                                                                                Current             Previous
                                                                                   Year                 Year
                                                                                Rupees               Rupees
    Sales and Other Income                                                     1,123,846,625               877,145,044
    Operating Profit                                                             352,763,501               269,095,173
    Depreciation                                                                  82,108,526                 60,809,094
    Profit Before Tax                                                            270,654,975               208,286,079
    Extraordinary Items (net)                                                                -                  587,792
    Provision for Taxes                                                           28,537,327                 18,310,147
    Profit after Taxes before Minority Interest                                  242,117,648               189,388,140
    Less : Minority Interest in Net Profit / (Loss) of the Subsidiary             33,624,065                 18,844,093
    Profit After Tax                                                             208,493,583               170,544,047
    Balance brought forward                                                      587,420,421               460,704,957
    Profit available for appropriation                                           795,914,004               631,249,004
    Appropriations:
    Proposed Dividend                                                             29,971,574                 21,210,932
    Corporate Dividend Tax                                                         9,145,664                  2,717,651
    Transfer to General Reserves                                                  25,400,000                 19,900,000
    Surplus carried forward                                                      731,396,766               587,420,421
                                                                                 795,914,004               631,249,004
                                                                                                                              25
2.   DIVIDEND:                                                        Company, retire by rotation at the ensuing Annual
     The Directors recommend payment of dividend for the              General Meeting and being eligible offer themselves for
     year at the rate of Rs. 5.50 per equity share of Rs.10.00        reappointment.
     each as against the dividend at the rate of Rs. 4.00 per    6.   INVESTMENTS
     equity share paid last year. The payout including
                                                                      During the year under review, the Company entered into
     Corporate Dividend Tax works out to 16.21% of the
                                                                      a strategic investment agreement with Virtual Supply
     consolidated profits of the Company.
                                                                      Chain Engineering, Inc. (VSCE) of U.S.A. to make
     This recommendation follows a review of the dividend             investment of upto US$ 500,000 in its 9% non-convertible
     policy by the Directors. The Directors believe the payout        preference shares. The Company has already made
     should increase to between 16% and 20% of                        initial investment of US$ 200,000 on signing the
     consolidated profit after tax, unless there are special          Agreement. The balance investment will be made on
     circumstances.                                                   VSCE achieving the specified targets of business
3.   ISSUE OF BONUS SHARES                                            benefiting the Company from itself or its affiliates.
     The Board of Directors of your company has, subject to      7.   AUDITORS:
     approval of the members in the forthcoming Annual                M/s. Kalyaniwalla & Mistry, Chartered Accountants,
     General Meeting, recommended issue of Bonus Shares               Auditors of the Company, retire at the forthcoming Annual
     in the ratio of 1:1 i.e. one fully paid Bonus Share for          General Meeting and being eligible offer themselves for
     every Share held on the record date. The Company will            reappointment.
     separately announce the record date in due course.
                                                                 8.   AUDIT COMMITTEE:
     To accommodate the increased paid up capital on issue
                                                                      The Company has an Audit Committee consisting of
     of Bonus Shares, the Board of Directors has also
                                                                      three Non-executive Directors of the Company, viz., Mr.
     proposed to increase the authorised capital from existing
                                                                      K.A. Palia- Chairman, Mr. Abhay Havaldar and Ms. Anita
     Rs. 70 million to Rs. 130 million.
                                                                      Ramachandran.
4.   BUSINESS PROSPECTS:
                                                                 9.   DISCLOSURE UNDER SECTION 217 (1) (e) OF THE
     The Company has started providing Engineering
                                                                      COMPANIES ACT, 1956:
     Services from its new Unit III set up at Bangalore. Our
                                                                      In terms of Section 217 (1) (e) of the Companies Act,
     revenue from industrial customers, through partners
                                                                      1956, read with the Companies (Disclosure of
     has seen steady increase. Revenue from industrial
                                                                      Particulars in the Report of the Board of Directors) Rules,
     customers has exceeded 25% of the revenue as
                                                                      1988, the Directors furnish herein below the required
     compared to 14% last year. Business through partners,
                                                                      additional information:
     including Engineering Services, is expected to see good
     volume growth.                                                   a)   Conservation of Energy: The nature of the
     Business from Dassault Systemes to our joint venture                  Company’s operations entail a very low level of
     3D PLM has shown significant growth. Also business                    energy consumption.
     from UGS PLM and other software OEMs continues to                b)   Research & Development (R&D): The Company is
     grow. Strong relationship with leading PLM software                   actively involved in the software development
     OEMs has also helped Company in providing better                      activities.
     services to its industrial customers through partners.
                                                                      c)   Technology Absorption: The Company has not
     The Company is confident of growing its business in
                                                                           imported any technology during the year under review.
     the current financial year by continuing its strategy of
     focusing on PLM space and by leveraging partnership              d)   Foreign Exchange Earnings and Outgo: The
     model. We plan to expand our activities in all three                  Company’s foreign exchange earnings and outgo
     centres viz. Mumbai, Pune and Bangalore to                            during the year under review amount to Rs.
     accommodate business growth.                                          607,881,461 and Rs. 120,479,684 respectively,
                                                                           details of which have been given in the Notes
5.   DIRECTORS:
                                                                           forming part of the Accounts (Notes 19 and 20 of
     Mr. J.N. Godrej and Mr. Marc Dulude, Directors of the                 Schedule “L”).
                                                                                                                                    26
                                                                                          Geometric Software Solutions Co. Ltd.


10. SUBSIDIARIES:                                               16. DIRECTORS’ RESPONSIBILITY STATEMENT:

    The Company has the following wholly-owned                      The Board of Directors of the Company confirms:
    Subsidiary Companies:                                           a)   that in preparation of the annual accounts, the
    Geometric Software Solutions, Inc., U.S.A.                           applicable accounting standards have been
    Geometric Software Solutions Pte., Ltd., Singapore                   followed and there has been no material departure;

    3D PLM Software Solutions Ltd. is also a subsidiary             b)   that the selected accounting policies were applied
    Company in which the Company holds 70% stake.                        consistently and the Directors made judgments
                                                                         and estimates that are reasonable and prudent so
    As required under Section 212 of the Companies Act,
                                                                         as to give a true and fair view of the state of affairs
    1956, the audited statement of accounts of the Subsidiary
                                                                         of the Company as at March 31, 2004 and of the
    Companies for the year ended March 31, 2004, are
                                                                         profit of the Company for the year ended on that
    annexed.
                                                                         date;
11. EXPANSION OF UNIT II AND SETTING UP OF UNIT III                 c)   that proper and sufficient care has been taken for
    The Company has expanded its business of Unit II and                 the maintenance of adequate accounting records
    shifted it to the newly constructed ‘Pyramid’ Building at            in accordance with the provisions of the
    Hinjwadi, Pune.                                                      Companies Act, 1956 for safeguarding the assets
    The Company has also set up Unit III at Bangalore for                of the Company and for preventing and detecting
    providing Engineering Services.                                      fraud and other irregularities;

12. CORPORATE GOVERNANCE:                                           d)   that the annual accounts have been prepared on a
                                                                         going concern basis.
    As required under the listing agreement with Stock
    Exchanges a report on Corporate Governance is given         17. ACKNOWLEDGEMENTS:
    in Annexure ‘A’ forming part of this report.                    The Directors gratefully acknowledge the contribution
13. STOCK OPTIONS:                                                  made by the employees towards the success of the
    The disclosures required to be made under SEBI                  Company. The Directors are also thankful for the co-
    (Employee Stock Option Scheme and Employee Stock                operation, support and assistances received from the
    Purchase Scheme) Guidelines, 1999 are given in                  banks, investors, customers, Central and State
    Annexure ‘B’ to this report.                                    Government departments and local authorities.
                                                                    The Directors would also like to acknowledge the
14. PARTICULARS OF EMPLOYEES:
                                                                    continued support of the Company’s shareholders.
    As required by the provisions of sub-section (2A) of
    Section 217 of the Companies Act, 1956, as amended,
    read with Companies (Particulars of Employees) Rules,                                On behalf of the Board of Directors
    1975, the names and other particulars of the employees
    are set out in the Annexure ‘C’ to this report.                              J. N. GODREJ              MANU PARPIA
                                                                                 Chairman                  Managing Director
15. EMPLOYEE RELATIONS:
    The Company continued to have cordial relations with        Mumbai
    its employees.                                              Date: April 26, 2004




                                                                                                                                   27
                                                        Annexure ‘A’ to the Directors’ Report

Report of Auditors’ on                                            Report on Corporate Governance
Corporate Governance
To the Members of                                                 1.   Company’s Philosophy on Corporate Governance
Geometric Software Solutions Co. Ltd.                                  The Company’s philosophy on Corporate Governance
Plant 14, Pirojshanagar,                                               lays strong emphasis on transparency, accountability
Vikhroli (East), Mumbai 400 079.                                       and integrity. The Company has implemented the
                                                                       mandatory requirements of the ‘Code of Governance’
We have examined the compliance of conditions of Corporate             as mentioned in the clause 49 of the Listing Agreement.
Governance by Geometric Software Solutions Company                     The Compliance Report of the Company vis-à-vis the
Limited (the Company) for the year ended on March 31, 2004,            Stock Exchange Listing Agreement is presented below.
as stipulated in clause 49 of the Listing Agreements entered
                                                                  2.   Board of Directors
into with the Stock Exchanges in India.
                                                                       a) Composition and Category of Directors:
The compliance of conditions of Corporate Governance is                    The Company has an optimum combination of
the responsibility of the Management. Our examination was                  Executive and Non-executive directors. The Board
limited to procedures and implementation thereof, adopted                  comprises of one Executive Director – the Managing
by the Company for ensuring compliance with the conditions                 Director and six Non-executive Directors. The Non-
of Corporate Governance. It is neither an audit nor an                     executive Directors comprise 86% of the Board.
expression of opinion on the financial statements of the
                                                                           The Chairman of the Board is a Non-executive
Company.
                                                                           Director and more than one third of the Board
In our opinion and to the best of our information and according            comprises of independent directors.
to the explanations given to us and the representations made
                                                                           Except the Managing Director, all other Directors
by the Directors and the Management, we certify that the
                                                                           are liable to retire by rotation as per the provisions
Company has complied with the conditions of Corporate
                                                                           of the Companies Act, 1956.
Governance as stipulated in the above-mentioned Listing
Agreement.

As per the records of the Company, there were no investor
grievances remaining unattended for a period exceeding one
month against the Company.

We further state that such compliance is neither an assurance
as to the future viability of the Company nor the efficiency or
effectiveness with which the Management has conducted
the affairs of the Company.

For and on behalf of
KALYANIWALLA & MISTRY
CHARTERED ACCOUNTANTS

Daraius Z. Fraser
PARTNER

Place: Mumbai
Date: April 26, 2004.


                                                                                                                                    28
                                                                                                  Geometric Software Solutions Co. Ltd.


The composition of the Board and other relevant details relating to Directors are given below:

 Name of the                    Designation           Category of            No. of Other            No. of Other Committee
 Director                                             Directorship           Directorships*              Memberships #
                                                                                                   Chairman           Member

 Mr. J. N. Godrej               Chairman               Non-Executive            12                   2                   3

 Mr. Manu Parpia                Managing Director      Executive                2                    -                   1

 Mr. K. A. Palia                Director               Non-Executive            4                    2                   2

 Ms. Anita Ramachandran         Director               Non-Executive            2                    -                   3

 Mr. Abhay Havaldar             Director               Non-Executive            2                    1                   3

(* Directorships in Private and Foreign Companies are excluded.
# Memberships of only Audit Committee, Shareholders’ Grievance Committee and Remuneration Committee have been
considered.)


b)   Appointment / Reappointment of Directors:                                 Mr. Marc Dulude brings with him considerable
                                                                               expertise in the development and implementation
     The Directors who retire by rotation and who are eligible
                                                                               of computer-aided design (CAD), computer-aided
     for re-appointment are:
                                                                               manufacturing (CAM) for mechanical design and
     i)   Mr. Marc Dulude                                                      development and computer-aided engineering
                                                                               (CAE) for printed circuit boards.
          Mr. Marc Dulude, 43, holds a Master’s Degree in
          Mechanical Engineering from Carleton University                      He has been a Director of the Company since
          in Canada. He began his career as a Licensed                         September 1996.
          Engineer with the Association of Professional                ii)     Mr. J. N. Godrej
          Engineers of Ontario (APEO) and was
                                                                               Mr. J. N. Godrej, 55, has graduated from Illinois
          subsequently associated with the Young
                                                                               Institute of Technology, USA. He joined the Board
          Presidents Organisation (YPO).
                                                                               of Management of Godrej & Boyce Mfg. Co. Ltd. as
                                                                               Director in 1974, became the Managing Director in
          After completing his undergraduate degree and the
                                                                               1991 and Chairman of the Board in 2000. Presently
          course work for his graduate degree, he worked
                                                                               as Chairman & Managing Director of Godrej &
          with ICAM Technologies Corporation as a Software
                                                                               Boyce Mfg. Co. Ltd he heads diverse businesses
          Engineer and thereafter as a Group Leader till
                                                                               which are the leaders in consumer durables, office
          October 1986. Then he served as a CAE specialist
                                                                               equipment and industrial products.
          at Bell-Northern Research (BNR) till April 1989,
          thereafter he gradually took over the responsibilities               Mr. Godrej is the President of World Wide Fund for
          as Project Manager and Manager, CAD/CAM/CAE                          Nature – India. He is the past president of
          Tools and processes. Till April 1994, he acted as                    Confederation of Indian Industry and the Indian
          Director, Technical Marketing at Parametric                          Machine Tool Manufacturers’ Association.
          Technology Corporation (NASDAQ: PMTC) wherein                        Mr. J. N. Godrej has been the Chairman of the
          he was made the Senior Vice President of Marketing                   Company since March 1994. He is also the
          in October 1995. He was the President and CEO of                     Chairman of the Remuneration Commmittee and
          Moldflow Corporation (NASDAQ: MFLO) from May                         the Shareholders’/Investors’ Grievance Committee
          1996 until he turned over those responsibilities in                  of the Board. Presently, he is a Director in 12 other
          June 2000. Currently, he is the Chairman of                          Public Companies, 4 Private Companies and 4
          Moldflow Corporation and firstRain. He is also a                     Foreign Companies listed below:
          partner in Ampersand Ventures.                                                                                                  29
           1.      Godrej & Boyce Mfg. Co. Ltd.                                  3.   Audit Committee

           2.      Bajaj Auto Ltd.                                                    a)   Constitution of Audit Committee:

           3.      Godrej Agrovet Ltd.                                                     The current Audit Committee constituted on
                                                                                           February 28, 2001, consists of 3 Directors all being
           4.      Godrej Foods Ltd.                                                       Non-executive Directors who are independent and
                                                                                           most of them have financial and accounting
           5.      Godrej Sara Lee Ltd.
                                                                                           knowledge.
           6.      Godrej Properties & Investments Ltd.
                                                                                      b)   Composition of Audit Committee and Number of
           7.      Godrej Industries Ltd.                                                  Meetings Attended:

           8.      Godrej Consumer Products Ltd.                                           Five Audit Committee Meetings were held during
                                                                                           the financial year 2003-04, on April 21, 2003, May
           9.      Godrej Tea Ltd.
                                                                                           8, 2003, July 15, 2003, October 20, 2003 and
           10. 3D PLM Software Solutions Ltd.                                              January 15, 2004. The composition of the Audit
                                                                                           Committee and the number of meetings attended
           11. Lawkim Ltd.                                                                 during the financial year 2003-04 were as under:
                                                                                            Committee Members        Designation       No. Of Meetings
           12. Godrej Upstream Ltd.
                                                                                            Attending the Meeting                          Attended
           13. Antrix Corporation Ltd.
                                                                                            Mr. K. A. Palia            Chairman                5
           14. Godrej Investments Pvt. Ltd.
                                                                                            Mr. Abhay Havaldar          Member     2 (and 2 on teleconference)
           15. Tata TD Waterhouse Trustee Company Pvt. Ltd.
                                                                                            Ms. Anita Ramachandran      Member                 4

           16. Illinois Institute of Technology (India) Pvt. Ltd.                     c)   Attendees:
           17. Godrej (Malaysia) Sdn. Bhd.                                                 The Audit Committee invites such of the executives,
                                                                                           as it considers appropriate to be present at its
           18. Godrej (Singapore) Pte. Ltd.                                                meetings. The Chief Financial Officer and Director
           19. Godrej (Vietnam) Company Ltd.                                               - Finance and Accounts attend such meetings. The
                                                                                           Statutory Auditors and Internal Auditors are also
           20. Godrej & Khimji (Middle East) LLC                                           invited to these meetings. Mr. Rajkumar Bidawatka,
c)   Board Meetings and Annual General Meeting:                                            the Company Secretary, acts as the Secretary of
                                                                                           the Committee.
     During the financial year 2003-04, four Board Meetings                           d)   The Terms of Reference of the Audit Committee:
     were held on - April 22, 2003, July 16, 2003, October 21,                             The terms of reference of the Audit Committee as
     2003 and January 15, 2004. The last Annual General                                    defined by the Board are as under:
     Meeting of the Company was held on June 18, 2003.                                     i)    Hold discussions with the auditors periodically
     The details of attendance of Directors in Board Meetings                                    about internal control systems, the scope of
     and last Annual General Meeting are as follows.                                             audit including the observations of the auditors
       Name of the Director     No. of Board Meetings          Attendance at                     and review the half-yearly and annual financial
                                       Attended                Last Annual                       statements before submission to the Board
                                                               General Meeting
                                                                                                 and also ensure compliance of internal control
      Mr. J. N. Godrej                      4                  Present
                                                                                                 systems.
      Mr. Manu Parpia                       4                  Present
                                                                                           ii) Oversight of the Company's financial reporting
      Mr. K. A. Palia                       4                  Present                           process and the disclosure of its financial
      Ms. Anita Ramachandran                4                  Present                           information to ensure that the financial
      Mr. Abhay Havaldar       2 (and 2 on teleconference)     Present                           statement is correct, sufficient and credible.
      Mr. Frank Perna Jr.      Nil (and 3 on teleconference)   Absent                      iii) Recommending the appointment and removal
      Mr. Marc Dulude          Nil (and 3 on teleconference)   Absent
                                                                                                 of external auditor, fixation of audit fee and also
                                                                                                 approval for payment for any other services.                    30
                                                                                            Geometric Software Solutions Co. Ltd.


iv)   Reviewing with management the quarterly,                e)     Powers of the Audit Committee:
      half-yearly and annual financial statements             The Board delegated the following powers to the Audit
      before submission to the Board, focusing                Committee:
      primarily on:
       -   Any changes in accounting policies and             i)     Investigating any activity within its terms of reference
           practices.                                                as above or in relation to the items specified in
       -   Major accounting entries based on                         section 292A of the Companies Act, 1956, or as
           exercise of judgment by Management.                       may be referred to it by the Board, from time to
       -   Qualifications in draft audit report.                     time, and for this purpose, it shall have full access
       -   Significant adjustments arising out of                    to information contained in the records of the
           audit.                                                    Company and external professional advice, if
       -   The going concern assumption.                             necessary
       -   Compliance with accounting standards.
                                                              ii)    Seek information from any employee.
       -   Compliance with stock exchange and
           legal requirements concerning financial            iii)   Obtain outside legal or other professional advice,
           statements.                                               if necessary.
       -   Any related party transactions, i.e.,
           transactions of the Company of material            iv)    Secure attendance of outsiders with relevant
           nature, with promoters or the                             expertise, if it considers necessary.
           management, their subsidiaries or             4.   Remuneration Committee
           relatives, etc. that may have potential
           conflict with the interests of the Company         a)     Constitution of Remuneration Committee:
           at large.
                                                                     The current Remuneration Committee constituted
v) Reviewing with the management, external and
                                                                     on February 28, 2001, consists of 3 members. All
      internal auditors, and the adequacy of internal
                                                                     the members are Non- Executive Directors.
      control systems.
vi) Reviewing the adequacy of internal audit                  b)     Composition of Remuneration Committee and the
      function, staffing and seniority of the official               Number of meetings attended:
      handling the function, reporting structure,
      coverage and frequency of internal audit.                      Five Remuneration Committee Meetings were held
vii) Discussion with internal auditors on any                        during the financial year on April 21, 2003, June
      significant findings and follow up thereon.                    16, 2003, July 16, 2003, September 15, 2003 and
viii) Reviewing the findings of any internal                         December 1, 2003. The composition of
      investigations by the internal auditors into                   Remuneration Committee and the number of
      matters where there is suspected fraud or                      meetings attended during the financial year 2003-
      irregularity or a failure of internal control                  2004 was as under:
      systems of a material nature and reporting                      Name of Director            Designation       No. of Meetings
      the matter to the Board.                                                                                         Attended
ix) Discussion with the external auditors, before                     Mr. J. N. Godrej             Chairman               5
      the audit commences, on the nature and                          Mr. Frank Perna Jr.           Member                Nil
      scope of the audit as well as have post-audit
                                                                      Ms. Anita Ramachandran        Member                5
      discussion to ascertain any area of concern.
x) Reviewing the Company's financial and risk                 c)     Terms of reference:
      management policies.                                           The Committee to conduct periodic reviews of the
xi) To look into the reasons for substantial                         remuneration payable to the Senior Management
      defaults in the payment to the depositors,                     of the Company and also consider the Employee
      debenture holders, shareholders (in case of                    Stock Option Plans, which the Company may wish
      non-payment of declared dividends) and                         to offer to its employees and report the same to the
      creditors.                                                     Board of Directors.
                                                                                                                                      31
d)   Remuneration Policy:                                                         the difference between the market price and
     i) Management Staff :                                                        the issue price amounting to Rs. 59,800/-, is
        Remuneration of employees largely consists                                to be amortised over the vesting period. The
        of basic remuneration, perquisites and                                    unamortised portion amounting to Rs. 17,483/
        Employee Stock Option Plan as per SEBI                                    - has been considered as Deferred Employee
        Guidelines. The components of the total                                   Stock Option Compensation.
        remuneration vary for different grades and are                     iii)   Executive Directors :
        governed by industry patterns, qualifications                             The Managing Director is the only Executive
        and experience of the employees,                                          Director in the Company. His remuneration for
        responsibilities handled by him, his individual                           the period commencing from April 1, 2003, to
        performance, etc.                                                         March 31, 2006, has been approved by the
     ii)   Non-Executive Directors :                                              Compensation Committee of the Board of
           The Company pays commission to all the                                 Directors, the Board of Directors, the
           Non-executive Directors within the limits                              Shareholders at the General Meeting and also
           prescribed by the Companies Act, 1956 and                              the Central Government as required by the
           the approval of the shareholders. No sitting                           Companies Act, 1956.
           fees or other remuneration is paid to them.              e)     Remuneration to Managing Director:
                                                                           Details of remuneration paid to the Managing
           The total Commission payable for the year
                                                                           Director of the Company for the year ended March
           ended March 31, 2004, to the Non-Executive
                                                                           31, 2004 are given below:
           Directors amounted to Rs. 1,600,000 as
           under:                                                                 Particulars                    Amount (Rs.)

            Name of Director                 Commission                      i    Salary and Allowances              4,583,550
                                                   (Rs.)
                                                                             ii   Estimated monetary value
            Mr. J. N. Godrej                     285,714
                                                                                  of perquisites                        35,020
            Mr. K. A. Palia                      285,714
                                                                             iii Performance Bonus*                  5,906,480
            Mr. Abhay Havaldar                   285,714
            Ms. Anita Ramachandran               285,714                          Total                             10,525,050
            Mr. Frank Perna Jr.                  228,572                 * Including provision for deferred Long Term
            Mr. Marc Dulude                      228,572                   Performance Bonus of Rs. 2,706,480 which is due
            Total                               1,600,000                  for payment at the end of three-year tenure.
           The Company has also devised an "ESOP -             5.   Shareholders'/ Investors' Grievance Committee
           DIRECTORS - 2000" scheme duly approved                   a) Constitution and Composition of Shareholders’
           by shareholders at the Annual General Meeting                Grievance Committee:
           held on July 14, 2000, for offer and grant of                   The current Shareholders' / Investors’ Grievance
           30,000 Stock Options convertible into equity                    Committee was constituted on January 17, 2002 to
           shares of the Company to Non-Executive                          look into and investigate the investors complaints
           Directors of the Company. So far 21,000                         like transfer of shares, non-receipt of declared
           warrants have been granted under this                           dividends, etc. and take necessary steps for
           scheme, of which 1,000 warrants have been                       redressal thereof. The Committee consists of three
           surrendered. During the year the Company                        Non-executive Directors and the Managing Director
           has granted 5,000 Stock Options to Non-                         as under:
           Executive Directors at a price of Rs. 374/- per
           Option. The market price of the option                           Name of Director       Designation   No. of Meetings
                                                                                                                    Attended
           determined in accordance with the SEBI
                                                                            Mr. J. N. Godrej       Chairman            4
           (Employee Stock Option Scheme and
                                                                            Mr. Manu Parpia        Member              4
           Employee Stock Purchase Scheme)
                                                                            Mr. K. A. Palia        Member              4
           Guidelines, 1999, amounts to Rs. 386/- per
                                                                            Mr. Abhay Havaldar     Member              1
           option. The intrinsic value of the options, being                                                                       32
                                                                                                                     Geometric Software Solutions Co. Ltd.


     b)   Mr. Rajkumar Bidawatka, the Company Secretary,                                   ii)    Special Resolution:
          is also the Compliance Officer for the committee.                                       The    following    special resolutions
     c)   The Committee meets at frequent intervals to                                            were passed at the last Annual General
          consider shareholders' complaints.                                                      Meeting:

     d)   At the commencement of the year 2003-04, 6                                                       Subject Matter of Resolution
          complaints were pending. 36 new complaints were
                                                                                                  1.      Approval of Allotment of 5,000
          received from shareholders / investors during the
                                                                                                          Convertible Warrants to Professor
          year. Out of the total complaints received, 41
                                                                                                          Milind Sohoni.
          complaints were solved as on March 31, 2004. Only
          one unresolved complaint was pending as at the                                          2.      Extension of benefits of ESOP Scheme
          year end, which has since been resolved.                                                        2001 to the employees of subsidiaries
                                                                                                          of the Company.
     e)   All valid share transfers received during the year
          2003-04 have been acted upon by the Company                                             3.      Approval of ESOP Scheme 2003, for
          and there are no pending share transfers.                                                       275,000 Stock Options.
     f)   The Company regularly submits quarterly results                                         4.      Extension of benefits of ESOP Scheme
          to the National Stock Exchange and the BSE, the                                                 2003 to the employees of subsidiaries
          Stock Exchange, Mumbai on which the shares of                                                   of the Company.
          the Company are listed. The said results are also
                                                                                                  5.      Approving remuneration payable to the
          published in the newspapers and put on the
                                                                                                          Managing Director.
          website.

6.   Share Transfers in Physical Mode                                                      iii)   The special resolution moved at the last AGM
     In order to expedite the process of share transfers, the                                     were passed on a show of hands by the
     Board of Directors of the Company delegated the power                                        shareholders present at the meeting and no
     to the Registrar & Share Transfer Agent (The R&TA),                                          resolution was put to vote by postal ballot.
     M/s Intime Spectrum Registry Ltd. with effect from October
                                                                                           iv)    A procedure for postal ballot has been laid
     2002.
                                                                                                  down.
     The R&TA transfer the shares received in the physical
     mode on a fortnightly basis. Summary of the shares                               b)   Extraordinary General Meeting:
     transferred is noted at the next Board Meeting.                                       i)     Location, time and date where Extraordinary
7.   General Body Meetings                                                                        General Meeting was held during the financial
                                                                                                  year 2003-04 are given below:
     a)   Annual General Meeting:
                                                                                                   Date                Time        Location of the Meeting
          i)  Location, time and date where last three
                                                                                                  October 20, 2003     3.00 p.m.   Conference Room, Plant No. 11,
              Annual General Meetings were held are given
                                                                                                                                   Pirojshahnagar, Vikhroli (W),
              below:                                                                                                               Mumbai 400 079.
                Financial   Date            Time      Location of the Meeting
               Year                                                                        ii)    Special Resolution:
                2000-01     June 22, 2001   4.00 p.m. M. C. Ghia Hall, Bhogilal                   One special resolution was passed at the
                                                      Hargovindas Bldg., 2nd Floor,
                                                      18/20, Kaikhushru Dubash                    Extraordinary General Meeting for ratification
                                                      Marg, Mumbai 400 001.                       of ESOP Scheme 1999 as per the amended
                2001-02     June 11, 2002   3.30 p.m. M. C. Ghia Hall, Bhogilal                   guidelines issued by Securities and Exchange
                                                      Hargovindas Bldg., 2nd Floor,
                                                      18/20, Kaikhushru Dubash                    Board of India.
                                                      Marg, Mumbai 400 001.

                2002-03     June 18, 2003   4.00 p.m. M. C. Ghia Hall, Bhogilal
                                                                                           iii)   The special resolution moved at the
                                                      Hargovindas Bldg., 2nd Floor,               Extraordinary General Meeting was passed on
                                                      18/20, Kaikhushru Dubash
                                                                                                  a show of hands by the shareholders present
                                                      Marg, Mumbai 400 001.
                                                                                                  at the meeting and no resolution was put to
                                                                                                  vote by postal ballot.                                            33
8.   Means of Communication                                        g)   Market Price Data:
     a) The Company does not send its half-yearly report                The monthly high and low quotations of shares
        to each household of shareholders.                              traded on the National Stock Exchange of India Ltd.
                                                                        during each month in last financial year are as
     b)   The quarterly, half-yearly and full year results are          follows:
          published in the Business Standard, Sakal / Tarun
                                                                         Month                 High (Rs.)       Low (Rs.)
          Bharat.
                                                                         April 2003            505.40           332.00
     c)   The financial results and other information is
                                                                         May 2003              421.00           333.00
          displayed on the Company's website -
          www.geometricsoftware.com.                                     June 2003             398.90           336.00

                                                                         July 2003             445.00           310.15
     d)   The Management Discussion and Analysis is given
          separately in the Annual Report.                               August 2003           394.80           318.00

                                                                         September 2003        465.00           340.00
9.   General Shareholder Information
                                                                         October 2003          468.00           341.00
     a)   Annual General Meeting:
                                                                         November 2003         489.90           369.00
          Date and Time      :   June 29, 2004, at 5.00 p.m.
                                                                         December 2003         613.00           475.00
          Venue              :   M. C. Ghia Hall, Bhogilal               January 2004          612.00           465.00
                                 Hargovindas Building
                                                                         February 2004         527.50           435.00
                                 2nd Floor, 18/20, Kaikhusru
                                 Dubash Marg,                            March 2004            548.00           485.00
                                 Mumbai 400 001.
                                                                   h)   Performance in comparison to broad - based
     b)   Financial Calendar:                                           indice of BSE Sensex is as under:

          The Company follows April-March as its financial
          year. The results for every quarter beginning from
          April are declared in the month following the quarter.

     c)   Date of Book Closure:

          June 18, 2004 to June 29, 2004 (both days
          inclusive).

     d)   Dividend Payment Date:                                   i)   Share Transfer System:
          July 2, 2004.                                                 Applications for transfer of shares held in physical
                                                                        form are received at the office of the Registrars
     e)   Listing on Stock Exchanges:                                   and Share Transfer Agents of the Company. They
                                                                        attend to share transfer formalities at least once in
          The Company's shares are listed on the National
                                                                        15 days.
          Stock Exchange of India Ltd. and BSE, The Stock
          Exchange, Mumbai. The Company has paid Listing                Shares held in the dematerialized form are
          Fees to the Stock Exchanges within the prescribed             electronically traded in the Depository and the
          time.                                                         Registrars and Share Transfer Agents of the
     f)   Stock Code/Symbol                                             Company periodically receive from the Depository
                                                                        the beneficiary holdings so as to enable them to
          NSE - GEOMETRIC
                                                                        update their records and to send all corporate
          BSE - 532312                                                  communications, dividend warrants, etc.                 34
                                                                                                                     Geometric Software Solutions Co. Ltd.


     Physical shares received for dematerialisation are                                         o)   Plant Locations:
     processed and completed within a period of 21                                                   The Company's development offices                are
     days from the date of receipt, provided they are in                                             located at:
     order in every respect. Bad deliveries are                                                      Mumbai:
     immediately returned to Depository Participants                                                 1. Geometric Software Solutions Co. Ltd.
     under advice to the shareholders.                                                                    Plant 14, Pirojshanagar,
                                                                                                          Vikhroli (East), Mumbai 400 079.
j)   Category wise Shareholding as at March 31, 2004:
                                                                                                     Pune:
     Category                                       No. of Shares          Percentage
                                                                                                     1. Geometric Software Solutions Co. Ltd.
     Godrej & Boyce Mfg. Co. Ltd. (Promoter Co.)            1,127,500              20.69
                                                                                                         Plot No. 4, Pune Infotech Park,
     Directors and Their Relatives                           626,500               11.49
                                                                                                         Taluka - Mulshi, Hinjwadi, Pune 411 027.
     Foreign Corporate Bodies                                520,000                9.54
                                                                                                     2. Geometric Software Solutions Co. Ltd.
     Other Bodies Corporate                                  296,452                5.44
                                                                                                         Unit II
     Foreign Institutional Investors                          31,879                0.59
                                                                                                         Plot No. 5, 6 and 8
     Financial Institutions                                  182,967                3.36
                                                                                                         Pune Infotech Park,
     Mutual Funds                                            740,355               13.59
                                                                                                         Taluka - Mulshi, Hinjwadi, Pune 411 027.
     Non Resident Indians (Repatriable)                            --                  --
     Non Resident (Non Repatriable)                           52,838                0.97             Bangalore (Unit III) :
     Government Companies                                        750                0.01             1. Geometric Software Solutions Co. Ltd.
     Clearing Members                                         40,509                0.74                 No. 2/1, Ground Floor, Embassy Icon Annex
     General Public                                         1,829,177              33.57                 Infantry Road, Bangalore - 560 001.
     Banks                                                       450                0.01        p)   Address for Investor Correspondence:
     TOTAL                                                  5,449,377            100.00              For any assistance regarding dematerialisation of
                                                                                                     shares, share transfers, transmissions, change
k)   Distribution of Shareholding as at March 31, 2004:
                                                                                                     of address, non-receipt of dividend or any other
     Shareholding                   No. of                     Share Capital
     of Nominal Value         Shareholders     % of Total      Amount (Rs.)    % of Total
                                                                                                     query relating to shares:
     (Rs.)
                                                                                                     Intime Spectrum Registry Ltd.
     1 - 5,000                         7,130       93.56          5,175,770         9.50
                                                                                                     C-13, Pannalal Silk Mills Compound, L. B. S. Marg,
     5,001 - 10,000                     191         2.51          1,497,030         2.75
                                                                                                     Bhandup, Mumbai-400078.
     10,001 - 20,000                    126         1.65          1,855,130         3.40
                                                                                                     Tel: 022 - 55555454
     20,001 - 30,000                     49         0.64          1,265,840         2.32
                                                                                                     Fax: 022 - 55555353 / 25672693
     30,001 - 40,000                     25         0.33            897,690         1.65

     40,001 - 50,000                     20         0.26            936,380         1.72             For general correspondence:
     50,001 - 100,000                    32         0.42          2,373,880         4.36             Geometric Software Solutions Co. Ltd.
     100,001 - 99,999,999                48         0.63         40,492,050        74.30             Plant No. 14, Pirojshanagar,
     TOTAL                             7,621      100.00         54,493,770       100.00             Vikhroli (East), Mumbai 400 079.
                                                                                                     Tel: 022 - 55960800
l) Dematerialisation of Shares and Liquidity:
                                                                                                     Fax: 022 - 55960891
   About 67.69 % of the shares have been dematerialized
   as on March 31, 2004. The equity shares of the                                           10. Other Disclosures
   Company are traded in the BSE, The Stock Exchange,                                           a)   The Company did not have any related party
   Mumbai and the National Stock Exchange.                                                           transactions, i.e. transactions of the Company of
m) Outstanding GDRs / ADRs / Warrants or any                                                         material nature, with its promoters, Directors or
   Convertible Instruments conversion date and likely                                                the Management, their subsidiaries or relatives,
   impact on equity:                                                                                 etc. which may have potential conflict with the
     The Company has not issued any GDRs / ADRs.                                                     interests of the Company at large. Related Party
     There were no outstanding convertible warrants                                                  transactions have been disclosed in the Notes to
     as on March 31, 2004.                                                                           Accounts in the financial statements as at March
n)   Registrar and Share Transfer Agents:                                                            31, 2004.
         Intime Spectrum Registry Ltd.                                                          b)   The Company has complied with the requirements
         C-13, Pannalal Silk Mills Compound                                                          of regulatory authorities on capital markets and no
         L. B. S. Marg                                                                               penalty / stricture was imposed on the Company
         Bhandup, Mumbai-400078                                                                      during the last three years.                            35
                                                        Annexure ‘B’ to the Directors’ Report
Disclosures as required under Securities and Exchange Board of India (Employees Stock Option Scheme and Employees
Stock Purchase Scheme) Guidelines, 1999 are as under:
The details under various Stock Option Schemes of the Company are as under:

       Particulars             Scheme II              Scheme III             Scheme IV              Scheme V
                               Numbers                Numbers                Numbers                Numbers
 1.    Details of the          Annual                 Annual General         Annual General         Annual General
       Meeting                 General Meeting        Meeting                Meeting                Meeting
                               (Sept. 21, 1999)       (July 14, 2000)        (June 22, 2001)        (June 18, 2003)
 2.    Approved                300,000                30,000                 354,625                275,000
 3.    Options Granted         285,276                21,000                 344,912                137,640
 4.    The Pricing             Rs. 150/-              National Stock         Closing price on       Closing price on NSE
       Formula                 (pre IPO) Rs.300/-     Exchange (NSE)          National Stock        on date immediately
                               (post IPO but pre      market price           Exchange (NSE)         preceding grant
                               listing), NSE Market                          on a day previous      of options.
                               price (post listing)                          to the day of grant.   The options may be
                                                                                                    granted at Market
                                                                                                    Price computed in
                                                                                                    accordance with the
                                                                                                    ESOP Guidelines
 5.    Options Vested          215,590                15,000                 118,200                Nil
 6.    Options Exercised       163,457                5,950                  63,535                 Nil
 7.    The total number of     143,158                3,300                  62,919                 Nil
       shares arising as a
       result of exercise of
       options
 8.    Options Forfeited /     67,326                 1,000                  67,099                 5,092
       Surrendered
 9.    Options                 52,133                 9,050                  54,665                 Nil
       Unexercised
10.    Options Lapsed          Nil                    Nil                    Nil                    Nil
11.    Money realised by       25,542,710             1,924,900              5,061,105              Nil
       exercise of options
12.    Total number of         54,493                 14,050                 214,278                132,548
       options in force
13.    Variation of terms      N.A                    N.A                    Amended on             N.A
       of options                                                            18.06.2003 so as to
                                                                             contemplate the
                                                                             grant of options to
                                                                             employees of the
                                                                             subsidiaries of the
                                                                             Company
                                                                             retrospectively.
 14.   Vesting Schedule        The options so         The options granted    The options so         The options so granted
                               granted shall vest     shall vest one year    granted shall vest     shall vest in 4 equal
                               in 4 equal annual      after the date of      in 4 equal annual      annual instalments
                               instalments            grant and will be      instalments            beginning one year
                               beginning one year     convertible in three   beginning              after the date of
                               after the date of      tranches between       one year               grant
                               grant                  one and three          after the
                                                      years from the grant   date of grant
                                                                                                                             36
                                                                                             Geometric Software Solutions Co. Ltd.


