NOTES FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015 1. Company's Background Genesys International Corporation Limited is engaged in providing Geographical Information Services comprising of photogrammetry, remote sensing, cartography, data conversion, state of the art terrestrial and 3D geo-content including location and other computer based related services. The company is a public limited company incorporated and domiciled in India and has its registered office at Mumbai, Maharashtra. The company has its primary listing on Bombay Stock Exchange and National Stock Exchange. 2. Significant Accounting Policies A) Basis of brparation of financial statements These financial statements are brpared and brsented in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis of accounting. GAAP comprises mandatory accounting standards as brscribed under Section 133 of the Companies Act,2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules,2014,the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. B) Use of estimates The brparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported balance of assets, liabilities, revenues and expense and disclosures relating to contingent liabilities as of the date of the financials. Examples of such estimates include estimate of useful life of assets, provision for doubtful debts, income taxes, unbilled revenue, etc. Actual results may differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. Any revisions to accounting estimates are recognized prospectively in current and future periods. C) Revenue recognition and expenses Revenues are recognized on accrual basis. Revenue from operations is accounted for on the basis of services rendered and billed to / accepted by clients. Unbilled revenue rebrsents amount recognized based on services performed in advance of billing in accordance with contract terms. Excess of billing over revenue recognized is classified as unearned revenue. Interest income is recognized on accrual basis. Dividend income is recognized as and when right to receive dividend is established. Expenses are accounted for on accrual basis and provisions are made for all known liabilities and losses. D) Fixed Assets (i) Tangible Assets Tangible fixed Assets are stated at cost of acquisition including directly attributable costs for bringing the assets to its brsent location and use, less accumulated debrciation. Advances paid, if any, towards the acquisition of fixed assets are disclosed under the head Long Term Loans and Advances, as Capital Advances. (ii) Intangible Assets Purchases of intangibles are capitalized at the acquisition price including directly attributable costs for bringing the asset into use, less accumulated debrciation. Direct expenditure, if any, incurred for internally developed intangibles from which future economic benefits are expected to flow over a period of time is treated as intangible asset as per the Accounting Standard on Intangible Assets (AS - 26). (iii) Debrciation / Amortization Debrciation is charged on fixed assets, other than the assets mentioned below, on straight line basis using useful lives of tangible assets contained in Part "C" Schedule II to the Companies Act, 2013. Following fixed assets are subjected to accelerated rate of debrciation on straight line basis to take care of technology obsolescence, data relevance, etc., Debrciation/Amortization is charged on a pro-rata basis on assets purchased /sold during the year with reference to date of installation/disposal. Assets costing individually Rs. 5,000/- or less are fully debrciated in the year of purchase / installation. Residual value is considered as Nil for all the assets. E) Borrowing Costs Borrowing costs, if any, directly attributable to the acquisition of the qualifying asset are capitalized for the period until the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Other borrowing costs are recognized as expense in the period in which they are incurred. F) Impairment of assets The carrying amounts of the Company's assets including intangible assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating units exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a brviously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to the extent of the carrying value of the asset that would have been determined (net of debrciation/amortization) had no impairment loss been recognized. G) Investments Investments are classified into Current and Long-term Investments. Investments that are readily realizable and intended to be held for not more than a year as on the date of acquisition are classified as Current Investments. All other investments are classified as Long Term Investments. Current investments are stated at lower of cost or fair value. Any reduction in the carrying amount and any reversal of such reductions are charged and credited to the Statement of Profit and Loss, as the case may be. Long Term Investments are stated at cost. Provision is made to recognize a decline, other than temporary, in the value of such investments. H) Leases Finance Lease Assets taken on finance lease are accounted for as fixed assets in accordance with Accounting Standard - 19. Operating Lease Assets taken on lease under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating lease are recognized as expenses on accrual basis in accordance with the respective lease agreement. I) Foreign Currency Transactions All transactions denominated in foreign currency are recorded at the exchange rate brvailing on the date when the relevant transactions take place. