Geometric

The Directors have pleasure in presenting their report on the business
 and operations of the Company for the year ended March 31, 2008.
 
 1A. FINANCIAL RESULTS (Unconsolidated):
 
 The Companys operating performance (unconsolidated) during the year
 ended March 31, 2008 as compared to the previous year, is summarized
 below.
 
                                                       (Rupees Million)
                                           Current Year   Previous Year
 
 SALES AND OTHER INCOME                       2,012.29       1,972.86
 Profit before Interest, Depreciation and Tax   375.03         479.48
 Less: Interest                                  14.99           8.84
 Less: Depreciation                              93.20         121.34
 PROFIT BEFORE TAXES                            266.84         349.30
 Less: Tax Adjustments in respect of earlier Years 9.26             -
 Less: Provision for Taxes                       43.39          40.73
 NET PROFIT                                     214.19         308.57
 Surplus brought forward                       1124.28         908.32
 Residual Dividend for previous year             (0.01)         (3.24)
 Corporate Dividend Tax thereon                      -          (0.45)
 PROFIT AVAILABLE FOR APPROPRIATION           1,338.46       1,213.20 
 APPROPRIATIONS
 Proposed Dividend                               49.68          49.54
 Corporate Dividend Tax                           8.44           8.42
 Transfer to General Reserve                     22.35          30.96
 Surplus carried forward                       1257.99       1,124.28
 TOTAL                                        1,338.46       1,213.20
 
 1B. FINANCIAL RESULTS (Consolidated):
 
 The Companys operating performance during the year ended March 31,
 2008 as compared to the previous year, is summarized below:
 
                                                       (Rupees Million)
                                         Current Year     Previous Year
 
 SALES AND OTHER INCOME                      5,061.74        3,942.63
 Profit before Interest, Depreciation and Tax  696.99          753.44
 Less: Interest                                 56.92           34.70
 Less: Depreciation                            197.62          212.28
 PROFIT BEFORE TAXES                           442.45          506.46
 Less: Tax Adjustments in respect of earlier 
 Years                                           9.09               -
 Less: Provision for Taxes                      56.81           67.63
 PROFIT AFTER TAX AND BEFORE EXTRA ORDINARY 
 ITEMS                                         376.55          438.84
 Less: Prior Period Adjustments                  0.27               - 
 PROFIT AFTER TAXES BEFORE MINORITY INTEREST   376.28          438.84
 Less: Minority Interest in Net Profit of 
 Subsidiaries                                   54.98           64.44
 NET PROFIT                                    321.30          374.39
 Surplus brought forward                      1330.52        1,079.05
 Residual Dividend for previous Year             0.01           (3.24)
 Corporate Dividend Tax thereon                     -           (0.45)
 PROFIT AVAILABLE FOR APPROPRIATION          1,651.83        1,449.75
 APPROPRIATIONS:
 Proposed Dividend                              49.68           49.54
 Corporate Dividend Tax                          9.50            8.42
 Transfer to General Reserve                    46.85           45.17
 Corporate Dividend Tax paid by Subsidiary      17.24           16.10
 Surplus carried forward                      1526.59        1,330.52
 TOTAL                                       1,651.83        1,449.75
 
 2.  DIVIDEND
 
 The Directors recommend payment of dividend for the year at the rate of
 Rs. 0.80 per Equity Share of Rs. 2 each, as against dividend at the
 rate of Rs. 0.80 per Equity Share of Rs. 2 each paid last year.
 
 3.  BUSINESS REVIEW
 
 The Financial Year 2007-08 saw Geometric undergo significant change and
 undertake a number of significant initiatives focused on growth.
 
 a.  The consolidated revenues for year ended FY08 grew from USD 85.16
 Mn in FY07 to USD 121.56 Mn, a growth of 42.7%. Revenues in rupee terms
 grew from INR 383.07 Cr to INR 485.83 Cr, a growth of 26.8%. For the
 same period, profit-after-tax reduced from INR 37.44 Cr to INR 32.13
 Cr, a decline of 14.2% over the previous year.  This drop was on
 account of an appreciation of the rupee by approximately 12% and the
 full year consolidation of Geometric Engineering, Inc (i.e.  Modern
 Engineering) as against consolidation of 5 months of this business in
 FY07, after acquisition.
 
 b.  The business Units of the company - Software services, Engineering
 services and Products recorded the following trends in the year FY08:
 
 Software services contribution to the topline decreased from 64.2% in
 FY07 to 55.9% in FY08. In absolute terms this business grew by 24% over
 the previous year.
 