Employee-wise Details Of Grants Made During The Year To:

- Senior Managerial Personnel:

                                          Scheme                       Director / Employee name               Options Granted

                              ESOP Directors – 2000 Scheme             Marc Dulude, Director                               1000

                              ESOP Directors – 2000 Scheme             K.A.Palia, Director                                 1000

                              ESOP Directors – 2000 Scheme             Abhay Havaldar, Director                            1000

                              ESOP Directors – 2000 Scheme             Anita Ramachandran, Director                        1000

                              ESOP Directors – 2000 Scheme             Frank Perna, Director                               1000

                                    ESOP Scheme 2003                   B.R. Lanka                                          1348

                                    ESOP Scheme 2003                   Shashank Patkar                                     1156

                                    ESOP Scheme 2003                   Prasad Joshi                                        1348

                                    ESOP Scheme 2003                   S. Kalidas                                          1156

                                    ESOP Scheme 2003                   Sandeep Kulkarni                                    1156

                                    ESOP Scheme 2003                   Kalpana Jaishankar                                  1156

                                    ESOP Scheme 2003                   Anil Risbud                                         1156

                                    ESOP Scheme 2003                   Anant Govande                                       1156

                                    ESOP Scheme 2001                   Sailesh Shenoi                                       692

                                    ESOP Scheme 2003                   Sailesh Shenoi                                      1156

                                    ESOP Scheme 2003                   Ajit Joshi                                          1156

                                    ESOP Scheme 2003                   Rajiv Salkar                                        1156

                                    ESOP Scheme 2003                   Hemant Gadgil                                       1000

- Employees who were granted, during any one year, options amounting to 5% or more of the                                 None
options granted during the year

- Identified employees who were granted option, during any one year, equal to or exceeding                                None
1% of the issued capital (excluding outstanding warrants and conversions) of the Company
under the grant

- Diluted Earnings Per Share pursuant to issue of shares on exercise of options calculated in
  accordance with International Accounting Standards IAS 33                                                               30.83
   Weighted average exercise price of Options granted during the year whose: -
- Exercise price equals market price on the date of grant                                                                      –
- Exercise price is greater than market price on the date of grant                                                       450.00
- Exercise price is less than market price on the date of grant                                                          374.00
   Weighted average fair value of options granted during the year: -
- Exercise price equals market price on the date of grant                                                                      –
- Exercise price is greater than market price on the date of grant                                                       165.16
- Exercise price is less than market price on the date of grant                                                          127.63
                                                                                                                                     37
 The stock-based compensation cost calculated as per the intrinsic value method for the financial year 2003-04 is
 Rs. 42,317/-. If the stock-based compensation cost was calculated as per the fair value method prescribed by SEBI, the total
 cost to be recognised in the financial statements for the year 2003-04 would be Rs. 4,225,314/-. The effect of adopting the
 fair value method on the net income and earnings per share is presented below:

 Pro Forma Adjusted Net Income and Earning Per Share

 Particulars                                                                                                              Rs.
 Net Income
 As Reported                                                                                                     166,599,349
 Add: Intrinsic Value Compensation Cost                                                                               42,317
 Less: Fair Value Compensation Cost                                                                                4,225,314
 Adjusted Pro Forma Net Income                                                                                   162,416,352

 Earning Per Share :       Basic
                           As Reported                                                                                 31.16
                           Adjusted Pro Forma                                                                          30.38
 Earning Per Share :       Diluted
                           As Reported                                                                                 30.83
                           Adjusted Pro Forma                                                                          30.05

Method and Assumptions used to estimate the fair value of options:
The Assumptions used in the model are as follows:
                                                                                                    Dates of granting options
 Variables                                                                                          01-Dec-03     16-Jul-03
 1.     Risk Free Interest Rate                                                                        4.50%           4.50%
 2.     Expected Life                                                                                2.5 Years        2 Years
 3.     Expected Volatility                                                                           58.22%         55.67%
 4.     Dividend Yield                                                                                 1.33%           1.33%
 5.     Price of the underlying share in market at the time of the option grant.                       449.40         386.00

                              Annexure ‘C’ to the Directors’ Report
Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975 and forming part of the Directors’ Report for the year ended March 31, 2004
The information is in the following format:
Sr. No., Name, Designation, Qualification, Age in Years, Date of Joining, Experience in years, Gross remuneration in Rs. and
Previous Employment.
Employed for the whole year:
1.    Mr. Manu M. Parpia, Managing Director, BE(Chem), Dipl Finance, MBA, 53, 1-Jul-94, 24, 7818570, Self employed
2.    Mr. Rajiv Salkar, Vice President - Business Partners, BE (Mech), MMS (OR), 44, 8-Apr-02, 19, 2493412, IDBI Intech Limited
3.    Mr. Ajit Joshi, Vice President-Delivery, B Tech(Civil) MS(Structures) PGDMM(Mktg), 39, 1-Aug-02, 14, 2673333, Geometric
      Software Solutions Inc. - head Info. Mgmt. BU
Employed for part of the year:
1.    Mr. Nitin Deshpande, Chief Operating Officer, B Tech(Elect.) PGDM(Sys & Fin), 45, 20-Nov-01, 19, 1397914, Satyam
      Computer Services, Asstt. Vice-President.
2.    Mr. Aniruddha Oak, Director, Industrial Projects, BE(Mech), 40, 27-Aug-02, 18.2, 592695,Satyam Computer Services Ltd.
3.    Mr. Deepankar Ghosh, Head-Engineering Services, B Tech (Metallurgy), 43, 3-Apr-03, 19.75, 1535850, Hope
      Technologies Ltd., Delhi
Note : All appointments are non-contractual, except in the case of Managing Director.                                             38
Management Discussion and Analysis Report
                                                                                              Geometric Software Solutions Co. Ltd.


Overview                                                                b)   Talent retention: Company has to ensure that the
                                                                             people working for it who constitute its major
The financial statements have been prepared in compliance
                                                                             competitive advantage continue to contribute
with the requirements of the Companies Act, 1956, and
                                                                             productively to its business. Company has always
Generally Accepted Accounting Principles (GAAP) in India.
                                                                             maintained excellent work environment and competitive
The management of Geometric Software Solutions Company
                                                                             remuneration packages for this purpose.
Limited (Geometric) accepts responsibility for the integrity
and objectivity of those financial statements, as well as for           c)   Technology obsolescence: The company has to
various estimates and judgements used in preparing the                       ensure that it constantly updates and upgrades its
financial statements.                                                        technology so as to be on par with the competitors.

A.   Industry Structure and Developments                           C.   Segment-wise or product-wise performance

     Geometric specialises in Product Lifecycle Management              Detailed information about segment performance has
     (PLM) services for the mechanical design,                          been given in the Consolidated Financial Statements.
     manufacturing        &       industrial       markets.        D.   Outlook
     PLM solutions include software applications, component
                                                                        The company has a positive outlook for the coming year.
     technology and development services in the area of
                                                                        This is however, subject to the risks and uncertainties
     Computer Aided Design/ Computer Aided
                                                                        mentioned below.
     Manufacturing, Computer Aided Engineering, Product
     Data Management & Collaborative Engineering.                  E.   Risks and concerns
     According to figures released from consulting and                  The risks and uncertainties include, but are not limited
     research firm CIMdata, Inc., the worldwide Product                 to, risks and uncertainties regarding fluctuations in
     Lifecycle Management (PLM) market achieved overall                 earnings and exchange rates, our ability to manage
     growth of 4% during an economically tough 2003.                    growth, intense competition in IT services including
     CIMdata defines the PLM market as comprised of two                 those factors which may affect our cost advantage, wage
     major segments - authoring and analysis tools (such                increases in India, our ability to attract and retain highly
     as CAD/CAM, MDA, EDA, CASE, etc.) and collaborative                skilled professionals, time and cost overruns on fixed-
     Product Definition management (cPDm). According to                 price contracts, client concentration, restrictions on
     CIMdata, PLM growth was higher in the cPDm segment,                immigration, our ability to manage our international
     which reached $4.5 billion in 2003 – an increase of 8%             marketing & sales operations, reduced demand for
     over 2002. The good news for PLM technology suppliers              technology in our key focus areas, disruptions in
     was that new license sales increased 6% year-over-                 telecommunication networks, liability for damages on
     year, although the major suppliers saw little of this gain.        our service contracts & product warranty, the success of
     PLM-related services and software maintenance                      the companies in which the Company has made
     showed significant increases during 2003.                          strategic investments, withdrawal of governmental fiscal
B.   Opportunities and Threats                                          incentives, political instability, legal restrictions on
                                                                        acquiring companies outside India, and unauthorized
     Geometric sees strong opportunities in the PLM space
                                                                        use of our and our customers intellectual property, the
     for offshore software development and revenues from
                                                                        latter when in our possession as well as general
     licensing products. This will be complemented with
                                                                        economic conditions affecting our industry. The
     revenue from software consultants deputed on
                                                                        Company may, from time to time, make additional written
     customers’ site wherever required.
                                                                        and oral forward-looking statements and our reports to
     There are three significant threats to the company’s               shareholders. The company does not undertake to
     business :                                                         update any forward-looking statement that may be made
     a)   Competitive pressures: Since the company                      from time to time by or on behalf of the company.
          operates in world markets, competitive pressures
                                                                   F.   Internal control systems and their adequacy
          can develop from any corner of the globe. Company
          has to be on the lookout for tracking the competition         The company has adequate internal control systems
          and maintaining its competitive edge in terms of              and procedures commensurate with its size and nature
          quality and value proposition.                                of business. All areas of the company’s operations are         39
       covered by such internal control systems including sale                          The Company has verified the assets and where required
       of software, purchase of fixed assets and equipments,                            the technology assets have been replaced.
       other purchases, other expenditure etc. An independent                           5.    Investments
       firm of Chartered Accountants has been appointed as                                                                                                  (Amount in Rupees)
       the Internal Auditors of the Company and the Audit                                Particulars                          Unconsolidated               Consolidated
                                                                                                                           Current      Previous        Current      Previous
       Committee has accepted their reports and the                                                                          Year           Year          Year           Year
       recommendations where feasible have been                                          Investments in Mutual funds   104,989,725   102,514,807    125,521,037   102,514,807
       implemented.                                                                     Company has made investments in units of various debt-
G.     Discussion on financial performance with respect to                              based and dividend paying mutual funds. This represents
       operational performance.                                                         surplus funds of the Company parked with these mutual
                                                                                        fund schemes, which can be recalled at very short notice.
(I)    Financial condition
                                                                                        As advised by the bankers to the company, these funds are
1.     Share Capital                                                                    safe investments with good yields and are liquid to meet any
The Company has only one class of shares namely equity                                  sudden needs of the Company. The Company’s treasury
shares. The face value of equity shares is Rs. 10/- per share.                          policy calls for investing only in highly rated Mutual Funds
During the year, 143,344 equity shares have been issued                                 with a limit for individual Funds.
under Employee Stock Option Plan (Previous year 47,441)                                 As at the end of the year company had the following strategic
and 3,300 equity shares (Previous year Nil) under Director’s                            investments:
Stock Option Scheme of the Company.                                                     a)    Rs. 30,959,151 in Powerway, Inc., USA. Powerway is a
                                                                                              provider of web-based solutions for automobile
2.     Reserves and Surplus
                                                                                              manufacturing supply chain. This investment is
                                                                   (Amount in Rupees)
                                                                                              expected to enable the company to gain experience in
  Particulars                        Unconsolidated               Consolidated
                                   Current     Previous        Current      Previous
                                                                                              supply chain management software and gain entry into
                                     Year          Year          Year           Year          the industrial segment.
  Increase in Share             18,945,961     5,193,916    18,945,961     5,193,916    b)    Rs. 12,759,160 in Oncourse Technologies, Inc., USA.
  Premium Amount on
  account of newly issued
                                                                                              This sales and marketing investment aims at promoting
  shares on exercise of                                                                       Camworks ®, a machining software product, based on
  Employee Stock option
                                                                                              our Feature Recognition technology. This product is
  Transitional adjustment on            –     19,122,236            –     19,122,236          being distributed by Teksoft, Inc., a subsidiary of
  account of Deferred Tax
                                                                                              Oncourse Technologies, Inc.
  Total reserves and           825,473,045   673,697,102   903,064,124   714,669,501
                                                                                        c)    The Company has, during the year, entered into a
  surplus as at the balance
  sheet date                                                                                  strategic investment agreement with Virtual Supply
                                                                                              Chain Engineering Inc. U.S.A. (“the Corporation”) to
The deferred tax liability as at the balance sheet date is
                                                                                              invest US$ 500,000 to acquire up to 70,000 shares of
Rs. 24,235,661 (Unconsolidated) and Rs. 24,066,175
                                                                                              the Corporation’s Series A Preferred Stock, US$ 0.001
(Consolidated).
                                                                                              par value per share and a warrant to purchase shares
                                                                                              of the Corporation’s Common Stock, US$ 0.001 par
3.     Secured Loans
                                                                                              value per share.
During the year Company has repaid the entire loan taken                                      Pursuant to the said agreement, the Company has,
towards New Software Development Centre Building Project                                      during the year, for the aggregate purchase price of Rs.
undertaken in Pune.                                                                           9,044,000, acquired 28,000 shares of the Corporation’s
                                                                                              Series A Preferred Stock and a warrant to purchase
4.     Fixed Assets
                                                                                              25,000 shares of the Corporation’s Common Stock, at
                                                                   (Amount in Rupees)         an exercise price of US$ 7.5 per share.
  Particulars                        Unconsolidated               Consolidated          6.    Sundry Debtors
                                   Current     Previous        Current      Previous                                                                        (Amount in Rupees)
                                     Year          Year          Year           Year
                                                                                         Particulars                          Unconsolidated               Consolidated
  Addition to Gross Block      217,738,639   25,537,966    307,829,162    88,878,146                                       Current      Previous        Current      Previous
                                                                                                                             Year           Year          Year           Year
                                                                                         Sundry Debtors                145,994,815   117,842,717    199,836,010   132,245,161
  Investment in Technology
  Assets                        35,122,016   12,673,322    116,382,321    68,816,407     Days Sales Outstanding                84              73           69            57
                                                                                                                                                                                 40
                                                                                                                     Geometric Software Solutions Co. Ltd.


These debtors are considered good and realizable, and                                   Loan to subsidiary includes
provision has been made for all doubtful debts.
                                                                                        (i)    Loan of Rs. 11,990,000 ($ 275,000), [previous year Rs.
The age profile of outstanding receivables is as given below:                                  13,065,250 ($ 275,000)] to Geometric Software
                                                                                               Solutions, Inc., Company’s Wholly Owned Subsidiary in
 Period in days                        Unconsolidated            Consolidated
                                                                                               USA to enable it to meet its ongoing working capital
                                     Current      Previous     Current     Previous
                                       Year           Year       Year          Year            needs. This loan was granted in 1999 and its initial
 0 – 30                                53%           57%         59%             58%           repayment term till June 2001 has now been extended
 31 – 60                               30%           26%         27%             25%           till June 2005. The Company will endeavor to collect
 61 – 90                               10%              11%       8%             12%
                                                                                               this amount before the due date.
 More than 90                           7%               6%       6%              5%
 Total                                100%          100%        100%             100%
                                                                                        (ii)   Loan of Rs. 1,310,500 (SGD 50000), [previous year nil]
                                                                                               to Geometric Software Solution, Pte., Company’s Wholly
7.       Cash and bank balances                                                                Owned Subsidiary in Singapore to enable it to meet its
                                                                   (Amount in Rupees)
                                                                                               ongoing working capital needs.
 Particulars                            Unconsolidated            Consolidated
                                        Current     Previous     Current   Previous     9.     Current liabilities
                                          Year          Year       Year        Year
 Unclaimed Dividend included in                                                         Sundry creditors represent the amount payable to vendors
 Current Account                       698,356       554,830    698,356     554,830     for the supply of goods and services. There are no amounts
 Balances in Exchange Earners                                                           due to Small Scale units. Unclaimed dividends represent
 Foreign Currency (EEFC) accounts–
                                                                                        dividends paid but not encashed by shareholders. Other
 US Dollar Account                   3,050,739       211,724   3,050,739    843,761     current liabilities include accrued salaries and benefits
 Euro Account                            4,625         4,625       4,625      4,625
                                                                                        payable to the staff (including leave encashment) and
The bank balances in EEFC accounts are generally used for                               amounts accrued for various other operational expenses.
a) import of technology assets, b) to meet the remittance                               Advances and deposits are retention money deposits of
requirements of overseas subsidiary/ branches in USA and                                various contractors.
other countries, c) for strategic investments and d) to meet                            10. Provisions
other operational expenditure overseas.
                                                                                        Provision for taxation represents estimated income tax
Balances of cash credit account represent bank balances in                              liability.
current accounts with scheduled banks, which accounts have
                                                                                        Provision for dividend represents proposed dividend
a cash credit facility.
                                                                                        recommended to the shareholders by the Board and would
8.       Loans and Advances                                                             be paid after the Annual General Meeting upon approval by
Loans and Advances are primarily towards amounts paid in                                the shareholders.
advance for value and services to be received in future.                                Provision for dividend tax represents tax payable on proposed
Advance payment of taxes represents payments made                                       dividend.
towards tax liability for the past years, tax deducted at source
and refunds due for previous years. The Company’s liability                             Provision for Leave encashment represents amount
towards income tax has been fully provided.                                             calculated on the basis of an actuarial valuation.

                                                                                        (II) Financial Review
Sundry deposits represent deposit towards telephone, rent,
                                                                                        1. Income
electricity and other deposits.
                                                                                        The Company derives its income mainly from software
The Company’s treasury policy calls for investing in Inter                              services and the sale of software products. Other income
Corporate Deposits only in highly rated companies with a                                consists of dividends from mutual funds, rent, gains on
limit for individual companies. At the end of the year an                               foreign exchange fluctuations against export realization and
amount of Rs. 175,000,000 was placed as inter corporate                                 income from investment of surplus funds.
investments (Previous Year Rs. 227,500,000).                                            Details of the business segmentation and geographical
Loans to employees are made to enable the purchase of                                   segmentation of income are given below. This segmentation
assets by employees and to meet any emergency                                           is based on the Consolidated Financial Statements of the
requirements.                                                                           company and its subsidiaries.
                                                                                                                                                             41
a)       Business segmentation of total sales (Consolidated)                            b) Geographical Segmentation of total sales (Consolidated)
                                                                                                                                                        (Amount in Rupees)
                                                                 (Amount in Rupees)
                                                                                         Region                          Current Year                  Previous Year
 Type                        Current Year                Previous Year                                                   Rs.              %             Rs.              %
                              Rs.             %           Rs.                  %
                                                                                         U.S.A.                  724,360,280            68%     596,972,324            71%
 Projects              948,715,606          89%    719,071,138               85%         Europe                  211,686,399            20%     208,150,989            25%
                                                                                         Asia-Pacific             69,529,075             7%      20,115,142             2%
 Products              111,556,022          11%    122,090,553               15%
                                                                                         India                    54,695,874             5%      15,923,236             2%
 Total               1,060,271,628          100%   841,161,691              100%         Total                  1,060,271,628           100%    841,161,691            100%


2.       Expenditure
     2.1        Operating and other Expenses (Unconsolidated)
                                                                                                                                                (Amount in Rupees)
         Particulars                                                      Current Year                    %          Previous Year                    %          Growth
1.       Personnel Expenses:
         Salaries, Bonus and Allowances                                    299,582,285                  40.8%            246,282,646             38.6%            21.6%
         Contribution to Provident and Other Funds                           10,656,403                 1.5%               9,186,186              1.4%            16.0%
         Staff Welfare Expenses                                                9,408,907                1.3%               8,962,241              1.4%             5.0%
2.       Software Tools and Packages                                         15,510,256                 2.1%               16,464,964              2.6%           -5.8%
3.       Electricity Expenses                                                  7,658,794                1.0%                    7,194,236          1.1%            6.5%
4.       Rates and Taxes                                                           401,947               0.1%                    476,251           0.1%          -15.6%
5.       Rent                                                                  5,484,003                0.7%                    6,331,004          1.0%          -13.4%
6.       Repairs and Maintenance:
         Computers                                                             2,471,977                0.3%                    2,191,755          0.3%           12.8%
         Others                                                                5,942,605                0.8%                    4,870,229          0.8%           22.0%
         Subtotal                                                              8,414,582                1.1%                    7,061,984          1.1%           19.2%
7.       Insurance                                                             3,489,161                0.5%                    3,304,188          0.5%            5.6%
8.       Travelling and Conveyance Expenses                                  42,773,177                 5.8%               23,060,615              3.6%           85.5%
9.       Communication Expenses                                              11,047,537                 1.5%                    8,854,722          1.4%           24.8%
10. Auditors Remuneration                                                      1,434,002                 0.2%                   1,338,098          0.2%            7.2%
11. Advertising and Publicity                                                  2,745,897                0.4%                    1,891,804          0.3%           45.1%
12. Staff Recruitment Expenses                                                 5,485,432                0.7%                    4,995,011          0.8%            9.8%
13. Bad Debts Written Off                                                          572,357               0.1%                   2,722,403          0.4%          -79.0%
14. Royalty                                                                    4,996,806                0.7%                    5,141,867          0.8%           -2.8%
15. Legal and Professional Charges                                           13,380,591                  1.8%                   8,944,136          1.4%           49.6%
16. Sales and Marketing Expenses                                             52,140,615                 7.1%               71,097,140            11.1%           -26.7%
17. Commission to Non Executive Directors                                      1,600,000                0.2%                    1,200,000          0.2%           33.3%
18. Diminution in Value of Investments                                                18,229             0.0%                             -        0.0%
19. Bank Interest                                                                     27,902             0.0%                       4,004          0.0%
20. Miscellaneous Expenses                                                     4,445,421                0.6%                    4,953,353          0.8%          -10.3%
21. Loss / (Profit) on Sale of Fixed Assets (Net)                                  214,534               0.0%                   3,148,511          0.5%          -93.2%
22. Provision for Bad and Doubtful Debts                                           122,150               0.0%                   2,437,094          0.4%          -95.0%
         Total Operating and Other Expenses                              501,610,988               68.3%               445,052,458              69.7%             12.7%
         Total Income                                                    734,452,644              100.0%               638,397,692             100.0%             15.0%
                                                                                                                                                                              42
                                                                                                      Geometric Software Solutions Co. Ltd.


2.2 Operating and other Expenses (Consolidated)
                                                                                                                        (Amount in Rupees)
    Particulars                                                Current Year            %         Previous Year            %        Growth
1.  Personnel Expenses:
    Salaries, Bonus and Allowances                               540,481,350      48.1%           412,251,573         47.0%           31.1%
    Contribution to Provident and Other Funds                     14,706,211       1.3%            10,951,062          1.2%           34.3%
    Staff Welfare Expenses                                        13,977,224       1.2%            10,743,502          1.2%           30.1%
2.  Software Tools and Packages                                   18,364,046       1.6%            18,235,365          2.1%            0.7%
3.  Electricity Expenses                                          11,522,079       1.0%             9,505,206          1.1%           21.2%
4.  Rates and Taxes                                                  484,827       0.0%               516,687          0.1%           -6.2%
5.  Rent                                                          13,690,994       1.2%            13,717,535          1.6%           -0.2%
6.  Repairs and Maintenance:
    Computers                                                    4,416,264         0.4%             2,431,855          0.3%           81.6%
    Others                                                       6,784,076         0.6%             5,397,515          0.6%           25.7%
    Subtotal                                                    11,200,340         1.0%             7,829,370          0.9%           43.1%
7.  Insurance                                                   14,009,775         1.2%            11,832,237          1.3%           18.4%
8.  Travelling and Conveyance Expenses                          53,003,404         4.7%            33,297,151          3.8%           59.2%
9.  Communication Expenses                                      16,037,426         1.4%            13,286,158          1.5%           20.7%
10. Auditors Remuneration                                        1,799,853         0.2%             1,638,588          0.2%            9.8%
11. Advertising and Publicity                                    3,335,558         0.3%             2,860,812          0.3%           16.6%
12. Staff Recruitment Expenses                                   6,478,223         0.6%             7,387,351          0.8%          -12.3%
13. Bad Debts Written Off                                          655,613         0.1%             2,722,403          0.3%          -75.9%
14. Royalty                                                      4,996,806         0.4%             5,141,867          0.6%           -2.8%
15. Legal and Professional Charges                              21,868,772         1.9%            15,667,083          1.8%           39.6%
16. Sales and Marketing Expenses                                 8,361,844         0.7%            14,022,186          1.6%          -40.4%
17. Commission to Non Executive Directors                        1,600,000         0.1%             1,200,000          0.1%           33.3%
18. Diminution in Value of Investments                              18,229         0.0%                     -          0.0%
19. Bank Interest                                                  106,878         1.2%                 4,004          0.0%
20. Miscellaneous Expenses                                      14,046,988         0.0%             9,654,124          1.1%           45.5%
21. Loss on Sale of Fixed Assets (Net)                             214,534         0.0%             3,148,513          0.4%          -93.2%
22. Provision for Bad and Doubtful Debts                           122,150         0.0%             2,437,094          0.3%          -95.0%
    Total Operating and Other Expenses                         771,083,124        68.6%           608,049,871         69.3%           26.8%
    Total Income                                             1,123,846,625       100.0%           877,145,044        100.0%           28.1%
2.3 Depreciation
                                                                                                                      (Amount in Rupees)
     Particulars                                           Unconsolidated                                     Consolidated
                                                  Current Year          Previous Year               Current Year           Previous Year
     Depreciation                                  45,451,141             45,218,604                 82,108,526              60,809,094
     % to gross block of assets                          7.4%                  11.3%                      10.5%                   12.8%
     % to Sales: Software
     Packages & Services                                  7.1%                     7.7%                     7.7%                      7.2 %
3.   Operating Profits
                                                                                                                      (Amount in Rupees)
     Particulars                                           Unconsolidated                                     Consolidated
                                                  Current Year          Previous Year               Current Year           Previous Year
       Operating Profit
       (Profit Before Tax Less
       Other Income)                               89,659,658              100,450,997                207,079,978              172,302,726
       Sales: Software Packages &
       Services                                   636,721,787              590,722,059              1,060,271,628              841,161,691
       Operating Margin                                 14.1%                       17%                   19.53%                    20.48%
The growth in operating profits reflects the continuous focus given by the company towards better revenue realization and cost control.
4.     Provision for tax
The company has tax holiday under Section 10A of the Income Tax Act. Provision for tax has been made accordingly. Provision for deferred
tax liability has been made in accordance with the Accounting Standard (AS- 22) issued by the Institute of Chartered Accountants of India.
H. Material developments in Human Resources
       The company continues its focus on attracting and retaining the best talent in the industry. Several technical and behavioural training
       programmes were organized during the year.
       Number of people employed (consolidated):
     Particulars               March 31, 2004                March 31, 2003
     Production                           710                           566
     Support                              135                            64
     Total                                845                           630                                                                      43
                                       Report of the Auditors to the Members of
                                   Geometric Software Solutions Company Limited

1.   We have audited the attached Balance Sheet of                     d)   In our opinion, the Balance Sheet, the Profit and
     GEOMETRIC SOFTWARE SOLUTIONS COMPANY                                   Loss Account and the Cash Flow Statement dealt
     LIMITED, as at March 31, 2004, the Profit and Loss                     with by this report comply with the Accounting
     Account of the Company for the year ended on that date                 Standards referred to in sub-section (3C) of section
     annexed thereto and the Cash Flow Statement for the                    211 of the Companies Act, 1956.
     year ended on that date. These financial statements are
                                                                       e)   In our opinion and to the best of our information and
     the responsibility of the Company’s management. Our
                                                                            according to the explanations given to us, the said
     responsibility is to express an opinion on these financial
                                                                            accounts read with the notes thereon, give the
     statements based on our audit.
                                                                            information required by the Companies Act, 1956,
                                                                            in the manner so required and give a true and fair
2.   We conducted our audit in accordance with auditing
                                                                            view in conformity with the accounting principles
     standards generally accepted in India. Those Standards
                                                                            generally accepted in India:
     require that we plan and perform the audit to obtain
     reasonable assurance about whether the financial
                                                                            i)     in the case of the Balance Sheet, of the state of
     statements are free of material misstatement. An audit
                                                                                   affairs of the Company as at March 31, 2004;
     includes examining, on a test basis, evidence supporting
     the amounts and disclosures in the financial statements.               ii)    in the case of the Profit and Loss Account, of
     An audit also includes assessing the accounting                               the profit of the Company for the year ended on
     principles used and significant estimates made by                             that date; and
     management, as well as evaluating the overall financial                iii)   in the case of the Cash Flow Statement, of the
     statement presentation. We believe that our audit                             cash flows of the Company for the year ended
     provides a reasonable basis for our opinion.                                  on that date.
3.   As required by the Companies (Auditor’s Report) Order,       5.   On the basis of the written representations received from
     2003, issued by the Central Government of India in terms          the Directors as on March 31, 2004 and taken on record
     of section 227 (4A) of the Companies Act, 1956, we annex          by the Board of Directors, we report that none of the
     hereto a statement on the matters specified in                    Directors is disqualified as on March 31, 2004, from being
     paragraphs 4 and 5 of the said Order.                             appointed as a Director in terms of clause (g) of sub-
4.   Further to our comments in the Annexure referred to               section (1) of section 274 of the Companies Act, 1956.
     above, we report that:

     a)   We have obtained all the information and
          explanations which to the best of our knowledge         For and on behalf of
          and belief were necessary for the purpose of our        KALYANIWALLA & MISTRY
          audit.                                                  CHARTERED ACCOUNTANTS

     b)   In our opinion, proper books of account as required
          by law, have been kept by the Company so far as         Daraius Z. Fraser
          appears from our examination of such books.             PARTNER
     c)   The Balance Sheet, Profit and Loss Account and
          the Cash Flow Statement dealt with by this report       M. No. : 42454
          are in agreement with the books of account.             Mumbai: April 26, 2004.




                                                                                                                                       44
Annexure to the Auditor’s Report
                                                                                              Geometric Software Solutions Co. Ltd.

As required by the Companies (Auditor's Report) Order, 2003,                 no dues which have remained outstanding as at
issued by the Central Government in terms of section 227 (4A)                the end of the financial year, for a period of more
of the Companies Act, 1956, we further report that:                          than six months from the date they became payable.
1. Fixed Assets:                                                             We are informed that the provisions of the
     a) The Company has maintained proper records                            Employees Provident Fund Act, 1952 and the
           showing full particulars, including quantitative                  Employees’ State Insurance Act, 1948, are not
           details and general location of fixed assets.                     applicable to the Company.
     b) The major assets have been physically verified by              b) There are no disputed amounts of statutory dues which
           the management on a sample basis during the year                  have not been deposited with the concerned authorities.
           and in our opinion, the frequency of verification is   9. The Company has no accumulated losses as at the end
           reasonable. No material discrepancies were                  of the financial year and it has not incurred cash losses
           noticed on such verification.                               in the current financial year or the immediately preceding
     c) There has been no substantial disposal of fixed                financial year.
           assets during the year.                                10. According to the records of the Company, there has been
2. The Company has neither granted nor taken any loans,                no default in repayment of dues to a financial institution
     secured or unsecured to / from companies, firms or other          or bank.
     parties listed in the register maintained under section      11. According to the information and explanations given to
     301 of the Companies Act, 1956.                                   us and based on the documents and records produced
3. In our opinion and according to the information and                 before us, the Company has not granted any loans or
     explanations given to us, there are adequate internal             advances on the basis of security by way of pledge of
     control procedures commensurate with the size of the              shares, debentures or other securities.
     Company and the nature of its business, for the              12. According to the information and explanations given to us,
     purchases of computers and other equipment and for                the Company does not deal or trade in shares, securities
     the sale of software and services. During the course of           or debentures. Proper records have been maintained of
     our audit, no major weakness has been noticed in the              the transactions and contracts in respect of the
     internal controls.                                                investments made by the Company. The investments are
4. Transactions that need to be entered in the register                held by the Company in its own name.
     maintained under section 301 of the Companies Act, 1956:     13. According to the information and explanations given to
     a) Based upon the audit procedures applied by us and              us, the company has not given any guarantee for loans
           according to the information and explanations given         taken by others from banks or financial institutions.
           to us, we are of the opinion that the transactions     14. In our opinion and according to the information and
           that need to be entered into the register maintained        explanations given to us, the term loan obtained by the
           under section 301 of the Companies Act, 1956, have          Company was applied for the purpose for which the loan
           been so entered.                                            was obtained.
     b) In our opinion and according to the information and       15. According to the information and explanations given to
           explanations given to us, such transactions                 us and the cash flow statement and other records
           exceeding the value of Rs. 500,000 in respect of            examined by us, the Company has not used funds raised
           any party during the year, have been made at prices         on long term basis for short term investment. The
           which are reasonable having regard to prevailing            Company has not raised any short term funds.
           market prices at the relevant time.                    16. The Company has not made any preferential allotment
5. The Company has not accepted any deposits from the                  of shares to any parties or companies covered in the
     public within the meaning of section 58A of the                   register maintained under section 301 of the Companies
     Companies Act, 1956 and the rules framed thereunder.              Act, 1956.
6. In our opinion, the Company has an internal audit system       17. Based upon the audit procedures performed by us, to
     commensurate with the size of the Company and nature              the best of our knowledge and belief and according to
     of its business.                                                  the information and explanations given to us, no fraud
7. According to the information and explanations given to              on, or by the company, has been noticed or reported
     us, the maintenance of cost records has not been                  during the year.
     prescribed by the Central Government under section           18. None of the other matters specified in the Companies
     209(1)(d) of the Companies Act, 1956, for any of the              (Auditor’s Report) Order, 2003, are applicable to the
     activities of the Company.                                        Company. Consequently, we have not included these
8. Statutory Dues                                                      matters in this report.
     a) According to the information and explanation given        For and on behalf of
           to us, the company is regular in depositing            KALYANIWALLA & MISTRY
           undisputed statutory dues including dues pertaining    CHARTERED ACCOUNTANTS
           to Investor Education and Protection Fund, Income-     Daraius Z. Fraser
           tax, Sales-tax, Wealth Tax, Custom Duty, Cess and      PARTNER
           any other statutory dues with the appropriate          M. No. : 42454
           authorities. We have been informed that there are      Mumbai: April 26, 2004.
                                                                                                                                       45
                                                         Balance Sheet as at March 31, 2004


                                                                                            Current          Previous
                                                                                               Year              Year
                                                         SCHEDULE             Rupees        Rupees            Rupees
SOURCES OF FUNDS:
1.   SHAREHOLDERS’ FUNDS
     a)   Share Capital                                      A          54,493,770                        53,027,330
     b)   Share Application Money                                         4,014,488                           20,850
     c)   Reserves and Surplus                               B         825,473,045                       673,697,102
                                                                                        883,981,303      726,745,282
2.   LOAN FUNDS
     a)   Secured Loans                                      C                                     –      30,088,509

3.   DEFERRED TAX LIABILITY                                  D                           24,235,661       19,493,095
     TOTAL                                                                              908,216,964      776,326,886
APPLICATION OF FUNDS:
4.   FIXED ASSETS                                            E
     a)   Gross Block                                                  614,789,147                       399,367,123
     b)   Less: Depreciation                                           175,889,333                       132,061,717
     c)   Net Block                                                    438,899,814                       267,305,406
     d)   Capital Work-in-Progress                                       26,531,533                       26,888,169
                                                                                        465,431,347      294,193,575
5.   INVESTMENTS                                             F                          171,519,307      160,018,618
6.   CURRENT ASSETS, LOANS AND ADVANCES                      G
     a)   Sundry Debtors                                               145,994,815                       117,842,717
     b)   Cash and Bank Balances                                        37,177,446                        23,451,700
     c)   Other Current Assets                                          12,793,559                        10,317,332
     d)   Loans and Advances                                           252,113,557                       277,516,332
                                                                       448,079,377                       429,128,081
7.   Less: CURRENT LIABILITIES AND PROVISIONS                H
     a)   Current Liabilities                                          103,273,162                        60,345,154
     b)   Provisions                                                    73,539,905                        46,668,234
                                                                       176,813,067                       107,013,388
8.   NET CURRENT ASSETS                                                                 271,266,310      322,114,693
     TOTAL                                                                              908,216,964      776,326,886
NOTES TO ACCOUNTS                                            L
The Schedules referred to above form an integral part of the Balance Sheet.
As per our Report attached                                 Signatures to the Balance Sheet and Schedules A to H and L.
For and on behalf of                                                                    For and on behalf of the Board
Kalyaniwalla & Mistry
Chartered Accountants                                               J. N. Godrej       Manu Parpia         K. A. Palia
                                                                    Chairman           Managing            Director
                                                                                       Director
Daraius Z. Fraser                   Rajkumar Bidawatka
Partner                             Company Secretary

April 26, 2004.                                                                                                          46
Profit and Loss Account for
The Year Ended March 31, 2004
                                                                                        Geometric Software Solutions Co. Ltd.


