##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K/A
 (Amendment No. 1)
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March
    31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number:
    000-33477
  GENESIS MICROCHIP
    INC.
 (Exact name of registrant as
    specified in its charter)
  DELAWARE

77-0584301(State or other jurisdiction
    of incorporation)

(IRS Employer
    Identification Number)2525 AUGUSTINE DRIVE
    SANTA CLARA, CALIFORNIA

95054(Address of principal executive
    offices)

(Zip Code)   (408) 919-8400
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to section 12(b) of the
    Act:
 None.
  Securities registered pursuant to section 12(g) of the
    Act:
 Shares of Common Stock, $0.001 par value
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 



TABLE OF
    CONTENTS
  PageEXPLANATORY
    NOTE


3PART IItem 1


Business


4Item 1A


Risk
    Factors


9Item 1B


Unresolved Staff
    Comments


19Item 2


Properties


19Item 3


Legal
    Proceedings


19Item 4


Submission of
    Matters to a Vote of Securities Holders


19PART IIItem 5


Market for Our
    Common Stock and Related Stockholder Matters


20Item 6


Selected
    Consolidated Financial Data


22Item 7


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


23Item 7A


Quantitative and
    Qualitative Disclosures About Market Risk


34Item 8


Financial
    Statements and Supplementary Data


34Item 9


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


36Item 9A


Controls and
    Procedures


36Item 9B


Other
    Information


36PART IIIItem 10


Directors,
    Executive Officers and Corporate Governance


36Item 11


Executive
    Compensation


42Item 12


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


61Item 13


Certain
    Relationships and Related Transactions, and Director
    Independence


68Item 14


Principal
    Accountant Fees and Services


68PART IVItem 15


Exhibits and
    Financial Statement Schedules


69Signatures


70Index to
    Exhibits Filed Together with this Annual Report


71EXHIBIT 21EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1   2




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EXPLANATORY
    NOTE
  Form 10-K/A (Form 10-K/A) Form 10-K Form 10-K/A Form 10-K/A Form 10-K/A Form 10-K/A
  Form 10-K/A
  STATEMENT
    REGARDING FORWARD-LOOKING STATEMENTS
    TRADEMARKS
  ® ® ® ® ® ® ® ® ® ® tm ® ® ® tm tm
  AVAILABLE
    INFORMATION
  Form 10-K, Form 10-Q, Form 8-K,
  1-800-SEC-0330. http://www.sec.gov.
 3




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PART I
  ITEM 1.
    BUSINESS  OVERVIEW
          MARKETS
    AND APPLICATIONS
    
    Flat-Panel Computer Monitors.  Flat-panel
    computer monitors using liquid crystal displays, or LCDs, are
    increasingly replacing monitors that use CRTs. For the year
    ended March 31, 2007, applications sold into the flat-panel
    computer monitor market represented an estimated 40% of our
    total revenues. Companies whose flat-panel computer monitors
    incorporate our products include AOC, BenQ, Dell, Fujitsu,
    Gateway, HP, Innolux, Lenovo, Legend, Lite-On, NEC, Philips,
    Samsung, Sony, ViewSonic, and many other leading brands.
    Television & Video.  We are
    leveraging our technologies in video image processing to produce
    products for fast-growing flat-panel television and high
    definition digital television applications. These technologies,
    which include products containing analog video image processing,
    digital/MPEG video image processing, timing controllers and
    other technologies, may also be designed into other applications
    such as Digital
    CRT-TVs,
    home theaters, video projectors, audio/video receivers and DVD
    players. Companies whose televisions incorporate our products
    include leading TV manufacturers, including Changhong, Dell,
    Eizo, Fujitsu, Haier, Hisense, Konka, LG, NEC, Philips, Samsung,
    Sharp, Skyworth, Sony, Toshiba, TTE, Westinghouse and Zenith.
    For the year ended March 31, 2007, revenue from
    applications serving these markets represented an estimated 60%
    of our total revenues. 4




