MANAGEMENT DISCUSSION AND ANALYSIS

Industry Overview and Developments

Way back in 1956, Arthur C Clarke, a noted science fiction writer, in a letter described his views of the future, featuring a satellite system 'whereby anyone could locate himself'. In 21st century, the brdiction looks blatantly accurate. Irrespective of whether it was a mere forecast or his ability to visualize the importance of Geographical Information System (GIS) services well in advance, there is no denying of the fact that GIS plays an important role in all walks of our modern life including major decision making across industries. Today, GIS is a multi-billion dollar industry with a growth rate of close to 10%.

With a contribution of more than 30% of the industry's annual revenue, Governments have been the major customers of GIS industry. Be it municipalities, defense, national security, infrastructure or governance, dependency of governments on GIS is increasing with every passing day. It provides a better understanding of the spatial phenomenon that occurs around us. Such phenomenon however is complex in nature and requires a vast collection of data; integration of geographic data from different sources therefore is fundamental requirement to analyze and understand the problems that keeps relation with geography in one way or another.

GIS application in the retail sector has witnessed a high growth in the recent years and such a phenomenon indicates that the retailers, in the process, use GIS for monitoring their trade areas, assess competition and position their new stores locations and therefore, use GIS as an important decision making tool as part of their strategy.

Maps, an important component of GIS, possess insightful power for decision-making. Processes like selection of sites / stores locations, distribution, transportation, market analysis, facilities management, entertainment and tourism are highly dependent on GIS data, as it enhances the quality of market analysis, brdictive investigations, business modeling, competition, selection of suppliers and the likes.

Consumer market is brdominantly driven by the mobile and Internet technologies. With the proliferations of smart phones / tablets / VTS device, there is growing demand for geo data content to aid search, navigation and local commerce.

On the Enterprises side, utilities and infrastructure companies use GIS extensively for major decision-making process in the area of planning, operations and maintenance of field assets.

Government Initiative and GIS Industry in India

The Union Cabinet has approved Central government spending worth Rs 98,000 crore under two new urban missions over the next five years. The Cabinet chaired by Prime Minister Mr. Narendra Modi, cleared the Smart Cities Mission under which 100 smart cities would be built and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for 500 cities with outlays of Rs 48,000 crore and Rs 50,000 crore, respectively. Under the Smart Cities Mission, each selected city would get central assistance of Rs 100 crore per year for five years.

E-Governance is the cornerstone of the Smart City Mission. With the Digital India Programme initiative, the Indian Government plans to integrate government departments and citizen services in a seamless manner. This initiative shall ensure an overhaul transparency in the functioning of various government departments as well as timely completion of intended services.

The Highway sector has been allocated nearly 45,000 Crores, twice as much from last year's budget. The National Highway Authority of India (NHAI) has also mandated the use of LiDAR technology in the current year to conduct feasibility studies for all highway projects. Poor feasibility studies have huge repercussions during construction phase of any project. Employing LiDAR technology mitigates such a scenario to a great extent.

The current Budget provides an allocation of Rs. 5,300 crore to support micro-irrigation, watershed development and the Pradhan Mantri Krishi Sinchai Yojana. The India Railway Minister, Mr. Suresh Prabhu in the current union budget stressed the need for digitizing and GIS mapping of the vast land assets owned by the Railways.

With $3 bn in annual revenues and a contribution of 0.2% of India's GDP, The Indian Geospatial services industry has transformed policy planning and implementation and currently is at a pivotal position to drive India's growth in the coming years upwards in an exponential manner.

Projects / initiatives undertaken by Genesys

Genesys has successfully executed various projects belonging to diverse verticals during the year under review. Genesys as a company believes in not limiting itself to a br-defined operational protocol when it comes to projects that it undertakes. It is for this very reason that each distinct project with its respective individual challenges are met with innovative and path breaking solutions. A few noteworthy mentions out of the numerous projects / initiatives undertakes by Genesys are mentioned below:

Foraying into the heritage field we conducted a geotechnical investigation of a mountainous facade overlying the Religious site in Nashik. This investigation helped demarcate potential hazardous rock fall zones enabling the concerned authorities to take corrective steps brventing the temple located at the foothills from being damaged by a rock fall.

During the year, A UNESCO World heritage site and one of the busiest railway stations in India was mapped by Genesys using LiDAR technology for restoration purposes.

Genesys became the first geospatial company in the world to undertake a detailed LiDAR survey within Slums. Located within the heart of Mumbai, individual houses within the slums were demarcated empowering concerned authorities to fabricate various redevelopment decisions based on the combrhensive data generated by the survey.

Genesys also conducted a detailed topographic survey for a leading government power utility company with one of the main deliverables being potential landslide demarcation zones, which would otherwise hamper the smooth functioning of the government power utility company.

No project is too big a challenge for Genesys and cementing this fact is the project undertaken for the mapping of 1500 road junctions within Mumbai. The main objective was to demarcate strategic positions for installations of CCTV cameras around these junctions.