                                                                                                Current           Previous
                                                                                                   Year               Year
                                                  SCHEDULE                   Rupees             Rupees             Rupees
INCOME:
1.   Sales - Software Packages and Services                                                636,721,787        590,722,059
2.   Other Income                                             I                             97,730,857          47,675,633
                                                                                           734,452,644        638,397,692
EXPENDITURE:
3.   Operating and Other Expenses                             J                            501,610,988        445,052,458
4.   Depreciation                                                                           45,451,141          45,218,604
                                                                                           547,062,129        490,271,062
PROFIT BEFORE TAX:                                                                         187,390,515        148,126,630
5.   Prior Period and Extraordinary Items                    K                                         –           587,792
6.   Provision for Taxes:
     a) Current Taxes
     - Indian Income Tax                                                 13,550,000                             12,500,000
     - Foreign Taxes                                                       2,498,600                             1,046,650
     b) Deferred Taxes                                                     4,742,566                               370,859
                                                                                            20,791,166          13,917,509
PROFIT AFTER TAX:                                                                          166,599,349        133,621,329
7.   Surplus Brought Forward                                                               551,318,022        456,625,276
PROFIT AVAILABLE FOR APPROPRIATION:                                                        717,917,371        590,246,605

APPROPRIATIONS:
1.   Proposed Dividend                                                                      29,971,574          21,210,932
2.   Dividend Tax                                                                             3,840,110          2,717,651
3.   Transfer to General Reserve                                                            17,000,000          15,000,000
4.   Surplus Carried Forward                                                               667,105,687        551,318,022
     TOTAL                                                                                 717,917,371        590,246,605
EARNINGS PER EQUITY SHARE (Face Value Rs.10 each) L - 21
     Basic                                                                                        31.16               25.32
     Diluted                                                                                      30.83               24.88
NOTES TO ACCOUNTS                                            L
The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our Report attached                                Signatures to the Profit and Loss Account and Schedules I to L.
For and on behalf of                                                                       For and on behalf of the Board
Kalyaniwalla & Mistry
Chartered Accountants                                                J. N. Godrej         Manu Parpia            K. A. Palia
                                                                     Chairman             Managing               Director
                                                                                          Director
Daraius Z. Fraser                  Rajkumar Bidawatka
Partner                            Company Secretary

April 26, 2004.                                                                                                                 47
                                                                        Cash Flow Statement
                                                          For The Year Ended March 31, 2004


                                                                                        Current        Previous
                                                                                           Year            Year
                                                                        Rupees          Rupees          Rupees
A.   CASH FLOW FROM OPERATING ACTIVITIES:
     Net Profit Before Tax                                                          187,390,515     148,126,630
     Adjustment for:
     Depreciation                                                    45,451,141                      45,218,604
     Depreciation of earlier years written back                               –                      (2,779,083)
     Net Unrealised Foreign Exchange Gain                             5,289,649                      (2,773,796)
     Interest Paid                                                       27,902                           4,004
     Interest Earned                                                (17,573,503)                    (11,561,410)
     Loss / (Profit) on Sale of Fixed Assets                            214,534                       3,148,511
     Loss / (Profit) on Sale of Investments                          (5,291,665)                     (9,866,509)
     Diminution in Value of Investments                                  18,229                               –
     Dividend Received                                              (44,884,004)                    (11,080,734)
     (Including Rs. 1,006,357 Reinvested-previous year Rs. Nil )
     Deffered Employee Stock Compensation                                42,317                               –
                                                                                   (16,705,400)      10,309,587
     Operating Profit Before Working Capital Changes                                170,685,115     158,436,217
     Adjustments for:
     Trade and Other Receivables                                    (39,376,822)                    (27,211,323)
     Trade Payables                                                  43,724,452                      (6,168,761)
                                                                                      4,347,630     (33,380,084)
     Cash Generated from Operations                                                 175,032,745     125,056,133
     Taxes Paid                                                                      (9,497,653)     (9,110,193)
     Cash Flow before Prior Year Adjustments                                        165,535,092     115,945,940
     Prior Period Adjustments                                                                 –        (587,792)
     Net Cash Flow from Operating Activities                                        165,535,092     115,358,148

B.   CASH FLOW FROM INVESTING ACTIVITIES:
     Purchase of Fixed Assets                                      (223,011,953)                    (50,946,388)
     Sale of Fixed Assets                                               478,555                       4,331,322
     Purchase / Reinvestment of Investments                        (229,534,464)                   (357,336,890)
     (Including Rs. 1,006,357 Reinvested-previous year Rs. Nil )
     Investments in Subsidiary Company                                        –                      (2,742,000)
     Trade Investments                                               (9,044,000)                              –
     Sale of Investments                                            232,351,212                     461,637,314
     Loan to Subsidiary                                              (1,310,500)                              –
     Intercorporate Deposits Placed                                (387,500,000)                   (277,500,000)
     Intercorporate Deposits Refund                                 440,000,000                      50,000,000
     Interest Received                                               14,031,361                       4,267,944
     Dividend Received                                               44,884,004                      11,080,734
     (Including Rs. 1,006,357 Reinvested -previous year Rs. Nil)
     Net Cash Used in Investing Activities                                         (118,655,785)   (157,207,964)

                                Balance carried forward                              46,879,307     (41,849,816)
                                                                                                                   48
                                                                                 Geometric Software Solutions Co. Ltd.


                                                                                        Current            Previous
                                                                                           Year                Year
                                                                      Rupees            Rupees              Rupees

                               Balance brought forward                               46,879,307        (41,849,816)

C.   CASH FLOW FROM FINANCING ACTIVITIES:

     Proceeds from Issue of Share Capital/ESOP Exercised           24,406,039                             5,689,176
     Borrowings from Bank                                          90,942,411                           30,088,509
     Repayment of Bank Loan                                     (121,030,920)                                       -
     Interest Paid on Loan                                         (3,686,034)                            (588,480)
     Dividend Paid                                               (21,067,406)                          (15,353,283)
     Dividend Tax Paid                                             (2,717,651)                                      -

     Net Cash (Used) / Raised in Financing Activities                              (33,153,561)         19,835,922
     NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS:                           13,725,746        (22,013,894)
     CASH AND CASH EQUIVALENTS

     AS AT THE BEGINNING OF THE YEAR                                                 23,451,700         45,465,594
     AS AT THE END OF THE YEAR

         Cash and Bank Balances                                                      37,347,144         23,376,350
         Unrealised Foreign Exchange Restatement in Cash and Cash Equivalents         (169,698)              75,350
         Cash and Cash Equivalents as per Accounts                                   37,177,446         23,451,700
     NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS:                           13,725,746        (22,013,894)
     -




For and on behalf of                                                                For and on behalf of the Board
Kalyaniwalla & Mistry
Chartered Accountants                                          J. N. Godrej        Manu Parpia            K. A. Palia
                                                               Chairman            Managing               Director
                                                                                   Director

Daraius Z. Fraser                 Rajkumar Bidawatka
Partner                           Company Secretary

April 26, 2004.




                                                                                                                         49
                                                  Schedules Forming Part of The Accounts
                                                       For The Year Ended March 31, 2004


                                                                                        Current       Previous
                                                                                           Year           Year
                                                                         Rupees         Rupees         Rupees

SCHEDULE A: SHARE CAPITAL
1. AUTHORISED:
    7,000,000 (previous year 7,000,000) Equity
    shares of Rs. 10/- each.                                                         70,000,000     70,000,000
2. ISSUED, SUBSCRIBED AND PAID UP:
    5,449,377 Equity shares (previous year 5,302,733)                                54,493,770     53,027,330
    of Rs. 10/- each fully paid up.
    TOTAL                                                                            54,493,770     53,027,330
Note:
    a) Of the above 2,850,000 equity shares have been allotted
         as fully paid up bonus shares by capitalisation of surplus
         in the Profit and Loss Account.
    b) During the year, 143,344 equity shares (previous year
         47,441) have been issued under Employee Stock Option
         Plan and 3,300 equity shares (previous year NiI) under
         Directors’ Stock Option Scheme of the Company.
SCHEDULE B: RESERVES AND SURPLUS
1. SHARE PREMIUM ACCOUNT
    As per last Balance Sheet                                         111,341,316                  106,147,400
    Received During the Year                                           18,945,961                    5,193,916
                                                                                    130,287,277    111,341,316
2.   GENERAL RESERVE
     As per last Balance Sheet                                        11,037,764                    15,160,000
     Add:
     Transfer from Profit and Loss Account                            17,000,000                    15,000,000
     Less:
     Transitional adjustment on account of
     Opening Deferred Tax Liability                                            –                   (19,122,236)
                                                                                     28,037,764      11,037,764
3. EMPLOYEE STOCK OPTIONS OUTSTANDING                                                     59,800              -
4. DEFFERED EMPLOYEE STOCK OPTION COMPENSATION                                          (17,483)              -
5. PROFIT AND LOSS ACCOUNT                                                          667,105,687    551,318,022
   TOTAL                                                                            825,473,045    673,697,102
SCHEDULE C: SECURED LOANS
1. Borrowings from Banks
   Term Loan                                                                                  –     30,088,509
   (Secured by a lien / charge on Inter Corporate
   Deposit of Rs. 150,000,000)
   TOTAL                                                                                      –     30,088,509
SCHEDULE D: DEFERRED TAX LIABILITY
1. Deferred Tax Liability as at the commencement of the year                         19,493,095              –
   Add:
   Transfer from General Reserve
   -    Depreciation on Fixed Assets                                                          –     19,122,236
2. Current year Liability / (Asset)
   -    Depreciation on Fixed Assets                                   5,528,976                       370,859
   -    Others                                                         (786,410)
                                                                                      4,742,566
     TOTAL                                                                           24,235,661     19,493,095
                                                                                                                  50
 Schedules Forming Part Of The Accounts For The Year Ended March 31, 2004
 SCHEDULE E: FIXED ASSETS
                                                                                                                                                                              Rupees
                                                       GROSS BLOCK                                                    DEPRECIATION                               NET BLOCK
     ASSET                          As on                                    As on          Upto     Write back of      For the           On        Upto         As on     As on
                                 1-Apr-03      Additions    Deductions   31-Mar-04     31-Mar-03     Earlier Years        Year    Deductions   31-Mar-04     31-Mar-04 31-Mar-03

     Leasehold Land              24,134,010    44,110,110           –     68,244,120      595,527            -         334,841             -      930,368     67,313,752    23,538,483

     Buildings                  102,869,810    88,743,923            -   191,613,733     9,878,248           -        3,849,803            -    13,728,051   177,885,681    92,991,562

     Leasehold Improvement        3,508,901             -            -     3,508,901     1,795,062           -         856,919             -     2,651,981      856,920      1,713,839

     Computers                  114,497,991    35,122,016    1,532,575   148,087,432    77,610,693           -       23,621,532   1,455,937     99,776,288    48,311,144    36,887,298

     Electrical Installation     60,111,576    30,821,235            -    90,932,811    17,716,734           -        7,741,852            -    25,458,586    65,474,225    42,394,842

     Office Equipment &

     EPABX System                22,460,442     4,702,664            -    27,163,106     6,165,053           -        1,996,931            -     8,161,984    19,001,122    16,295,389

     Furniture and Fixtures      69,715,407    12,911,095            -    82,626,502    17,861,721           -        6,812,062            -    24,673,783    57,952,719    51,853,686

     Vehicles                     2,068,986    1,327,596      784,040      2,612,542      438,679            -         237,201       167,589      508,291      2,104,251     1,630,307

     TOTAL                      399,367,123   217,738,639    2,316,615   614,789,147   132,061,717           -       45,451,141    1,623,526   175,889,333   438,899,814

     Previous Year              410,987,542    25,537,966   37,158,385   399,367,123   119,300,747   2,779,083       45,218,604   29,678,552   132,061,717                 267,305,406

     Capital Work-in-Progress                                                                                                                                 26,531,533    26,888,169

     TOTAL                                                                                                                                                   465,431,347 294,193,575




                                                                                                                                                                                         Geometric Software Solutions Co. Ltd.
51
                                                                 Schedules Forming Part of The Accounts
                                                                     For The Year Ended March 31, 2004



SCHEDULE F: INVESTMENTS
  Previous      Current                                                Face                  Current     Previous
      Year        Year                                                 Value                   Year          Year
      Nos.        Nos.                                                  Rs.        Rupees    Rupees       Rupees
1.IN UNITS OF MUTUAL FUNDS
Current Investments (At lower of cost or market value)
Quoted, Non Trade
  822,944      822,944     HDFC Cash Management Fund                    10      10,000,000             10,000,000
                           Savings Plan-Growth Option
                           (formerly Zurich India Liquidity
                           Fund Savings Growth)
  931,723      931,723     Birla Bond Plus Retail Plan -Growth          10      10,000,000             10,000,000
          -   1,029,144    Birla Bond Plus                              10      11,500,000                     –
                           Retail Plan Dividend Payout
              1,029,144    Purchased during the year
          -   1,073,325    Prudential ICICI                             10      12,706,021                     –
                           Liquid Plan Dividend Option
              2,112,209    Purchased during the year
                 17,265    Dividend Reinvested during the year
              1,056,148    Sold during the year
          -    254,044     Kotak Liquid Regular Plan- Dividend          10       2,545,154                     –
               249,536     Purchased during the year
                 4,508     Dividend Reinvested during the year
          -   1,016,000    Templeton India                              10      10,160,599                     –
                           Liquid Fund Weekly Dividend Reinvestment
               999,940     Purchased during the year
                16,060     Dividend Reinvested during the year
          -   1,755,753    HDFC Liquid Fund Dividend Reinvestment       10      17,679,312                     –
              2,234,496    Purchased during the year
                 17,934    Dividend Reinvested during the year
                496,677    Sold during the year
          -    462,584     Reliance Liquid Fund                         10       5,043,238                     –
                           Cash Plan - Weekly Dividend Option
               458,619     Purchased during the year
                 3,965     Dividend Reinvested during the year
          -    943,661     ING Vysya Liquid Fund                        10      10,162,903                     –
                           Weekly Dividend Option
               928,531     Purchased during the year
                15,130     Dividend Reinvested during the year
          -    496,393     HSBC Cash Fund - Dividend                    10       5,057,253                     –
               490,773     Purchased during the year
                 5,620     Dividend Reinvested during the year
          -    816,887     DSP Merrill Lynch                            10      10,135,245                     –
                           Liquidity Fund - Weekly Dividend
              1,208,972    Purchased during the year
                 10,943    Dividend Reinvested during the year
                403,028    Sold during the year

                                            Balance Carried Forward            104,989,725             20,000,000
                                                                                                                    52
Schedules Forming Part of The accounts
For The Year Ended March 31, 2004

                                                                             Geometric Software Solutions Co. Ltd.

SCHEDULE F: INVESTMENTS (Contd.)
 Previous     Current                                            Face                     Current      Previous
     Year       Year                                             Value                      Year           Year
     Nos.       Nos.                                              Rs.       Rupees        Rupees        Rupees
                                 Balance Brought Forward                 104,989,725                 20,000,000
  458,589           -   HDFC High Interest Fund                   10                -                 5,000,000
                        Short Term Plan - Growth Option
                        (formerly Zurich India High Interest
                        Fund STP - Growth)
             458,589    Sold during the year

1,433,052           -   HDFC Short Term Plan - Growth             10                -                15,014,807
            1,433,052   Sold during the year

1,366,556           -   Prudential ICICI Short Term Plan          10                -                15,000,000
                        Cummulative Option
            1,366,556   Sold during the year

  850,724           -   Kotak Liquid Regular Plan - Growth        10                -                10,000,000
              614,925   Purchased during the year
            1,465,649   Sold during the year

  957,139          -    Alliance Short Term Fund - Growth         10                -                10,000,000
             957,139    Sold during the year

1,472,070           -   DSP Merrill Lynch                         10                -                15,000,000
                        Short Term Fund Growth
            1,472,070   Sold during the year

   11,597           -   Templeton India                           10                -                12,500,000
                        Short Term Income Plan Growth
               11,597   Sold during the year

        -           -   Alliance Income Fund                      10                -                           -
                        Regular Dividend
             411,854    Purchased during the year
             411,854    Sold during the year

        -           -   Birla Income Plus                         10                -                           -
                        Plan A Dividend-Payout
             566,048    Purchased during the year
             566,048    Sold during the year

        -          -    Birla Cash Plus Retail Plan Growth        10                -                           -
             243,863    Purchased during the year
             243,863    Sold during the year

        -           -   Prudential ICICI                          10                -                           -
                        Income Plan -Dividend
             402,026    Purchased during the year
             402,026    Sold during the year

                                       Balance Carried Forward           104,989,725                102,514,807
                                                                                                                     53
                                                           Schedules Forming Part of The Accounts
                                                               For The Year Ended March 31, 2004


SCHEDULE F: INVESTMENTS (Contd.)
 Previous     Current                                            Face                  Current      Previous
     Year       Year                                             Value                   Year           Year
     Nos.       Nos.                                              Rs.        Rupees    Rupees        Rupees
                                   Balance Brought Forward               104,989,725             102,514,807


        –          –    Templeton India                           10              –                       –
                        Income Fund - Dividend Payout
        –    268,747    Purchased during the year
             268,747    Sold during the year

        –          –    DSP Merrill Lynch                         10              –                       –
                        Bond Fund Retail Dividend
             127,242    Purchased during the year
             127,242    Sold during the year

        –          –    DSP Merrill Lynch                         10              –                       –
                        Short Term Fund - Dividend
            1,067,536   Purchased during the year
            1,067,536   Sold during the year

        –          –    Principal Income Fund                     10              –                       –
                        Dividend Payout Quarterly
            2,364,164   Purchased during the year
            2,364,164   Sold during the year

        –          –    SUN F & C                                 10              –                       –
                        Money Value Fund - Liquid Normal
            2,604,502   Purchased during the year
            2,604,502   Sold during the year

        –          –    Grindlays Cash Fund - Growth              10              –                       –
             217,918    Purchased during the year
             217,918    Sold during the year

        –          –    Reliance Liquid Fund - Treasury Plan      10              –                       –
                        Retail option - Growth Plan
             332,303    Purchased during the year
             332,303    Sold during the year

        –          –    Reliance Fixed Term Scheme                10              –                       –
                        Monthly Plan III Dividend Option
             500,412    Purchased during the year
             500,412    Sold during the year

        –          –    Reliance Liquid Fund Treasury Plan        10              –                       –
                        Retail Option Weekly Dividend Option
             486,316    Purchased during the year
               1,617    Dividend Reinvested during the year
             487,933    Sold during the year

                                     Balance Carried Forward             104,989,725             102,514,807
                                                                                                               54
Schedules Forming Part of The accounts
For The Year Ended March 31, 2004
                                                                                  Geometric Software Solutions Co. Ltd.


SCHEDULE F: INVESTMENTS (Contd.)
     Previous    Current                                                                     Current        Previous
         Year      Year                                                                        Year             Year
         Nos.      Nos.                                                        Rupees        Rupees          Rupees
                             Balance Brought Forward                                     104,989,725    102,514,807
2.     IN EQUITY SHARES OF SUBSIDIARY COMPANIES
       Long Term (At Cost)
       Unquoted, Trade
      50,000      50,000     No Par Value Common Shares of US $ 1            2,041,500                     2,041,500
                             each in Geometric Software Solutions,
                             Inc. - a wholly owned subsidiary company
                             incorporated in U.S.A.
     900,200     900,200     Equity shares of Rs.10 each fully paid up       9,002,000                     9,002,000
                             in 3D PLM Software Solutions Ltd. - a
                             subsidiary company incorporated under
                             the Companies Act, 1956.
     100,000     100,000     Common Shares of Singapore $ 1 each             2,742,000                     2,742,000
                             in Geometric Software Solutions, Pte Limited
                             - a wholly owned subsidiary company
                             incorporated in Singapore
                                                                                          13,785,500     13,785,500
3.     OTHER TRADE INVESTMENTS
    Unquoted, Long Term (At Cost)
      269         269   Oncourse Technologies, Inc.                         12,759,160                   12,759,160
                        No par value, fully paid and non
                        -assessable shares of the Series A
                        Convertible Preferred Stock
1,410,176 1,410,176     Powerway Inc.                                       30,959,151                   30,959,151
                        No par value shares of Series E Senior
                        Preferred Stock, fully paid and non
                        -assessable.
        -      28,000   Virtual Supply Chain Engineering, Inc                9,044,000                               –
                        Series A Preferred Stock
                        (par value = US$ 0.001 per share)
                                                                                          52,762,311      43,718,311
TOTAL BOOK VALUE OF INVESTMENTS                                                          171,537,536    160,018,618
4.     PROVISION FOR DEPLETION IN VALUE OF INVESTMENTS                                        18,229                 –
       TOTAL                                                                             171,519,307    160,018,618
Aggregate Book Value of Investments:
Quoted                                                                                   104,971,496    102,514,807
Unquoted                                                                                  66,547,811      57,503,811
       TOTAL                                                                             171,519,307    160,018,618


Market Value of Quoted Investments                                                       106,778,752    105,199,786


                                                                                                                          55
                                                            Schedules Forming Part of The Accounts
                                                                For The Year Ended March 31, 2004


                                                                                   Current      Previous
                                                                                      Year          Year
                                                                     Rupees        Rupees        Rupees
SCHEDULE G: CURRENT ASSETS, LOANS AND ADVANCES
1. SUNDRY DEBTORS
   (Unsecured - Considered good, unless otherwise stated)
   a) Debts outstanding for a period exceeding six months          2,190,984                      20,648
   b) Other Debts                                                146,701,387                 120,597,475
       (Including doubtful debts Rs. 2,897,556;
       previous year Rs. 2,775,406)
                                                                 148,892,371                 120,618,123
     c)   Less : Provision for Doubtful Debts                      2,897,556                   2,775,406
                                                                               145,994,815   117,842,717
2.   CASH AND BANK BALANCES
     a) Cash in Hand                                                      –                           –
     b) Balances with Scheduled Banks
        - in Current Accounts                                     23,036,475                   6,255,031
        - in Cash Credit Accounts                                  6,164,776                   6,978,385
        - in Fixed Deposit Account                                 3,708,271                  10,083,271
     c) Balances with Non-scheduled Banks
        - in Current Accounts
        i)    Deutsche Bank, Aachen, Germany                       4,267,924                    134,269
              (Maximum Balance during the year Rs. 7,862,193;
              previous year Rs. 5,431,581 )
        ii) Bank of Tokyo, Japan                                          –                         744
              (Maximum Balance during the year Rs. 1,101,059;
              previous year Rs. 851,464)
                                                                                37,177,446    23,451,700
3.   OTHER CURRENT ASSETS
     a) Accrued Interest                                          10,835,608                   7,293,466
     b) Unrealised Forward Exchange Contract Premium               1,957,951                   3,023,866
                                                                                12,793,559    10,317,332
4.   LOANS AND ADVANCES
     (Unsecured - considered good)
     a) Loan to Subsidiaries                                      13,300,500                  13,065,250
     b) Dues from Subsidiary                                       5,577,579                           –
     c) Advances recoverable in cash or in                        27,072,028                  15,866,385
         kind or for value to be received
     d) Inter-corporate Deposits                                 175,000,000                 227,500,000
     e) Sundry Deposits                                            4,613,159                   4,032,059
     f)  Advance Payment of Taxes                                 26,550,291                  17,052,638
                                                                               252,113,557   277,516,332
     TOTAL                                                                     448,079,377   429,128,081
SCHEDULE H: CURRENT LIABILITIES AND PROVISIONS
1.   CURRENT LIABILITIES
     a) Sundry Creditors
        - Small Scale Industrial Undertakings                              –                           –
        - Others                                                   9,698,099                   2,274,966
     b) Subsidiary Companies                                      16,187,847                   1,232,710
     c) Advances and Deposits                                      5,591,680                     733,230
     d) Unclaimed Dividend                                           693,356                     549,830
     e) Other Current Liabilities                                 71,102,180                  55,554,418
                                                                               103,273,162    60,345,154
                                                                                                           56
Schedules Forming Part of The accounts
For The Year Ended March 31, 2004
                                                                                     Geometric Software Solutions Co. Ltd.


                                                                                            Current            Previous
                                                                                               Year                Year
                                                                          Rupees            Rupees              Rupees
2.    PROVISIONS
      a) For Taxation                                                   34,002,692                          17,954,092
      b) For Proposed Dividend                                          29,971,574                          21,210,932
      c) For Tax on Dividend                                             3,840,110                           2,717,651
      d) For Leave Encashment                                            5,725,529                           4,785,559
                                                                                        73,539,905          46,668,234
      TOTAL                                                                            176,813,067         107,013,388

SCHEDULE I: OTHER INCOME
1. Dividend from Mutual Funds                                                            3,474,804              548,394
2. Dividend from Subsidiary Company                                                     41,409,200           10,532,340
3. Gain on Exchange Fluctuations (Net)                                                  16,158,000            4,240,739
4. Interest On Advances and Deposits (Gross)                                            17,573,503           11,561,410
   (Tax Deducted at Source Rs. 1,977,804 ; previous year Rs. 700,785)
5. Rent Received                                                                        13,726,637           10,646,744
6. Profit on Sale of Investments (Net)                                                   5,291,665            9,866,509
7. Miscellaneous Income                                                                     97,048              279,497
   TOTAL                                                                                97,730,857           47,675,633

SCHEDULE J: OPERATING AND OTHER EXPENSES
1. Personnel Expenses:
   -    Salaries, Bonus and Allowances                                                 299,582,285         246,282,646
   -    Contribution to Provident and Other Funds                                       10,656,403           9,186,186
   -    Staff Welfare Expenses                                                           9,408,907           8,962,241
2. Software Tools and Packages (Net of Reimbursements)                                  15,510,256          16,464,964
3. Electricity Expenses                                                                  7,658,794           7,194,236
4. Rates and Taxes                                                                         401,947             476,251
5. Rent and Service Charges                                                              5,484,003           6,331,004
6. Repairs and Maintenance:
   a) Computers                                                          2,471,977                           2,191,755
   b) Others                                                             5,942,605                           4,870,229
                                                                                         8,414,582           7,061,984
7. Insurance                                                                             3,489,161           3,304,188
8. Travelling and Conveyance Expenses (Net of Reimbursements)                           42,773,177          23,060,615
9. Communication Expenses                                                               11,047,537           8,854,722
10.Auditors Remuneration                                                                 1,434,002           1,338,098
11.Advertising and Publicity                                                             2,745,897           1,891,804
12.Staff Recruitment Expenses                                                            5,485,432           4,995,011
13.Bad Debts Written Off                                                                   572,357           2,722,403
14.Royalty                                                                               4,996,806           5,141,867
15.Legal and Professional Charges                                                       13,380,591           8,944,136
16.Sales and Marketing Expenses (Net of Reimbursements)                                 52,140,615          71,097,140
17.Commission to Non Executive Directors                                                 1,600,000           1,200,000
18.Diminution in Value of Investments                                                       18,229                   -
19.Bank Interest                                                                            27,902               4,004
20.Miscellanous Expenses                                                                 4,445,421           4,953,353
21.Loss / (Profit) on Sale of Fixed Assets (Net)                                           214,534           3,148,511
22.Provision for Bad and Doubtful Debts                                                    122,150           2,437,094
   TOTAL                                                                               501,610,988         445,052,458
SCHEDULE K: PRIOR PERIOD AND EXTRAORDINARY ITEMS
1. Excess Depreciation of Earlier Years Written Back                                               –        (2,779,083)
2. Communication Expenses                                                                          –          1,134,794
3. Tax Adjustments in Respect of Earlier Years                                                     –          2,232,081
   TOTAL                                                                                           –            587,792
                                                                                                                             57
                                                                   Schedules Forming Part of The accounts
                                                                       For The Year Ended March 31, 2004


SCHEDULE L : NOTES TO ACCOUNTS
1.   SIGNIFICANT ACCOUNTING POLICIES                                 d)   Foreign Exchange Transactions:
     a)   Basis of Accounting:                                            Transactions in foreign currency are recorded at
          The financial statements have been prepared on                  the exchange rates prevailing on the date of the
          accrual basis under the historical cost convention,             transaction. Assets and liabilities related to foreign
          in conformity in all material aspects with the                  currency transactions, remaining unsettled at the
          generally accepted accounting principles in India,              year end, are stated at the contracted rates, when
          the Accounting Standards issued by the Institute of             covered under forward foreign exchange contracts
          Chartered Accountants of India and the                          and at year end rates in other cases. The premium
          requirements of the Companies Act, 1956.                        payable on forward foreign exchange contracts is
                                                                          amortised over the period of the contract. Exchange
     b)   Fixed Assets and Depreciation:
                                                                          gains/losses are recognised in the Profit and Loss
          Fixed Assets are stated at cost less accumulated                Account except in respect of liabilities incurred to
          depreciation. Cost includes all expenses related                acquire fixed assets in which case they are
          to acquisition and installation of the concerned                adjusted to the carrying amount of such fixed
          assets and any attributable cost of bringing the                assets.
          asset to the condition of its intended use.
                                                                     e)   Revenue Recognition:
          Direct financing cost incurred during the                       Revenue from time and material contracts for
          construction period on major projects is also                   software development is recognised on completion
          capitalised. Exchange differences on repayment                  of contracts or at stages as per the applicable terms
          and year end translation of foreign currency                    and conditions agreed with the customers and
          liabilities relating to acquisition of fixed assets is          when the deliverables are despatched to
          adjusted to the carrying cost of the respective                 customers. In case of fixed price contracts, revenue
          assets.                                                         is recognized on milestones achieved as specified
          Depreciation is provided under the straight line                in the contracts on the proportionate completion
          method, based on useful lives of assets as                      method on the basis of work completed. Revenue
          estimated by the Management. Depreciation is                    from sale of traded software products and software
          charged on a monthly pro-rata basis for assets                  upgradation fee is recognised when the sale has
          purchased / sold during the year. Individual assets             been completed with the passing of the title.
          acquired for less than Rs. 5,000/- are entirely                 Revenue from software upgradation fees on
          depreciated in the year of acquisition. Leasehold               software developed by the Company is recognised
          assets are amortised over the period of the lease.              over the period for which it is received.
          The Management’s estimate of useful lives for              f)   Expenditure:
          various fixed assets is as under:
                                                                          The cost of software purchased for use in software
          Asset                 Useful Life Of Asset In Years             development is charged to the Profit and Loss Ac-
          Buildings                                         28            count in the year in which it is incurred. The cost of
          Computers                                          3            software purchased for specific software develop-
                                                                          ment contracts is charged over the period of such
          Electrical Installation                            8
                                                                          contracts.
          Office Equipment                                  13
                                                                          Project costs incurred on fixed price contracts where
          Furniture and Fixtures                            10            milestones are yet to be reached are classified as
          EPABX Systems                                     10            “Contracts in Progress” in the balance sheet.
          Vehicles                                          10       g)   Employee Stock Options Scheme:
     c)   Investments:                                                    Stock Options granted to employees during the year,
          Long term investments are carried at cost.                      subsequent to the amendment to the SEBI (Em-
          Provision for diminution, if any, in the value of each          ployee Stock Option Scheme and Employee Stock
          long term investment is made to recognise a                     Purchase Scheme) Guidelines, 1999, effective from
          decline, other than that of a temporary nature.                 June 30, 2003, are at market price calculated under
                                                                          the said Guidelines. The intrinsic value, being the
          Current investments intended to be held for less
                                                                          difference, if any, between market price and exer-
          than one year are stated at the lower of cost and
                                                                          cise price is treated as Personnel Expenses and
          market value.                                                                                                            58
Schedules Forming Part of The Accounts
For The Year Ended March 31, 2004
                                                                                            Geometric Software Solutions Co. Ltd.


SCHEDULE L : NOTES TO ACCOUNTS (Contd.)

         charged to Profit and Loss Account. The value of the               Cum Life Assurance Scheme through a Master
         options are treated as a part of employee compen-                  Policy with the Life Insurance Corporation of India
         sation in the financial statements and are amor-                   towards which annual premiums are paid and
         tised over the vesting period.                                     charged against revenue.
    h)   Borrowing Costs:                                                   The Company has maintained a Group Superan-
         Borrowing costs that are directly attributable to the              nuation Scheme for its senior executives through a
         acquisition of an asset that necessarily takes a sub-              Master Policy with the Life Insurance Corporation of
         stantial period of time to get ready for its intended              India towards which monthly premiums are paid and
         use are capitalised as part of the cost of that asset              charged against revenue.
         till the date it is put to use. Other borrowing costs              The provision for leave encashment payable on re-
         are recognised as an expense in the period in which                tirement of an employee is made as per the
         they are incurred.                                                 Company’s rules for all eligible employees, on the
    i)   Research and Development Expenditure:                              basis of an actuarial valuation.
         Expenditure on in-house development of software is
         charged to the Profit and Loss Account in the year in    2.   CONTINGENT LIABILITIES
         which it is incurred.                                         a)   Guarantees given by the Company’s bankers
    j)   Warranty Obligations:                                              against counter guarantees given by the Company
         In respect of products sold by the Company, which                  Rs. 6,259,125 (previous year Rs. 4,590,000).
         carry a specified warranty, future costs that will be         b)   Claims against the Company not acknowledged,
         incurred by the Company in carrying out its obliga-                as debt Rs. 159,386 (previous year Rs. Nil) in
         tions are estimated and accounted for on accrual                   respect of Income tax assessment of a previous
         basis.                                                             year, which has been disputed by the Company.
                                                                            Pending settlement of the dispute, the Company
    k)   Income-tax:                                                        has paid the amount to the authorities and the same
         Income taxes have been computed using the tax                      has been disclosed under Advance Payment of
         effect accounting method, where taxes are accrued                  Taxes.
         in the same period as the related revenue and ex-
         penses. Deferred tax assets and liabilities are          3.   CAPITAL COMMITMENTS
         recognised for the expected future tax consequences
                                                                       Estimated amount of contracts remaining to be
         attributable to timing differences between the tax-
                                                                       executed on capital account to the extent not provided
         able income and the accounting income for a pe-
                                                                       for (net of advances) Rs. 17,945,817 (previous year Rs.
         riod. Deferred tax assets and liabilities are mea-
                                                                       84,551,031).
         sured using enacted tax rates expected to apply to
         taxable income in the years in which the timing dif-     4.   CAPITALISATION OF BORROWING COSTS
         ferences are expected to be recovered or settled.
                                                                       Borrowing cost directly attributable to eligible fixed
         The effect of changes in the tax rates on deferred tax
                                                                       assets capitalised during the year amounts to Rs.
         assets and liabilities is recognised in the statement
                                                                       3,593,910 (previous year Rs. 584,476) .
         of income in the period of change. Deferred tax as-
         sets are recognised based on management’s judg-          5.   INVESTMENTS
         ment as to the sufficiency of future taxable income           The Company has, during the year, entered into a
         against which the deferred tax asset can be realised.         strategic investment agreement with Virtual Supply
    l)   Retirement Benefits:                                          Chain Engineering Inc. U.S.A. (“the Corporation”) to
         The employees of the Company do not come under                invest US$ 500,000 to acquire up to 70,000 shares of
         the purview of the Employee’s Provident Fund                  the Corporation’s Series A Preferred Stock, US$ 0.001
         Scheme, 1952. The Company has constituted an                  par value per share and a warrant to purchase shares
         excluded Provident Fund where some of the em-                 of the Corporation’s Common Stock, US$ 0.001 par
         ployees have voluntarily participated. In case of such        value per share.
         employees, the company makes contribution to the              Pursuant to the said agreement, the Company has,
         provident fund.                                               during the year, for the aggregate purchase price of US$
                                                                       200,000, acquired 28,000 shares of the Corporation’s
         The Company has maintained a Group Gratuity
                                                                       Series A Preferred Stock and a warrant to purchase           59
                                                                    Schedules Forming Part of The accounts
                                                                        For The Year Ended March 31, 2004


SCHEDULE L : NOTES TO ACCOUNTS (Contd.)

      25,000 shares of the Corporation’s Common Stock, at                        Maximum debit balance during the year Rs.
      an exercise price of US$ 7.5 per share.                                    13,163,963 (previous year Rs.14,574,000).
6.    SUNDRY DEBTORS                                                        ii) Geometric Software Solutions Pte. Limited, a
      Sundry Debtors include Rs. 20,236,235 (previous year                       wholly-owned subsidiary of the Company: Rs.
      Rs. 11,613,658) due from Geometric Software Solutions                      1,310,500 (previous year Nil). Maximum debit
      Pte. Ltd., a wholly-owned subsidiary of the Company.                       balance during the year Rs. 1,311,814
7.    LOANS AND ADVANCES                                                         (previous year Nil).
      Loans and advances include:                                      b)   Dues from Subsidiary:
      a) Loans given to Subsidiaries:                                       3D PLM Software Solutions Limited, a subsidiary
          i)  Geometric Software Solutions, Inc., a wholly-                 of the Company: Rs. 5,577,579 (previous year Nil).
              owned subsidiary of the Company: Rs.                          Maximum debit balance during the year Rs.
              11,990,000 (previous year Rs. 13,065,250).                    5,125,862 (previous year Rs. 10,994,474).

8.    EMPLOYEE STOCK OPTIONS
        a)        The position of the existing schemes is summarized as under:
         Particulars               Scheme II                Scheme III                 Scheme IV                Scheme V
                                     Numbers                 Numbers                   Numbers                    Numbers
 1.   Details of the             Annual General         Annual General           Annual General            Annual General
      Meeting                    Meeting                Meeting                  Meeting                   Meeting
                                 (Sept. 21, 1999)       (July 14, 2000)          (June 22, 2001)           (June 18, 2003)

 2.   Approved                   300,000                30,000                   354,625                   275,000

 3.   Price per Option           Rs. 150/- (pre IPO)    National Stock           Closing price on          Closing Price on NSE
                                 Rs. 300/- (post IPO    Exchange (NSE)           National Stock            on date immediately
                                 but pre listing),      market price             Exchange (NSE)            preceding grant of
                                 NSE market price                                on a day previous         options. The options
                                 (post listing)                                  to the day of grant.       may be granted at
                                                                                                           market price computed
                                                                                                           in accordance with the
                                                                                                           ESOP Guidelines.