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PRODUCTS
    Product Family

Description

MarketsFLI23xx

Video format conversion and image
    enhancement processors

CRT TVs, flat-panel TVs, DVD
    players, video projectorsgm15xx/gm16xx

Graphics/TV video processors for
    SXGA-WUXGA resolutions

Flat-panel monitors, flat-panel
    TVs, video projectorsgm22xx/gm52xx

Integrated LCD monitor controllers
    supporting resolutions up to SXGA

Multi-function monitors and
    entry-level LCD TVsgm23xx/gm53xx

Integrated LCD monitor controllers
    supporting resolutions up to SXGA

Flat-panel monitorsgmZAN3xx

Analog interface LCD monitor
    controllers (for XGA and SXGA- resolution monitors)

LCD monitors and other
    fixed-resolution pixilated displaysgm56xx/57xx/26xx/27xx (Phoenix)

Pin/firmware compatible family of
    analog & dual input LCD monitor controllers for XGA,
    SXGA and UXGA resolutions

Mainstream LCD monitors using LVDS
    or RSDS LCD panelsFLI812x (Hudson)

Single-chip flat-panel TV
    controller for cost-sensitive applications with 2D NTSC/PAL
    decoder and Faroudja DCDi Edge video processing

Entry to mid-level flat panel and
    digital CRT TVsFLI85xx (Cortez, Cortez Plus,
    Cortez Lite)

Single-chip high-end flat panel TV
    controller with 3D NTSC/PAL decoder and high-end Faroudja DCDi
    Cinema  video processing with optional HDMI receiver

Entry-level, Mid-range and
    high-end flat panel TVsFLI86xx (Cortez Advanced)

Premium TV video controller with
    10-bit Faroudja DCDi Cinema video processing and two 3D comb
    filters

LCD/PDP TVs, premium AVR, high
    definition DVD players, premium LCD TV monitorsFLI59xx (Oak)

Single-chip highly integrated,
    mixed-signal LCD controller for multi-function monitors
    supporting resolutions up to WUXGA

Multi-function monitors and LCD TVsgm10500 (PurVIEW
    HDtm)

Digital TV audio and video decoder

ATSC/DVB/OpenCabletmcompliant integrated Digital TVs   RESEARCH
    AND DEVELOPMENT
    
    Algorithm Development Group:  focuses on
    developing high-quality image processing technologies and their
    implementation in silicon.
    Product Development Group:  focuses on
    developing standard semiconductor components to service our
    television, monitor and computer original equipment manufacturer
    (OEM) customers. In addition, we develop semiconductor
    components to serve customers who are designing products for new
    market applications, such as flat-panel television and other
    potential mass markets. 5




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
    Software Engineering Group:  develops the
    software environment required for our products to work within
    target systems. Software is now embedded in many of our
    products. The other major role of software engineering is tool
    development. We provide sophisticated software tools to help our
    customers develop their applications and customize their
    software to improve the productivity of those engineers involved
    in the process of getting their products into production.
    Systems Engineering Group:  develops reference
    design hardware and software applications, validates chips,
    validates intellectual property, system performance tuning and
    competitive analysis, and provides regional application
    engineers to support our field application engineers.      CUSTOMERS,
    SALES AND MARKETING
               6




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MANUFACTURING
  state-of-the-art
    QUALITY
    ASSURANCE
         7




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INTELLECTUAL
    PROPERTY AND LICENSES
    COMPETITION
      
    image quality,
    product design features and performance,
    product price,
    the time to market of our products, and
    the quality and speed of customer support.  BACKLOG
  quarter-to-quarter
 8




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EMPLOYEES
    ITEM 1A.
    RISK
    FACTORS  Our business involves risks and uncertainties. You should
    carefully consider the risks described below, together with all
    of the other information in this Annual Report on
    Form 10-K/A
    and other filings with the Securities and Exchange Commission in
    evaluating our business. If any of the following risks actually
    occur, our business, financial condition, operating results and
    growth prospects would likely be adversely affected. In such an
    event, the trading price of our common stock could decline, and
    you could lose all or part of your investment in our common
    stock. Our past financial performance should not be considered
    to be a reliable indicator of future performance, and investors
    should not use historical trends to anticipate results or trends
    in future periods. These risks involve forward-looking
    statements and our actual results may differ substantially from
    those discussed in these forward-looking statements.
  Our
    quarterly revenues and operating results fluctuate significantly
    due to a variety of factors, which may result in volatility or a
    decline in our stock price.
    