 Engineering services contribution to the topline increased from 25.10%
 in FY07 to 36.9% in FY08. This was on account of an increase in the
 products engineering business (in-house engineering business) by 34% in
 absolute terms over previous year as well as full year business
 consolidation of the acquired engineering business (Geometric
 Engineering Inc) in FY08 as against a 5 month business consolidation in
 the previous year.
 
 Products business contribution to the topline decreased from 10.7% to
 7.2%. In absolute terms the products business remained flat in
 comparison to the previous year.
 
 c.  The 4 regions in which the company operates recorded the following
 trends:
 
 US geography exposure grew from 62.8% in FY07 to 69.3% in FY08
 
 Europe’s share of revenue dropped from 29.4% in FY07 to 20.2% in FY08
 
 APAC’s share increased from 5.4% in FY07 to 7.6% in FY08
 
 India’s share remained flat and was at 2.5% in FY07 compared to 2.8% in
 FY08
 
 Much of these changes were on account of full year consolidation of
 Geometric Engineering, Inc.  (Modern Engineering), which has US centric
 operations, as compared to 5 month business consolidation in the
 previous year.
 
 d.  Trends in various vertical segments that the company catered to
 were as follows:
 
 Software ISV & Partners: Segment share of business reduced from 58.6%
 in FY07 to 51.1% in FY08. In absolute terms this segment grew by 24%
 over the previous year.
 
 Automotive: Segment share of business increased from 23.8% in FY07 to
 30.3% in FY08. In absolute terms this segment recorded a growth of 82%
 over the previous year.
 
 Agricultural and Construction Equipment: Segment share of business
 increased from 4.4% in FY07 to 10.2% in FY08. In absolute terms this
 segment recorded a growth of 231% over the previous year.
 
 Industrial and Marine Engineering: Segment share of business dropped
 from 5% in FY07 to 4.2% in FY08. In absolute terms this segment
 recorded a year–on–year growth of 20%.
 
 The reduction in the share of business from partners was a planned one
 with the company focusing on only strategic partnerships. We had taken
 specific initiatives to drive our direct to market strategy and the
 growth in the share of business from various verticals is a testimony
 of movement of business in this direction.
 
 e.  Total number of employees (in the year end) increased from 2551 in
 FY07 to 2968 in FY08, an addition of 417 employees. New recruitment in
 the year was 1017 in FY08 as compared to 937 in FY07. In FY08 13.6% of
 our workforce are women as compared to 11% in FY07.  Employees from
 other nationalities (other than Indian) constituted 16% of our
 workforce in FY08 as compared to 7.5% (on a prorated basis due to 5
 month consolidation of acquired business) in FY07.
 
 The Company had announced its three year strategic plan in FY07 and had
 identified 6 strategic initiatives that it would focus on:
 
 Extend our offerings to span the entire product realization value
 chain. Extend into new verticals.  Differentiate with products.
 
 Leverage the global delivery network to offer customers the best
 combination of proximity, cost efficiencies and capacity, on a strong
 quality foundation.
 
 Build a strong brand and increase reach to market by going direct to
 end users of our services.
 
 Strengthen select strategic partnerships to extend value proposition
 and improve go-to-market effectiveness.
 
 Deploy an organizational model that will create a foundation for
 integration and facilitate scaling.
 
 Achieve growth acceleration in key areas through acquisition.
 
 All initiatives driven by the company this year were directed at
 achieving these goals and the company will continue to drive these
 initiatives into the next year.
 
 4.  DIRECTORS
 
 Dr. Richard Riff and Mr. Milind Sarwate, Directors of the Company,
 retire by rotation at the ensuing Annual General Meeting and being
 eligible offer themselves for reappointment.
 