 4.   Granted                        285,276                  21,000                    344,912                   137,640

 5.   Vested                         215,590                  15,000                    118,200                      NIL

 6.   Exercised                       163,457                  5,950                     63,535                      NIL

 7.   Forfeited / Surrendered         67,326                   1,000                     67,099                     5,092

 8.   Unexercised                     52,133                   9,050                     54,665                      NIL

 9.   Lapsed                            NIL                      NIL                       NIL                       NIL
 10. Vesting Schedule           The options granted The Opitons granted          The options are to be     The options are to be
                                shall vest in 4 equal shall vest one year        granted in quarterely     granted within two years
                                annual installments after the date of grant       tranches starting from   The options granted
                                beginning one year and will be convertible       Aug., 2001. The option    shall vest in 4 equal
                                after the date of grant. in three tranches       so granted shall vest     annual installments
                                                         between one and three   in 4 equal annual         beginning one year
                                                         years from the grant.   installments beginning    after the date of
                                                                                 one year after the date   grant.
                                                                                 of grant.
                                                                                                                                      60
Schedules Forming Part of The Accounts
For The Year Ended March 31, 2004
                                                                                                          Geometric Software Solutions Co. Ltd.


SCHEDULE L : NOTES TO ACCOUNTS (Contd.)


In the event of any further rights or bonus issue of equity shares         owes any sum which is outstanding for more than
prior to conversion, the entitlement of shares shall be suitably           thirty days.
revised. In the event of a bonus issue, the number of shares
                                                                     10. ACCOUNTING FOR LEASES
shall be increased proportionately and the price revised down-
wards. The options vest in the employees to whom they are                  The lease rentals in respect of office space charged
granted subject to the employee being in employment of the                 during the period and maximum obligations on non-
Company and his/her performance in that year.                              cancellable operating leases payable as per the
                                                                           rentals stated in the lease agreement are given in
     b)   During the year, the Company has granted 5,000
                                                                           accordance with the Accounting Standard (AS-19) on
          Options under the ESOP Scheme III on July 16,
                                                                           “Leases” issued by the Institute of Chartered Account-
          2003, at the rate of Rs. 374/- per option. The market
                                                                           ants of India.
          price of the option determined in accordance with
          the SEBI (Employee Stock Option Scheme and                                                                                       (Amounts in Rupees)

          Employee Stock Purchase Scheme) Guidelines,                       Particulars                                            Current Year   Previous Year
          1999, amounts to Rs. 386/- per option. The intrinsic
                                                                            1.    Lease Rentals paid during the year                 5,484,003       6,045,000
          value of the options, being the difference between
          the market price and the issue price amounting to                 2.    Future Lease Obligations
          Rs. 59,800/- shown under Reserves, is to be                             -Due within one year of the Balance Sheet date     6,206,400       4,680,000
          amortised over the vesting period. The
                                                                                  -Due between one year and five years               1,949,816       3,510,000
          unamortised portion amounting to Rs. 17,483/-
          has been disclosed as Deferred Employee Stock                           -Due after five years                                     Nil             Nil
          Option Compensation.
                                                                     11. SEGMENT REPORTING
9.   CURRENT LIABILITIES
                                                                           Accounting Standard - 17 ‘Segment Reporting’ is-
     a)   Unclaimed Dividends reflects the position as at
                                                                           sued by the Institute of Chartered Accountants of In-
          March 31, 2004, after transfer of dividends, which
                                                                           dia prescribes that where a financial report contains
          have remained unpaid or unclaimed for a period ex-
                                                                           both consolidated financial statements and the sepa-
          ceeding seven years, to the Investor Education and
                                                                           rate financial statements of the parent, segment in-
          Protection Fund in accordance with the provisions of
                                                                           formation need be presented only on the basis of the
          section 205A of the Companies Act, 1956.
                                                                           consolidated financial statements. Accordingly, the
     b)   There are no parties which can be classified as small            segment information has been provided only in the
          scale industrial undertakings to whom the Company                consolidated financial statements.




                                                                                                                                                                  61
                                                                    Schedules Forming Part of The accounts
                                                                        For The Year Ended March 31, 2004


SCHEDULE L : NOTES TO ACCOUNTS (Contd.)


12. RELATED PARTY TRANSACTIONS:
    A. Related Parties and their Relationships
       a) Subsidiary Companies                                :       Geometric Software Solutions Inc., USA.
                                                                      Geometric Software Solutions Pte. Ltd., Singapore.
                                                                      3D PLM Software Solutions Ltd.
          b)    Parties Having Substantial Interest           :       Godrej and Boyce Manufacturing
                                                                      Company Ltd.
          c)    Key Management Personnel                      :       Manu Parpia, Managing Director


    B.    Transactions with Related Parties
                                                                                                             (Amounts in Rupees)
     Nature of Transaction                                          Subsidiary              Parties Having                  Key
                                                                   Companies            Substantial Interest       Management
                                                                                                                     Personnel
     a)        Sales – Software Services                            51,005,137                     737,800                   Nil
                                                                  (30,348,856)                 (2,632,300)                 (Nil)
     b)        Marketing Expenses Paid to Subsidiary                44,462,053                           Nil                 Nil
                                                                  (61,636,200 )                         (Nil)              (Nil)
     c)        Purchase of Fixed Assets                                      Nil               22,734,142                    Nil
                                                                           (Nil)               (2,206,307)                 (Nil)
     d)        Loan Given                                             1,310,500                          Nil                 NIl
                                                                  (25,000,000 )                         (Nil)              (Nil)
     e)        Interest Received on Loans to Subsidiaries               295,679                          Nil                 Nil
                                                                    (1,254,032)                         (Nil)              (Nil)
     f)        Interim Dividend Received                            41,409,200                           Nil                 Nil
                                                                  (10,532,340)                          (Nil)              (Nil)
     g)        Rent Paid towards Leased Premises                             Nil                   936,000                   Nil
                                                                           (Nil)               (1,209,000)                 (Nil)
     h)        Rent Income                                            9,377,226                          Nil                 Nil
                                                                    (5,901,932)                         (Nil)              (Nil)
     i)        Reimbursement of Expenses                            25,094,583                   6,330,487                   Nil
                                                                  (18,531,895)                 (9,400,886)                 (Nil)
     j)        Managerial Remuneration                                       Nil                         Nil        10,525,050
                                                                           (Nil)                        (Nil)       (6,847,240)
     Balances as on Balance Sheet Date:                          22,926,467 Dr                  451,547 Dr                   Nil
                                                               (23,392,917 Dr)              (1,205,632 Dr)                 (Nil)
    Note: Previous year’s figures are given in brackets
13. DEFERRED INCOME TAX
    The Company accounts for taxes on income to include the effect of timing differences in the tax expenses in the Profit and
    Loss Account and deferred tax asset / liability in the balance sheet in accordance with the Accounting Standard (AS-22) on
    “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India. The Company has evaluated
    the various elements of tax computation to determine whether any deferred tax asset or liability needs to be recognised.
    Tax Holiday under Section 10A of the Income tax Act, 1961, is available to the Company. In view of this, the deferred tax
    asset / liability in respect of timing differences that originate and reverse during the tax holiday period is ignored and
    deferred tax liability in respect of timing difference that originate during tax holiday period but reverse after the tax holiday
    period is recognised.
                                                                                                                                        62
Schedules Forming Part of The Accounts
For The Year Ended March 31, 2004
                                                                           Geometric Software Solutions Co. Ltd.


SCHEDULE L : NOTES TO ACCOUNTS (Contd.)                                          Current             Previous
                                                                                    Year                 Year
                                                                Rupees           Rupees               Rupees
14. COMPUTATION OF PROFITS UNDER SECTION
    349 OF THE COMPANIES ACT, 1956.
    Profit before Extraordinary Items and Taxes as per
    Profit and Loss Account                                                 187,390,515          148,126,630
    Add:
          Depreciation as per Accounts                        45,451,141                          45,218,604
          Managerial Remuneration                             12,125,050                           8,047,240
          Loss on Sale of Assets (Net)                           214,534                           3,148,511
          Diminution in Value of Current Investments              18,229                                   –
          Provision for Doubtful Debts                           122,150                                   –
                                                                             57,931,104           56,414,355
                                                                            245,321,619          204,540,985
    Less:
        Depreciation under section 350 of the Companies
        Act, 1956                                             45,451,141                          45,218,604
        Profit on Sale of Investments (Net)                    5,291,665                           9,866,509
                                                                             50,742,806           55,085,113
    Eligible Profits                                                        194,578,813          149,455,872
    a) Remuneration to the Managing Director @ 5%
         of Eligible Profit as per section 198 read with
         Schedule XIII of the Companies Act, 1956, shall
         not exceed:                                                           9,728,941            7,472,794
    b) Maximum Remuneration to the Managing Director
         for the financial year 2003-04 in the terms of the
         Central Government Approval vide its letter
         No. 1/220/03–CL. VII dated January 2, 2004, shall
         not exceed:                                                          11,461,000                    –
    c) Managerial Remuneration (See Note 15)                                  10,525,050            6,847,240
    d) Maximum remuneration payable to the
         Non-Executive Directors @ 1% of Eligible
         Profit as per section 198 read with
         Schedule XIII of the Companies Act, 1956.                             1,945,788            1,494,559
    e) Commission Payable to Non-Executive Directors                           1,600,000            1,200,000
         (See Note 15)
15. MANAGERIAL REMUNERATION
    a) Managing Director’s Remuneration:
         - Managing Director’s Salary and Allowances           4,583,550                            4,313,300
         - Estimated Monetary Value of Perquisites                35,020                               33,940
         - Performance Bonus to Managing Director             5,906,480*                            2,500,000
                                                                              10,525,050            6,847,240
    b)   Commission to Non-Executive Directors                                 1,600,000            1,200,000
         TOTAL                                                                12,125,050            8,047,240
    *    Including provision for deferred Long Term
         Performance Bonus of Rs. 2,706,480, which
         is due for payment at the end of three-year
         tenure.
                                                                                                                   63
                                                      Schedules Forming Part of The accounts
                                                          For The Year Ended March 31, 2004


SCHEDULE L : NOTES TO ACCOUNTS (Contd.)                                    Current      Previous
                                                                              Year          Year
                                                              Rupees       Rupees        Rupees
16. AUDITOR’S REMUNERATION
    a) Audit Fees                                                         642,600       577,800
    b) Taxation Matters                                                   200,000       200,000
    c) In Other Capacity:
        - Tax Audit Fees                                                   135,000       108,000
        - Certification and Other Matters                                  428,070       434,100
        - Reimbursement of Expenses                                         28,332        18,198
        TOTAL                                                            1,434,002     1,338,098
17. VALUE OF IMPORTS ON C.I.F. BASIS
    a) Capital Goods                                                    32,318,237     9,506,097
        TOTAL                                                           32,318,237     9,506,097
18. EXPENDITURE (NET) IN FOREIGN CURRENCY
    a) Travel Expenses                                                  22,256,033    11,035,066
    b) Professional Fees                                                 1,961,324      1,872,157
    c) Sales and Marketing Expenses                                     53,445,463    77,056,613
    d) Exhibition Expenses                                                 674,877      1,448,572
    e) Royalty                                                           4,996,806      5,141,867
    f)  Salary-On Site Employees                                        30,705,366    13,944,754
    g) Software Packages & Tools                                         5,311,219    (1,131,500)
    h) Others                                                            1,128,596      1,694,342
        TOTAL                                                          120,479,684   111,061,871
19. EARNINGS IN FOREIGN EXCHANGE
    a) Income from Software Development and
        Sale of Software                                               606,140,033   580,791,139
    b) Interest                                                            295,679       386,679
    c) Others                                                            1,445,749     1,415,816
        TOTAL                                                          607,881,461   582,593,634
20. REMITTANCE OF DIVIDEND
    a) Number of non-resident shareholders                                      1             4
    b) Number of shares held                                              520,000       520,580
        (Equity shares of Rs. 10 each)
    c) Dividend Remitted                                                 2,080,000     1,249,374
        (Net of withholding taxes where applicable)
21. EARNINGS PER SHARE
    a) Net Profit After Tax                                            166,599,349   133,621,329
    b) Number of Equity Shares
        - As at the beginning of the year                                5,302,733     5,255,292
        - As at the end of the year                                      5,449,377    5,302,733*
    c) Weighted Average Number of Equity Shares
        Basic                                                            5,346,654    5,277,307*
        Diluted                                                          5,404,477    5,371,370*
    d) Earning Per Equity Share of Rs. 10 each.
        Basic                                                                31.16        25.32*
        Diluted                                                              30.83        24.88*
        * As Revised - Refer Note 22 (a)


                                                                                                    64
Schedules Forming Part of The Accounts
For The Year Ended March 31, 2004
                                                                                        Geometric Software Solutions Co. Ltd.


SCHEDULE L : NOTES TO ACCOUNTS (Contd.)
22. GENERAL
    a) The Company had, subsequent to the preparation of the Balance Sheet as at March 31, 2003, obtained legal
       opinion from external legal counsel that the allotment of 3,000 Options under the ‘Preferential Options Scheme
       2001’ was void ab initio. Consequently, the following items in the Company’s Financial Statements as at March
       31, 2003, were revised as under:
                    Particulars                                                              As at March 31, 2003
                                                                                             Original           Revised
                                                                                                 Rs.                Rs.
       Share Capital                                                                     53,057,330          53,027,330
       Reserves and Surplus                                                             673,881,564         673,697,102
       Current Liabilities                                                                60,117,154         60,345,154
       Proposed Dividend and Tax thereon                                                 23,942,121          23,928,583
      b)   Figures for the previous year have been regrouped / restated wherever necessary to conform to current year’s
           presentation.
      c)   Other information required by Schedule VI to the Companies Act, 1956, has been given only to the extent
           applicable.
23.    ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV TO THE COMPANIES ACT, 1956
       BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
       I   Registration Details:
           Registration No.                                                                       :                77342
           State Code                                                                             :                    11
           Balance Sheet Date                                                                     :        March 31, 2004
       II Capital Raised During the Year: (Amount in Rs. Thousand)
           Public Issue                                                                           :                      -
           Right Issue                                                                            :                      -
           Bonus Issue                                                                            :                      -
           Private Placement                                                                      :                      -
           Employee Stock Options including Share Premium and Share Application                   :                 24,406
       III Position of Mobilisation and Deployment of Funds: (Amount in Rs. Thousand)
           Total Liabilities                                                                      :                908,217
           Total Assets                                                                           :                908,217
           Sources of Funds
           Paid-up Capital                                                                        :                 58,508
           Reserves and Surplus                                                                   :                825,473
           Secured Loans                                                                          :                      -
           Unsecured Loans                                                                        :                      -
           Deferred Tax Liability                                                                 :                 24,236
           Application of Funds
           Net Fixed Assets                                                                       :                465,431
           Investments                                                                            :                171,519
           Net Current Assets                                                                     :                271,267
           Misc. Expenditure                                                                      :                      -
       IV Performance Of The Company: (Amount in Rs. Thousand)
           Turnover                                                                               :                734,453
           Total Expenditure                                                                      :                547,062
           Profit Before Tax                                                                      :                187,391
           Profit After Tax                                                                       :                166,599
           Earning Per Share of Rs. 10 each (in Rupees)
           Basic                                                                                  :                   31.16
           Diluted                                                                                :                   30.83
           Dividend Rate %                                                                        :                    55%
       V Generic Names Of 3 Principal Products / Services of Company:
           (As per monetary terms)
           a) Item Code No. (ITC Code)                                                            :        85249904.10
           b) Product Description                                                                 :    Computer Software        65
                             Statement pursuant to Section 212 of the
             Companies Act, 1956, relating to the Subsidiary Companies


A. Name of the Subsidiary                      :   Geometric Software      Geometric Software        3D PLM Software
                                                   Solutions, Inc.         Solutions Pte Ltd.,       Solutions Limited
                                                                           Singapore
B. Financial year of the subsidiary ended on: March 31, 2004               March 31, 2004            March 31, 2004
C. The Company’s interest in the subsidiary
   on the aforesaid date
    a) Number of share held                    :   The Company held        The Company held          900,200 Equity
                                                   the entire common       the entire stock of       Shares
                                                   stock of the            aggregate value of
                                                   aggregate value of      Singapore $ 100,000
                                                   US$ 50,000
    b) Face Value per Share                    :   Common stock            S $1                      Rs. 10
                                                   - No face value
    c) Extent of Holding                       :   100%                    100%                      70%
D. The net aggregate of the Profits / (Losses)
   of the subsidiary so far it concerns the
   members of the company.
    a) Not dealt with in the accounts of the
       company amounted to
        1. For the Subsidiary’s financial year :   US Dollars 77,554       Singapore Dollars         Rs. 31,741,397
           ended as in “B” above                                           52,235
        2. For the previous financial years :      US Dollars 237,063      Singapore Dollars         Rs. 32,152,471
           of the subsidiary since it became                               (99,102)
           the company’s subsidiary
    a) Dealt with in the accounts of the
       company amounted to
        1. For the Subsidiary’s financial year
           ended as in “B” above               :   Nil                     Nil                       Rs.41,409,200
        2. For the previous financial years of
           the subsidiary since it became the
           company’s subsidiary                :   Nil                     Nil                       Rs. 10,532,340



                                                                                         For and on behalf of the Board




                                      J.N. GODREJ                      MANU PARPIA                         K. A. PALIA
April 26, 2004                             Chairman                  Managing Director                         Director




                                                                                                                          66
Ratio Analysis For The Year
Ended March 31, 2004
                                                                       Geometric Software Solutions Co. Ltd.


                                                 Unconsolidated                    Consolidated
Ratios - Financial Performances                Current     Previous             Current          Previous
                                                 Year          Year                Year              Year

Export Revenue / Total Revenue                 79.25%       90.04%              89.48%             94.08%
Domestic (India) Revenue / Total Revenue        7.45%        2.49%                4.87%             1.82%
Other Income / Total Revenue                   13.31%        7.47%                5.66%             4.10%
Manpower Cost / Total Revenue                  43.52%       41.42%              50.64%             49.47%
Other Expenses / Total Revenue                 24.78%       28.29%              17.97%             19.85%
Operating and Other Expenses / Total Revenue   68.30%       69.71%              68.61%             69.32%
Depreciation / Total Revenue                    6.19%        7.08%                7.31%             6.93%
Ordinary Profit / Total Revenue                25.51%       23.20%              24.08%             23.75%
Ordinary Profit / Average Net Worth            23.33%       21.83%              31.38%             29.71%
ROCE (PBIT / Average Capital Employed)         23.33%       21.74%              31.39%             29.62%
Capital Output Ratio (Total Revenue /
Average Capital Employed)                         0.91         0.94                 1.30              1.25
Ratios - Balance Sheet
Debt / Equity Ratio                                  -         0.04                     -             0.04
Days Sale Outstanding                              84             73                  69                57
Current Ratio                                     2.53         4.01                 1.99              3.23
Cash and cash equivalents / Total Assets        4.09%        3.02%                5.20%             7.01%
Cash and cash equivalents / Total Revenue       5.06%        3.67%                4.71%             6.66%
Depreciation for the year /
Average Gross Block of Assets                   8.96%       11.16%              13.09%             13.56%
Ratios - Growth compared to previous year
Export Revenue                                  1.26%        0.92%              21.85%            32.62%
Total Revenue                                  15.05%        4.44%              28.13%            32.33%
Operating and Other Expenses                   12.71%        1.97%              26.81%            26.38%
Profit before Extraordinary Items and Taxes    26.51%       13.74%              29.94%             53.68%
Profit after taxes                             24.68%        6.04%              22.25%            32.67%
Per - Share Data
Basic Earnings (Rs.)                             31.16        25.32               39.00              32.32
Cash Earnings (Basic) (Rs.)                      39.66        33.89               54.35              43.84
Dividend                                         55%           40%                  55%               40%
Dividend per Share (Rs.)                          5.50         4.00                 5.50              4.00
Book Value (Rs.)                               166.66        146.40              186.60            157.35
Dividend Payout compared to Profit After Tax   20.30%       17.91%              16.22%             14.03%




                                                                                                               67
GEOMETRIC SOFTWARE SOLUTIONS, INC.
       (A Wholly owned subsidiary of
  Geometric Software Solutions Company Ltd.)




        ANNUAL REPORT FOR THE
      YEAR ENDED MARCH 31, 2004




      30, DANIEL WEBSTER HIGHWAY
      SUITE 4, MERRIMACK, NH 03054
      UNITED STATES OF AMERCIA
      TEL : + 1 603 881 3633
      FAX : + 1 603 881 3636




                                               68
                                               68
Independent Auditors’ Report
                                                                                              Geometric Software Solutions, Inc.


To the Board of Directors and Stockholder
Geometric Software Solutions, Inc.
Merrimack, New Hampshire

We have audited the accompanying balance sheet of Geometric Software Solutions, Inc. (a wholly owned subsidiary of
Geometric Software Solutions, Ltd.) as of March 31, 2004 and 2003 and the related statements of income and retained
earnings and cash flows for the years then ended. These financial statements are the responsibility of the management of
Geometric Software Solutions, Inc. Our responsibility is to express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, a test basis, evidence supporting the amounts and disclo-
sures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
Geometric Software Solutions, Inc. as of March 31, 2004 and 2003 and the result of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in United States of America.




Boston, Massachusetts                                                                                  Miller Wachman LLP
April 15, 2004                                                                                 Certified Public Accountants




                                                                                                                                   69
                                                                                                                                   69
                                                                                     Balance Sheets
                                                                            March 31, 2004 And 2003




Assets                                                                              2004         2003
Current Assets
Cash                                                                              $ 24,506   $248,831
Accounts receivable, trade                                                        422,773     333,649
Due from parent company                                                           371,281      25,933
Loan to employees                                                                  48,567      36,126
Prepaid expenses                                                                    3,906       2,474
Prepaid federal income tax                                                              –       7,200
Deferred income tax                                                                29,576      18,161
Total current assets                                                              900,609     672,374
Equipment                                                                          59,979      59,459
Less Accumulated depreciation                                                      52,533      45,509
                                                                                    7,446      13,950
Other Assets
Security deposits                                                                   1,347       4,121
Total Assets                                                                     $ 909,402   $ 690,445

Liabilities and Stockholder’s Equity
Current Liabilities
Accounts payable and accrued expenses                                             $ 49,448    $53,745
Note payable to parent company                                                           -    275,000
Deferred revenue                                                                  105,882            -
Accrued wages and payroll taxes                                                   109,090      69,444
Accrued income tax                                                                  5,365       5,193
Total current liabilities                                                         269,785     403,382

Note Payable to Parent Company                                                    275,000            -
Commitments
Stockholder’s Equity
Common stock, no par value, 50,000 shares
authorized, issued and outstanding                                                 50,000      50,000
Retained earnings                                                                 314,617     237,063
Total stockholder’s equity                                                        364,617     287,063


Total Liabilities and Stockholder’s Equity                                       $ 909,402   $690,445
The accompanying notes are an integral part of these financial statements




                                                                                                         70
                                                                                                         70
Statement of Income and Retained Earnings
Years Ended March 31, 2004 And 2003
                                                                                  Geometric Software Solutions, Inc.




                                                                                     2004                     2003
Sales
Compensation for services from parent company                                $    958,293              $1,273,776
Other consulting services                                                        2,032,112              1,584,387
Other miscellaneous income                                                              14                     101
     Total Sales                                                                 2,990,419              2,858,264
Expenses
Salaries                                                                         1,692,780              1,528,430
Payroll taxes                                                                     134,830                 129,887
Medical insurance                                                                 178,481                 157,960
Professional fees                                                                 134,253                 129,598
Licenses, permits and registrations                                                    962                     375
Depreciation                                                                         7,024                   7,886
Bank services charges                                                                  285                     227
Contract labour                                                                      7,282                        –
Dues and subscriptions                                                             13,724                    4,889
Other insurance                                                                    12,976                   11,363
Other supplies                                                                       2,209                   4,820
Interest expense – parent company                                                    6,086                   8,006
Interest expense – other                                                             1,738                     161
Development and software services – parent company                                445,828                 391,135
Miscellaneous                                                                          196                       85
Conferences and meetings                                                           12,878                   20,120
Employee training                                                                    1,663                     180
Employee recruiting fees                                                             1,250                  16,955
Employee relocation expense                                                        15,758                   39,321
Rent                                                                               16,363                   48,440
Utilities                                                                            2,930                   2,316
Trash removal and maintenance                                                          600                   1,045
Postage and freight                                                                  6,207                   6,441
Telephone and data services                                                        40,843                   49,136
Vehicle mileage reimbursement                                                        5,193                   4,867
Travel and entertainment                                                          110,282                 134,159
Total expenses                                                                   2,852,621              2,697,802
Income before Income Taxes                                                        137,798                 160,462
Income Taxes                                                                       60,244                   24,759
Net Income                                                                         77,554                 135,703
Retained Earnings Beginning of Year                                               237,063                 101,360
Retained Earnings End of Year                                                $    314,617               $ 237,063
The accompanying notes are an integral part of these financial statements.


                                                                                                                       71
                                                               Statements of Cash Flows
                                                    Years Ended March 31, 2004 And 2003


                                                                                     2004           2003
Cash Flows from Operating Activities

Net income                                                                   $     77,554        $135,703

Adjustments to reconcile net income to

net cash provided by operating activities

Depreciation                                                                        7,024           7,886

Deferred income tax                                                               (11,415)         (4,749)

                                                                                   73,163         138,840

Changes in operating assets and liabilities

Accounts receivable                                                               (89,124)       (23,261)

Due from parent company                                                          (345,348)        176,018

Prepaid expenses and security deposits                                              8,542          (1,047)

Income taxes payable                                                                  172        (76,715)

Accounts payable and accrued expenses                                              (4,297)         15,941

Deferred revenue                                                                  105,882               –

Accrued wages                                                                      39,646        (18,648)

Net cash provided (used) by operating activities                                 (211,364)        211,128

Cash Flows from Investing Activities

Acquisition of property, plant and equipment`                                        (520)         (3,824)

Loans to employees                                                                (99,567)       (90,309)

Repayment of loans by employees                                                    87,126          87,518

Net cash used for investing activities                                            (12,961)         (6,615)

Cash Flows from Financing Activities

Payment on loan from parent company                                                     –        (25,000)

Increase (Decrease) in Cash                                                      (224,325)        179,513

Cash at Beginning of Year                                                         248,831          69,318

Cash at End of Year                                                          $     24,506    $    248,831

Supplemental Disclosure of Cash Flow Information

Cash paid for income taxes                                                   $     66,286    $    107,055

Cash Paid for interest                                                       $      1,738    $        161

The accompanying notes are an integral part of these financial statements.



                                                                                                             72
Notes to Financial Statements
March 31, 2004 And 2003
                                                                                                 Geometric Software Solutions, Inc.




Note A - Nature of Business and Organization                      Deferred revenue
Geometrics Software Solutions, Inc. (the “Company”) was           In some instance, the Company receives cash in advance of
incorporated on August 18,1997 as a Massachusetts                 the work performed of its consultants. Such revenue is
corporation and is a wholly owned subsidiary of Geometric         recorded as a current liabilty and is recorded as revenue
Software Solutions Company, Ltd. (the “Parent”), an Indian        when earned under the accrual basis of accounting.
corporation. The Company provides marketing assistance            Advertising Expenses
and promotes software products developed by its Parent.           The Company expenses advertising costs as incurred. There
The Parent compensates the Company for these marketing            were no advertising expenses in 2004 or 2003.
services. The Company is also a software consultant for           Income Taxes
other customers.                                                  The Company recognised deferred tax assets and liabilities
Note B - Summary of Significant Accounting Policies               based on differences between the financial reporting and
This summary of significant accounting policies of the            tax bases of assets and liabilities, applying statutory rates in
Company is presented to assist in understanding the               effect for the year in which the differences are expected to
Company’s financial statements. The financial statements          reverse.
and notes are representations of the Company’s                    Note C - Concentration of Credit Risks
management who is responsible for their integrity and             The Company’s revenue is earned from sales throughout
objectivity. These accounting policies conform to accounting      the world and is subject to the general economic risks related
policies generally accepted in the United States of America.      thereto. The Company’s cash accounts are maintained at
Basis of Accounting                                               high credit quality financial institutions. From time to time the
The accompanying financial statements were prepared on            Company maintains cash on deposit at financial institutions
the accrual basis, under which sales revenue is recorded          in excess of federally insured limits.
when services are performed or title to goods sold is             Note D - Note Payable to Parent Company
tranferred, and expenses or cost of assets are recorded when      The Company has a loan agreement with its parent company,
liability for payment is incurred.                                which provides for up to $ 300,000 in loan. Interest is
Use of Estimates                                                  calculated at 1% over the three month London InterBank
                                                                  Overnight interest rate prevailing as of the end of every
The preparation of financial statements in conformity with
                                                                  calendar quarter. There are no specific repayment terms,
generally accepted accounting principles requires
                                                                  but the entire amount is payable by July 1, 2005. At March 31,
Management to make estimates and assumptions that affect
                                                                  2004 and 2003, $275,000 was owed to the parent company.
the reported amounts of assets and liabilities, and disclosure
                                                                  Interest expense for the years ended March 31, 2004 and
of contingent assets and liabities at the date of the financial
                                                                  2003 was $6,086 and $8,006, respectively and such interest
statements, and the reported amounts of revenue and
                                                                  is credited to the amount due from its parent company.
expenses during the reporting period. Actual results could
                                                                  Note E- Major Customers
differ from those estimates.
                                                                  During the years ended March 31, 2004 and 2003, the
Accounts Receivable
                                                                  Company earned thirty two- and forty-five percent of its
The Company evaluates the collectability of amounts               revenue, respectively, from the parent company. Revenue
receivable and provides an allowance for doubtful accounts        from the parent company for the years ended March 31, 2004
when required. At March 31, 2004 and 2003, there was no           and 2003 was $958,293 and $1,273,776 respectively.
allowance for doubtful accounts and there was no bad debt
                                                                  Revenue recognized from the consulting services to non-
expense in both 2004 and 2003 respectively.
                                                                  affiliates for the years ending March 31, 2004 and 2003 was
Equipment                                                         $2,032,112 and $1,584,387, respectively. Consulting service
Equipment is stated at cost. Depreciation is provided using       revenue for the years ended March 31, 2004 and 2003 was
accelearated methods over an estimated useful life of five        received from sixteen and thirteen customers, respectively,
years. Expenditures for maintenance and repairs are charged       the largest of which were $408,972 and $265,918
to expense as incurred.                                           respectively.
                                                                                                                                      73
                                                                                                                                      73
Note- F - Lease Commitment                                                                               2004          2003
The Company entered into a noncancelable lease for office     Current:
space in Merrimack, New Hampshire, commencing October
                                                              Federal                                 $ 57,660       $26,077
1, 2003 and terminating on May 31, 2004. The lease contains
provisions for additional charges for operating expenses.     State                                    13,999          3,431
The lease is expected to be renewed for an additional two     Total current                            71,659         29,508
year period ending May 31, 2004 a monthly rent of $1,347.     Deferred
Future minimum lease payments at March 31, 2004 are as        Less - Deferred tax asset
follows:
                                                              resulting from timing differences       (11,415)       (4,749)
Year Ended                                                    Income Tax Expense                  $    60,244    $    24,759
March 31, 2005                                     $2,694
                                                              Included in the current year income tax provision is
                                                  $ 2,694     approximately $8,000 applicable to prior years.

                                                              Note H - Fair Value
Note G - Stock Options
                                                              The Company considers the historic carrying values of cash
Geometric Software Solutions Co., Ltd, (the Parent), has
                                                              and equivalents, receivables and payables, prepaids and
issued stock options to certain employees of Geometric
                                                              other current assets and liabilties and loans payable to
Software Solutions, Inc. The Parent has not recorded any
                                                              approximate their fair values.
expense for issuing such options.
                                                              The Company considers the fair value of its financial
Note G - Income Taxes                                         instruments to approximate their carrying values because
The components of income tax expense for the years ended      conditions pertaining to the historic carrying values
March 31, 2004 and 2003 were as follows:                      approximate those in the current market.




                                                                                                                               74
                                                                                                                               74
                                           3D PLM Software Solutions Ltd.




   3D PLM SOFTWARE SOLUTIONS LTD.




   THIRD ANNUAL REPORT AND ACCOUNTS
    FOR THE YEAR ENDED MARCH 31, 2004




                  Regd. Office :
      Plant 14, Pirojshanagar, Vikhroli (E)
Mumbai - 400 079 Tel. : 5599 5100. q Fax : 55960891




                                                                            75
                                                                            75
                                                                Director’s Report to the Members

The Directors have pleasure in presenting their report on the business and operations of the Company for the year ended
March 31, 2004.

1.   FINANCIAL RESULTS:
     The Company’s operating performance during the year ended March 31, 2004 as compared to the previous year, is
     summarised below:
                                                                                      Current           Previous
                                                                                          Year              Year
                                                                                       Rupees            Rupees
     Sales and Other Income                                                                332,304,404          196,365,920
     Operating Profit / (Loss)                                                             150,875,994           82,046,975
     (Profit Before Interest, Depreciation and Tax)
     Interest                                                                                          –            867,354
     Gross Profit / (Loss) Before Depreciation                                             150,875,994           81,179,621
     Depreciation                                                                           36,335,756           15,211,161
     Profit / (Loss) Before Taxes                                                          114,540,238           65,968,460
     Provision for Taxes                                                                      2,460,022           3,154,816
     Profit / (Loss) After Taxes                                                           112,080,216           62,813,644
     Balance Brought Forward                                                                38,932,101           (1,835,343)
     Profit / (Loss) Available for Appropriation                                           151,012,317           60,978,301
     Appropriations:
     Interim Dividend                                                                       59,156,000           15,046,200
     Proposed Dividend                                                                      15,432,000                    -
     Dividend Tax                                                                            9,556,588                    -
     Transfer to General Reserve                                                            12,000,000            7,000,000
     Balance Carried Forward                                                                54,867,729           38,932,101
2.   DIVIDEND:
     The following interim dividends were declared and paid during the year:-
      Date of declaration                          % to Paid       Rs. per        Total amount                Dividend
                                                   up capital      share           of dividend             Distribution Tax
      June 23, 2003                                   100            10            12,860,000                1,647,688
      September 22, 2003                              120            12            15,432,000                1,977,225
      December 18, 2003                               120            12            15,432,000                1,977,225
      March 08, 2004                                  120            12            15,432,000                1,977,225
      Total                                           460            46            59,156,000                7,579,363

      The Board of Directors recommends a final dividend of 120% (Rs. 12/- per share) on the paid up capital of the
      Company. The final dividend will absorb Rs.15,432,000/- and dividend distribution tax thereon will be Rs.1,977,225/-

3.   BUSINESS PROSPECTS:
     Your Company’s main business is to accelerate                 Your Company is involved in major new projects for the
     introduction of Dassault Systemes (DS) brands in the          Enovia and Catia brands leading to a growth in people
     marketplace.                                                  and hardware resources. Your Company started a new
                                                                   area of activity involving core development for the Spatial
     There has been an increase in the activities associated
                                                                   brand. It continues to be deeply involved in development
     with product development particularly in the areas of
                                                                   activities for the Solidworks brand. Services activity has
     customer support, documentation and technical support.
                                                                   also started in the areas of development around Catia,
     This is in addition to development and quality assurance
                                                                   courseware development and Enovia data migration.
     activities.
                                                                   A focus area is creating a product culture in the Company     76
                                                                                                      3D PLM Software Solutions Ltd.

     that encourages building areas of expertise. Visits by        7.   PARTICULARS OF EMPLOYEES:
     key DS management personnel have further                           As required by the provisions of sub-section (2A) of
     strengthened the relationship. Your Company is a                   Section 217 of the Companies Act, 1956, as amended,
     strategic development partner in the DS Extended                   read with Companies (Particulars of Employees) Rules,
     Enterprise.                                                        1975, the names and other particulars of the employees
                                                                        are set out in the annexure to the Directors Report.
4.   DIRECTORS:
     Your Directors were appointed in the Annual General           8.   COMPLIANCE CERTIFICATE:
     meeting held on April 22, 2002 for a term of three years.          Compliance Certificate received from a Practicing
     Two-third i.e. 4 of the Directors were appointed on                Company Secretary under section 383A of the
     principle of proportional representation. As per Article           Companies Act, 1956 is attached with this report.
     54 of the Articles of Association of the Company no
     Director is liable to retire by rotation.                     9.   DIRECTORS RESPONSIBILITY STATEMENT:
     Mr. Berjis Desai ceased to be an Alternate Director of             The Board of Directors of the Company confirms:
     the Company w.e.f. January 9, 2004.                                i.     that in preparation of the annual accounts, the
                                                                               applicable accounting standards have been
5.   AUDITORS:
                                                                               followed and there has been no material departure;
     M/s. Deloitte Haskins & Sells, Auditors of the Company,            ii.    that the selected accounting policies were applied
     retire at the forthcoming Annual General Meeting and                      consistently and the directors made judgments and
     being eligible offer themselves for reappointment.                        estimates that are reasonable and prudent so as
                                                                               to give a true and fair view of the state of affairs of
6.   DISCLOSURE UNDER SECTION 217 (1) (e) OF THE
                                                                               the Company as at March 31, 2004 and of the profit
     COMPANIES ACT, 1956:
                                                                               of the Company for the year ended on that date;
     In terms of section 217 (1) (e) of the Companies Act,
                                                                        iii.   that proper and sufficient care has been taken for
     1956, read with the Companies (Disclosure of
                                                                               the maintenance of adequate accounting records
     Particulars in the Report of the Board of Directors) Rules,
                                                                               in accordance with the provisions of the
     1988, the Directors furnish herein below the required
                                                                               Companies Act, 1956 for safeguarding the assets
     additional information:
                                                                               of the Company and for preventing and detecting
     a)   Conservation of Energy: The nature of the                            fraud and other irregularities;
          Company’s operations entail a very low level of
                                                                        iv.    that the annual accounts have been prepared on a
          energy consumption.
                                                                               going concern basis.
     b)   Research & Development (R&D): The Company is
          actively involved in the software development            10. ACKNOWLEDGEMENTS:
          activities.                                                   The Directors gratefully acknowledge the contribution made
     c)   Technology Absorption: The Company has not                    by the employees towards the success of the Company.
          imported any technology during the year under                              On behalf of the Board of Directors
          review.
     d)   Foreign Exchange Earnings and Outgo: The                                   MANU PARPIA            MARTINE WALLIMANN
          Company’s foreign exchange earnings during the                             Managing               Director
          period under review amount to Rs. 315,981,355/-                            Director
          details of which have been given in the Notes
          forming part of the Accounts (Note No.10 of              Mumbai,
          schedule “J”).                                           April 16, 2004




                                                                                                                                         77
                                                                                                                                         77
                                 Annexure to the Directors’ Report
Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2004
The information is in the following format:
Sr. No., Name, Designation, Qualification, Age in Years, Date of Joining, Experience in years, Gross remuneration in Rs.
and Previous Employment.
Employed for the whole year
1.   Mr. Nikunj Desai, Director-Projects, BE(Mech) M Tech (CS), 40, 1-Dec-02, 20, 2943495, Geometric Software Solutions
     Co. Ltd. Director-Projects.
Employed for part of the year
1.   Mr. Prasad Joshi, Chief Operating Officer, BE(Mech) M Tech (Mech), 41, 15-Apr-02, 18, 384770, Geometric Software
     Solutions Co. Ltd.- Head of Engg (Projects)
2.   Mr. B.R. Lanka, Chief Operating Officer, BE (Mech) M Tech(Prod),40, 2-May-03, 16, 2084015, Geometric Software
     Solutions Co. Ltd., Head of Engg. (Projects)
3.   Mr. Venkat Seshagiri Rao Cheru, Software Engineer, B. Tech (Civil) M Tech (Cons. Tech. & Mgmt.), 28, 01-Dec-02, 3,
     484478, Geometric Software Solutions Co. Ltd. Software Designer




                                                                                                                           78
Secretarial Compliance Certificate
[In terms of Section 383A(1) of the Companies Act, 1956.]
                                                                                               3D PLM Software Solutions Ltd.