    Our ability to gain and maintain design wins with
    our customers and ramp up new designs into production volumes;
    Customer inventory levels and market share;
    Growth rate of the flat-panel TV and LCD monitor markets;
    Seasonal consumer demand for flat-panel TV, high definition TV
    (HDTV) and LCD monitors into which our products are
    incorporated;
    Changes in the mix of products we sell, especially between our
    higher-priced TV/video products and our lower-priced monitor
    products;
    Increased competition and competitive pricing pressures;
    The timing of new product introductions by us and our
    competitors;
    Availability and pricing of panels and other components for
    flat-panel TVs and LCD monitors;
    Wafer costs and other product fabrication costs;
    Foreign exchange rate fluctuations, research and development tax
    credits and other factors that impact tax rates; and
    Changes in product costs or manufacturing yields or available
    production capacity at our fabrication facilities.   9




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We
    have had significant senior management and key employee
    turnover, and may not be able to attract, retain and motivate
    the personnel we need to succeed.
    
    In May 2006, Tzoyao Chan, our Senior Vice President, Product
    Development, resigned and Behrooz Yadegar joined the company as
    his successor.
    In July 2006, Ken Murray, our Vice President, Human Resources,
    resigned and we appointed a successor.
    In August 2006, Mohammad Tafazzoli, our Senior Vice President,
    Operations, resigned and we appointed a successor.
    In September 2006, Hildy Shandell, our Senior Vice President,
    Corporate Development, joined the company.
    In October 2006, Raphael Mehrbians, our Senior Vice President,
    Product Marketing, resigned and we appointed two Vice Presidents
    of Marketing, but have not yet appointed a Senior Vice President.
    In May 2007, Michael Healy, our Chief Financial Officer,
    resigned and we have not yet appointed a successor.
    In June 2007, Anders Frisk, our Executive Vice President,
    resigned and we have not yet appointed a successor.      We
    must increase our revenues and reduce our operating expenses in
    order to return to profitability and we may not be able to
    achieve profitability on a quarterly or annual
    basis.
  reductions-in-force,
  We
    face intense competition in our market, especially from larger,
    better-known companies, and we may lack sufficient financial or
    other resources to maintain or improve our competitive
    position.
   10




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start-up
    Our
    failure to respond quickly to customer demand for technological
    improvements and integrate new features could have an adverse
    effect on our ability to compete.
        We do
    not have long-term commitments from our customers, so it is
    difficult for us to forecast our revenues, and could result in
    excess inventory.
   11




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A
    limited number of our customers comprise a significant portion
    of our revenues and any decrease in revenue from these customers
    could have an adverse effect on our net revenues and operating
    results.
      Our
    success will depend on the growth of the market for flat-panel
    televisions and LCD monitors, and our customers commercial
    success in those markets.
    
    A continued reduction in the costs of products in the respective
    markets;
    The availability, at a reasonable price, of components required
    by such products (such as LCD panels); and
    The emergence of competing technologies and standards.    Our
    success may depend in part on market adoption of the DisplayPort
    digital interface standard.
  and/or
  Our
    customers experience fluctuating product cycles and seasonality,
    which causes their sales to fluctuate.
   12




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We
    must sell our current products in greater volumes, or introduce
    new products with improved margins.
  and/or
  Our
    semiconductor products are complex and are difficult to
    manufacture cost-effectively.
    Product
    quality problems could increase our costs, cause customer
    claims, and delay our product shipments.
    We
    rely on distribution partners to sell our products, and
    disruptions to or our failure to effectively develop these
    channels could adversely affect our ability to generate revenues
    from the sale of our products.
    We
    subcontract our manufacturing, assembly and test
    operations.
    