From the infrastructure vertical point of view Genesys has carried out an integrated topographic and LiDAR survey of a proposed airport runway at Navi Mumbai covering an area of approximately 450 sq. km. We also have undertaken an extensive rail corridor survey for the Railway Authorities of the Indian Government.

The mining vertical has also been explored and met with great success. The main objective of the mining projects was to survey potential untapped mining areas and to cross check the intrusion of forests within these leased areas.

The above stated projects / initiatives give us a brief but a very profound idea of Genesys's capability as a Surveying company. We believe that no matter how daunting a challenge might be, the solution is always achievable. This statement is reflected time and again in the diverse projects that we undertake. We are continually researching into various surveying platforms and surveying methodologies along with upcoming and state-of-the-art technologies so that whenever the need arises we are ready to accomplish any and every challenge with confidence.

Challenges and Opportunities

The need for customized Geospatial solutions, which addresses both the enterprise and government problems, is on the rise. This demand is expected to grow for designing accessible, user friendly and seamless applications that work both online and offline 24/7.

Highly Accurate geospatially captured data is needed by industry specific verticals for purposes ranging from planning and designing to operations and maintenance.

With the advances in various laser scanning and survey platforms, Genesys through various partnerships has a unique advantage to deploy geospatial data collection services both in India and across the globe.

Genesys with its uniquely customized geospatial solutions translates these challenges into 'Real World' working models. Our recent partnership with a European GIS firm has leveraged our ability to provide seamless web based HD pano plus LiDAR integrated GIS solutions across various verticals such as telecom, e-governance, infrastructure, utilities, water management and urban management.

Internal Control System and its adequacy

The Company has put necessary process and systems in place to effectively control and monitor its operations. Compliance with process and systems are reviewed in view of the growth and complexity in the nature of Company's business. Such processes cover all the areas of Company's operations, namely production, purchase, sales, support services, etc.

All our development centers, two in Mumbai and one in Bangalore are ISO 9001:2008 certified, signifying a matured and reliable delivery system.

Considering the nature and size of the operations of the Company, the management believes, necessary internal control processes are in place and adequate to take care of the current need.

Discussion on Financial Performance LIABILITIES AND ASSETS Share Capital

During the year under review, the Company issued 600,000 equity shares of Rs.5 each at a price of Rs.100 per equity share, on conversion of equal number of share warrants, held by non-promoters investors on brferential basis.

While there was no change in the Authorized Equity Share Capital at Rs.2,550 lacs comprising of 51,000,000 shares of Rs.5 each, in the current year, Issued and Subscribed Share Capital underwent a change in view of the above allotment of 600,000 Equity Shares, with new Issued and Subscribed Share Capital standing at Rs.1,522.38 lacs at the end of March 31, 2015, as against Rs.1,492.38 lacs at the end of the brvious year.

The Company had a balance of 3,400,000 equity share warrants, Rs.50 paid up per warrant, at the end 2014-15. Since the holders of such warrants didn't exercise the option to convert the said warrants into equity shares on payment of the balance amount of Rs.50 per warrant before the due date, consideration earlier received in respect of those warrants was forfeited by the Company in terms of Chapter VII of the SEBI(ICDR) Regulations, 2009.

Reserves and Surplus

Reserves and Surplus consists of balance in Capital Reserve, General Reserve, Security Premium Account and Profit & Loss Account.

There is an increase in the General Reserve Account as on March 31, 2015, following transfer of Rs.45.85 lacs out of profit and loss account of 2014-15, to Rs.2,295.85 lacs. Increase in the Securities Premium Reserve to Rs.923.70 lacs as on March 31, 2015, was on account of conversion of 600,000 Equity Share Warrants of Rs.100 each into equal number of equity shares of Rs.5 each. Security Premium Reserve balance as on March 31, 2014, was Rs.353.70 lacs. There was no movement in the Capital Reserve in the year under review and it continued to be at Rs.35.05 lacs as at the end of brvious year.

Balance in the Profit & Loss Account stood at Rs.14,343.36 lacs as on March 31, 2015 as against Rs.14,022.69 lacs as on March 31, 2014, rebrsenting the net profit earned by the Company during 2014-15 and net of transfer to General Reserve.

Borrowings

Company's borrowings are grouped under two major heads, short term and long term. While short term borrowings have gone up to Rs.1,054.96 lacs at the end of March 31, 2015 from Rs.605.64 lacs at the end of brvious year, long term borrowings have gone up marginally to Rs.67.37 lacs at the end of 2014-15 as against Rs.56.89 lacs at the end of last year. Increase in the short-term borrowings is largely attributable to borrowings from the bank on account for working capital purpose. No terms loan is outstanding at the end of 2014-15, as the Company has repaid it in full to the bank in the year under review.