To,                                                             8.   The Company has not advanced any loans to its
The Members,                                                         directors or persons or firms or companies referred
3D PLM Software Solutions Ltd,                                       to in Section 295 of the Act.
Plant 14, Pirojshanagar,
Vikhroli (East), Mumbai 400 079.                                9.   The Company has not entered into any contracts
                                                                     falling within the purview of Section 297 of the Act.
I have examined the registers, records, books and papers
of 3D PLM Software Solutions Ltd, as required to be             10. The Company has made the necessary entries in
maintained under the Companies Act, 1956 (the Act), and             the Register maintained under Section 301 of the Act.
the Rules made thereunder and also the provisions               11. As there were no instances falling within the purview
contained in the Memorandum and Articles of Association             of Section 314 of the Act, the company has not
of the Company for the Financial Year ended 31st March,             obtained any approvals from the Board of Directors,
2004.                                                               members or the Central Government, as the case
In my opinion, and to the best of my information, and               may be.
according to the examinations carried out by me and the         12. The company has not issued any duplicate share
explanations furnished to me by the company, its officers           certificates during the financial year.
and agents, I certify, that in respect of the aforesaid
                                                                13. (i)   There were no allotment of shares of the company
Financial Year :
                                                                          during the year under review, and thus the
1.   The Company has kept and maintained all registers                    company was not required to deliver any share
     as stated in Annexure ’A’ to this certificate, as per                certificates to the allottees. The company has
     the provisions and the rules made thereunder and all                 delivered all the certificates of shares on the
     entries therein have been duly recorded.                             lodgment thereof for transfer/transmission.
2.   The Company has duly filed the forms and returns as             (ii) The company did not declare any Final Dividend
     stated in Annexure ‘B’ to this certificate, with the                 during the Financial Year ended 31st March, 2004.
     Registrar of Companies, Regional Director, Central                   However, it declared Interim Dividend during the
     Government, Company Law Board or other authorities                   Financial Year ended 31st March, 2004, on 23rd
     within the time prescribed under the Act and the rules               June, 2003, 22 nd September, 2003, 18 th
     made thereunder.                                                     December, 2003 and 8 th March, 2004 the
3.   The Company, being a Public Limited Company, has                     amounts of which were deposited in separate
     the minimum prescribed Paid Up Share Capital.                        Bank Accounts within five days from the
                                                                          respective dates of declaration of such Interim
4.   The Board of Directors duly met eight (8) times on                   Dividend.
     14th April, 2003, 23rd June, 2003, 15th July, 2003, 22nd
     September, 2003, 14th October, 2003, 18th December,             (iii) The company did not declare any Final Dividend
     2003, 9th January, 2004 and 8th March, 2004 in respect                during the Financial Year ended 31st March, 2004.
     of which meetings proper notices were given and the                   However, it declared Interim Dividend during the
     proceedings were properly recorded and signed,                        Financial Year ended 31st March, 2004, on 23rd
     including the Circular Resolutions passed, in the                     June, 2003, 22 nd September, 2003, 18 th
     Minutes Book maintained for the purpose.                              December, 2003 and 8th March, 2004, in respect
                                                                           of which the dividend warrants have been posted
5.   The Company has not closed its Register of Members                    to all the members within a period of thirty days
     and/or Debenture holders during the Financial Year.                   from the date of declaration. As on the date of
6.   The Annual General Meeting for the Financial Year                     this report there were no amounts outstanding
     ended 31st March, 2003 was held on 14th April, 2003,                  under the head ‘Unpaid/Unclaimed Dividend’.
     after giving due notice to the members of the Company           (iv) The company has duly complied with the
     and the resolutions passed thereat were duly recorded                requirements of Section 217 of the Act.
     in the Minutes Book maintained for the purpose.
                                                                14. The Board of Directors of the Company is duly
7.   No Extra Ordinary General Meeting was held during              constituted, and there was no appointment of
     the Financial Year.                                            directors, additional directors, alternate directors and    79
                                                                                                                                79
    directors to fill casual vacancies during the financial       24. The Company has not made any borrowings during
    year. Mr.Berjis Desai, the alternate director, vacated            the Financial Year ended 31st March, 2004.
    his office, in that capacity, with effect from 9th January,
                                                                  25. The Company has not made any loans or advances
    2004 on the return of Ms.Martine Wallimann, the
                                                                      or given guarantees or provided securities to other
    original director.
                                                                      bodies corporate and consequently no entries have
15. The appointment of Managing Director has been duly                been made in the register kept for the purpose.
    made in compliance with the provisions of Section
                                                                  26. The Company has not altered the provisions of the
    269 read with Schedule XIII of the Act. The company
                                                                      Memorandum with respect to the situation of the
    was not required to obtain the approval of the Central
                                                                      Registered Office of the Company from one State to
    Government to the appointment of Managing Director.
                                                                      another during the year under scrutiny.
    The company has not appointed any Whole-time
    Director or Manager.                                          27. The Company has not altered the provisions of the
                                                                      Memorandum with respect to the Objects of the
16. The Company has not appointed any Sole Selling
                                                                      Company during the year under scrutiny.
    Agents during the financial year.
                                                                  28. The Company has not altered the provisions of the
17. There was no such activity for which the company
                                                                      Memorandum with respect to the name of the
    was required to obtain any approval of the Central
                                                                      Company during the year under scrutiny.
    Government, Company Law Board, Regional Director,
    Registrar of Companies and/or such authorities                29. The Company has not altered the provisions of the
    prescribed under the various provisions of the Act.               Memorandum with respect to the Share Capital of
                                                                      the Company during the year under scrutiny.
18. The directors have disclosed their interest in other
    firms/ companies to the Board of Directors pursuant           30. The Company has not altered its Articles of
    to the provisions of the Act and the rules made                   Association during the Financial Year.
    thereunder.                                                   31. There was no prosecution initiated against or Show
19. The Company has not issued any shares, debentures                 Cause Notices received by the Company for offences
    or other securities during the Financial Year.                    under the Act.

20. The Company has not bought back any shares during             32. The Company has not received any money as security
    the Financial Year.                                               from its employees during the financial year.

21. The Company has not issued any Preference Shares              33. The company has deposited both the employees’ and
    or Debentures and hence there was no redemption of                the employers’ contributions to Provident Fund with
    Preference Shares or Debentures during the financial              the prescribed authorities pursuant to Section 418 of
    year.                                                             the Act.

22. There were no transactions necessitating the
    company to keep in abeyance the rights to dividend,
    Rights Shares and Bonus Shares pending registration
                                                                           Name of Company Secretary : Atul Jayant Gandhi
    of transfer of shares.
                                                                           Certificate of Practice No.   : 2095
23. The Company has not invited/accepted any deposits
    including any unsecured loans falling within the purview      Place: Mumbai.
    of Section 58A of the Act, during the financial year.         Date : 5th April, 2004




                                                                                                                              80
                                                                                          3D PLM Software Solutions Ltd.



                                                ANNEXURE : A
LIST OF REGISTERS MAINTAINED BY 3D PLM SOFTWARE SOLUTIONS LTD.
1.   Register of Members under Section 150 and Share Ledger.
2.   Register of Application and Allotment of Shares.
3.   Register of Share Transfers.
4.   Register of Directors, Managing Director under Section 303.
5.   Register of Directors’ Shareholdings under Section 307.
6.   Register of Contracts in which directors are interested under Section 301(3).
7.   Investment Register.
8.   Register of Loans.
9.   Register of Transfers.
10. Board Meetings Minutes Book.
11. General Meeting Minutes Book.




                                                ANNEXURE : B
Forms and Returns filed by 3D PLM Software Solutions Ltd with the Registrar of Companies, Regional
Director, Central Government or other prescribed authorities during the Financial Year ended
31st March, 2004.
1.   Annual Accounts filed under Section 220 for the year ended 31st March, 2003 filed on 13th May, 2003.
2.   Secretarial Compliance Certificate in terms of Section 383A(1), dated 14th April, 2003 filed on 13th May, 2003.
3.   Annual Return (Schedule V) filed under Section 159 and made up to 14th April, 2003, being the date of the Annual
     General Meeting of the Company, filed on 19th June, 2003.
4.   Form No.32 dated 16 th January, 2004 regarding change in directors on 9 th January, 2004, filed on
     20th January, 2004.




                                                                                                                           81
                                                                                                                           81
                                                                Auditor’s Report to the Members

We have audited the attached Balance Sheet of 3DPLM                (d) in our opinion, the Balance Sheet, the Profit and
SOFTWARE SOLUTIONS LIMITED as at 31st March 2004 and                   Loss Account and the Cash Flow Statement dealt
also the Profit and Loss Account and the Cash Flow Statement           with by this report are in compliance with the
of the Company for the year ended on that date annexed                 Accounting Standards referred in Section 211 (3C)
thereto. These financial statements are the responsibility of          of the Companies Act, 1956, in so far as they apply
the company's management. Our responsibility is to express             to the Company;
an opinion on these financial statements based on our audit.
                                                                   (e) On the basis of written representations received
We conducted our audit in accordance with auditing                     from the directors, as on March 31, 2004 we report
standards generally accepted in India. Those Standards                 that none of the directors is disqualified as on
require that we plan and perform the audit to obtain                   March 31, 2004 from being appointed as a director
reasonable assurance about whether the financial                       in terms of clause (g) of sub-section (1) of Section
statements are free of material misstatements. An audit                274 of the Companies Act, 1956;
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An        (f)   In our opinion and to the best of our information
                                                                         and according to explanations given to us, the said
audit also includes assessing the accounting principles used
                                                                         accounts give the information required by the
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We              Companies Act, 1956, in the manner so required
                                                                         and give a true and fair view in conformity with the
believe that our audit provides a reasonable basis for our
                                                                         accounting principles generally accepted in India:
opinion.

1)   As required by the Companies (Auditor's Report) Order,
     2003, issued by the Central Government of India in terms            (i)    in the case of the Balance Sheet, of the state
                                                                                of affairs of the Company as at 31st March,
     of Section 227 (4A) of the Companies Act, 1956, we
     enclose in the Annexure a statement on the matters                         2004;
     specified in paragraphs 4 & 5 of the said Order, to the             (ii)   in the case of the Profit and Loss Account, of
     extent applicable to the Company.                                          the profit of the Company for the year ended
                                                                                on that date;
2)   Further to our comments in the Annexure referred to in
     paragraph 1 above, we report that:                                  (iii) in the case of the Cash Flow Statement, of the
     (a) we have obtained all the information and                              cash flows for the year ended on that date.
         explanations, which to the best of our knowledge
         and belief were necessary for the purpose of our         For DELOITTE HASKINS AND SELLS
         audit;                                                   Chartered Accountants
     (b) in our opinion, proper books of account as required
         by law have been kept by the Company so far as it
         appears from our examination of those books:             Hemant M. Joshi
                                                                  Partner
     (c)   the Balance Sheet, the Profit and Loss Account and     Membership No: 38019
           the Cash Flow Statement dealt with by this report
           are in agreement with the books of account;            Pune, April 16, 2004




                                                                                                                                 82
                                                                                                          3D PLM Software Solutions Ltd.

Annexure to the Auditors’ Report
(Referred to in paragraph 1 of our report of even date)
(i)    In respect of its fixed assets:                                        (a) According to the information and explanations
       (a) The Company has maintained proper records                              given to us, the Company has been regular in
           showing full particulars, including quantitative                       depositing undisputed statutory dues, including
           details and situation of fixed assets.                                 Provident Fund, Income-tax, Custom Duty, and any
                                                                                  other statutory dues with the appropriate authorities
       (b) The fixed assets were physically verified during the
                                                                                  during the year. There are no arrears as on March
           year by the management in accordance with a
                                                                                  31, 2004 exceeding six months from the date they
           programme of verification, which in our opinion
                                                                                  became payable. As explained to us the provisions
           provides for physical verification of all the fixed assets
                                                                                  of the Employees' State Insurance Act, 1948 are
           at reasonable intervals. According to the information
                                                                                  not applicable to the Company for the year ended
           and explanations given to us no material
                                                                                  March 31, 2004.
           discrepancies were noticed on such verification.
                                                                              (b) There are no disputed income tax amounts
(ii)   On the basis of the information and explanations given
                                                                                  pending with the relevant Appellate Authorities.
       to us, the Company has not granted or taken loans,
       secured or unsecured, to or from companies, firms or             (ix) The Company does not have any accumulated losses.
       other parties covered in the register maintained under                The Company has not incurred cash losses during the
       section 301 of the Companies Act 1956.                                current and the immediately preceeding financial year.

(iii) In our opinion and according to the information and               (x)   According to the information and explanations given to
      explanations given to us, there are adequate internal                   us, the Company does not have any outstanding dues
      control procedures commensurate with the size of the                    to financial institutions, banks or debentureholders.
      Company and the nature of its business for the purchase           (xi) In our opinion and according to the information and
      of fixed assets.                                                       explanations given to us, the Company has not granted
(iv) In respect of transactions entered in the register                      loans and advances on the basis of security by way of
     maintained in pursuance of section 301 of the                           pledge of shares, debentures and other securities.
     Companies Act 1956:                                                (xii) The Company does not deal or trade in shares,
       (a) To the best of our knowledge and belief and                        debentures securities and other investments.
           according to the information and explanations                (xiii) According to the information and explanations given to
           given to us, transactions that needed to be entered                 us, the Company has not given any guarantees for loans
           into the register have been so entered.                             taken by others from banks and financial institutions.
       (b) According to the information and explanations                (xiv) The Company has not obtained any term loans during the year.
           given to us, where each of such transactions is in           (xv) According to the information and explanations given to
           excess of Rs 5 lakhs in respect of any party, the                 us, and the cash flow statement and other records
           transactions have been made at prices which are                   examined by us the company has not raised funds, short
           prima facie reasonable having regard to the                       term or long term during the year.
           prevailing market prices at the relevant time.
                                                                        (xvi) To the best of our knowledge and belief and according
(v)    The Company has not accepted any deposits from the public.             to the information and explanations given to us, no fraud
(vi) In our opinion, the internal audit functions carried out                 on or by the Company was noticed or reported during
     during the year by a firm of Chartered Accountants                       the year.
     appointed by the management have been
     commensurate with the size of the Company and the                  For DELOITTE HASKINS AND SELLS
     nature of its business.                                            Chartered Accountants
(vii) We are informed that the Central Government has not               Hemant M. Joshi
      prescribed the maintenance of cost records under                  Partner
      section 209(1)(d) of the Companies Act, 1956 for any              Membership No: 38019
      products of the Company.
(viii) Statutory and other dues                                         Pune, April 16, 2004                                                 83
                                                                                                                                             83
                                                           Balance Sheet as at March 31, 2004




                                                                                                 Current         Previous
                                                                                                    Year             Year
                                                        SCHEDULE              Rupees             Rupees           Rupees
SOURCES OF FUNDS:
1.   SHAREHOLDERS’ FUNDS
     a) Share Capital                                        A          12,860,000                             12,860,000
     b) Reserves and Surplus                                 B          73,867,729                             45,932,101

                                                                                             86,727,729        58,792,101

2.   DEFERRED TAX LIABILITY                                                                   1,265,838           305,816
   TOTAL                                                                                     87,993,567        59,097,917
APPLICATION OF FUNDS:
3.   FIXED ASSETS                                            C
     a) Gross Block                                                    162,215,426                             72,150,352
     b) Less: Depreciation                                              51,730,312                             15,394,555
     c) Net Block                                                      110,485,114                             56,755,797
     d) Capital Work-in-Progress                                           746,697                              4,877,288

                                                                                             111,231,811       61,633,085

4.   INVESTMENTS                                             D                               20,531,312                  -
5.   CURRENT ASSETS, LOANS AND ADVANCES                      E
     a) Sundry Debtors                                                  31,896,703                              5,270,913
     b) Cash and Bank Balances                                          12,677,995                             16,448,369
     c) Other Current Assets                                             1,597,130                              2,865,777
     d) Loans and Advances                                              23,681,624                              9,974,582

                                                                        69,853,452                             34,559,641

6.   Less: CURRENT LIABILITIES AND PROVISIONS                F
     a) Current Liabilities                                             88,508,587                             33,905,196
     b) Provisions                                                      25,114,421                              3,189,613
                                                                       113,623,008                             37,094,809

7.   NET CURRENT ASSETS                                                                     (43,769,556)      (2,535,168)
   TOTAL                                                                                     87,993,567        59,097,917
NOTES TO ACCOUNTS                                             J

The Schedules referred to above form an integral part of the Balance Sheet.
As per our Report of even date attached                                                Signatures to the Balance Sheet and
                                                                                                    Schedules A to F and J.

For DELOITTE HASKINS & SELLS                                                                For and on behalf of the Board
Chartered Accountants


HEMANT M. JOSHI                                                          Manu Parpia             Martine Wallimann
Partner                                                                  Managing                Michael Payne
                                                                         Director                Y.C. Risbud
April 16, 2004                                                                                   Directors
                                                                                                                              84
Profit and Loss Account for the
Year Ended March 31, 2004
                                                                                             3D PLM Software Solutions Ltd.




                                                                                               Current           Previous
                                                                                                  Year               Year
                                                        SCHEDULE            Rupees             Rupees             Rupees

INCOME:
1.   Sales - Software Packages and Services                                               314,826,002        189,833,955
2.   Other Income                                             G                            17,478,402          6,531,965

                                                                                          332,304,404        196,365,920

EXPENDITURE:
3.   Operating and Other Expenses                             H                           181,428,410        114,318,945
4.   Interest - Others                                        I                                     -            867,354
5.   Depreciation                                                                          36,335,756         15,211,161

                                                                                          217,764,166        130,397,460

PROFIT BEFORE TAX:                                                                        114,540,238         65,968,460
6.   Provision for Taxes:
     a) Current Taxes                                                     1,500,000                            1,830,000
     b) Deferred Taxes                                                      960,022                            1,324,816
                                                                                             2,460,022         3,154,816

PROFIT AFTER TAX:                                                                         112,080,216         62,813,644

7.   Balance Brought Forward                                                                38,932,101        (1,835,343)

PROFIT AVAILABLE FOR APPROPRIATION:                                                       151,012,317         60,978,301
APPROPRIATIONS:
1.   Interim Dividend                                                                       59,156,000        15,046,200
2.   Proposed Dividend                                                                      15,432,000                 -
3.   Dividend Tax                                                                            9,556,588                 -
4.   Transfer to General Reserve                                                            12,000,000         7,000,000
5.   Surplus Carried Forward                                                                54,867,729        38,932,101

     TOTAL                                                                                151,012,317         60,978,301

EARNINGS PER EQUITY SHARE OF Rs. 10 EACH                    J-12
     Basic                                                                                       87.15              48.84
     Diluted                                                                                     87.15              48.84
NOTES TO ACCOUNTS                                             J
The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our Report of even date attached                                          Signatures to the Profit and Loss Account
                                                                                                    and Schedules G to J.
For DELOITTE HASKINS & SELLS                                                              For and on behalf of the Board
Chartered Accountants

HEMANT M. JOSHI                                                          Manu Parpia           Martine Wallimann
Partner                                                                  Managing              Michael Payne
                                                                         Director              Y.C. Risbud
April 16, 2004                                                                                 Directors
                                                                                                                              85
                                                                                                                              85
                                                                 Cash Flow Statement for the
                                                                  Year Ended March 31, 2004

                                                                                      Current         Previous
                                                                                         Year             Year
                                                                      Rupees          Rupees           Rupees
A.   CASH FLOW FROM OPERATING ACTIVITIES:
     Net Profit Before Tax                                                        114,540,238      65,968,460
     Adjustment for:
          Depreciation                                             36,335,756                      15,211,161
          Interest Paid                                                      -                        867,354
          Interest Earned                                           (188,333)                          (7,262)
          Loss / (Profit) on Sale of Investments                      (19,356)                               -
          Net Unrealised Foreign Exchange Gain                      1,461,899                      (2,734,020)
          Dividend Received                                         (597,564)                                -
                                                                                   36,992,402      13,337,233
     Operating Profit Before Working Capital Changes                              151,532,640      79,305,693
     Adjustments for:
         Trade and Other Receivables                             (25,939,483)                     (11,450,401)
         Trade Payables                                            57,618,974                      29,353,009
                                                                                   31,679,491      17,902,608

     Cash Generated from Operations                                               183,212,131      97,208,301
     Taxes Paid                                                                    (1,513,735)     (1,750,000)
     Net Cash Flow from Operating Activities                                      181,698,396      95,458,301

B.   CASH FLOW FROM INVESTING ACTIVITIES:
         Purchase of Fixed Assets                                (99,007,348)                     (67,320,717)
         Purchase of Investments                                 (55,597,587)                                -
         Sale of Investments                                       35,085,631                                -
         Interest Received                                            188,333                            7,262
         Dividend Received                                            597,564                                -
     Net Cash Used in Investing Activities                                       (118,733,407)    (67,313,455)
C.   CASH FLOW FROM FINANCING ACTIVITIES:
        Loan Received                                                       -                       25,000,000
        Loan Repaid                                                         -                     (25,000,000)
        Interest Paid                                                       -                        (867,354)
        Dividend Paid                                            (59,156,000)                     (15,046,200)
        Dividend Tax Paid                                         (7,579,363)                                -
     Net Cash (Used) / Raised in Financing Activities                            (66,735,363)     (15,913,554)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS:                              (3,770,374)     12,231,292
     CASH AND CASH EQUIVALENTS
     AS AT THE BEGINNING OF THE YEAR                                               16,448,369       4,217,077
     AS AT THE END OF THE YEAR
         Cash and Bank Balances                                                    12,871,247      16,540,193
         Unrealised Foreign Exchange Restatement in Cash and Cash Equivalents       (193,252)         (91,824)
         Cash and Cash Equivalents as per Accounts                                 12,677,995      16,448,369

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS:                              (3,770,374)     12,231,292

For DELOITTE HASKINS & SELLS                                                     For And On Behalf Of The Board
Chartered Accountants

HEMANT M. JOSHI                                                   Manu Parpia         Martine Wallimann
Partner                                                           Managing            Michael Payne
                                                                  Director            Y.C. Risbud
April 16, 2004                                                                        Directors
                                                                                                                  86
Schedules Forming Part of the Accounts
for the Year Ended March 31, 2004
                                                                                                                     3D PLM Software Solutions Ltd.

                                                                                                                       Current               Previous
                                                                                                                          Year                   Year
                                                                                              Rupees                   Rupees                 Rupees

SCHEDULE A: SHARE CAPITAL

1.    AUTHORISED:
             2,000,000 (previous year: 2,000,000) Equity
             shares of Rs. 10/- each.                                                                               20,000,000           20,000,000

2.    ISSUED, SUBSCRIBED AND PAID UP:
      1,286,000 Equity shares (previous year 1,286,000)                                                             12,860,000           12,860,000
      of Rs. 10/- each fully paid up.
      TOTAL                                                                                                         12,860,000           12,860,000

Note:

      a)     Of the above, 900,200 equity shares are held by
             Geometric Software Solutions Company Limited, the
             Holding Company.

SCHEDULE B: RESERVES AND SURPLUS

1.    GENERAL RESERVE

             As per last Balance Sheet                                                     7,000,000                                                 -

             Transfer from Profit and Loss Account                                        12,000,000                                        7,000,000

                                                                                                                    19,000,000              7,000,000

2.    PROFIT AND LOSS ACCOUNT                                                                                       54,867,729           38,932,101

      TOTAL                                                                                                         73,867,729           45,932,101

SCHEDULE C: FIXED ASSETS
                                                                                                                                             Rupees

                                       GROSS BLOCK                                          DEPRECIATION                             NET BLOCK
           ASSET
                              As on                                   As on        Upto     For the            On         Upto       As on       As on
                           01-Apr-03    Additions   Deductions    31-Mar-04 31-Mar-03         Year     Deductions    31-Mar-04 31-Mar-04 31-Mar-03
Computers                  62,189,362 81,260,305       –         143,449,667 14,587,250   35,246,689       –        49,833,939 93,615,728 47,602,112
Electrical Installation    2,609,810 2,998,430         –          5,608,240   195,409      339,545         –         534,954     5,073,286 2,414,401
Office Equipment &
EPABX System               1,536,322 1,696,804         –          3,233,126   102,643      159,414         –         262,057     2,971,069 1,433,679
Furniture and Fixtures     5,814,858 4,109,535         –          9,924,393   509,253      590,109         –         1,099,362   8,825,031 5,305,605
TOTAL                      72,150,352 90,065,074       –         162,215,426 15,394,555   36,335,757       –        51,730,312 110,485,114
Previous Year              8,995,831 63,154,521        –         72,150,352   183,394     15,211,161       –        15,394,555               56,755,797
Capital Work-in-Progress                                                                                                          746,697    4,877,288
TOTAL                                                                                                                            111,231,811 61,633,085




                                                                                                                                                          87
                                                                                                                                                          87
                                                                Schedules Forming Part of the Accounts
                                                                     for the Year Ended March 31, 2004


SCHEDULE D: INVESTMENTS



     Previous        Current                                        Face                Current   Previous
         Year           Year                                        Value                 Year        Year
         Nos.           Nos.                                         Rs.    Rupees      Rupees     Rupees


1.   IN UNITS OF MUTUAL FUNDS
     Current Investments (At lower of cost or market value)
     Quoted, Non Trade
                   1,245,736 HDFC Liquid Fund-                       10          –   12,531,312         –
                             Dividend Plan- Reinvestment Option
                   2,734,934 Purchased During the Year
                   1,489,203 Sold During the Year

                     697,338 Grindlays Cash Fund                     10          –    8,000,000         –
                             Plan A Growth Option
                             Purchased During the Year

                             Prudential ICICI Liquid Plan            10          –           –          –
                             Dividend Reinvestment Option
                     501,019 Purchased During the Year
                     501,019 Sold During the Year

                             Templeton India Liquid Fund             10          –           –          –
                             Weekly dividend reinvestment option
                     423,566 Purchased During the Year
                     423,566 Sold During the Year

                             DSP Merril Lynch Liquid Fund            10          –           –          –
                             Weekly dividend reinvestment option
                     405,420 Purchased During the Year
                     405,420 Sold During the Year

                             JM High Liquidity Fund                  10          –           –          –
                             Dividend plan- reinvestment option
                     418,753 Purchased During the Year
                     418,753 Sold During the Year
                TOTAL BOOK VALUE OF INVESTMENTS                                      20,531,312         –


                Market Value of Quoted Non -Trade Investments                        20,772,320         –




                                                                                                             88
Schedules Forming Part of the Accounts
for the Year Ended March 31, 2004
                                                                             3D PLM Software Solutions Ltd.

                                                                               Current           Previous
                                                                                  Year               Year
                                                                 Rupees        Rupees             Rupees
SCHEDULE E: CURRENT ASSETS, LOANS AND ADVANCES
1.   SUNDRY DEBTORS
     (Unsecured - Considered good, unless otherwise stated)
     a) Debts outstanding for a period exceeding six months            –                               –
     b) Other Debts                                           31,896,703                       5,270,913
                                                                           31,896,703           5,270,913
2.   CASH AND BANK BALANCES
     a) Cash in Hand                                                   -                                 -
     b)   Balances with Scheduled Banks
          - in Current Accounts                                9,677,995                      16,448,369
          - in Fixed Deposit Accounts                          3,000,000                               -
                                                                           12,677,995         16,448,369
3.   OTHER CURRENT ASSETS
     a)   Interest Accrued                                             -                               -
     b)   Unrealised Forward Exchange Contract Premium         1,597,130                       2,865,777
                                                                             1,597,130         2,865,777
4.   LOANS AND ADVANCES
     (Unsecured - considered good)
     a) Advances recoverable in cash or in
         kind or for value to be received                     20,394,889                       8,224,582
     b) Sundry Deposits                                           23,000                               –
     b) Advance Payment of Taxes                               3,263,735                       1,750,000
                                                                           23,681,624          9,974,582

   TOTAL                                                                   69,853,452         34,559,641
SCHEDULE F: CURRENT LIABILITIES AND PROVISIONS
1.   CURRENT LIABILITIES
     a)   Sundry Creditors
          - Small Scale Industrial Undertakings                        -                               -
          - Others                                             7,756,372                         934,914
     b)   Advances Received                                   69,511,162                      26,642,195
     c)   Other Current Liabilities                           11,241,053                       6,328,087
                                                                           88,508,587         33,905,196
2.   PROVISIONS
     a) For Taxation                                           3,330,000                       1,830,000
     b) For Proposed Dividend                                 15,432,000                               -
     c) For Tax on Dividend                                    1,977,225                               -
     d) For Leave Encashment                                   4,375,196                       1,359,613
                                                                            25,114,421         3,189,613
     TOTAL                                                                 113,623,008        37,094,809




                                                                                                              89
                                                                                                              89
                                                           Schedules Forming Part of the Accounts
                                                                for the Year Ended March 31, 2004


                                                                                  Current      Previous
                                                                                     Year          Year
                                                                   Rupees         Rupees        Rupees

SCHEDULE G: OTHER INCOME
1.   Dividend from Mutual Funds                                                  597,564              -
2.   Gain on Exchange Fluctuations                                             16,672,988     6,514,729
3.   Interest On Advances and Deposits (Gross)                                   188,333          7,262
4.   Miscellaneous Income                                                            161          9,974
5.   Profit / (Loss) on Sale of Investments                                        19,356             -
     TOTAL                                                                     17,478,402     6,531,965


SCHEDULE H: OPERATING AND OTHER EXPENSES
1.   Personnel Expenses:
     - Salaries, Bonus and Allowances                                         135,881,132   79,638,456
     - Contribution to Provident and Other Funds                                4,049,808     1,764,876
     - Staff Welfare Expenses                                                   3,521,737     1,708,948
2.   Software Tools and Packages (Net of Reimbursements)                        2,853,791     1,770,400
3.   Electricity Expenses                                                       3,729,108     2,200,132
4.   Rates and Taxes                                                               82,880       40,436
5.   Rent                                                                      16,397,226   10,874,432
6.   Repairs and Maintenance:
     a)     Computers                                             1,944,287                    240,100
     b)     Others                                                 804,665                     487,590
                                                                                2,748,952      727,690
7.   Insurance                                                                  1,234,015      874,478
8.   Travelling and Conveyance Expenses (Net of Reimbursements)                 2,856,429     2,595,633
9.   Communication Expenses                                                     2,113,661     1,460,874
10. Auditors Remuneration (see note 7 of Schedule J)                             286,321       198,250
11. Staff Recruitment Expenses                                                   935,553      1,569,798
12. Legal and Professional Charges                                              1,059,658      339,164
13. Sales and Marketing Expenses (Net of Reimbursements)                         101,451      4,561,246
14. Miscellanous Expenses                                                       3,576,688     3,994,132
     TOTAL                                                                    181,428,410   114,318,945



SCHEDULE I: INTEREST

1.   Interest Paid on Borrowings From Holding Company                                  –       867,354

     TOTAL                                                                             –       867,354




                                                                                                          90
Schedules Forming Part of the Accounts
for the Year Ended March 31, 2004
                                                                                                3D PLM Software Solutions Ltd.

SCHEDULE J : NOTES TO ACCOUNTS                                           Current investments intended to be held for less
                                                                         than one year are stated at the lower of cost and
1.   SIGNIFICANT ACCOUNTING POLICIES
                                                                         market value.
     a)   Basis of Accounting:
                                                                    d)   Foreign Exchange Transactions:
          The financial statements have been prepared on
                                                                         Transactions in foreign currency are recorded at the
          accrual basis under the historical cost convention,
                                                                         exchange rates prevailing on the date of the
          in conformity in all material aspects with the
                                                                         transaction. Assets and liabilities related to foreign
          generally accepted accounting principles in India,
                                                                         currency transactions, remaining unsettled at the
          the Accounting Standards issued by the Institute of
                                                                         year end, are stated at the contracted rates, when
          Chartered Accountants of India and the
                                                                         covered under forward foreign exchange contracts
          requirements of the Companies Act, 1956.
                                                                         and at year end rates in other cases. The premium
     b)   Fixed Assets and Depreciation:                                 payable on forward foreign exchange contracts is
          Fixed Assets are stated at cost less accumulated               amortised over the period of the contract. Exchange
          depreciation. Cost includes all expenses related               gains/losses are recognised in the Profit and Loss
          to acquisition and installation of the concerned               Account except in respect of liabilities incurred to
          assets and any attributable cost of bringing the               acquire fixed assets in which case they are adjusted
          asset to the condition of its intended use.                    to the carrying amount of such fixed assets.

          Exchange differences on repayment and year end            e)   Revenue Recognition:
          translation of foreign currency liabilities relating to        Revenue from time and material contracts for
          acquisition of fixed assets is adjusted to the carrying        software development is recognised on completion
          cost of the respective assets.                                 of contracts or statements of work or at stages as
          Depreciation is provided under the straight line               per the applicable terms and conditions agreed
          method based on useful lives of assets as                      with the customers and when the deliverables are
          estimated by the Management. Depreciation is                   despatched to customers.
          charged on a monthly pro-rata basis for assets            f)   Expenditure:
          purchased / sold during the year. Individual assets
                                                                         The cost of software purchased for use in software
          acquired for less than Rs. 5,000/- are entirely
                                                                         development is charged to the Profit and Loss
          depreciated in the year of acquisition. The
                                                                         Account in the year in which it is incurred.
          Management’s estimate of useful lives for various
          fixed assets is as under:                                 g)   Income Tax:
                                                                         Income taxes have been computed using the tax
           Asset                        Useful Life Of Asset
                                                                         effect accounting method, where taxes are accrued
                                                    In Years
                                                                         in the same period as the related revenue and
           Computers                                         3           expenses. Deferred tax assets and liabilities are
           Electrical Installation                           8           recognized for the expected future tax
                                                                         consequences attributable to timing differences
           Office Equipment                                13
                                                                         between the taxable income and the accounting
           Furniture and Fixtures                          10
                                                                         income for a period. Deferred tax assets and
           EPABX Systems                                   10            liabilities are measured using enacted tax rates
                                                                         expected to apply to taxable income in the years in
     c)   Investments:                                                   which the timing differences are expected to be
          Long term investments are carried at cost.                     recovered or settled. The effect of changes in the
          Provision for diminution, if any, in the value of such         tax rates on deferred tax assets and liabilities is
          long term investment is made to recognize a                    recognized in the statement of income in the period
          decline, other than that of a temporary nature.                of change.