    Lack of adequate capacity during periods of excess demand; 13




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
    Increased manufacturing cost or the unavailability of product in
    the event that manufacturing capacity becomes constrained;
    Reduced control over manufacturing and delivery schedules of
    products;
    Reduced control over quality assurance and reliability;
    Difficulty of managing manufacturing costs and quantities;
    Potential misappropriation of intellectual property; and
    Political or environmental risks (including earthquake and other
    natural disasters) in Taiwan, where the manufacturing facilities
    are located.    Our
    products require licenses of third-party technology that may not
    be available to us on reasonable terms, or at all.
    Because
    of the lengthy sales cycles for our products and the fixed
    nature of a significant portion of our expenses, we may incur
    substantial expenses before we earn associated revenue and may
    not ultimately achieve our forecasted sales for our
    products.
   14




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We are
    subject to risks associated with international operations, which
    may harm our business.
    
    Unexpected changes in, or impositions of, legislative or
    regulatory requirements;
    Delays resulting from difficulty in obtaining export licenses
    for certain technology, tariffs, quotas and other trade barriers
    and restrictions;
    Imposition of additional taxes and penalties;
    The burdens of complying with a variety of foreign laws; and
    Other factors beyond our control, including acts of terrorism,
    which may delay the shipment of our products, impair our ability
    to travel or our ability to communicate with foreign locations.    Our
    multi-jurisdictional tax structure is complex and we could be
    subject to increased taxation.
      Most
    of our revenues will come from sales to customers outside of the
    United States, which creates additional business
    risks.
    
    Fluctuations in currency exchange rates, tariffs, import
    restrictions and other trade barriers;
    Unexpected changes in regulatory requirements;
    Political and economic instability;
    Exposure to litigation or government investigations in these
    countries;
    Longer payment periods;
    Ability to enforce contracts or payment terms;
    Potentially adverse tax consequences; 15




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
    Export license requirements; and
    Unexpected changes in diplomatic and trade relationships.  non-U.S. markets
  The
    cyclical nature of the semiconductor industry may lead to
    significant variances in the demand for our
    products.
    We
    have in the past and may in the future engage in acquisitions of
    companies, products or technologies, which involve numerous
    risks and the anticipated benefits of any acquisitions we make
    may never be realized.
    
    We may experience difficulty in assimilating the acquired
    operations and employees;
    We may be unable to retain the key employees of the acquired
    operations;
    The acquisitions may disrupt our ongoing business;
    We may not be able to incorporate successfully the acquired
    technologies and operations into our business and maintain
    uniform standards, controls, policies and procedures;
    We may lack the experience to enter into new markets, products
    or technologies; and
    An acquisition we choose to pursue may require a significant
    amount of capital, which limits our ability to pursue other
    strategic opportunities.    Intellectual
    property infringement suits brought against us or our customers
    may significantly harm our business.
  and/or
 16




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
    Stop selling the products or using the technology that are
    allegedly infringing;
    Attempt to obtain a license to the relevant intellectual
    property, which license may not be available on commercially
    reasonable terms or at all;
    Incur substantial costs including defense costs, settlements
    and/or
    judgments; and
    Attempt to redesign those products that are allegedly infringing.    We may
    be required to indemnify our customers against claims of
    intellectual property infringement.
  and/or
  We may
    be unable to adequately protect our intellectual property. We
    rely on a combination of patent, copyright, trademark and trade
    secret laws, as well as non-disclosure agreements and other
    methods to protect our proprietary technologies.
    We
    need to continually evaluate internal financial controls against
    evolving standards.
   17