 Mr. Marc Dulude who was a member of the Board for around 12 years has
 resigned from the board with effect from 1st April, 2008. We place on
 record our deep appreciation of the services by Mr. Dulude during his
 tenure on the Board. Mr. Dulude participated actively in deliberations
 of Board. The company immensely benefited by his foresightfulness.
 
 5.  INVESTMENTS
 
 During the year, Geometric Americas, Inc., a wholly-owned subsidiary of
 the Company bought 17.74% shares of Geometric Technologies, Inc.
 (Teksoft) for US$ 577,018.  Accordingly, Geometric Technologies has
 become a wholly owned subsidiary of the Company.
 
 6.  AUDITORS
 
 M/s. Kalyaniwalla & Mistry, Chartered Accountants, Auditors of the
 Company, retire at the forthcoming Annual General Meeting and being
 eligible offer themselves for reappointment.
 
 7.  AUDIT COMMITTEE
 
 The Company has an Audit Committee consisting of four non-executive
 Directors of the Company, viz., Mr. Milind Sarwate - Chairman, Dr. K.
 A. Palia, Dr. Richard Riff and Ms. Anita Ramachandran.
 
 8.  CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
 ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 The particulars as prescribed under Section 217 (1) (e) of the
 Companies Act, 1956, read with the Companies (Disclosure of Particulars
 in the Report of the Board of Directors) Rules, 1988, are set out in
 the Annexure A to this Report.
 
 9.  SUBSIDIARIES
 
 The Company has the following wholly-owned Subsidiary Companies:
 
 a.  Geometric Americas, Inc., U.S.A.
 
 b.  Geometric Asia Pacific Pte. Ltd., Singapore
 
 c.  Geometric Technologies, Inc.
 
 The Company has the following other Subsidiary Companies:
 
 a.  3D PLM Software Solutions Ltd., in which the Company holds 70%
 stake.
 
 b.  Geometric Engineering, Inc. (on 1st April 2008 it merged with
 Geometric Americas, Inc.)
 
 c.  Geometric China, Inc. (Subsidiary of Geometric Asia Pacific Pte.
 Ltd., Singapore)
 
 d.  Geometric SRL, Romania (Subsidiary of Geometric Engineering, Inc.)
 
 e.  Geometric SAS, France (Subsidiary of Geometric Engineering, Inc.)
 
 As required under Section 212 of the Companies Act, 1956, the
 subsidiaries audited statement of accounts for the year ended March
 31, 2008, are attached to the Balance Sheet.
 
 10.  PARTICULARS OF EMPLOYEES
 
 As required by the provisions of Section 217 (2A) of the Companies Act,
 1956, as amended, read with Companies (Particulars of Employees) Rules,
 1975, the names and other particulars of the employees are set out in
 the Annexure B to this Report.
 
 11.  STOCK OPTIONS
 
 The disclosures required to be made under SEBI (Employee Stock Option
 Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are given
 in the Annexure C to this Report.
 
 12.  CORPORATE GOVERNANCE
 
 As required under the Listing Agreement with Stock Exchanges a report
 on Corporate Governance is given in the Annexure D to this Report.
 
 13.  EMPLOYEE RELATIONS
 
 The Company continued to have cordial relations with its employees.
 
 14.  DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act, 1956, the
 Directors, based on the representations received from the Operating
 Management, and after due enquiry, confirm:
 
 a. that in preparation of the annual accounts, the applicable
 accounting standards have been followed and there has been no material
 departure;
 
 b.  that the selected accounting policies were applied consistently and
 the Directors made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at March 31, 2008 and of the profit of the Company for
 the year ended on that date;
 
 c.  that proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 d.  that the annual accounts have been prepared on a going concern
 basis.
 
 15. ACKNOWLEDGEMENTS
 
 The Directors gratefully acknowledge the contribution made by the
 employees towards the success of the Company. The Directors are also
 thankful for the co- operation, support and assistances received from
 the banks, investors, customers, Central and State Government
 departments and local authorities.
 
 The Directors would also like to acknowledge the continued support of
 the Companys shareholders.
 
                                    On behalf of the Board of Directors
 
                      J. N. GODREJ              DR. RAVI GOPINATH
                      Chairman                  Managing Director
                                                     & CEO
 Mumbai
 Date: April 18, 2008