                                                                                                                                  91
                                                                                                                                  91
                                                                 Schedules Forming Part of the Accounts
                                                                      for the Year Ended March 31, 2004


SCHEDULE J : NOTES TO ACCOUNTS (contd...)                       4.   DISCLOSURES RELATING TO DEFERRED INCOME
                                                                     TAXES
     h)   Retirement Benefits:
                                                                     The Company accounts for taxes on income to include
          The employees of the Company do not come under
                                                                     the effect of timing differences in the tax expenses in the
          the purview of the Employee’s Provident Fund
                                                                     Profit and Loss Account and deferred tax asset / liability
          Scheme, 1952. The Company has constituted an
                                                                     in the balance sheet in accordance with the Accounting
          excluded Provident Fund where some of the
                                                                     Standard (AS-22) on “Accounting for Taxes on Income”
          employees have voluntarily participated. In case of
                                                                     issued by the Institute of Chartered Accountants of India.
          such employees, the company makes contribution
          to the provident fund.                                     Tax Holiday under Section 10A of the Income tax Act,
                                                                     1961 is available to the Company. In view of this, the
          The Company participates in Group Gratuity Cum
                                                                     deferred tax asset / liability in respect of timing differences
          Life Assurance Scheme through a Master Policy
                                                                     that originate and reverse during the tax holiday period
          with the Life Insurance Corporation of India for
                                                                     is ignored and deferred tax liability in respect of timing
          which annual premiums are paid and charged
                                                                     difference that originate during tax holiday period but
          against revenue.
                                                                     reverse after the tax holiday period is recognised.
          The    Company       participates    in   Group
                                                                     The effects of significant timing differences that result
          Superannuation Scheme for its senior executives
                                                                     in deferred tax assets and liabilities as at the end of the
          through a Master Policy with the Life Insurance
                                                                     year are given below:
          Corporation of India for which monthly premiums
          are paid and charged against revenue.                                                           (Amounts in Rupees)
                                                                          Particulars                     Current        Previous
          The provision for leave encashment is made as
                                                                                                            Year             Year
          per the Company’s rules for all eligible employees
          on the basis of actuarial valuation.                        1. Depreciation on
                                                                         Fixed Assets                  1,265,838         305,816
2.   CAPITAL COMMITMENTS
     Estimated amount of contracts remaining to be                        Net Deferred
     executed on capital account net of advances paid                     Tax Liability / (Asset)      1,265,838         305,816
     (Rs.13,072,866 Previous year Rs. 2,644,184) to the
     extent not provided for Rs. 5,438,235 (Previous year Rs.   5.   EMPLOYEE STOCK OPTIONS
     5,372,800).
                                                                     Some of the employees have been allotted Employee
3.   LIABILITIES                                                     Stock Options in Geometric Software Solutions
     There are no parties, which can be classified as small-         Company Limited (the holding company). Geometric
     scale industrial undertakings to whom the Company owes          Software Solutions Company Limited has not incurred
     any sum which is outstanding for more than thirty days.         any expenses for issuing such options.




                                                                                                                                       92
Schedules Forming Part of the Accounts
for the Year Ended March 31, 2004
                                                                                               3D PLM Software Solutions Ltd.

SCHEDULE J : NOTES TO ACCOUNTS (contd...)

6.   RELATED PARTY TRANSACTIONS

     A.   Related parties and their Relationships

          a)   Holding Company                                -        Geometric Software Solutions Company Limited

          b)   Parties Having Substantial Interest            -        Dassault Systemes

          c)   Parties Exercising Significant                 -  Spatial Corp.
               Influence                                         Solidworks Enovia
                                                                 Godrej and Boyce Manufacturing Company Limited.
          d)   Key Management Personnel                   -      Manu Parpia, Managing Director
               (There are no transactions with Key Management Personnel)

B.   Transactions with Related Parties
                                                                                                      (Amounts in Rupees)

          Nature of Transaction                       Holding Company             Parties Having        Parties Exercising
                                                                              Substantial Interest    Significant Influence

     a) Sales – Software Services                                 581,831            118,176,845              191,099,197
                                                                      (Nil)        (120,645,281)              (69,188,674)

     b) Purchase of Fixed Assets                                       Nil                    Nil                3,961,438
                                                                      (Nil)                  (Nil)             (3,039,782)

     c)   Interim Dividend Paid                               41,409,200              17,746,800                        Nil
                                                            (10,532,340)              (4,513,860)                      (Nil)

     d) Rent & Expenses towards                                9,377,226                      Nil                7,020,000
        Leased Premises                                      (5,901,932)                     (Nil)             (4,972,500)

     e) Loan Taken / Interim Finance                                 Nil                      Nil                       Nil
                                                            (25,000,000)                     (Nil)                     (Nil)

     f)   Interest Paid on Loan                                      Nil                      Nil                       Nil
                                                               (867,354)                     (Nil)                     (Nil)

     g) Advances Received                                              Nil            65,397,924                       Nil
                                                                      (Nil)         (29,715,362)               (2,260,740)

     h) Reimbursement of Expenses                             26,946,126                5,463,469                5,565,343
                                                            (18,531,895)              (3,133,748)              (3,194,154)

     Balances as on Balance Sheet Date:                     5,577,580 Cr           54,264,590 Cr            16,102,464 Dr
                                                                    (Nil)        (24,302,063 Cr)            (2,930,781 Dr)


     Note : Previous Year’s figures are given in brackets




                                                                                                                                93
                                                                                                                                93
                                                                Schedules Forming Part of the Accounts
                                                                     for the Year Ended March 31, 2004


SCHEDULE J : NOTES TO ACCOUNTS (Contd.)

                                                                                               Current          Previous
                                                                                                  Year              Year
                                                                             Rupees            Rupees            Rupees

7.   STATUTORY AUDITOR’S REMUNERATION
     a)   Audit Fees                                                                           273,600           188,250
     b)   Certification Fees                                                                      5,400                 -
     c)   Out of Pocket Expenses                                                                  7,321           10,000

          TOTAL                                                                                286,321           198,250

8.   VALUE OF IMPORTS ON C.I.F. BASIS
     a)   Software Packages and Software Tools                                                 662,717           526,375
     b)   Capital Goods                                                                     79,900,782        57,347,952

          TOTAL                                                                             80,563,499        57,874,327

9.   EXPENDITURE IN FOREIGN CURRENCY                                                                 Nil              Nil

10. EARNINGS IN FOREIGN EXCHANGE
     a)   Income from Software Development                                                 314,244,171      189,833,955
     b)   Others (Net)                                                                       1,737,184         1,578,582

          TOTAL                                                                            315,981,355      191,412,537

11. REMITTANCE OF DIVIDEND
     a)   Number of Non - Resident Shareholders                                                       1                 1
     b)   Number of Shares Held                                                                385,800           385,800
     c)   Gross Amount of Dividend                                                          17,746,800         4,513,860
     d)   Dividend Remitted Net of tax deducted at source                                   17,746,800         4,062,474

12. EARNINGS PER SHARE
     (Equity shares, par value Rs. 10/- each)
          Basic                                                                                   87.15            48.84
          Diluted                                                                                 87.15            48.84

     Profit After Tax used in calculating Earnings Per Share                               112,080,216        62,813,644

     Weighted Average Number of Shares used for computing Earnings Per Share
          Basic                                                                              1,286,000         1,286,000
          Diluted                                                                            1,286,000         1,286,000
13. GENERAL

     a)   Other information under Schedule VI to the Companies Act, 1956, to the extent not applicable has not been given.

     b)   Figures for the previous year have been regrouped / restated wherever necessary to confirm to current year’s
          presentataion.




                                                                                                                             94
                                                                                   3D PLM Software Solutions Ltd.

ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV TO THE COMPANIES ACT, 1956
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE


I     Registration Details:
      Registration No.                                                                   :              134244
      State Code                                                                         :                    11
      Balance Sheet Date                                                                 :      March 31, 2004

II    Capital Raised During the Year: (Amount in Rs. Thousand)
      Public Issue                                                                       :                     -
      Right Issue                                                                        :                     -
      Bonus Issue                                                                        :                     -
      Private Placement                                                                  :                     -
      Employee Stock Options including Share Premium and Share Application               :                     -

III   Position of Mobilisation and Deployment of Funds: (Amount in Rs. Thousand)
      Total Liabilities                                                                  :               87,994
      Total Assets                                                                       :               87,994

      Sources of Funds
      Paid-up Capital                                                                    :               12,860
      Reserves and Surplus                                                               :               73,868
      Secured Loans                                                                      :                     -
      Unsecured Loans                                                                    :                     -
      Deferred Tax Liability                                                             :                1,266

      Application of Funds
      Net Fixed Assets                                                                   :              111,232
      Investments                                                                        :               20,531
      Net Current Assets                                                                 :             (43,769)
      Misc. Expenditure                                                                  :                     -
      Accumulated Losses                                                                 :                     -

IV    Performance Of The Company: (Amount in Rs. Thousand)
      Turnover                                                                           :             332,304
      Total Expenditure                                                                  :             217,764
      Profit / (Loss) Before Tax                                                         :             114,540
      Extraordinary and Prior Period Items                                               :                     -
      Provision for Taxation                                                             :                2,460
      Profit / (Loss) After Tax                                                          :             112,080
      Earning Per Share of Rs. 10 each (in Rupees)                                                        87.15
      Dividend Rate %                                                                    :                580%

V     Generic Names Of 3 Principal Products / Services of Company                        :
      (As per monetary terms)
      a)   Item Code No. (ITC Code)                                                      :        85249904.10
      b)   Product Description                                                           : Computer Software
                                                                                                                    95
                                                                                                                    95
GEOMETRIC SOFTWARE SOLUTIONS PTE. LTD.
     (Incorporated in the Republic of Singapore)




      ANNUAL FINANCIAL STATEMENTS
    FOR THE YEAR ENDED MARCH 31, 2004




     Regd. Office: 78, Shenton Way # 26-02 A,
                Singapore 079120




                                                   96
Report of the Directors
                                                                                          Geometric Software Solutions Pte. Ltd.

The directors present their report together with the audited financial statements of the Company for the financial year ended
31 March 2004.
1   DIRECTORS OF THE COMPANY
    The directors in office at the date of this report are:
    Parpia Manu Mahmud
    Low Tiak Huan
    Rajiv Nilkant Salkar                      (Appointed on 16 October 2003)
2   ARRANGEMENTS FOR DIRECTORS TO ACQUIRE SHARES OR DEBENTURES
    Neither at the end nor at any time during the financial year was the Company a party to any arrangement whose object
    is to enable the directors of the Company to acquire benefits through the acquisition of shares in or debentures of the
    Company or any other body corporate.
3   DIRECTORS’ INTEREST IN SHARES OR DEBENTURES
    The directors holding office at the end of the financial year and their interests in the shares of the Company as recorded
    in the register kept by the Company for the purposes of Section 164 of the Companies Act, Cap. 50. were as follows:
                                                                                            Other holdings in which
                                                     Holding in the name                   Directors are deemed to
                                                        of the Directors                       have an interest

    Name of Directors                        At 01.04.03/           At 31.03.04             At 01.04.03           At 31.03.04
                                    Date of appointment
    Holding Company
    - Geometric Software Solutions Company Limited
                                                  Shares of Rs10 each
    Parpia Manu Mahmud                    599,000             586,000                            25,500                25,500

    Share Options                                          Shares of Rs10 each
    Low Tiak Huan #                                1,540                 2,680                         -                      -
    Rajiv Nilkant Salkar # *                       2,448                 3,604                         -                      -
    * Appointed on 16 October 2003
    # Exercise price of between INR 450 to INR 517 per share
    Geometric Software Solutions Company Limited has issued stock option to the above directors of the Company. The
    holding company has not incurred any cost for issuing such options.
4   DIRECTORS’ CONTRACTUAL BENEFITS
    Since the end of previous financial year, no director has received or become entitled to receive a benefit by reason of a
    contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with
    a company in which he has a substantial financial interest other than those, which have been disclosed in the financial
    statements.
5   SHARE OPTIONS GRANTED
    No options were granted during the financial year to take up unissued shares of the Company.
6   SHARE OPTIONS EXERCISED
    During the financial year, no shares were issued by virtue of the exercise of options granted.
7   UNISSUED SHARES UNDER OPTION
    There were no unissued shares under option at the end of the financial year.
8   AUDITORS
    The auditors, Messrs. Rohan · Mah & Partners, Certified Public Accountants, have expressed their willingness to accept
    re-appointment.
                               ON BEHALF OF THE BOARD
                               Parpia Manu Mahmud                   Low Tiak Huan             Salkar Rajiv Nilkant
                                      Director                         Director                    Director

Date: April 21, 2004
Singapore.                                                                                                                         97
                                          Statement by Directors

In the opinion of the directors, the financial statements set out on pages 5 to 15 are drawn up so as to give a true and fair view
of the state of affairs of the Company as at 31 March 2004 and of the results of the business, changes in equity and cash
flows of the Company for the year ended on that date, and at the date of this statement there are reasonable grounds to
believe that the Company will be able to pay its debts as and when they fall due.

                   ON BEHALF OF THE BOARD

                    Parpia Manu Mahmud                          Low Tiak Huan                    Salkar Rajiv Nilkant
                           Director                                Director                           Director

Date: April 21, 2004
Singapore.




                           Auditors’ Report to the Members of
                          Geometric Software Solutions Pte. Ltd.

We have audited the accompanying financial statements of Geometric Software Solutions Pte. Ltd. as set out on pages 5 to
15 for the year ended 31 March 2004. These financial statements are the responsibility of the Company’s directors. Our
responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion,

(a)    the financial statements are properly drawn up in accordance with the provisions of the Companies Act, Cap.50 (the
      “Act”) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the
      Company as at 31 March 2004 and the results, changes in equity and cash flows of the Company for the year then
      ended on that date; and

(b) the accounting and other records (excluding registers) required by the Act to be kept by the Company have been properly
    kept in accordance with the provisions of the Act.



      ROHAN · MAH & PARTNERS
      Certified Public Accountants
      Singapore, 21 April, 2004.
      (RK/ET/LC/ay)



                                                                                                                                     98
                                                                               Geometric Software Solutions Pte. Ltd.

                             Balance Sheet as at March 31, 2004
                                                                        Note              2004                2003
                                                                                            S$                  S$
ASSETS LESS LIABILITIES
Current Assets
    Trade and other receivables                                          3           1,017,423            185,051
    Bank balances                                                                       75,505            276,960
                                                                                     1,092,928            462,011
Current Liabilities
    Bank overdraft (unsecured)                                           5                   -             26,744
    Trade and other payables                                             6             943,361            434,369
    Provision for taxation                                                              96,434                  -
                                                                                     1,039,795            461,113

Net Assets                                                                              53,133                 898
EQUITY
     Share capital                                                       7             100,000            100,000
     Accumulated losses                                                                (46,867)           (99,102)
Total equity                                                                             53,133                898
The accompanying notes form an integral part of these financial statements.

       Profit and Loss Account for the Year Ended March 31, 2004
                                                                        Note          01.04.03            10.04.02
                                                                                            to                  to
                                                                                      31.03.04            31.03.03
                                                                                            S$                  S$
Sales                                                                                2,527,477            534,987
Interest income                                                                             45                   8
Other Income                                                                            39,861                   -
                                                                                     2,567,383            534,995
Costs and Expenses
Cost of services                                                         8         (1,613,863)           (427,989)
Staff costs                                                              9           (556,192)           (139,126)
Other operating expenses                                                 10          (248,039)            (66,982)
Profit/(Loss) from operations                                                          149,289            (99,102)
Finance costs                                                            11              (620)                   -
Profit/(Loss) before taxation                                                          148,669            (99,102)
Taxation                                                                 12           (96,434)                   -
Net profit/(loss) for the year                                                          52,235            (99,102)
The accompanying notes form an integral part of these financial statements.
    Statement of Changes in Equity for the Year Ended March 31, 2004
                                                                    Share       Accumulated
                                                                Capital S$        Losses S$               Total S$
As at 10 April 2002                                                      2                 -                     2
Issue of shares                                                    99,998                  -                99,998
Net loss for the year                                                    -          (99,102)              (99,102)
As at 31 March 2003                                              100,000            (99,102)                   898
Net profit for the year                                                  -            52,235                52,235
As at 31 March 2004                                              100,000            (46,867)                53,133
The accompanying notes form an integral part of these financial statements.
                                                                                                                        99
                                                                        Cash Flow Statement
                                                          For The Year Ended March 31, 2004



                                                                        Note       2004        2003

                                                                                     S$          S$

CASH FLOWS FROM OPERATING ACTIVITIES:

Profit/(Loss) before taxation                                                   148,669     (99,102)

Adjustments for:

     Interest expenses                                                              620           –

Operating profit/(loss) before working capital changes                          149,289     (99,102)

Working capital changes, excluding changes related to cash

     Trade and other receivables                                               (832,371)   (185,051)

     Trade and other payables                                                   508,991     434,369

Cash (used in)/generated from operations                                       (174,091)    150,216

     Interest expenses                                                             (620)          –

     Taxation paid - -

Net cash (used in)/generated from operating activities                         (174,711)    150,216

CASH FLOWS FROM INVESTING ACTIVITIES

     Proceeds from issue of shares                                       7            –     100,000

Net cash generated from investing activities                                          –     100,000

Net (decrease)/increase in cash                                                (174,711)    250,216

Cash and cash equivalents at beginning of year                                  250,216           –

Cash and cash equivalents at end of year                                         75,505     250,216

Cash and cash equivalents included in the cash flow statement
comprise the following balance sheet amounts:

Bank balances                                                                    75,505     276,960

Bank overdraft                                                                        –     (26,744)

                                                                                 75,505     250,216

The accompanying notes form an integral part of these financial statements.




                                                                                                       100
Notes to the Financial Statements - March 31, 2004
                                                                                           Geometric Software Solutions Pte. Ltd.

These notes form an integral part of and should be read in conjunction with the accompanying balance sheet, profit and loss
account, statement of changes in equity and statement of cashflows.

1   CORPORATE INFORMATION
    Geometric Software Solutions Pte. Ltd. is a limited liability company incorporated in Singapore with its registered office
    at 78 Shenton Way #26-02A Singapore 079120 and principal place of business at Blk 231 Yishun Street 21 #12-408,
    Singapore 760231.
    The Company is a wholly-owned subsidiary of Geometric Software Solutions Company Limited, a company incorporated
    in India, which is also the Company’s ultimate holding corporation.
    The principal activities of the Company in the course of the financial year are those of software development services
    and sale of software products. There have been no significant changes in the nature of these activities during the
    financial year.
    The financial statements of the Company for the year ended 31 March 2004 were authorised for issue in accordance
    with a resolution of the Directors on 21 April, 2004.
    The Company has 2 employees (2003: 1) at the end of the financial year.

2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    2.1    Statement of Compliance
           These financial statements have been prepared in accordance with Singapore Financial Reporting Standards
           (FRS) as required by the Companies Act. In previous years, the financial statements were prepared in accordance
           with Singapore Statements of Accounting Standard (SAS). The transition from SAS to FRS did not result in any
           significant changes in Accounting policies.

    2.2    Basis of Financial Statements Preparation
           The financial statements, expressed in Singapore dollars (SGD or S$), are prepared on the historical cost basis.

    2.3    Revenue Recognition
            Revenue from time and material contracts for software development is recognised on completion of contracts or
           at stages as per the applicable terms and conditions agreed with the customers and when the deliverables are
           dispatched to customers.
           In case of fixed price contracts, revenue is recognised on milestones achieved as specified in the contracts on
           the proportionate completion method on the basis of work completed. Revenue from sale of traded software
           products and software upgradation fee is recognised when the sale has been completed with the passing of the
           title. Revenue from software upgradation fees on software developed by the Company is recognised over the
           period for which it is received.
    2.4    Deferred Taxation
           Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date
           between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
           Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the
           years in which those temporary differences are expected to be recovered or settled based on tax rates enacted or
           substantively enacted at the balance sheet date. Deferred tax assets are recognised for all deductible temporary
           differences, carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable
           profit will be available against which the deductible temporary differences can be utilised.
    2.5    Impairment of Asset
           The carrying amounts of the Company assets, are reviewed at each balance sheet date to determine, whether
           there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated
           and impairment loss is recognised in the profit and loss account.

                                                                                                                                    101
NOTES TO THE FINANCIAL STATEMENTS (contd...)
    2.6   Reversals of Impairment
          An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying
          amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
          recognised. All other reversals of impairment are recognised in the profit and loss account.
    2.7   Financial Assets
          The Company’s principal financial assets are trade and other receivables and bank balances. Trade receivables
          are stated at original invoice amount less allowance for any uncollectable amounts. Other receivables are stated
          at cost less allowance for any uncollectable amounts.
    2.8   Financial Liabilities
          Financial liabilities are classified according to the substance of the contractual arrangements entered into.
          Financial liabilities include trade and other payables. Trade and other payables are stated at nominal value.
    2.9   Employee Benefits
          Defined Contribution Pension Costs
          The Company makes contribution to the Central Provident Fund Scheme in Singapore and also participates in the
          national pension schemes as defined by the law of the countries in which it has operation, a defined contribution pension
          scheme. These contributions are recognised as an expense in the period in which the related service is performed.

3   TRADE AND OTHER RECEIVABLES
                                                                                                        2004                2003
                                                                                                           S$                  S$
    Trade receivables (note 4)                                                                       901,862             183,734
    Advance costs                                                                                     53,499                   -
    Deposits                                                                                           1,000               1,000
    Prepayment                                                                                        61,062                 317
                                                                                                   1,017,423             185,051
4   TRADE RECEIVABLES
                                                                                                        2004                2003
                                                                                                           S$                  S$
    Trade debtors                                                                                    905,039             183,734
    Less: Provision for doubtful debts
    Balance at beginning of year                                                                            –                  –
    Provision made during the year                                                                      3176                   –
    Balance at end of year                                                                            (3,176)                  -
                                                                                                     901,862             183,734
5   BANK OVERDRAFT - UNSECURED
    The bank overdraft arise as a result of unpresented cheques amounting to approximately S$29,700 as of 31 March 2003.
6   TRADE AND OTHER PAYABLES
                                                                                                        2004              2003
                                                                                                           S$               S$
    Advance billings                                                                                  66,873                 –
    Other payables                                                                                        736                –
    Amount due to holding corporation - trade                                                        619,210           430,388
                                     – non-trade                                                     202,870             1,980
    Accrued operating expenses                                                                        53,672             2,001
                                                                                                     943,361           434,369
    The amount due to holding corporation is unsecured, interest free and with no fixed term of repayment.                            102
                                                                                     Geometric Software Solutions Pte. Ltd.

NOTES TO THE FINANCIAL STATEMENTS (contd...)

7    SHARE CAPITAL
                                                               2004                                  2003
                                            No. of shares                   S$      No. of shares                    S$
     Authorised :
     Ordinary shares of S$1 each                   3,000,000          3,000,000        3,000,000             3,000,000
     Issued and fully paid:
     At beginning of the year                       100,000            100,000                  2                     2
     Issue of shares                                      –                  –            99,998                99,998
     At end of the year                             100,000            100,000           100,000               100,000


8    COST OF SERVICES
     Cost of services include the following:                                            01.04.03              10.04.02
                                                                                               to                    to
                                                                                        31.03.04              31.03.03
                                                                                               S$                    S$
     Staff costs                                                                         456,268                      –

9    STAFF COSTS
     Staff costs (including executive directors)                                        01.04.03              10.04.02
                                                                                               to                    to
                                                                                        31.03.04              31.03.04
                                                                                               S$                    S$
     Wages, salaries and related costs                                                   938,520               123,727
     Defined contribution pension costs                                                   73,940                15,399
                                                                                       1,012,460               139,126
     Less: included in cost of services                                                (456,268)                      –
                                                                                         556,192               139,126

10   OTHER OPERATING EXPENSES
     Other operating expenses included the following for the year ended 31 March:
                                                                                        01.04.03              10.04.02
                                                                                              to                    to
                                                                                        31.03.04              31.03.04
                                                                                               S$                    S$
     Incorporation expenses written off                                                        –                  1,500
     Exchange loss                                                                        45,889                  1,908

11   FINANCE COSTS
                                                                                        01.04.03              10.04.02
                                                                                               to                    to
                                                                                        31.03.04              31.03.04
                                                                                               S$                    S$
     Loan interest                                                                           620                      –


                                                                                                                              103
NOTES TO THE FINANCIAL STATEMENTS (contd...)
12   TAXATION
                                                                                                 01.04.03           10.04.02
                                                                                                          to               to
                                                                                                 31.03.04           31.03.03
                                                                                                          S$              S$
     Recognised in the profit and loss accounts:
     Current taxation                                                                              96,434                   –
     Reconciliation of effective tax rate:
     Profit/(Loss) for the year                                                                   148,669           (99,102)
     Tax at the domestic rates applicable to profits in the countries concerned *                  72,728           (21,802)
     Non-deduction expenses                                                                        10,762                413
     Temporary differences exchange loss                                                              232                164
     Unutilised losses                                                                             12,712             21,225
     Income tax as per profit and loss account                                                     96,434                   –

     * The reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.

     Unrecognised deferred tax assets:
     Deferred tax assets have not been recognised in respect of the following items:
     Tax losses                                                                                    32,006             21,225

     Deferred tax assets in respect of the above items have not been recognised in the financial statements as the probability
     of future taxable profits being available to utilise such benefits cannot be reliably established.

13   SIGNIFICANT RELATED PARTY TRANSACTIONS
     During the year, there were the following significant transactions between the Company and related parties on terms
     arranged by or between the parties concerned:


                                                                                                 01.04.03           10.04.02
                                                                                                          to               to
                                                                                                 31.03.04           31.03.03
                                                                                                          S$              S$
     Immediate Holding Corporation
     Purchases from                                                                             1,157,595           427,989
     Director’s Remuneration
     The Company directors’ remuneration amounts to S$125,728 (2003: S$123,727).
     Rental Paid to Director
     Rental paid to director amounting to S$3,000 (2003: S$2,750).


14   FINANCIAL INSTRUMENTS
     Financial Risk Management Objectives and Policies
     The main risks arising from the Company’s financial instruments are credit, foreign exchange, interest rate and liquidity
     risks. The policies of managing each of these risks are summarised below:
                                                                                                                                 104
                                                                                            Geometric Software Solutions Pte. Ltd.

NOTES TO THE FINANCIAL STATEMENTS (contd...)

    Credit Risk
    Credit risk refers to the risk that counter parties may default on their contractual obligations resulting in a financial loss
    to the Company. The Company’s customer portfolio is diversified and there is no reliance on any customer. These
    exposures are monitored and provision for credit losses is adjusted when necessary.
    Foreign Currency Risk
    Foreign currency risk arises from change in foreign exchange rates that may have an adverse effect on the Company in
    the current reporting period and in the future years. Exposures to foreign currency risk are managed as far as possible
    by natural hedges of matching assets and liabilities.


    Interest Rate Risk
    Interest rate risk arises from the potential adverse effect that changes in interest rates may have on the Company’s
    results in the current reporting period and in the future years. The Company considers the fluctuation in interest rates to
    be within a narrow and manageable range.


    Liquidity Risk
    Liquidity risk refers to the risk that the Company is unable to meet its obligations when fall due. The company monitors
    its cash flow and collections on a regular basis as a means of managing liquidity risk.


    Fair Value of Financial Instruments
    There are no material differences between the book value and the fair value of the Company’s financial assets and
    liabilities. The Company does not engage in transactions involving financial derivatives.




                                                                                                                                     105
   CONSOLIDATED FINANCIAL STATEMENTS OF
GEOMETRIC SOFTWARE SOLUTIONS COMPANY LIMITED



       FOR THE YEAR ENDED MARCH 31, 2004




                                               106
Auditors’ Report on the Consolidated
Financial Statements
                                                                                               Consolidated Financial Statements


To,
The Board of Directors
Geometric Software Solutions Co. Ltd.


1.   We have examined the attached consolidated Balance               the requirements of Accounting Standard (AS) 21,
     Sheet of Geometric Software Solutions Company                    Consolidated Financial Statements, issued by the
     Limited and its subsidiaries listed in Note 2, Notes to          Institute of Chartered Accountants of India and on the
     Accounts, as at March 31, 2004, the Consolidated Profit          basis of the separate audited financial statements of
     and Loss Account and the Consolidated Cash Flow                  Geometric Software Solutions Company Limited and
     Statement for the year then ended (consolidated financial        its subsidiaries included in the consolidated financial
     statements).                                                     statements.

2.   These financial statements are the responsibility of the    5.   On the basis of the information and explanation given to
     group's management. Our responsibility is to express             us and on the consideration of the separate audit reports
     an opinion on these financial statements based on our            on the individual audited financial statements of
     audit. We conducted our audit in accordance with                 Geometric Software Solutions Company Limited and
     generally accepted auditing standards in India. These            its aforesaid subsidiaries, we are of the opinion that:
     Standards require that we plan and perform the audit to
     obtain reasonable assurance whether the financial                a)   the Consolidated Balance Sheet gives a true and
                                                                           fair view of the consolidated state of affairs of
     statements are prepared, in all material aspects, in
                                                                           Geometric Software Solutions Company Limited
     accordance with an identified financial reporting                     and its subsidiaries as March 31, 2004;
     framework and are free of material misstatements. An
     audit includes, examining on a test basis, evidence              b)   the Consolidated Profit and Loss Account gives a
     supporting the amounts and disclosures in the financial               true and fair view of the consolidated results of
                                                                           operations of Geometric Software Solutions
     statements. An audit also includes assessing the
                                                                           Company Limited and its subsidiaries for the year
     accounting principles used and significant estimates                  then ended; and
     made by management, as well as evaluating the overall
     financial statement presentation. We believe that our            c)   the Consolidated Cash Flow Statement gives a
     audit provides a reasonable basis for our opinion.                    true and fair view of the consolidated cash flows of
                                                                           Geometric Software Solutions Company Limited
                                                                           and its subsidiaries for the year then ended.
3.   We did not audit the financial statements of Geometric
     Software Solutions Inc., Geometric Software Solutions
     Pte. Ltd. and 3D PLM Software Solutions Limited, whose
     financial statements reflect total assets of Rs.
                                                                 For and on behalf of
     108,662,679 as at March 31, 2004 and total revenues of
     Rs. 389,393,981 for the year then ended. These financial
                                                                 KALYANIWALLA & MISTRY
     statements have been audited by other auditors whose
                                                                 CHARTERED ACCOUNTANTS
     report has been furnished to us and our opinion, insofar
     as it relates to the amounts included in respect of the
     subsidiaries, is based solely on the report of the other    Daraius Z. Fraser
     auditors.                                                   PARTNER

4.   We report that the consolidated financial statements        M. No.: 42454
     have been prepared by the Company in accordance with        Mumbai: April 26, 2004.




                                                                                                                                   107
                                                                     Consolidated Balance Sheet
                                                                           As At March 31, 2004


                                                                                             Current         Previous
                                                                                                Year             Year
                                                       SCHEDULE            Rupees            Rupees           Rupees
SOURCES OF FUNDS:
1. SHAREHOLDERS’ FUNDS
   a) Share Capital                                         A          54,493,770                          53,027,330
   b) Share Application Money                                           4,014,488                              20,850
   c) Reserves and Surplus                                  B         903,064,124                         714,699,501
                                                                                        961,572,382       767,747,681
2.   LOAN FUNDS
     a) Secured Loans                                       C                                       -      30,088,509
3.   DEFERRED TAX LIABILITY                                 D                            24,066,175        18,917,482
4.   MINORITY INTEREST                                                                   31,241,086        17,637,630
     TOTAL                                                                            1,016,879,643       834,391,302
APPLICATION OF FUNDS:
5. FIXED ASSETS                                             E
   a) Gross Block                                                     779,936,233                         474,423,686
   b) Less: Depreciation                                              230,160,367                         149,675,364
     c)   Net Block                                                    549,775,866                        324,748,322
     d)   Capital Work-in-Progress                                      27,278,230                         31,765,457
                                                                                         577,054,096      356,513,779
6.   INVESTMENTS                                            F                           178,265,119       146,233,118
7.   CURRENT ASSETS, LOANS AND ADVANCES                     G
     a) Sundry Debtors                                                199,836,010                         132,245,161
     b) Cash and Bank Balances                                         52,902,904                          58,455,363
     c) Other Current Assets                                           14,390,689                          13,183,109
     d) Loans and Advances                                            259,714,637                         276,430,002
                                                                      526,844,240                         480,313,635
8.   Less: CURRENT LIABILITIES AND PROVISIONS               H
     a)   Current Liabilities                                         177,487,319                          98,812,692
     b)   Provisions                                                   87,796,493                          49,856,538
                                                                      265,283,812                         148,669,230
9.   NET CURRENT ASSETS                                                                 261,560,428       331,644,405
     TOTAL                                                                            1,016,879,643       834,391,302
NOTES TO ACCOUNTS                                           L
The Schedules referred to above form an integral part of the Balance Sheet.
As per our Report attached                                  Signatures to the Balance Sheet and Schedules A to H and L.
For and on behalf of                                                                     For and on behalf of the Board
Kalyaniwalla & Mistry
Chartered Accountants                                              J. N. Godrej         Manu Parpia         K. A. Palia
                                                                   Chairman             Managing            Director
                                                                                        Director

Daraius Z. Fraser                Rajkumar Bidawatka
Partner                          Company Secretary

April 26, 2004.




                                                                                                                          108
Consolidated Profit and Loss Account
for the Year Ended March 31, 2004
                                                                                     Consolidated Financial Statements


                                                                                         Current           Previous
                                                                                            Year               Year
                                                    SCHEDULE             Rupees          Rupees             Rupees
INCOME:
1. Sales - Software Packages and Services                                          1,060,271,628       841,161,691
2. Other Income                                               I                       63,574,997        35,983,353
                                                                                   1,123,846,625       877,145,044
EXPENDITURE:
3. Operating and Other Expenses                               J                     771,083,124        608,049,871
4. Depreciation                                                                      82,108,526         60,809,094
                                                                                    853,191,650        668,858,965
PROFIT BEFORE TAX:                                                                  270,654,975        208,286,079
5. Prior Period and Extraordinary Items                       K                               -            587,792
6. Provision for Taxes:
   a) Current Taxes
        - Indian Income Tax                                           20,858,832                        14,330,000
        - Foreign Taxes                                                2,498,600                         2,510,103
   b) Deferred Taxes                                                   5,179,895                         1,470,044
                                                                                     28,537,327          18,310,147
PROFIT AFTER TAXES BEFORE MINORITY INTEREST                                         242,117,648        189,388,140
7. Less : Minority Interest in Net Profit of the Subsidiary                          33,624,065         18,844,093
PROFIT AFTER TAXES                                                                  208,493,583        170,544,047
8. Surplus Brought Forward                                                          587,420,421        460,704,957
PROFIT AVAILABLE FOR APPROPRIATION:                                                 795,914,004        631,249,004
APPROPRIATIONS:
1. Proposed Dividend                                                                 29,971,574         21,210,932
2. Corporate Tax on Dividend                                                          3,840,110          2,717,651
3. Corporate Tax on Dividend Paid by Subsidiary                                       5,305,554                  -
4. Transfer to General Reserve                                                       25,400,000         19,900,000
5. Surplus Carried Forward                                                          731,396,766        587,420,421
     TOTAL                                                                          795,914,004        631,249,004
EARNINGS PER EQUITY SHARE (Face Value Rs 10 each)L - 10
     Basic                                                                                 39.00               32.32
     Diluted                                                                               38.58               31.75
NOTES TO ACCOUNTS                                             L
The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our Report attached                        Signatures to the Profit and Loss Account and Schedules I to L.
For and on behalf of                                                                 For and on behalf of the Board
Kalyaniwalla & Mistry
Chartered Accountants                                             J. N. Godrej      Manu Parpia          K. A. Palia
                                                                  Chairman          Managing             Director
                                                                                    Director
Daraius Z. Fraser                  Rajkumar Bidawatka
Partner                            Company Secretary

April 26, 2004.

                                                                                                                         109
                                                           Consolidated Cash Flow Statement
                                                           for the Year Ended March 31, 2004


                                                                                              Current        Previous
                                                                                                 Year            Year
                                                                              Rupees          Rupees          Rupees
A.   CASH FLOW FROM OPERATING ACTIVITIES:
     Net Profit Before Tax                                                               270,654,975      208,286,079
     Adjustment for:
         Depreciation                                                      82,108,526                      60,809,094
         Depreciation of Earlier Years Written Back                                  -                     (2,779,083)
         Net Unrealised Foreign Exchange (Gain) / Loss                      8,160,480                      (5,097,197)
         Interest Paid                                                        106,878                           4,004
         Interest Earned                                                 (17,467,941)                     (10,314,900)
         Loss / (Profit) on Sale of Fixed Assets                              214,534                       3,148,513
         Loss / (Profit) on Sale of Investments                            (5,311,021)                     (9,866,509)
         Diminution in Value of Investments                                    18,229                                -
         Dividend Received                                                 (4,072,368)                       (548,394)
         (Including Rs. 1,006,357 Reinvested -
         previous year Rs. Nil )
         Deferred Employee Compensation                                        42,317                                -
                                                                                           63,799,634      35,355,528
     Operating Profit Before Working Capital Changes                                     334,454,609      243,641,607
     Adjustments for:
         Trade and Other Receivables                                      (75,860,267)                    (33,082,461)
         Trade Payables                                                    86,276,555                      32,463,180
                                                                                           10,416,288        (619,281)
     Cash Generated from Operations                                                      344,870,897      243,022,326
     Taxes Paid                                                                          (14,057,420)     (15,978,176)
     Cash Flow before Prior Year Adjustments                                             330,813,477      227,044,150
     Prior Period Adjustments                                                                        -       (587,792)
     Net Cash Flow from Operating Activities                                              330,813,477     226,456,358
B.   CASH FLOW FROM INVESTING ACTIVITIES:
         Purchase of Fixed Assets                                        (322,044,751)                   (121,096,950)
         Sale of Fixed Assets                                                 478,557                       4,331,320
         Purchase of Investments                                         (285,132,052)                   (357,336,890)
         (Including Rs. 1,006,357 Reinvested -previous year Rs. Nil )
         Trade Investments                                                 (9,044,000)                               -
         Sale of Investments                                              267,436,843                     461,637,314
         Intercorporate Deposits Placed                                  (387,500,000)                   (277,500,000)
         Intercorporate Deposits Refund                                   440,000,000                      50,000,000
         Interest Received                                                 13,925,799                       3,021,434
         Dividend Received                                                  4,072,368                         548,394
         (Including Rs. 1,006,357 Reinvested - previous year Rs. Nil )
     Net Cash Used in Investing Activities                                               (277,807,236)   (236,395,378)
     Balance carried forward                                                               53,006,241      (9,939,020)

                                                                                                                         110
Consolidated Cash Flow Statement
for the Year Ended March 31, 2004
                                                                                      Consolidated Financial Statements


                                                                                           Current          Previous
                                                                                              Year              Year
                                                                          Rupees           Rupees            Rupees

     Balance Brought Forward                                                           53,006,241        (9,939,020)

C.   CASH FLOW FROM FINANCING ACTIVITIES:
     Proceeds from Issue of Share Capital/ESOP Exercised               24,406,039                          5,689,176
     Borrowings from Bank                                              90,942,411                        30,088,509
     Repayment of Bank Loan                                         (121,030,920)                                    -
     Interest Paid                                                     (3,765,010)                         (588,480)
     Dividend Paid                                                    (38,814,206)                      (19,867,143)
     Dividend Tax Paid                                                (10,297,014)                                   -
     Net Cash (Used) / Raised in Financing Activities                                 (58,558,700)       15,322,062

NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS:                                                                      (5,552,459)         5,383,042

     CASH AND CASH EQUIVALENTS
     AS AT THE BEGINNING OF THE YEAR                                                   58,455,363         53,072,321
     AS AT THE END OF THE YEAR

          Cash and Bank Balances                                                       53,072,602         58,380,013

          Unrealised Foreign Exchange Restatement in Cash and
          Cash Equivalents                                                               (169,698)            75,350

          Cash and Cash Equivalents as per Accounts                                    52,902,904         58,455,363

NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS:                                                                      (5,552,459)         5,383,042


For and on behalf of                                                                 For and on behalf of the Board
Kalyaniwalla & Mistry
Chartered Accountants                                           J. N. Godrej         Manu Parpia          K. A. Palia
                                                                Chairman             Managing             Director
                                                                                     Director

Daraius Z. Fraser                Rajkumar Bidawatka
Partner                          Company Secretary

April 26, 2004.