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We may
    become subject to judgments for securities class action
    suits.
    A
    breakdown in our information technology systems could cause a
    business interruption, impair our ability to manage our business
    or report results, or result in the unauthorized disclosure of
    our confidential and proprietary information.
  back-up
  General
    economic conditions may reduce our revenues and harm our
    business.
   18




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ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   19




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PART II
  ITEM 5.
    MARKET
    FOR OUR COMMON STOCK AND RELATED STOCKHOLDER
    MATTERS  MARKET
    INFORMATION
    High


LowFiscal 2006First Quarter

$
19.25


$
13.32Second Quarter

$
27.16


$
18.15Third Quarter

$
23.13


$
17.07Fourth Quarter

$
22.40


$
17.04Fiscal 2007First Quarter

$
17.37


$
11.10Second Quarter

$
14.78


$
9.89Third Quarter

$
12.15


$
9.69Fourth Quarter

$
10.11


$
7.67     DIVIDEND
    POLICY
   20




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STOCK
    PERFORMANCE GRAPH
    
    a group of our peer corporations, comprising the Nasdaq
    Electronic Components Stocks; and
    the Total Return Index for The Nasdaq Stock Market (US and
    Foreign).      Comparative
    chart
  
  Total NasdaqDate


Genesis


Peer Group


ReturnMarch 31, 2002



100.00




100.00




100.00March 31, 2003



48.00




57.68




73.00March 31, 2004



64.42




100.59




108.68March 31, 2005



55.58




80.46




109.67March 31, 2006



65.54




91.41




129.54March 31, 2007



35.73




89.54




134.98     SALES OF
    UNREGISTERED SECURITIES
   21




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ITEM 6.
    SELECTED
    CONSOLIDATED FINANCIAL DATA    Year Ended March 31,2007


2006


2005


2004


2003STATEMENTS OF OPERATIONS DATA:Revenues

$
214,617


$
269,506


$
204,115


$
213,420


$
194,325Cost of revenues(2)


126,281



153,039



125,394



134,735



127,110Gross profit


88,336



116,467



78,721



78,685



67,215Operating expenses:Research and development(2)


64,497



48,700



41,534



38,552



39,895Selling, general and
    administrative(2)


65,223



48,698



45,619



47,126



47,042Impairment of goodwill and
    intangible assets(1)


101,001















Total operating expenses


230,721



97,398



87,153



85,678



86,937Income (loss) from operations


(142,385
)


19,069



(8,432
)


(6,993
)


(19,722
)Interest and other income, net


12,259



5,403



1,939



1,725



946Income (loss) before income taxes


(130,126
)


24,472



(6,493
)


(5,268
)


(18,776
)Provision for (recovery of) income
    taxes


14,215



6,082



2,954



(1,063
)


(4,140
)Net income (loss)

$
(144,341
)

$
18,390


$
(9,447
)

$
(4,205
)

$
(14,636
)Earnings (loss) per share:Basic

$
(3.95
)

$
0.53


$
(0.29
)

$
(0.13
)

$
(0.47
)Diluted

$
(3.95
)

$
0.50


$
(0.29
)

$
(0.13
)

$
(0.47
)Weighted average number of common
    shares outstanding:Basic


36,514



34,909



33,084



31,876



31,248Diluted


36,514



36,877



33,084



31,876



31,248     (1)
    
    See Notes 5 & 6 to our consolidated financial
    statements included in Item 8 of this report.(2)
    
    Effective April 1, 2006 we adopted statement of Financial
    Accounting Standards No. 123 (Revised 2004), Share-Based
    Payment. See Note 9 to our consolidated financial
    statements in Item 8 of this report.  March 31,2007