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss of the year. Monetary assets and liabilities in the form of Loans, Current Assets and Current Liabilities in foreign currency, which are outstanding as at the year-end, are translated at the year-end closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss. The brmium or discount arising at the inception of the forward exchange contracts related to underlying receivables and payables, if any, are amortized as an expense or income recognized over the period of the contracts. Gains or losses on renewal or cancellation of foreign exchange forward contracts are recognized as income or expense for the period. Investments in overseas entity are recognized at the relevant exchange rates brvailing on the date of investments. All transactions of the foreign branch during the year are included in the accounts at the rate of exchange brvailing at the end of the month in which the transactions took place. Net Gain / Loss in foreign currency transactions are recognized in the Statement of Profit and Loss. Monetary assets and liabilities are translated at the rates brvailing on the balance sheet date. J) Employee Benefits Short-term employee benefits - Employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognized in the period in which the employee renders the related service. Post employment benefits (defined benefit plans) -The employees' gratuity scheme is a defined benefit plan. In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity for the eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company. The brsent value of the obligation under such defined benefit plan is determined at each Balance Sheet date based on an actuarial valuation using projected unit credit method. The discount rate is based on the brvailing market yields of Indian government securities. Actuarial gains/losses and current plan costs are recognized in the Statement of Profit and Loss. Post employment benefits (defined contribution plans) -Contributions to the provident fund is defined contribution plan and is recognized as an expense in the Statement of Profit and Loss in the period in which the contribution is due. Both the employee and the Company make monthly contributions to the provident fund scheme equal to the specified percentage of the covered employee's basic salary. Long-term employee benefits - Long-term employee benefits comprise of compensated absences and other employee incentives, if any. These are measured based on an actuarial valuation carried out by an independent actuary at each Balance Sheet date unless they are insignificant. Actuarial gains and losses and past service costs are recognized in the Statement of Profit and Loss. K) Taxation Current Tax The provision for current tax is made on the basis of tax liability computed after considering the admissible deductions and exemptions under the provisions of the Income Tax Act, 1961. Minimum Alternate Tax (MAT) credit is recognized in the Balance Sheet where it is probable that it will be adjusted against the discharge of the tax liability in future under the Income Tax Act, 1961. Deferred Tax Deferred tax as set or liability is recognized for reversible timing differences between the profit as per financial statements and the profit offered for income taxes, based on tax rates that have been enacted or substantively enacted at the Balance Sheet date. In respect of tax holiday unit deferred tax asset or liability is recognized only for those timing differences that originate during the tax holiday period but reverse after the tax holiday period. Timing differences, which reverse within the tax holiday period, do not result in tax consequence and therefore no deferred taxes are recognized in respect of the same. For this purpose, the timing differences, which originate first, are considered to reverse first. Deferred tax assets are recognized and carried forward to the extent there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets on unabsorbed debrciation and business losses are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized. Deferred Tax assets and liabilities are reviewed at each balance sheet date. L) Earning per Share (EPS) Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period brsented. M) Cash and Cash Equivalents Cash and Cash equivalents comprises cash and calls on deposit with banks and corporations. The Company considers all highly liquid financial statements, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalent. N) Cash Flow Statement Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. O) Provisions and Contingencies Provisions are recognized when the Company has a brsent obligation as a result of a past event, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provision is not discounted to its brsent value and is determined based on the last estimate required to settle the obligation at the year end. Contingent liabilities are not provided for and are disclosed by way of notes to accounts, where there is an obligation that may, but probably will not, require outflow of resources. Where there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed. Contingent assets are neither recognized nor disclosed in the financial statements. 37. Exchange Differences During the year, realized and unrealized exchange gain (net) amounting to Rs. 11,620,016/- (Previous Year: exchange gain of Rs. 10,627,531/-) is included in the financial statements. There are no forward exchange contracts/options outstanding as on 31st March, 2015. 38. Figures for brvious year have been re-grouped/re-classified wherever necessary to conform to current year's brsentation. As per our Report of even date attached For G.K.Choksi & Co. CHARTERED ACCOUNTANTS Firm Registration No. :125442W Shreyas V.Parikh PARTNER Membership No. 33402 For and on behalf of the Board Of Directors SAJID MALIK CHAIRMAN & MANAGING DIRECTOR GANAPATHY VISHWANATHAN DIRECTOR SUNIL DHAGE COMPANY SECRETARY HEMANT MAJETHIA DIRECTOR RATAN DAS CHIEF FINANCIAL OFFICER Date : May 30, 2015 Place : MUMBAI |