                                                                                                                          111
                                                   Schedules Forming Part of the Accounts
                                                        for the Year Ended March 31, 2004


                                                                                             Current      Previous
                                                                                                Year          Year
                                                                              Rupees         Rupees        Rupees
SCHEDULE A: SHARE CAPITAL
1.   AUTHORISED:
     7,000,000 (previous year 7,000,000) Equity
     shares of Rs. 10/- each.                                                             70,000,000    70,000,000
2.   ISSUED, SUBSCRIBED AND PAID UP:
     5,449,377 Equity shares (previous year 5,302,733)                                    54,493,770    53,027,330
     of Rs. 10/- each fully paid up.
     TOTAL                                                                                54,493,770    53,027,330

Note:
    a)    Of the above 2,850,000 equity shares have been allotted as
          fully paid up bonus shares by capitalisation of surplus in the
          Profit and Loss Account.
     b)   During the year, 143,344 equity shares (previous year 47,441)
          have been issued under Employee Stock Option Plans and
          3,300 equity shares (previous year Nil) under Directors’ Stock
          Option Scheme of the Company.
SCHEDULE B: RESERVES AND SURPLUS
1.   SHARE PREMIUM ACCOUNT
     As per last Balance Sheet                                             111,341,316                 106,147,400
     Received During the Year                                               18,945,961                   5,193,916

                                                                                         130,287,277   111,341,316

2.   GENERAL RESERVE
     As per last Balance Sheet                                             15,937,764                   15,160,000
     Add:
     Transfer from Profit and Loss Account                                 25,400,000                   19,900,000
     Less:
     Transitional adjustment on account of
     Opening Deferred Tax Liability                                                 –                  (19,122,236)
                                                                                          41,337,764    15,937,764

3.   EMPLOYEE STOCK OPTIONS OUTSTANDING                                                       59,800             –
4.   DEFERRED EMPLOYEE STOCK OPTION COMPENSATION                                            (17,483)             –
5.   PROFIT AND LOSS ACCOUNT                                                             731,396,766   587,420,421
     TOTAL                                                                               903,064,124   714,699,501
SCHEDULE C: SECURED LOANS
1. Borrowings from Banks
   Term Loan                                                                                      –     30,088,509
   (Secured by a lien / charge on Inter Corporate
   Deposit of Rs. 150,000,000)

     TOTAL                                                                                        –     30,088,509



                                                                                                                      112
Schedules Forming Part of the Accounts
for the Year Ended March 31, 2004
                                                                Consolidated Financial Statements




                                                                   Current            Previous
                                                                      Year                Year
                                                     Rupees        Rupees              Rupees

SCHEDULE D: DEFERRED TAX LIABILITY
1.   Deferred Tax Liability / (Asset) as at the
     commencement of the year                     18,917,482                       (1,674,798)
     Add : Transfer from General Reserve
     -   Depreciation on Fixed Assets                      –                       19,122,236

                                                                18,917,482          17,447,438
2.   Current Year Liability / (Asset)
     -   Depreciation on Fixed Assets               6,488,998                           35,567
     -   Preliminary Expenses                       (270,169)                           72,271
     -   Carry Forward Loss as per Income Tax               -                        1,587,837
     -   Others                                   (1,070,136)                        (225,631)

                                                                 5,148,693           1,470,044

     TOTAL                                                      24,066,175          18,917,482




                                                                                                    113
                      Schedules Forming Part of The Accounts For The Year Ended March 31, 2004
                                                                              SCHEDULE E: FIXED ASSETS
                                                                                                                                                                                Rupees

                                                        GROSS BLOCK                                                   DEPRECIATION                                  NET BLOCK
      ASSET                            As on                                    As on        Upto     Write back of      For the          On           Upto         As on         As on
                                    1-Apr-03     Additions   Deductions     31-Mar-04    31-Mar-03    Earlier Years        Year    Deductions      31-Mar-04    31-Mar-04     31-Mar-03

      Leasehold Land              24,134,010    44,110,110            -    68,244,120      595,527                -     334,841              -      930,368     67,313,752   23,538,483

      Buildings                  102,869,810   88,743,922             -   191,613,732     9,878,248               -    3,849,803             -    13,728,051   177,885,681   92,991,562

      Leasehold Improvement        3,624,858             -            -     3,624,858     1,795,062               -     856,919              -     2,651,981      972,877     1,829,796

      Computers                  176,687,353   116,382,321    1,532,575   291,537,099    92,197,943               - 58,868,219       1,455,935   149,610,227   141,926,872   84,489,410

      Electrical Installation     62,721,386    33,819,665            -    96,541,051    17,912,143               -    8,081,397             -    25,993,540    70,547,511   44,809,243

      Office Equipment &
      EPABX System                26,787,018    6,424,918             -    33,211,936     8,486,788               -    2,477,975             -    10,964,763    22,247,173   18,300,230

      Furniture and Fixtures     75,530,265    17,020,630             -   92,550,895    18,370,974               -    7,402,171              -   25,773,145    66,777,750    57,159,291

      Vehicles                     2,068,986    1,327,596      784,040      2,612,542      438,679                -     237,201       167,588       508,292      2,104,250    1,630,307

      TOTAL                      474,423,686   307,829,162    2,316,615   779,936,233   149,675,364               - 82,108,526       1,623,523   230,160,367   549,775,866

      Previous Year              422,703,925   88,878,146    37,158,385   474,423,686   121,323,906     2,779,084 60,809,094       29,678,552    149,675,364                 324,748,322

      Capital Work-in-Progress                                                                                                                                  27,278,230   31,765,457

      TOTAL                                                                                                                                                    577,054,096 356,513,779
114
Schedules Forming Part Of The Accounts
for The Year Ended March 31, 2004
                                                                                   Consolidated Financial Statements


SCHEDULE F: INVESTMENTS


     Previous    Current                                                                  Current        Previous
         Year      Year                                                                     Year             Year
         Nos.      Nos.                                                 Rupees            Rupees          Rupees



1.   IN UNITS OF MUTUAL FUNDS
     Current Investments (At lower of cost or market value)
     Quoted, Non Trade
      Geometric Software Solutions Company Limited Investments       104,989,725                     102,514,807
      3D PLM Software Solutions Limited Investments                   20,531,312                               -

                                                                                   125,521,037       102,514,807

2.   OTHER TRADE INVESTMENTS
     Unquoted, Long Term (At Cost)
        269            269 Oncourse Technologies, Inc.
                            No par value, fully paid and
                            non-assessable shares of the Series A
                            Convertible Preferred Stock              12,759,160                       12,759,160

     1,410,176    1,410,176 Powerway Inc.                            30,959,151                       30,959,151
                            No par value shares of Series E Senior
                            Preferred Stock, fully paid and
                            non-assessable.

             -       28,000 Virtual Supply Chain Engineering, Inc      9,044,000                                  -
                            Series A Preferred Stock
                            (par value = US $ 0.001 per share)
                                                                                     52,762,311        43,718,311

     TOTAL BOOK VALUE OF INVESTMENTS                                               178,283,348       146,233,118

3.   PROVISION FOR DEPLETION IN VALUE OF INVESTMENTS                                     18,229                   -

     TOTAL                                                                          178,265,119      146,233,118

Aggregate Book Value of Investments:
    Quoted                                                                         125,539,266       102,514,807

     Unquoted                                                                       52,725,853         43,718,311

     TOTAL                                                                          178,265,119      146,233,118


Market Value of Quoted Investments                                                 127,551,072       105,199,786




                                                                                                                       115
                                                            Schedules Forming Part Of The Accounts
                                                                 for The Year Ended March 31, 2004



                                                                                     Current      Previous
                                                                                        Year          Year
                                                                       Rupees        Rupees        Rupees
SCHEDULE G: CURRENT ASSETS, LOANS AND ADVANCES
1.   SUNDRY DEBTORS
     (Unsecured - Considered good, unless otherwise stated)
     a)   Debts outstanding for a period exceeding six months        2,273,889                      20,648
          (Including doubtful debts Rs. 83,256;
          previous year Rs. Nil)
     b)   Other Debts                                              200,542,933                 134,999,919
          (Including doubtful debts Rs. 2,897,556;
          previous year Rs. 2,775,406)
                                                                   202,816,822                 135,020,567
     c)   Less : Provision for Doubtful Debts                        2,980,812                   2,775,406
                                                                                 199,836,010   132,245,161
2.   CASH AND BANK BALANCES
     a)  Cash in Hand                                                1,021,071                          –
     b)  Balances with Banks
         - in Current Accounts                                      39,008,786                  41,393,707
         - in Cash Credit Accounts                                   6,164,776                   6,978,385
         - in Fixed Deposit Account                                  6,708,271                  10,083,271
                                                                                  52,902,904    58,455,363
3.   OTHER CURRENT ASSETS
     a)  Accrued Interest                                           10,835,608                   7,293,466
     b)  Unrealised Forward Exchange Contract Premium                3,555,081                   5,889,643
                                                                                  14,390,689    13,183,109
4.   LOANS AND ADVANCES
     (Unsecured - considered good)
     a)   Advances recoverable in cash or in
           kind or for value to be received                         50,170,388                  25,872,618
     b)   Inter-corporate Deposits                                 175,000,000                 227,500,000
     c)   Sundry Deposits                                            4,730,223                   4,254,746
     d)   Advance Payment of Taxes                                  29,814,026                  18,802,638
                                                                                 259,714,637   276,430,002
          TOTAL                                                                  526,844,240   480,313,635
SCHEDULE H: CURRENT LIABILITIES AND PROVISIONS
1.  CURRENT LIABILITIES
    a)  Sundry Creditors
        - Small Scale Industrial Undertakings                                -                           -
        - Others                                                     9,869,131                   4,504,578
    b)  Advances and Deposits                                        5,591,680                     733,230
    c)  Unclaimed Dividend                                             693,356                     549,830
    d)  Other Current Liabilities                                  161,333,152                  93,025,054
                                                                                 177,487,319    98,812,692
2.   PROVISIONS
     a)  For Taxation                                               40,094,183                  19,782,783
     b)  For Proposed Dividend                                      29,971,574                  21,210,932
     c)  For Tax on Dividend                                         3,840,110                   2,717,651
     d)  For Leave Encashment                                       13,890,626                   6,145,172
                                                                                  87,796,493    49,856,538
          TOTAL                                                                  265,283,812   148,669,230


                                                                                                             116
Schedules Forming Part Of The Accounts
for The Year Ended March 31, 2004

                                                                                     Consolidated Financial Statements


                                                                                          Current          Previous
                                                                                             Year              Year
                                                                          Rupees          Rupees            Rupees
SCHEDULE I: OTHER INCOME
1.  Dividend from Mutual Funds                                                         4,072,368            548,394
2.  Gain on Exchange Fluctuations (Net)                                               31,243,843         10,219,267
3.  Interest On Advances and Deposits (Gross)                                         17,467,941         10,314,900
    (Tax Deducted at Source Rs. 1,977,804 ; previous year Rs. 517,920)
4.  Rent Received                                                                      4,349,411          4,744,812
5.  Profit on Sale of Investments (Net)                                                5,311,021          9,866,509
6.  Miscellaneous Income                                                               1,130,413            289,471
      TOTAL                                                                           63,574,997         35,983,353
SCHEDULE J: OPERATING AND OTHER EXPENSES
1.    Personnel Expenses:
      - Salaries, Bonus, Gratuity, Allowances and Provident Fund                     540,481,350       412,251,573
      - Contribution to Provident and Other Funds                                     14,706,211        10,951,062
      - Staff Welfare Expenses                                                        13,977,224        10,743,502
2.    Software Tools and Packages (Net of Reimbursements)                             18,364,046        18,235,365
3.    Electricity Expenses                                                            11,522,079         9,505,206
4.    Rates and Taxes                                                                    484,827           516,687
5.    Rent                                                                            13,690,994        13,717,535
6.    Repairs and Maintenance:
      a)    Computers                                                    4,416,264                        2,431,855
      b)    Others                                                       6,784,076                        5,397,515
                                                                                      11,200,340          7,829,370
7.    Insurance                                                                       14,009,775         11,832,237
8.    Travelling and Conveyance Expenses (Net of Reimbursements)                      53,003,404         33,297,151
9.    Communication Expenses                                                          16,037,426         13,286,158
10.   Auditors Remuneration                                                            1,799,853          1,638,588
11.   Advertising and Publicity                                                        3,335,558          2,860,812
12.   Staff Recruitment Expenses                                                       6,478,223          7,387,351
13.   Bad Debts Written Off                                                              655,613          2,722,403
14.   Royalty                                                                          4,996,806          5,141,867
15.   Legal and Professional Charges                                                  21,868,772         15,667,083
16.   Sales and Marketing Expenses (Net of Reimbursements)                             8,361,844         14,022,186
17.   Commission to Non Executive Directors                                            1,600,000          1,200,000
18.   Diminution in Value of Investments                                                  18,229                  -
19.   Miscellanous Expenses                                                           14,046,988          9,654,124
20.   Provision for Bad and Doubtful Debts                                               122,150          2,437,094
21.   Loss on Sale of Fixed Assets (Net)                                                 214,534          3,148,513
22.   Bank Interest                                                                      106,878              4,004
           TOTAL                                                                     771,083,124       608,049,871
SCHEDULE K: PRIOR PERIOD AND EXTRAORDINARY ITEMS
1.    Excess Depreciation of Earlier Years Written Back                                           -     (2,779,083)
2.    Communication Expenses                                                                      -       1,134,794
3.    Tax Adjustments in Respect of Earlier Years                                                 -       2,232,081
      TOTAL                                                                                       -         587,792


                                                                                                                         117
                                                                   Schedules Forming Part of The Accounts
                                                                        for The Year Ended March 31, 2004



SCHEDULE L: NOTES TO ACCOUNTS                                            In case of fixed assets of the subsidiary, Geometric
                                                                         Software Solutions, Inc., the accelerated method of
1.   SUMMARY OF GROUP'S SIGNIFICANT ACCOUNTING
                                                                         depreciation has been followed. The gross value
     POLICIES
                                                                         of fixed assets of the subsidiary was Rs. 2,931,661
     a)   Basis of Accounting:                                           and Rs. 2,906,211 as at March 31, 2004 and March
          The financial statements have been prepared on                 31, 2003 respectively. This has no material impact
          accrual basis under the historical cost convention,            on the consolidated financial statements.
          in conformity in all material aspects with the            c)   Investments:
          generally accepted accounting principles in India,
                                                                         Long term investments are carried at cost. Provision
          the Accounting Standards issued by the Institute of
                                                                         for diminution, if any, in the value of each long term
          Chartered Accountants of India and the
                                                                         investment is made to recognise a decline, other
          requirements of the Companies Act, 1956.
                                                                         than that of a temporary nature.
     b)   Fixed Assets and Depreciation:
                                                                         Current investments intended to be held for less
          Fixed Assets are stated at cost less accumulated               than one year are stated at the lower of cost and
          depreciation. Cost includes all expenses related               market value.
          to acquisition and installation of the concerned
                                                                    d)   Foreign Exchange Transactions:
          assets and any attributable cost of bringing the
          asset to the condition of its intended use.                    Transactions in foreign currency are recorded at the
                                                                         exchange rates prevailing on the date of the
          Direct financing cost incurred during the
                                                                         transaction. Assets and liabilities related to foreign
          construction period on major projects is also
                                                                         currency transactions, remaining unsettled at the
          capitalised. Exchange differences on repayment
                                                                         year end, are stated at the contracted rates, when
          and year end translation of foreign currency
                                                                         covered under forward foreign exchange contracts
          liabilities relating to acquisition of fixed assets is
                                                                         and at year end rates in other cases. The premium
          adjusted to the carrying cost of the respective
                                                                         payable on forward foreign exchange contracts is
          assets.
                                                                         amortised over the period of the contract. Exchange
          Depreciation is provided under the straight line               gains / losses are recognised in the Profit and Loss
          method, based on useful lives of assets as                     Account except in respect of liabilities incurred to
          estimated by the Management. Depreciation is                   acquire fixed assets in which case they are adjusted
          charged on a monthly pro-rata basis for assets                 to the carrying amount of such fixed assets.
          purchased / sold during the year. Individual assets
                                                                    e)   Foreign subsidiary consolidation:
          acquired for less than Rs. 5,000/- are entirely
          depreciated in the year of acquisition. Leasehold              Revenue items, except depreciation, are translated
          assets are amortised over the period of the lease.             into Rupees at average rate. Monetary items are
          The Management's estimate of useful lives for                  translated into Rupees using the closing rate. Non-
          various fixed assets is as under:                              monetary items other than fixed assets are
                                                                         translated using the exchange rate at the date of
          Asset                              Useful Life Of
                                                                         the transaction. Fixed assets are translated using
                                             Asset In Years
                                                                         the rate at the date of the transaction. The net
          Buildings                                 28                   exchange difference resulting from the translation
          Computers                                 3                    of items in financial statements of the foreign
                                                                         subsidiary are recognised as income or expense
          Electrical Installation                   8
                                                                         for the period.
          Office Equipment                          13
                                                                    f)   Revenue Recognition:
          Furniture and Fixtures                    10
                                                                         Revenue from time and material contracts for
          EPABX Systems                             10                   software development is recognised on completion
          Vehicles                                  10                   of contracts or at stages as per the applicable terms
                                                                                                                                  118
Schedules Forming Part of The Accounts
for The Year Ended March 31, 2004

                                                                                               Consolidated Financial Statements


SCHEDULE L: NOTES TO ACCOUNTS (contd...)                             k)   Warranty Obligations:

        and conditions agreed with the customers and                      In respect of products sold by the Company which
        when the deliverables are despatched to                           carry a specified warranty, future costs that will be
        customers. In case of fixed price contracts, revenue              incurred by the Company in carrying out its
        is recognised on milestones achieved as specified                 obligations are estimated and accounted for on
        in the contracts on the proportionate completion                  accrual basis.
        method on the basis of work completed. Revenue               l)   Income - tax:
        from sale of traded software products and software
        upgradation fee is recognised when the sale has                   Income taxes have been computed using the tax
        been completed with the passing of the title.                     effect accounting method, where taxes are accrued
        Revenue from software upgradation fees on                         in the same period as the related revenue and
        software developed by the Company is recognised                   expenses. Deferred tax assets and liabilities are
        over the period for which it is received.                         recognised for the expected future tax consequences
   g)   Expenditure:                                                      attributable to timing differences between the taxable
        The cost of software purchased for use in software                income and the accounting income for a period.
        development is charged to the Profit and Loss                     Deferred tax assets and liabilities are measured
        Account in the year in which it is incurred. The cost             using enacted tax rates expected to apply to taxable
        of software purchased for specific software                       income in the years in which the timing differences
        development contracts is charged over the period                  are expected to be recovered or settled. The effect of
        of such contracts.                                                changes in the tax rates on deferred tax assets and
                                                                          liabilities is recognised in the statement of income
        Project costs incurred on fixed price contracts where
                                                                          in the period of change. Deferred tax assets are
        milestones are yet to be reached are classified as
                                                                          recognised based on management's judgment as
        "Contracts in Progress" in the balance sheet.
                                                                          to the sufficiency of future taxable income against
   h)   Employee Stock Options Scheme:                                    which the deferred tax asset can be realised.
        Stock Options granted to employees during the year,
        subsequent to the amendment to the SEBI                      m) Retirement Benefits:
        (Employee Stock Option Scheme and Employee                        The employees of the Company do not come under
        Stock Purchase Scheme) Guidelines, 1999, effective                the purview of the Employee's Provident Fund
        from June 30, 2003, are at market price calculated                Scheme, 1952. The Company has constituted an
        under the said Guidelines. The intrinsic value, being             excluded Provident Fund where some of the
        the difference, if any, between market price and                  employees have voluntarily participated. In case of
        exercise price is treated as Personnel Expenses                   such employees, the company makes contribution
        and charged to Profit and Loss Account. The value                 to the provident fund.
        of the options are treated as a part of employee
                                                                          The Company participates in a Group Gratuity Cum
        compensation in the financial statements and are
                                                                          Life Assurance Scheme through a Master Policy with
        amortised over the vesting period.
                                                                          the Life Insurance Corporation of India towards
   i)   Borrowing Costs:
                                                                          which annual premiums are paid and charged
        Borrowing costs that are directly attributable to the
                                                                          against revenue.
        acquisition of an asset that necessarily takes a
        substantial period of time to get ready for its                   The Company participates in Group Superannuation
        intended use are capitalised as part of the cost of               Scheme for its senior executives through a Master
        that asset till the date it is put to use. Other borrowing        Policy with the Life Insurance Corporation of India
        costs are recognised as an expense in the period                  towards which monthly premiums are paid and
        in which they are incurred.                                       charged against revenue.
   j)   Research and Development Expenditure:                             The provision for leave encashment payable on
        Expenditure on in-house development of software                   retirement of an employee is made as per the
        is charged to the Profit and Loss Account in the                  Company's rules for all eligible employees on
        year in which it is incurred.                                     actuarial basis.                                         119
                                                                   Schedules Forming Part of The Accounts
                                                                        for The Year Ended March 31, 2004



SCHEDULE L: NOTES TO ACCOUNTS (Contd.)

2.   LIST OF SUBSIDIARIES
     Name                                                                                         Country of      Proportion of
                                                                                            Incorporation or       Ownership
                                                                                                 Residence             Interest
     Geometric Software Solutions, Inc.                                                                USA                100%
     Geometric Software Solutions, Pte. Ltd.                                                     Singapore                100%
     3D PLM Software Solutions Ltd.                                                                   India                70%
3.   CONTINGENT LIABILITIES
     a) Guarantees given by the Company's bankers against counter guarantees given by the Company Rs. 6,259,125
        (previous year Rs. 4,590,000).
     b) Claims against the Company not acknowledged as debt is Rs. 159,386 (previous year Rs. Nil) in respect of
        Income tax assessment of a previous year, which has been disputed by the Company. Pending settlement of the
        dispute, the Company has paid the amount to the authorities and the same has been disclosed under Advance
        Payment of Taxes.
4.   CAPITAL COMMITMENTS
     Estimated amount of contracts remaining to be executed on capital account to the extent not provided for (net of
     advances) Rs. 23,384,052 (previous year Rs. 89,923,831).
5.   CAPITALISATION OF BORROWING COSTS
     Borrowing cost directly attributable to eligible fixed assets capitalised during the year amounts to Rs. 3,593,910 (previous
     year Rs. 584,476).
6.   INVESTMENTS
     The Company has, during the year, entered into a strategic investment agreement with Virtual Supply Chain Engineering
     Inc. U.S.A. ("the Corporation") to invest US$ 500,000 to acquire up to 70,000 shares of the Corporation's Series A
     Preferred Stock, US$ 0.001 par value per share and a warrant to purchase shares of the Corporation's Common Stock,
     US$ 0.001 par value per share.
     Pursuant to the said agreement, the Company has, during the year, for the aggregate purchase price of US$ 200,000,
     acquired 28,000 shares of the Corporation's Series A Preferred Stock and a warrant to purchase 25,000 shares of the
     Corporation's Common Stock, at an exercise price of US$ 7.5 per share.
7.   EMPLOYEE STOCK OPTIONS
     a) The position of the existing schemes is summarized as under:
          Particulars                      Scheme II             Scheme III            Scheme IV            Scheme V
                                           Numbers               Numbers               Numbers              Numbers
      1. Details of the Meeting            Annual General        Annual General        Annual General       Annual General
                                           Meeting               Meeting               Meeting              Meeting
                                           (Sept. 21, 1999)      (July 14, 2000)       (June 22, 2001)      (June 18, 2003)
      2. Approved                          300,000               30,000                354,625              275,000
      3. Price per Option                  Rs. 150/- (pre IPO) National Stock          Closing price        Closing Price on
                                           Rs. 300/- (post IPO Exchange (NSE)          on National          NSE on date
                                           but pre listing),   market price            Stock Exchange       immediately
                                           NSE market price                            (NSE) on a day       preceding grant of
                                           (post listing)                              previous to the      options. The
                                                                                       day of grant.        options may be
                                                                                                            granted at market
                                                                                                            price computed in
                                                                                                            accordance with
                                                                                                            the ESOP
                                                                                                            Guidelines.
                                                                                                                                    120
Schedules Forming Part of The Accounts
for The Year Ended March 31, 2004

                                                                                                 Consolidated Financial Statements


SCHEDULE L: NOTES TO ACCOUNTS (Contd.)

          Particulars                      Scheme II             Scheme III            Scheme IV              Scheme V
     4.   Granted                               285,276                21,000                344,912             137,640
     5.   Vested                                215,590                15,000                118,200                  NIL
     6.   Exercised                             163,457                  5,950                63,535                  NIL
     7.   Forfeited / Surrendered                67,326                  1,000                67,099                5,092
     8.   Unexercised                            52,133                  9,050                54,665                  NIL
     9.   Lapsed                                     NIL                   NIL                    NIL                 NIL
     10. Vesting Schedule                   The options           The options        The options are   The options are to
                                           granted shall vest    granted shall vest to be granted in   be granted within
                                           in 4 equal annual     one year after the quarterly tranches two years. The
                                           installments          date of grant and    starting from    options granted
                                           beginning one         will be convertible August, 2001.     shall vest in 4
                                           year after the date   in three tranches   The options so    equal annual
                                           of grant.             between one and granted shall vest installments
                                                                 three years from    in 4 equal annual beginning one
                                                                 the grant.          installments      year after the date
                                                                                     beginning one      of grant.
                                                                                     year after the
                                                                                     date of grant.

          In the event of any further rights or bonus issue of equity shares prior to conversion, the entitlement of shares shall
          be suitably revised. In the event of a bonus issue, the number of shares shall be increased proportionately and the
          price revised downwards. The options vest in the employees to whom they are granted subject to the employee
          being in employment of the Company and his/her performance in that year.

     b)   During the year, the Company has granted 5,000 Options under the ESOP Scheme III on July 16, 2003, at the rate
          of Rs. 374/- per option. The market price of the option determined in accordance with the SEBI (Employee Stock
          Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, amounts to Rs. 386/- per option. The
          intrinsic value of the options, being the difference between the market price and the issue price amounting to Rs.
          59,800/- shown under Reserves, is to be amortised over the vesting period. The unamortised portion amounting
          to Rs. 17,483/- has been disclosed as Deferred Employee Stock Option Compensation.

8.   ACCOUNTING FOR LEASES
     The lease rentals charged during the period and maximum obligations on non-cancellable operating leases payable
     as per the rentals stated in the lease agreement are given in accordance with the Accounting Standard (AS-19) on
     "Leases" issued by the Institute of Chartered Accountants of India.
                                                                                                 (Amounts in Rupees)
          Particulars                                                                          Current Year      Previous Year
     1.   Lease Rentals paid during the year                                                    11,350,994          13,357,528
     2.   Future Lease Obligations
          -    Due within one year of the Balance Sheet date                                     9,833,900          12,467,952
          -    Due between one year and five years                                               1,949,816           7,147,992
          -    Due after five years                                                                     Nil                 Nil

9.   DEFERRED INCOME TAX
     The Company accounts for taxes on income to include the effect of timing differences in the tax expenses in the Profit and
     Loss Account and deferred tax asset / liability in the balance sheet in accordance with the Accounting Standard (AS-22) on
     "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. The Company has evaluated
     the various elements of tax computation to determine whether any deferred tax asset or liability needs to be recognised.        121
                                                                     Schedules Forming Part of The Accounts
                                                                          for The Year Ended March 31, 2004



SCHEDULE L: NOTES TO ACCOUNTS (Contd.)

    Tax Holiday under Section 10A of the Income tax Act, 1961, is available to the Company. In view of this, the deferred tax
    asset / liability in respect of timing differences that originate and reverse during the tax holiday period is ignored and
    deferred tax liability in respect of timing difference that originate during tax holiday period but reverse after the tax holiday
    period is recognised.

    The effects of significant timing differences that result in deferred tax assets and liabilities as at the end of the year are
    given below:

                                                                                                            (Amounts in Rupees)
    Particulars                                                                                  Current Year       Previous Year
    Current Tax Liability / (Asset)
    l    Depreciation                                                                              26,287,909          19,798,911

    l    Others                                                                                    (2,221,734)           (881,429)

    Deferred Tax Liability / (Asset) (Net)                                                         24,066,175          18,917,482
                                                                                                         Current          Previous
                                                                                                           Year               Year
                                                                                                        Rupees             Rupees
10. EARNINGS PER SHARE
    a)    Net Profit After Tax                                                                     208,493,583       170,544,047
    b)    Number of Equity Shares
          - As at the beginning of the year                                                           5,302,733         5,255,292
          - As at the end of the year                                                                 5,449,377        5,302,733*
    c)    Weighted Average Number of Equity Shares
          Basic                                                                                       5,346,654        5,277,307*
          Diluted                                                                                     5,404,477        5,371,370*
    d)    Earning Per Equity Share of Rs. 10 each.
          Basic                                                                                            39.00            32.32*
          Diluted                                                                                          38.58            31.75*
          * As Revised-(Refer Note 12 a).
11. SEGMENT REPORTING
    The Company’s primary segments consist of Projects and Products.
    The Secondary segments are geographical areas by location of customers
    PRIMARY BUSINESS SEGMENT RESULTS:
    A. Segment Revenue:
        Products                                                                                   111,556,022       122,090,553
        Projects                                                                                   948,715,606       719,071,138
        Total                                                                                    1,060,271,628       841,161,691
        Less: Inter Segment Revenue                                                                          -                 -
        Net Sale / Income from Operations                                                        1,060,271,628       841,161,691




                                                                                                                                        122
Schedules Forming Part of The Accounts
for The Year Ended March 31, 2004

                                                                                                   Consolidated Financial Statements


SCHEDULE L: NOTES TO ACCOUNTS (Contd.)

                                                                                                          Current        Previous
                                                                                                             Year            Year
                                                                                                           Rupee          Rupees
    B.     Segment Results
           Profit / Loss Before Tax and Interest From Each Segment
           Products                                                                                  48,256,203        56,898,768
           Projects                                                                                462,691,048        374,829,999
           Total                                                                                   510,947,251        431,728,767
           Less :     (i) Interest                                                                      106,878                   -
                      (ii) Other Unallocable Expenditure                                           240,185,398        223,442,688
                          net of unallocable income

           Total Profit Before Tax                                                                 270,654,975        208,286,079

    SECONDARY GEOGRAPHICAL SEGMENTS - REVENUE
         Region
           US                                                                                      724,360,280        596,972,324
           Europe                                                                                   211,686,399       208,150,989
           Asia Pacific                                                                              69,529,075        20,115,142
           India                                                                                     54,695,874        15,923,236

    TOTAL                                                                                        1,060,271,628        841,161,691

   Fixed Assets used in the company’s operations or liabilities contracted have not been identified to any of the reportable
   segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently
   not practicable to provide segment disclosures relating to total assets and liabilities.
12. GENERAL
   a)     The Company had, subsequent to the preparation of the Balance Sheet as at March 31, 2003, obtained legal
          opinion from external legal counsel that the allotment of 3,000 Options under the ‘Preferential Options Scheme
          2001’ was void ab initio. Consequently, the following items in the Company’s Financial Statements as at March 31,
          2003, were revised as under:

          Particulars                                                                            As at March 31, 2003

                                                                                               Original             Revised
                                                                                                 Rs.                  Rs.

          Share Capital                                                                       53,057,330            53,027,330

          Reserves and Surplus                                                              714,883,963          714,699,501

          Current Liabilities                                                                 98,584,692            98,812,692

          Proposed Dividend and Tax thereon                                                   23,942,121            23,928,583

   b)     Figures for the previous year have been regrouped / restated wherever necessary to conform to current year’s presentation.

   c)     Other information required by Schedule VI to the Companies Act, 1956, has been given only to the extent applicable.



                                                                                                                                       123
CONSOLIDATED FINANCIAL STATEMENTS
          AS PER US GAAP




                                    124
                                                                             Consolidated Financial Statements As Per US GAAP

                  Report of the Management                                     Independent Auditors' Report

The management is responsible for preparing the                 To the Board of Directors and Stockholders Geometric
Company's consolidated financial statements and related         Software Solutions Company Limited
information that appears in this annual report. The
                                                                We have audited the accompanying consolidated Balance
management believes that the consolidated financial
                                                                Sheets of Geometric Software Solutions Company Limited
statements fairly reflect the form and substance of
                                                                ("the Company"), Geometric Software Solutions Inc,
transactions, and reasonably present the Company's
                                                                Geometric Software Solutions Pte. Limited and 3D PLM
consolidated financial condition and results of operations in
                                                                Software Solutions Limited ("the Subsidiaries") as of March
conformity with United States Generally Accepted Accounting
                                                                31, 2004 and March 31, 2003 and the related consolidated
Principles. The management has included, in the Company's
                                                                Statements of income, Stockholders' Equity and Cash Flows
consolidated financial statements, amounts that are based
                                                                for each of the years in the three-year period ended March
on estimates and judgments, which it believes are
                                                                31, 2004. These consolidated financial statements are the
reasonable under the circumstances.
                                                                responsibility of the Company's management. Our
The Company maintains a system of internal procedures           responsibility is to express an opinion on these consolidated
and controls intended to provide reasonable assurance, at       financial statements based on our audits.
appropriate cost, that transactions are executed in
                                                                We conducted our audit in accordance with auditing
accordance with Company authorization and are properly
                                                                standards generally accepted in the United States of America.
recorded and reported in the financial statements, and that
                                                                Those standards require that we plan and perform the audit
assets are adequately safeguarded.
                                                                to obtain reasonable assurance about whether the financial
Kalyaniwalla & Mistry audits the Company's financial            statements are free of material misstatement. An audit
statements in accordance with the generally accepted            includes examining, on a test basis, evidence supporting
auditing standards in the United States of America.             the amounts and disclosures in the financial statements. An
                                                                audit also includes assessing the accounting principles used
The Board of Directors has appointed an audit committee
                                                                and significant estimates made by management, as well as
composed of outside directors. The committee meets with
                                                                evaluating the overall financial statement presentation. We
the management, internal auditors and the independent
                                                                believe that our audit provides a reasonable basis for our
auditors to review internal accounting controls and
                                                                opinion.
accounting, auditing and financial reporting matters.
                                                                The report on accounts of the Company's wholly owned
                                                                subsidiary, Geometric Software Solutions Inc, audited by
J. N. Godrej        Manu Parpia             K. A. Palia         another auditor in conformity with accounting principles
Chairman          Managing Director          Director           generally accepted in the United States of America (''US
                                                                GAAP") has been produced before us and the same has
Place : Mumbai                                                  been considered in preparing our report.
Dated : April 26, 2004
                                                                In our opinion, the consolidated financial statements referred
                                                                to above present fairly, in all material respects, the financial
                                                                position of the Company and its Subsidiaries as of March
                                                                31, 2004 and March 31, 2003, and the results of their
                                                                operations and their cash flows for each of the years in the
                                                                three year period ended March 31, 2004, in conformity with
                                                                US GAAP.