2006


2005


2004


2003BALANCE SHEETS DATA:Cash, cash equivalents and
    short-term investments

$
188,250


$
185,379


$
129,757


$
118,222


$
113,138Working capital


202,108



204,518



156,411



147,651



130,831Total assets


351,714



479,677



416,292



410,726



402,654Stockholders equity


323,369



439,423



389,496



386,855



373,833  22




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ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion contains forward-looking statements
    within the meaning of Section 27A of the Securities Act of
    1933, as amended, and Section 21E of the Securities
    Exchange Act of 1934, as amended, including statements regarding
    anticipated revenues, gross margins, operating expenses,
    amortization of intangibles and stock-based compensation,
    liquidity and cash flow, business strategy, demand for our
    products, average selling prices, regional market growth, amount
    of sales to distributors and future competition. Words such as
    anticipates, expects,
    intends, plans, believes,
    seeks, estimates and similar expressions
    identify such forward-looking statements. These forward-looking
    statements are subject to risks and uncertainties that could
    cause actual results to differ materially from those indicated
    in the forward-looking statements. Factors which could cause
    actual results to differ materially include those set forth in
    the following discussion, and, in particular, the risks
    discussed below under the subheading Risk Factors
    and in other documents we file with the Securities and Exchange
    Commission. Unless required by law, we undertake no obligation
    to update publicly any forward-looking statements.
  Form 10-K/A.
  OVERVIEW
         23




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Revenue
    Recognition
  point-of-sale
  Manufacturing
    and Supply
  set-up
  Global
    Operations
   24




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Critical
    Accounting Policies and Estimates
      
    We record estimated reductions to revenue for customer returns
    based on historical experience. A customer has a right to return
    products only if the product is faulty or upon termination of a
    distributor agreement, although in certain circumstances we
    agree to accept returns if replacement orders are placed for
    other products or to maintain our business relationship. If
    actual customer returns increase, we may be required to
    recognize additional reductions to revenue.
    We record the estimated future cost of replacing faulty product
    as an increase to cost of revenues. To date we have not
    experienced significant returns related to quality. If returns
    increase as a result of changes in product quality, we may be
    required to recognize additional warranty expense.
    We maintain allowances for estimated losses resulting from the
    inability of our customers to make required payments and other
    disputes. If the financial condition of our customers were to
    deteriorate, resulting in an impairment of their ability to make
    payments, additional allowances may be required. We have not
    suffered any significant loss in this area.
    We provide for inventory obsolescence reserves against our
    inventory for estimated obsolete or unmarketable inventory equal
    to the difference between the cost of inventory and the
    estimated market value based upon assumptions about future
    demand and market conditions. If actual market conditions are
    less favorable than those we project, additional inventory
    valuation reserves may be required.
    Commencing April 1, 2006, we account for stock-based
    compensation in accordance with Statement of Financial
    Accounting Standards (SFAS) No. 123R, Share-Based
    Payment. Under the provisions of SFAS No. 123R,
    stock based compensation is estimated at the grant date based on
    the awards fair-value as calculated by the Black-Scholes
    option-pricing model and is recognized as expense ratably over
    the requisite service period. The Black-Scholes model requires
    various judgmental assumptions including volatility, and
    expected option life. In addition, share-based compensation
    expense is adjusted to reflect 25