Provisions

Provisions, both long term and short term, include employee benefits in the nature of provision for leave encashment and gratuity provision, besides proposed dividend and tax on proposed dividend, which are part of short term provisions only. Provisions for leave encashment and gratuity payment are being made on the basis of actuarial valuation as on the balance sheet date. Long Term Provision, which was at Rs.448.84 lacs at the end of 2013-14, has come down to Rs.412.56 lacs at the end of 2014-15. Short Term Provisions have marginally gone up to Rs.165.47 lacs as on March 31, 2015, as against Rs.162.68 lacs at the end of March 31, 2014. Decrease in the long-term provision is largely attributable to change in the composition of manpower, in terms of seniority and compensation.

Trade Payables and Other Current Liabilities

There has been an increase in the Trade Payables from Rs.412.85 lacs at the end of 2013-14 to Rs.761.28 lacs at the end of 2014-15. Trade Payables include amount payable to the suppliers of the Company towards goods and services provided by them in the ordinary course of the business.

Similarly, there has been an increase in the Other Current Liabilities Rs.1,172.35 lacs at the end of 2014-15 from Rs.1,080.81 lacs as at the end of earlier year. Other Current Liabilities include, current maturities of long-term debt and finance lease obligation, advance from customers, unclaimed dividend, statutory liabilities and others.

Company is committed to reduce the balance of Trade Payables and Other Current Liabilities in the current year.

Fixed Assets

During the year 2014-15, the Company acquired Rs.547.79 lacs worth of fixed assets, to support its operational need. Addition to the fixed assets was reported at Rs.678.67 lacs in the year earlier.

Total Gross Block, consisting of Tangible and Intangible Assets, stood at Rs.8,510.88 lacs as on March 31, 2015, as against Rs.8,050.17 lacs at the end March 31, 2014. Similarly, Net Book Value of the assets, i.e., after debrciation, stood at Rs.2,118.93 lacs and Rs.2,520.67 lacs at the end of March 31, 2015 and March 31, 2014 respectively.

Company follows straight-line method for debrciating its assets as per useful life brscribed under Part C Schedule II to the Companies Act, 2013, barring that for computer hardware & software, imaging systems and GIS database which are debrciated at an accelerated rate on straight line basis over 3 years period. Also in line with the requirement under Schedule II to the Companies Act, 2013, and as part of the transitional provision, for assets which have completed useful life as on March 31, 2014, carrying value of Rs.45.26 lacs, being net of deferred tax of Rs.23.31 lacs, has been recognized in the retained earnings.

Investments

Company has only non-current investments reported at Rs.12,236.07 lacs as on the balance sheet date at the end of 2014-15. The number has not undergone any change vis-a-vis earlier year. It includes investment in equity, brference shares and debentures of associate and other companies. Company is confident to realize higher values out of these investments.

Loans and Advances

Long Term Loans and Advances, which include capital advance, loans to body corporate, advance income tax and deposits, stood at Rs.917.43 lacs as on March 31, 2015, as against Rs.1,231.85 lacs at the end of March 31, 2014. Similarly, Short Term Loans and Advances, which include loans to body corporate including interest, brpaid expenses, advance to employees and others, were at Rs.1,822.48 lacs at the end of 2014-15 as against Rs.1,504.34 lacs at the end of brvious year.

Trade Receivables

Trade Receivables, net of provisions, as on March 31, 2015,was at Rs.5,660.97 lacs as against Rs.3,893.98 lacs at the end of earlier year. Company is making every possible endeavor to realize the amount early.

Cash and Bank Balance And Other Current Assets

Total cash and bank balance as on March 31, 2015, was at Rs.296.43 lacs as against Rs.301.19 lacs at the end of earlier year. The Company maintains such balances in current and deposits accounts with scheduled banks.

Other Current Assets rebrsent unbilled revenue and interest accrued but not due.

INCOME & EXPENDITURE Income

During 2014-15, the Company recorded a revenue of Rs.6,026.55 lacs as against Rs.7,511.79 lacs in the year 2013-14, a decrease of around 20% over the brvious year. Decrease in revenue is largely attributable to postponement of projects by governments, private sector clients including overseas customers. Company is confident to improve this situation in the current year.

There is a marginal decrease in the Other Income as well at Rs.255.87 lacs in 2014-15 as against Rs.286.00 lacs in the year 2013-14. Other Income primarily includes income from bank deposits; Dividend income; inter corporate deposits and foreign exchange gain.

Net Profit after Tax (PAT) is reported at Rs. 457.59 lacs in 2014­15 vis-a-vis Rs.683.58 lacs in the earlier year, a decrease of around 33% over brvious year.

Expenditure

The Company incurred a total expenses, before tax, of Rs.5,768.24 lacs, including debrciation and finance cost, during 2014-15, as against Rs.6,938.25 lacs in the brvious year. Decrease in the cost is largely attributable to reduction in project expenses and employee cost, which have direct bearing on the revenue earned by the Company during the year.

CAUTIONARY STATEMENT

Certain statements made in the Management Discussion and Analysis Report may constitute 'forward-looking-statements' within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections, etc., whether exbrss or implied. Several factors could make a significant difference to the Company's operations. These include climate and economic conditions affecting demand and supply, government regulations and taxation, natural calamities, etc. over which the Company does not have any direct control.