                                                                Kalyaniwalla & Mistry
                                                                Chartered Accountants
                                                                Place : Mumbai
                                                                Dated : April 26, 2004




                                                                                                                                   125
                                        Consolidated Balance Sheets as at March 31


                                                                        2004          2003
                                                                       TOTAL        TOTAL

ASSETS
CURRENT ASSETS
Cash and cash equivalents                                           1,219,242    1,229,604
Trade accounts receivable, net of allowances                        4,605,578    2,781,766
Investments (Available for sale)                                    4,155,644    3,132,480
Prepaid expenses and other current assets                           5,521,113    5,606,978
Prepaid income taxes                                                  687,117      395,512
Total current assets                                               16,188,694   13,146,340
Property, plant and equipment - net                                13,299,242    7,499,238
Other assets                                                          109,016       89,498
TOTAL ASSETS                                                       29,596,952   20,735,076



LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable                                                      227,452       94,753
Borrowings - Short Term                                                     -      632,909
Other accrued liabilities                                           4,951,262    2,604,797
Unclaimed Dividend                                                     15,980       11,566
Income taxes payable                                                  924,042      416,129
Total current liabilities                                           6,118,736    3,760,154

Deferred Tax Liability                                               571,583       418,189

Minority Interest                                                    720,007       368,149

STOCKHOLDERS' EQUITY
Common Stock, $0.23 par value :
Authorized - 7,000,000
Issued and outstanding - 5,449,377                                  1,306,878    1,273,081
Additional paid-in-capital                                          2,984,916     2,548,273
Retained Earnings                                                  17,039,123   13,389,437
Accumulated other comprehensive income                                763,189   (1,022,646)
Total stockholders' equity                                         22,094,106   16,188,145
Common Stock $0.23 Par value                                          92,520           439
(Unallotted 23565)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                           29,596,952   20,735,076




                                                                                              126
Consolidated Statements of Income for the
Years Ended March 31
                                                Consolidated Financial Statements As Per US GAAP

                                                     2004                2003             2002
                                                  TOTAL               TOTAL            TOTAL

REVENUE
Revenue                                        23,837,420         17,608,706       13,188,021
Cost of revenue                                13,181,059          9,599,143        7,658,709
Gross profit                                   10,656,361          8,009,563         5,529,312
OPERATING EXPENSES
Selling, general and administrative expenses    3,653,517          2,911,661        2,409,937
Depreciation                                    1,793,154          1,257,686          967,612
Total operating expenses                        5,446,671          4,169,347        3,377,549
Operating income                                5,209,690          3,840,216        2,151,763
Other income, net                                 699,055            467,664           689,380
Income before income taxes                      5,908,745          4,307,880        2,841,143
Provision for income taxes                        623,222            827,100          154,618
Profit after tax before extraordinary items     5,285,523          3,480,780        2,686,525
Extraordinary items                                      -                   -                 -
Profit after tax and extraordinary items        5,285,523          3,480,780        2,686,525
Minority Interest                               (734,310)           (389,743)           11,531
Net income                                      4,551,213          3,091,037        2,698,056
EARNINGS PER EQUITY SHARE
Basic
   On Income other than extraordinary items          0.85                0.59             0.51
   On Extra Ordinary Items                              -                   -                -
Net Income per share                                 0.85                0.59             0.51
Assuming Dilution
   On Income other than extraordinary items          0.84                0.56             0.50
   On extraordinary items                               -                   -                -
Net Income per share                                 0.84                0.56             0.50
Weighted equity shares used in computing
earnings per equity share
   Basic                                        5,346,654          5,277,307        5,245,116
   Diluted                                      5,442,476          5,511,172        5,343,052




                                                                                                   127
                                  Consolidated Statements of Cash Flows for the
                                                         Years Ended March 31

                                                                                                       in $
                                                                          2004          2003          2002

CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                           4,551,213     3,091,037     2,698,056

Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation                                                         1,793,154     1,257,686       967,612
Loss / (Profit) on sale of fixed assets                                  4,685        65,119          (698)
(Gain) / Loss on sale of Short Term Investments                      (115,986)     (204,064)       (49,983)
Diminution in value of investments                                         398             -         62,811
Deferred Tax Charge / (Benefit)                                        159,844       432,640       (31,728)
Minority Interest                                                      734,310       389,743       (11,531)

Changes in assets and liabilities
Trade Accounts Receivable (Net)                                    (1,823,811)     (709,917)      (872,798)
Prepaid Expenses & Other Current Assets                              (635,754)     (446,679)        356,650
Prepaid Income Taxes (net)                                             216,307        75,398        125,373
Other Assets                                                          (19,518)      (16,073)         11,701
Accounts Payable                                                       132,698     (158,435)         95,015
Other Accrued Liabilities                                           1,937,530        808,181        462,330
Net cash provided by operating activities                            6,935,070     4,584,636     3,812,810

CASH FLOWS FROM INVESTING ACTIVITIES
Inter Corporate Deposit (Placed)/Repaid                              1,209,956    (4,785,444)              -
Expenditure on property plant & equipment                          (8,096,631)    (2,512,525)   (1,632,681)
Proceeds from sale of property plant & equipment                        10,451         89,583        27,276
Purchase of investments (available for sale)                       (6,748,083)    (7,554,625)   (2,400,289)
Proceeds from sale of investments (available for sale)               5,840,508      9,547,824     1,182,992
Net cash (used in) investing activities                            (7,783,799)    (5,215,187)   (2,822,702)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of Allotted common stock                            470,440       124,029         38,253
Proceeds from sale of Unallotted common stock                           92,081           439              -
Proceeds from issue of minority stock                                        -              -        80,796
(Repayment of)/Proceeds from borrowings                              (632,909)       632,909              -
Dividends paid                                                       (886,491)      (415,116)      (44,775)
Net cash (used in) / provided by financing activities                (956,879)       342,261        74,274

Effect of exchange rate changes                                      1,795,245       432,570      (647,016)
Net (decrease) / increase in cash and cash equivalents during the year (10,362)      144,280       417,366

Cash and cash equivalents at the beginning of the year               1,229,604     1,085,324       667,958
Cash and cash equivalents at the end of the year                     1,219,242     1,229,604     1,085,324




                                                                                                               128
  Consolidated Statements of Stockholders’ equity
                                                                                                                                       in $
                                                        Equity shares    Additional Comprehensive Accumulated      Retained           Total
                                                                           paid-in        Income         other     Earnings   stockholders’
                                               Shares       Par value      capital               comprehensive                      equity
                                                                                                       income
  Balance as of March 31, 2001              5,243,753     1,260,742     2,403,126              -    (838,706)    8,433,855      11,259,017
  Common stock issued                          11,539          2,360      35,893                                                    38,253
  Comprehensive income
         Net income                                                                   2,698,056                  2,698,056       2,698,056
         Other comprehensive income
             Unrealized holding gains                                                    22,222
             Foreign currency translation                                             (647,016)
                                                                                      (624,794)     (624,794)                    (624,794)
                                                                                      2,073,262
  Cash dividends declared                                                                                        (330,175)       (330,175)

  Balance as of March 31, 2002              5,255,292     1,263,102     2,439,019              -   (1,463,500) 10,801,736      13,040,357

  Common stock issued                          47,441          9,979     109,254                                                  119,233
  Comprehensive income
         Net income                                                                   3,091,037                  3,091,037       3,091,037
         Other comprehensive income
             Unrealized holding gains                                                     8,284
             Foreign currency translation                                               432,570
                                                                                        440,854       440,854                     440,854




                                                                                                                                              Consolidated Financial Statements As Per US GAAP
                                                                                      3,531,891
  Cash dividends declared                                                                                        (503,336)       (503,336)

  Balance as of March 31, 2003              5,302,733     1,273,081     2,548,273              -   (1,022,646) 13,389,437      16,188,145

  Common stock issued                        146,644         33,797      436,643                                                  470,440
  Deferred Stock Compensation
  Comprehensive income
      Net income                                                                      4,551,213                  4,551,213       4,551,213
         Other comprehensive income
             Unrealized holding gains                                                    (9,410)
             Foreign currency translation                                             1,795,245
                                                                                      1,785,835     1,785,835
                                                                                      6,337,048
  Cash dividends declared                                                                                        (901,527)       (901,527)
      Balance as of March 31, 2004          5,449,377     1,306,878     2,984,916              -      763,189 17,039,123       22,094,106
129
                          Profit Reconciliation
           (Statutory Accounts and Accounts as per US GAAP)
                                                                                                                       in $
                                                                                       Year ended March 31
                                                                           2004                     2003            2002
Consolidated profit as per statutory accounts                         4,553,256                 3,527,281      2,692,145
(converted at average exchange rate)
Deferred tax (liability) / asset                                                 -              (402,235)           3,066
(allocable to continuing operations)
Cumulative effect on prior years (to March 31, 2000)
of changing to a different depreciation method                                   -               (60,958)                -
Other adjustments                                                        (2,043)                  26,949            2,845
Profit as per US GAAP                                                 4,551,213             3,091,037          2,698,056

                 Notes to the Consolidated Financial Statements
1.   Significant Accounting Policies                                  consolidated with the financial statements of the
                                                                      Company with appropriate recognition of Minority
     a.   The Company
                                                                      Interest.
          Geometric Software Solutions Company Limited
                                                                      Inter Company balances and transactions are
          (the "Company") is a leading Company providing
                                                                      eliminated on consolidation.
          innovative software services and products to the
          PLM/ CAD/ CAM markets worldwide. It has software       d.   Use of Estimates
          development centers in Mumbai and Pune in India
                                                                      The preparation of financial statements in
          and presence in USA, Germany, Japan and
                                                                      conformity with generally accepted accounting
          Singapore. The Company provides innovative
                                                                      principles requires management to make
          software solutions to the Product Lifecycle
                                                                      estimates and assumptions that affect the reported
          Management (PLM) market.
                                                                      amounts of assets and liabilities and disclosure
     b.   Basis of preparation of financial statements                of contingent assets and liabilities on the date of
                                                                      the financial statements and the reported amounts
          The accompanying consolidated financial
                                                                      of revenues and expenses during the reporting
          statements have been prepared in accordance with
                                                                      period. Such estimates include provision for
          United States Generally Accepted Accounting
                                                                      expenses, bad and doubtful debts, future
          Principles ("US GAAP"). All amounts are stated in
                                                                      obligations under employee benefit plans,
          US Dollars.
                                                                      employee ex-gratia, profit-linked bonus, useful lives
     c.   Principles of Consolidation                                 of property plant and equipment. Actual results
                                                                      could differ from those estimates.
          The accounts of its wholly owned subsidiaries,
          Geometric Software Services Inc and Geometric          e.   Property, plant and equipment
          Software Solutions Pte Limited are consolidated
                                                                      Property, plant and equipment are stated at cost.
          with the financial statements of the Company.
                                                                      The Company depreciates all property, plant and
          Geometric Software Services Inc. was incorporated
                                                                      equipment using the written down method or the
          in the United States on August 18, 1997 to design
                                                                      declining method. The estimated useful lives of the
          and sell computer software programs and to
                                                                      assets are as follows:
          provide computer services. Geometric Software
          Solutions Pte Limited. was incorporated in the              Building                                   28 years
          Republic of Singapore on April 10, 2002 for software        Computers                                   3 years
          development services and sale of software
                                                                      Furniture & Fixtures/EPABX systems         10 years
          products.
                                                                      Office Equipment                           13 years
          The Company owns 70% of the outstanding
                                                                      Vehicles                                   10 years
          common shares of 3D PLM Software Solutions
          Limited. The accounts of 3D PLM have been                   Electrical installation                     8 years
                                                                                                                              130
                                                                          Consolidated Financial Statements As Per US GAAP
     Leasehold land is amortised over the period of                  measurement of deferred tax assets is reduced, if
     lease.                                                          necessary, by a valuation allowance for any tax
                                                                     benefits of which future realization is uncertain.
     Capital work in progress consists of cost of capital
     projects not completed and not put to use.                 j.   Fair value of financial instruments
     In case of the fixed assets of the subsidiary,                  The carrying amounts of cash, cash equivalents,
     Geometric Software Solutions Inc., depreciation is              accounts receivable and accounts payable
     provided using accelerated methods over an                      approximate their respective fair values due to short
     estimated useful life of five years.                            maturities of these instruments.
f.   Impairment of long-lived assets                            k.   Revenue Recognition
     The Company evaluates the recoverability of its                 Revenue from time and material contracts for
     long-lived assets and certain identifiable                      software development is recognised on completion
     intangibles, if any, whenever events or changes in              of contracts or at stages as per the applicable terms
     circumstances indicate that their carrying amounts              and conditions agreed with the customers and
     may not be recoverable.                                         when the deliverables are despatched to
                                                                     customers. In case of fixed price contracts, revenue
g.   Investments
                                                                     is recognised on milestones achieved as specified
     Investment securities in which the Company                      in the contracts on the proportionate completion
     controls less than 20% voting interest are currently            method on the basis of work completed. Revenue
     classified as "available for sale" securities. Non-             from sale of traded software products and software
     readily marketable equity securities for which there            upgradation fee is recognised when the sale has
     are no readily determinable fair values are                     been completed with the passing of the title.
     recorded at cost. Investment securities designated              Revenue from software upgradation fees on
     as "available-for-sale" are carried at their fair value.        software developed by the Company is recognised
     Fair value is based on quoted market prices.                    over the period for which it is received.
     Unquoted securities are carried at cost, adjusted
                                                                l.   Earnings per share
     for declines in value judged to be other than
     temporary. Temporary unrealized gains and losses,               The basic earnings per share is computed using
     net of the related tax effect are reported as a                 the weighted average number of common shares
     separate component of stockholders' equity until                outstanding during the period. Diluted earnings per
     realized. Realized gains and losses and declines                share is computed using the weighted average
     in value judged to be other than temporary on                   number of common and dilutive common
     available-for-sale securities are included in the               equivalent shares outstanding during the period,
     statements of income. The cost of securities sold               using the treasury stock method for options and
     is based on the weighted average method. Interest               warrants, except where the results would be anti-
     and dividend income is recognized when earned.                  dilutive.
h.   Cash and cash equivalents                                  m.   Research and Development
     The Company considers Cash and cash                             Research and Development costs are expensed
     equivalents to include cash in hand and balances                as incurred. Software product development costs
     in current account and deposit accounts (with                   are expensed as incurred until technological
     maturity of three months or less) with banks.                   feasibility is achieved. Software product
                                                                     development costs incurred subsequent to the
i.   Income Taxes
                                                                     achievement of technological feasibility have not
     Income taxes are accounted for using the asset                  been significant and have been expensed as
     and liability method. Deferred tax assets and                   incurred.
     liabilities are recognized for future tax
                                                                n.   Retirement benefits to employees
     consequences attributable to differences between
     the financial statement carrying amounts of                     i.    Provident Fund
     existing assets and liabilities, and their respective
                                                                           The employees of the Company do not come
     tax bases and operating loss carry forwards.
                                                                           under the purview of the Employee's Provident
     Deferred tax assets and liabilities are measured
                                                                           Fund Scheme, 1952. The Company has
     using enacted tax rates expected to apply to taxable
                                                                           constituted an excluded Provident Fund where
     income in the years in which those temporary
                                                                           some of the employees have voluntarily
     differences are expected to be recovered or settled.
                                                                           participated. In case of such employees, the
     The effect of changes in tax rates on deferred tax
                                                                           Company makes contribution to the Provident
     assets and liabilities is recognized as income in
                                                                           Fund.
     the period that includes the enactment date. The
                                                                                                                             131
     ii.    Gratuity                                                  The Company records income and expenditure in
                                                                      foreign currency at the exchange rates prevailing
            The Company provides for all employees
                                                                      at the time of transactions. All exchange losses
            covered statutorily under gratuity a defined
                                                                      and gains arising out of fluctuations in the exchange
            retirement benefit plan. The Company annually
                                                                      rates are dealt with in the Profit and Loss Account.
            contributes a certain percentage of each
            employee's salary towards a Group Gratuity           q.   Concentration of risk
            Assurance Scheme maintained by the Life
                                                                      Financial instruments that potentially subject the
            Insurance Corporation of India.
                                                                      Company to concentrations of credit risk consist
     iii.   Superannuation                                            principally of cash equivalents and trade
                                                                      receivables. The Company's cash resources are
            The Company has set up a non-contributory
                                                                      invested with corporations and banks with high
            superannuation scheme for providing pension
                                                                      investment grade credit ratings. Limitations have
            benefits to its senior management cadre
                                                                      been established by the Company as to the
            employees. The Company monthly contributes
                                                                      maximum amount of cash that may be invested
            certain percentage of employee's salary
                                                                      with any such single entity. To reduce its credit risk,
            towards a Superannuation Scheme fund
                                                                      the Company performs ongoing credit evaluations
            maintained by the Life Insurance Corporation
                                                                      of clients.
            of India.
                                                                 r.   Stock based Compensation
o.   Foreign currency translation
                                                                      The Company uses the intrinsic value-based
     The financial statements are reported in US dollars.
                                                                      method of Accounting Principles Board ("APB")
     The functional currency of the Company is the
                                                                      Opinion No. 25 to account for its employee stock
     Indian rupee. The balance sheet accounts are
                                                                      based compensation plan. The Company has
     translated using the exchange rate in effect at the
                                                                      therefore adopted the pro forma disclosure
     balance sheet date and revenue and expense
                                                                      provisions of SFAS No. 123, "Accounting for Stock-
     items are stated at an average of the monthly
                                                                      Based Compensation" to the extent applicable.
     simple averages for twelve months. The gains or
     losses arising due to such conversion are reported     2.   Property, plant & equipment
     as other comprehensive income, separately under
                                                                 l    Property, plant and equipment - net
     Stockholders' equity.
p.   Foreign currency transactions
                                                                                                   As at March 31
                                                                                            2004                      2003
Land                                                                                 $1,572,808                  $507,657
Buildings                                                                             4,416,080                  2,163,858
Leasehold Improvements                                                                    83,541                    76,248
Computers                                                                             6,718,993                  3,716,604
Electrical Installations                                                               2,224,961                 1,319,339
Office Equipment                                                                        765,428                    563,463
Furniture & Fixtures                                                                  2,133,000                  1,588,772
Vehicles                                                                                  60,211                    43,521
Capital work-in-progress & Capital Advances                                             628,676                    668,184
                                                                                     18,603,698                10,647,646
Accumulated Depreciation                                                              5,304,456                  3,148,408
                                                                                     13,299,242                  7,499,238


Depreciation expenses amounted to $1,793,154, $1,257,686 and $967,612 for the financial years ended March 31,
2004, 2003 and 2002 respectively.
As the depreciation calculated on accelerated basis in case of the subsidiary, Geometric Software Solutions Inc.
amounted to $7,024, $7,886 and $ 28,920 for the financial years ended March 31, 2004, 2003 and 2002 respectively, no
adjustment has been made as there is no material impact on the consolidated financial statements.
                                                                                                                                132
                                                                            Consolidated Financial Statements As Per US GAAP

3.   Cash & cash equivalents
     The cost & fair values for cash and cash equivalents as at March 31, 2004 and 2003 are as follows
                                                                                                    Cost and fair value
                                                                                             2004                    2003
     Cash on hand                                                                        $ 23,533               $          -
     Balance with Bank on Current & Deposit accounts                                    1,195,709               1,229,604
                                                                                        1,219,242               1,229,604
4.   Accounts Receivable
The accounts receivable as of March 31, 2004 amounted to $4,605,578 net of allowance for doubtful debts of $ 68,698. The
accounts receivable as of March 31, 2003 amounted to $2,781,766 net of allowance for doubtful debts of $ 58,380. The age
profile is as given below:
     Period in days                                                                      2004 (%)                   2003 (%)
     0 - 30                                                                                 58.17                      58.25
     31 - 60                                                                                27.33                      25.24
     61 - 90                                                                                 8.03                      11.50
     More than 90                                                                            6.47                       5.01
                                                                                           100.00                    100.00
5.   Prepaid expenses and other current assets
     Prepaid expenses and other current assets consist of the following:
                                                                                            2004                     2003
     Deposits with Corporates                                                         $ 4,282,913              $ 4,983,861
     Loans to employees                                                                    31,863                   20,280
     Prepaid expenses                                                                    315,443                  259,672
     Other loans and advances                                                            890,894                  343,165
                                                                                        5,521,113               5,606,978

     Other loans and advances primarily represent payments to vendors for supply of goods and services.
6.   Other Assets
     Other assets represent the non-current portion of deposits placed.
7.   Related Parties
     The Company grants loans to employees for leased housing deposits and for acquiring assets such as vehicles and
     computers. Such loans are repayable over fixed periods ranging from 10 to 12 months. Interest is charged @ 10% on
     vehicle loans, @ 13% on computer loans, @ 13% on Lease housing deposit.
     The estimated fair value of the related party receivables amounts to $ 31,863 as at March 31, 2004 and $ 20,280 as at
     March 31, 2003.
8.   Stockholders' Equity
     The Company has only one class of capital stock referred to herein as equity shares. The Company has issued
     146,644 and 50,441 equity shares on exercise of options granted, during the financial year ended March 31, 2004 and
     March 31, 2003 respectively.
     The Company had, subsequent to the preparation of the Balance Sheet as at March 31, 2003 obtained legal opinion
     from external legal counsel that the allotment of 3,000 Options under the 'Preferential Options Scheme, 2001' was void
     ab initio. Consequently, the 3,000 equity shares allotted pursuant to the exercise of the said Options were cancelled
     and the number of equity shares issued during the year ended March 31, 2003 stand revised from 50,441 to 47,441.
     Voting
     Each holder of equity shares is entitled to one vote per share.
     Dividends
     Dividends will be paid, as and when declared, in Indian Rupees. As per the guidelines issued by the Securities &
     Exchange Board of India, shares issued by Companies are to rank pari-passu in all respects. Accordingly, the Company
     had provided for dividend for the entire year, even on shares issued during the year, instead of on pro-rata basis.
     The Company has declared a cash dividend of $901,527, $503,621 and $330,175 for the financial years ended March
     31, 2004, 2003 and 2002 respectively.
                                                                                                                               133
     Pursuant to cancellation of the 3,000 shares mentioned above, cash dividend declared for the year ended March 31,
     2003 stands revised to $503,336.
     Liquidation
     In the event of liquidation of the Company, the holders of the Common Stock shall be entitled to receive the remaining
     assets of the Company, after distribution of all preferential amounts, if any. Such amounts will be in proportion to the
     number of equity shares held by the shareholders.
     Stock Options
     There are no voting, dividend or liquidation rights to the holders of options issued under the Company's Stock Option
     plan.
9.   Employee Stock Option Plan
     l      The position of the existing schemes is summarized as under:
            Particulars                Scheme II                    Scheme III                  Scheme IV                Scheme V
                                       Nos.                         Nos.                        Nos.                     Nos.
      1. Details of the meeting        Extra-ordinary General       Annual General              Annual General           Annual General
                                       Meeting                      Meeting                     Meeting                  Meeting
                                       (September 21, 1999)         (July 14, 2000)             (June 22, 2001)          (June18, 2003)
      2. Approved                      300,000                      30,000                      354,625                  275,000
      3. Price per option              l $3.83 (pre IPO)            National Stock Exchange     Closing price on NSE     Closing Price on NSE
                                       l $6.86 (post IPO but pre    (NSE) market price.          on a day previous to    on date immediately
                                         listing)                                                the day of grant.       preceding grant of
                                       l NSE market price                                                                options. The options
                                        (post listing)                                                                   may be granted at
                                                                                                                         Market Price computed
                                                                                                                         in accordance with the
                                                                                                                         ESOP Guidelines.
      4.    Granted                                   285,276                     21,000                 344,912                     137,640
      5.    Vested                                    215,590                     15,000                 118,200                           Nil
      6.    Exercised                                 163,457                      5,950                  63,535                           Nil
      7.    Forfeited / surrendered                    67,326                      1,000                  67,099                        5,092
      8.    Vested and unexercised                     52,133                      9,050                  54,665                           Nil
      9.    Lapsed                                         Nil                         Nil                      Nil                        Nil
      10.   Vesting Schedule           The options are to be        The options granted shall   The options are to be    The options are to be
                                       granted in quarterly         vest one year after the     granted in quarterly     granted within two
                                       tranches starting from       date of grant and will be   tranches starting from   years. The options so
                                       October 1999. The options    convertible in three        August, 2001. The        granted shall vest in 4
                                       so granted shall vest in 4   tranches between one        options so granted       equal          annual
                                       equal annual installments    and three years from the    shall vest in 4 equal    installments beginning
                                       beginning one year after     grant.                      annual installments      one year after the date
                                       the date of grant.                                       beginning one year       of grant.
                                                                                                after the date of the
                                                                                                grant.
     l      In the event of any further rights or bonus issue of equity shares prior to conversion, the entitlement of shares shall
            be suitably revised. In the event of a bonus issue, the number of shares shall be increased proportionately and the
            price revised downwards. The options vest in the employees to whom they are granted subject to the employee
            being in employment of the Company and his/her performance in that year.




                                                                                                                                                   134
                                                                             Consolidated Financial Statements As Per US GAAP

Deferred Stock Compensation :
Year ended March 31, 2004 : The Company has not recorded any deferred compensation with respect to 143,332 stock
options granted during the year for the difference, on the grant date, between the exercise price and the market value of the
Company's shares as the options were granted at a price equivalent to the closing market price on the National Stock
Exchange of India on a day previous to the day of grant or the market price as determined by SEBI (Employee Stock Options
Schemes and Employee Stock Purchase Scheme) Guidelines, 1999.
Year ended March 31, 2003 : The Company has not recorded any deferred compensation with respect to 157,400 stock
options granted during the year for the difference, on the grant date, between the exercise price and the market value of the
Company's shares as the options were granted at a price equivalent to the closing market price on the National Stock
Exchange of India on a day previous to the day of grant.
Year ended March 31, 2002 : The Company has not recorded any deferred compensation with respect to 202,420 stock
options granted during the year for the difference, on the grant date, between the exercise price and the market value of the
Company's shares as the options were granted at a price equivalent to the closing market price on the National Stock
Exchange of India on a day previous to the day of grant.
l   The Company has adopted the pro forma disclosure provisions of SFAS No 123. Had compensation cost for the
    Company's Stock Option Plan been determined in a manner consistent with the fair value approach described in SFAS
    No. 123, the Company's net income and basic earnings per share as reported would have been reduced to the pro
    forma amounts indicated below :
                                                                                        2004             2003                2002
    Net income
    As reported                                                              $4,551,213           $3,091,037            $2,698,056
    Adjusted pro forma                                                         3,986,213           2,742,037             2,609,989
    Basic earnings per share
    As reported                                                                     $0.85               $0.59                $0.51
    Adjusted pro forma                                                                  0.75             0.52                 0.50
    The fair value of each warrant is estimated on the date of grant using an option pricing model which takes into
    consideration the following assumptions :
                                                                                                         Year ended March 31
                                                                                        2004             2003                2002
    Dividend yield                                                                 1.33%                0.90%               0.68%
    Expected life                                                                 4 years              4 years             4 years
    Risk free interest rates                                                            4.5%              8%                 9.5%
    Volatility                                                                          34%              45%                  85%
l   Activity in the options held under all the schemes of the Employee Stock Option Plan and Preferential Stock Option Plan
    during the financial years ended March 31, 2004, 2003 and 2002 is as follows :
                                                       2004                        2003                            2002
                                             No. of shares    Weighted         No. of      Weighted            No. of    Weighted
                                               arising out     average        shares       average            shares     average
                                                of options     exercise   arising out      exercise       arising out    exercise
                                                                  price   of options           price      of options         price

    Scheme I
    Outstanding at the
    beginning of the year                                -            -             -              -        39,532           $1.2
      Granted                                            -            -             -              -             -              -
      Forfeited                                          -            -             -              -        39,532           $1.2
      Exercised                                          -            -             -              -             -              -
    Outstanding at the end of the year                   -            -             -              -             -              -
    Exercisable at the end of the year                   -            -             -              -             -              -

                                                                                                                                     135
                                                    2004                        2003                           2002
                                          No. of shares    Weighted         No. of     Weighted            No. of   Weighted
                                            arising out     average        shares      average            shares    average
                                             of options     exercise   arising out     exercise       arising out   exercise
                                                               price   of options          price      of options        price
Scheme II
Outstanding at the beginning
of the year                                   180,055         $3.80     211,066          $3.80         227,149         $3.86
   Granted                                          -             -           -              -           5,600         $1.74
   Forfeited                                    4,838         $3.80       3,570          $3.80          10,144         $3.86
   Exercised                                  120,724         $3.80      27,441          $3.80          11,539         $3.86
Outstanding at the end of the year             54,493         $3.80     180,055          $3.80         211,066         $3.80
Exercisable at the end of the year             52,133         $3.80     112,694          $3.80          85,351         $3.86
Scheme III
Outstanding at the beginning
of the year                                     15,000        $6.28      10,000          $5.09            6,000        $8.90
    Granted                                      5,000        $8.62        5,000         $8.67            5,000        $1.28
    Forfeited                                         -            -             -             -          1,000        $8.90
    Exercised                                    5,950        $6.28              -             -                -             -
Outstanding at the end of the year              14,050        $6.87      15,000          $6.28          10,000         $5.09
Exercisable at the end of the year               9,050        $6.28      10,000          $5.09            5,000        $8.90
Scheme IV
Outstanding at the beginning
of the year                                   309,632         $5.50     190,280          $1.73                  -             -
    Granted                                        692        $8.41     152,400         $10.20         191,820         $1.73
    Forfeited                                   52,651        $5.50      12,908          $1.73            1,540        $1.73
    Exercised                                   43,395        $5.50      20,140          $1.73                  -             -
Outstanding at the end of the year            214,278         $5.51     309,632          $5.50         190,280         $1.73
Exercisable at the end of the year              54,665        $5.50      26,763          $1.73                  -             -
Scheme V
Outstanding at the beginning of the year              -            -             -             -                -             -
    Granted                                   137,640       $10.37               -             -                -             -
    Forfeited                                    5,092      $10.37               -             -                -             -
    Exercised                                         -            -             -             -                -             -
Outstanding at the end of the year            132,548       $10.37               -             -                -             -
Exercisable at the end of the year                    -            -             -             -                -
l     The following table summarizes information about stock options outstanding as of March 31, 2004
                                           Outstanding                                 Exercisable
Range of           No. of shares     Weighted average      Weighted average          No. of shares    Weighted average
exercise price     arising out of           remaining         exercise price         arising out of      exercise price
                         options        contractual life                                   options
$3.80 - $10.37          415,369                    2.44                $3.57               115,848                    $4.80




                                                                                                                                  136
                                                                           Consolidated Financial Statements As Per US GAAP

10. Other accrued liabilities & unclaimed dividend
                                                                                                            As at March 31
                                                                                                    2004            2003
    Accrued compensation to staff                                                               $112,877        $154,213
    Post Retirement Benefits                                                                     320,134         129,263
    Accrued & Unclaimed dividends                                                                519,316         341,741
    Provision for free service under product warranties                                             2,523           2,303
    Advances from Customers                                                                    1,686,628         713,928
    Unearned Revenue                                                                             491,557         298,721
    Other liabilities                                                                          1,834,207          976,194
                                                                                               4,967,242        2,616,363
11. Employee post-retirement benefits
    a.   Gratuity
         In the financial year ended March 31, 2004, 2003 & 2002, the Company contributed, $78,466, $59,523 & $41,353
         respectively to the gratuity plan managed by the Life Insurance Corporation of India.
    b.   Superannuation Benefits
         The Company contributed $123,922, $ 101,958 & $ 75,786 to the superannuation plan maintained by the Life
         Insurance Corporation of India in the financial years ended March 31, 2004, 2003 and 2002 respectively.
12. Earnings per share
    The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity
    share :
                                                                                                     Year ended March 31
                                                                                 2004              2003              2002
    Basic earnings per equity share - weighted average number
    of common shares outstanding                                            5,346,654         5,277,307         5,245,116
    Effect of dilutive common equity shares
    - stock options outstanding                                                95,822           233,865            97,936
    Diluted earnings per equity share - weighted average number of
    common shares and common equivalent shares outstanding                  5,442,476         5,511,172         5,343,052
13. Segment Reporting
    The Company's primary segments consist of projects and products.
    The Secondary segments are geographical areas by location of customers
                                                                                                                         $
                                                                                 2004              2003              2002
    PRIMARY BUSINESS SEGMENT RESULTS

    A    Segment Revenue
         Products                                                           2,622,116         2,525,140         2,052,112
         Projects                                                          21,215,304       15,083,566         11,135,909
         Net sale / Income from Operations                                 23,837,420        17,608,706        13,188,021




                                                                                                                              137
    B      Segment Results                                                     2004            2003             2002
           Profit / Loss Before Tax and Interest from each Segment
           Products                                                        1,053,859      1,176,810          677,877
           Projects                                                       10,104,631      7,752,430        5,419,586
           Total                                                          11,158,490      8,929,240        6,097,463
           Less: (I) Interest                                                  2,334              83                -
           (II) Other unallocable Expenditure net of unallocable income    5,247,411      4,621,277        3,256,320
           Total Profit Before Tax                                         5,908,745      4,307,880        2,841,143

    SECONDARY GEOGRAPHICAL SEGMENT - REVENUE
           United States                                                  16,366,544     12,558,253       11,220,711
           Europe                                                          4,757,949      4,305,088        1,454,100
           Asia Pacific                                                    1,518,433        416,032          459,074
           India                                                           1,194,494        329,333           54,136
           Total                                                          23,837,420     17,608,706       13,188,021


    The Fixed Assets used in the company's operations or Liabilities contracted have not been identified to any of the
    reportable segments, as the fixed assets are used interchangeably between the segments. The Company believes
    that it is currently not practicable to provide segment disclosure relating to total assets and liabilities.
    Significant Clients
                                                                                                Year ended March 31
                                                                               2004            2003             2002
    Client 1 - % of revenue                                                  36.20%          38.86%           19.49%
           Receivable as at year end                                       $604,592         $22,429         $280,577
    Client 2 - % of revenue                                                  14.06%          16.78%           15.93%
           Receivable as at year end                                       $352,872                -        $397,616
    Client 3- % of revenue                                                    7.69%           5.96%           15.80%
           Receivable as at year end                                       $349,813        $297,655         $109,456
14. Other Income - Net
    Other income, net, consists of the following :
                                                                                                Year ended March 31
                                                                               2004            2003             2002
    Dividend Income                                                         $88,936         $11,342         $508,068
    Interest income                                                         381,479         213,338           21,642
    Rent                                                                     94,986          98,135          101,785
    Gain / (Loss) on sale of Investments                                    115,986         204,064           49,983
    (Loss) / Gain on sale of Fixed Assets                                    (4,685)        (65,119)             698
    Other Income                                                             24,687            5,987            7,204
    Interest expenses                                                        (2,334)            (83)                -
                                                                            699,055         467,664          689,380
15. Research & Development
    The cost incurred on account of Research & Development in the financial year ended March 31, 2004, 2003 and 2002
    has been apportioned to the respective heads of expense.




                                                                                                                         138
                                                                               Consolidated Financial Statements As Per US GAAP

16. Income Taxes
   l   The provision for Income Taxes is composed of :
                                                                                     2004               2003               2002
       Current Taxes
       Domestic Taxes                                                           $334,993           $342,545             $55,043
       Foreign Taxes                                                             128,385              51,915            131,303
                                                                                 463,378             394,460            186,346
       Deferred Taxes
       Domestic Taxes                                                            171,259            437,306            (24,407)
       Foreign Taxes                                                             (11,415)             (4,666)            (7,321)
                                                                                 159,844            432,640            (31,728)

       Aggregate Taxes                                                           623,222             827,100            154,618
   l   The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities and a description
       of the financial statement items that created these differences are :
                                                                                     2004               2003               2002
       Deferred Tax (Assets) / Liabilities
       Property, plant & equipment                                            $1,688,785         $1,160,886             $37,608
       Operating Losses carried forward                                          (18,830)           (53,050)           (93,146)
       Others                                                                   (142,728)           (51,682)           (33,337)
                                                                               1,527,227           1,056,154           (88,875)
       Less : Valuation allowance                                                  18,830             53,050                    -
       Net deferred tax Liabilities / (Assets)                                 1,546,057           1,003,104           (88,875)
   l   The difference in net deferred tax expense / (benefit) during the years ended March 31, 2004, 2003 and 2002 has
       been allocated as follows :
                                                                                     2004               2003               2002
       Deferred Tax expense / (benefit)
       allocated to continuing operations                                       $159,844           $432,640           $(31,728)
       Stockholder's equity - Unrealized gain on investments                       (2,946)             4,721             11,668
                                                                                 156,898            437,361            (20,060)
   l   Reconciliation of tax rates
                                                                                                         Year ended March 31
                                                                                     2004               2003               2002
       Income before taxes                                                    $5,908,745         $4,307,880         $2,841,143
       Statutory tax rate                                                         35.88%             36.75%             35.70%
       Income tax expense at the statutory tax rate                           $2,120,057         $1,583,146           1,014,288
       Increases/(Reductions) in taxes on account of
       Accelerated/specific tax deductions :                                        2,977           (14,479)           (84,441)
       Income exempt from income taxes                                        (1,388,775)        (1,085,488)          (827,495)
       Income charged at rates other than statutory tax rate                     (44,423)           (60,515)           (17,845)
       Expenses disallowed for tax purposes                                               -                  -           22,424
       Others                                                                    (66,614)            404,436             47,687
       Income tax expense reported                                               623,222             827,100            154,618




                                                                                                                                     139
17. Lines of Credit
    The Company has no lines of credit from its bankers for working capital requirements.
18. Commitments
    l    The Company has entered into Capital Contracts with various vendors. The estimated amount remaining to be
         executed as at March 31, 2004, 2003 and 2002 are $538,927, $1,891,540, and $76,844 respectively.
    l    The Company entered into non-cancelable leases for office space in Merrimack, New Hampshire, commencing
         from April 26, 2000 for four years ending May 31, 2004 with an option for an additional two-year period, Vikhroli,
         Mumbai from July 15, 2002 upto December 31, 2004 and Bangalore commencing from December 22, 2003 for two
         years ending December 21, 2005. The leases also contain provisions for additional charges for operating expenses.
    Future minimum lease payments are as follows :
    Year ended March 31,                                     Amount
    2005                                                   $226,640
    2006                                                     44,937
    2007                                                         Nil
                                                            271,577




                                                                                                                              140
                                                                                                                                                   The Management Council




The heartbeat of Geometric . . .


                                                                                                                           Standing (L to R): Kalidas S., Deepankar Ghosh, Anant Govande, Anil Risbud, Sailesh Shenoi, B. R. Lanka,
                                                                                                                           Sandeep Kulkarni.
                                                                                                                                                                                                                       ,
                                                                                                                           Sitting (L to R): Ajit Joshi, Hemant Gadgil, Manu Parpia, Kalpana Jaishankar, Shashank Patkar Rajiv Salkar.



                                                                                                                          “The search for quality service is unending. It's more a journey than a destination. It is a
                                                                                                                          challenge that renews itself every day, and demands our utmost effort.”

                                                                                                                          This has become a way of life to all Geometricians. To them, 'quality' is never confined to
                                                                                                                          'product quality' alone. They demand quality performance in every phase of their
                                                                                                                          operations - in the belief that each person doing his or her job knows it best, and will have
                                                                                                                          the best ideas on how to improve it - that’s the Geometric way!




... productive partnerships
Partnership is the single most powerful and intrinsic             The cover depicts our philosophy of scaling heights
component in Geometric's business operations.                     with our partners. The arrows connote growth that the
                                                                  company has achieved and intends to incessantly
Over the years, the company has demonstrated its                  pursue. The visual represents the linkage of our
ability to serve two competing partners                           growth and global reach achieved through
simultaneously. This is based on the twin principles of           partnerships - the power of productive partnerships.
trust and integrity, characteristics that our partners
have come to expect from and respect in us.




                                                S o f t w a r e S o l u t i o n s                                                                                      S o f t w a r e S o l u t i o n s

				
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posted:8/16/2011
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