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estimated forfeiture rates. If any of the assumptions change
    significantly, stock-based compensation expense may differ
    materially in the future from that recorded in the current
    period.  
    We provide for costs associated with settling litigation when we
    believe that we have a reasonable basis for estimating those
    costs. If actual costs associated with settling litigation
    differ from our estimates, we may be required to recognize
    additional costs.
    Goodwill, which represents the excess of cost over the fair
    value of net assets acquired in business combinations, is tested
    annually for impairment or more frequently whenever events or
    changes in circumstances indicate that the carrying amount may
    not be recoverable. The impairment tests are performed in
    accordance with FASB Statement of Financial Accounting Standards
    No. 142, Goodwill and Other Intangible Assets.
    Accordingly, an impairment loss is recognized to the extent that
    the carrying amount of goodwill exceeds its implied fair value.
    This determination is made at the reporting unit level. We have
    assigned all goodwill to a single, enterprise-level reporting
    unit. The impairment test consists of two steps. First, we
    determine the fair value of the reporting unit. The fair value
    is then compared to its carrying amount. Second, if the carrying
    amount of the reporting unit exceeds its fair value, an
    impairment loss is recognized for any excess of the carrying
    amount of the reporting units goodwill over the implied
    fair value of that goodwill. The implied fair value of goodwill
    would be determined by allocating the fair value of the
    reporting unit in a manner similar to a purchase price
    allocation in accordance with FASB Statement of Financial
    Accounting Standards No. 141, Business
    Combinations. The residual fair value after this
    allocation is the implied fair value of the reporting unit
    goodwill. We perform our annual impairment test on
    January 1st of each year.    
    We record a valuation allowance to reduce our deferred tax
    assets to the amount that we believe is more likely than not to
    be realized. The Company has, and expects to continue to provide
    a valuation allowance on future tax benefits in certain
    jurisdictions until it can demonstrate a sustained level of
    profitability that establishes its ability to utilize the assets
    in the jurisdictions that the assets relate.
    From time to time, we incur costs related to potential merger
    activities. When we assess that we will be the acquirer for
    accounting purposes in such transactions and we expect to
    complete the transaction, direct costs associated with the
    acquisition are deferred and form part of the final purchase
    price. In the event these assessments change, any such deferred
    costs would be expensed. Costs associated with other merger
    activities are expensed as incurred.  Recent
    Accounting Pronouncements
   26




---



##### Table of Contents



RESULTS
    OF OPERATIONS
  Revenue
    and Gross Profit
  Year Ended March 312007


2006


2005(Dollars in thousands)Total revenue

$
214,617


$
269,506


$
204,115Gross profit


88,336



116,467



78,721Gross profit percentage


41.2
%


43.2
%


38.6
%Revenue by geography:United States

$
1,180


$
3,493


$
8,803China


83,707



115,016



78,167Japan


24,005



27,356



15,289South Korea


53,256



51,487



52,871Taiwan


20,307



28,704



28,824Europe


24,705



31,131



13,334Rest of world


7,457



12,319



6,827Total revenue

$
214,617


$
269,506


$
204,115   Revenue
        Gross
    Profit
   27




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##### Table of Contents



OPERATING
    EXPENSES
  Research
    and Development
  Year Ended March 312007


2006


2005(Dollars in thousands)Research and development

$
64,497


$
48,700


$
41,534Research and development as a
    percentage of revenue


30.0
%


18.1
%


20.3
%     tm
    Selling,
    General and Administrative
  Year Ended March 312007


2006


2005(Dollars in thousands)Selling, general and
    administrative expenses

$
65,223


$
48,698


$
45,619Selling, general and
    administrative expenses as a percentage of revenue


30.4
%


18.1
%


22.3
%      28




---



##### Table of Contents



Impairment
    of goodwill and intangible assets
  Year Ended March 312007


2006


2005(In thousands)Impairment of goodwill and
    intangibles

$
101,001


$



$
         NON
    OPERATING INCOME AND EXPENSES
  Interest
    and Other Income
  Year Ended March 312007


2006


2005(In thousands)Interest income

$
9,042


$
5,403


$
1,939Gain on sale of investment


3,217







$
12,259


$
5,403


$
1,939        29




---



##### Table of Contents



Provision
    for Income Taxes
  Year Ended March 312007


2006


2005(In thousands)Current income tax expense

$
3,316


$
3,177


$
6,386Deferred income tax expense
    (recovery)


10,899



2,905



(3,432
)$
14,215


$
6,082


$
2,954            30




---



##### Table of Contents



and/or
    QUARTERLY
    RESULTS OF OPERATIONS
    Three Months EndedMar.


Dec.


Sep.


Jun.


Mar.


Dec.


Sep.


Jun.2007


2006


2006


2006


2006


2005


2005


2005(Unaudited)Revenues

$
38,592


$
51,117


$
69,009


$
55,899


$
60,862


$
73,965


$
74,854


$
59,825Cost of revenues(2)


24,555



30,261



38,225



33,240



35,684



39,762



41,974



35,619Gross profit


14,037



20,856



30,784



22,659



25,178



34,203



32,880



24,206Operating expenses:Research and development(2)


16,558



15,621



17,401



14,917



13,655



12,541



11,542



10,962Selling, general and
    administrative(2)


15,301



19,786



15,314



14,822



13,658



12,195



12,092



10,753Impairment of goodwill and
    intangibles(1)






101,001























Total operating expenses


31,859



136,408



32,715



29,739



27,313



24,736



23,634



21,715Income (loss) from operations


(17,822
)


(115,552
)


(1,931
)


(7,080
)


(2,135
)


9,467



9,246



2,491Interest and other income, net


2,342



2,324



2,212



5,381



1,907



1,519



1,067



910Income (loss) before income taxes


(15,480
)


(113,228
)


281



(1,699
)


(228
)


10,986



10,313



3,401Provision for (recovery of) income
    taxes


(28
)


17,209



173



(3,139
)


89



3,621



1,032



1,340Net income (loss)

$
(15,452
)

$
(130,437
)

$
108


$
1,440


$
(317
)

$
7,365


$
9,281


$
2,061Earnings (loss) per share:Basic

$
(0.42
)

$
(3.57
)

$
0.00


$
0.04


$
(0.01
)

$
0.21


$
0.27


$
0.06Diluted

$
(0.42
)

$
(3.57
)

$
0.00


$
0.04


$
(0.01
)

$
0.20


$
0.25


$
0.06Weighted average number of shares
    of common stock outstanding:Basic


37,030



36,585



36,437



36,001



35,760



35,413



34,826



33,624Diluted


37,030



36,585



36,840



36,518



35,760



37,295



37,534



35,060     (1)
    
    See Notes 5 & 6 to our consolidated financial
    statements included in Item 8 of this report.(2)
    
    Effective April 1, 2006 we adopted statement of Financial
    Accounting Standards No. 123 (Revised 2004), Share-based
    Payment. See Note 9 to our consolidated financial
    statements in Item 8 of this report. 31




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
     32




---



##### Table of Contents



March 31,2007


2006(Dollars in thousands)Cash and cash equivalents

$
123,701


$
154,630Short-term investments


64,549



30,749Cash, cash equivalents and
    short-term Investments


188,250



185,379Working capital

$
202,108


$
204,518Current ratio


8.13



6.08Days Sales Outstanding


46



54Inventory days


61



45           Contractual
    Obligations
    Payments Due By Fiscal YearTotal


2008


2009


2010


2011


2012Operating Leases

$
14,879


$
4,958


$
4,464


$
2,529


$
1,863


$
1,065    33




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Capital
    commitments
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures 34




---



##### Table of Contents



of the company are being made only in accordance with
    authorizations of management and directors of the
    company; and  
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    companys assets that could have a material effect on the
    financial statements.  page F-3.
 35




---



##### Table of Contents



FINANCIAL
    STATEMENTS TABLE OF CONTENTS
  PageNumberReports of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets


F-4Consolidated
    Statements of Operations


F-5Consolidated
    Statements of Stockholders Equity


F-6Consolidated
    Statements of Cash Flows


F-7Notes to
    Consolidated Financial Statements


F-8  F-1




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
                  F-2




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                      F-3




---



##### Table of Contents



Genesis
    Microchip Inc.
  Consolidated Balance Sheets
  March 31,2007


2006(In thousands, exceptper share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
123,701


$
154,630Short-term investments


64,549



30,749Accounts receivable trade, net of
    allowance for doubtful accounts of nil in 2007 and $401 in 2006


19,455



36,184Inventories (Note 3)


16,424



17,175Prepaids and other


6,324



6,034Total current assets


230,453



244,772Property and equipment, net
    (Note 4)


16,238



16,459Intangible assets, net
    (Note 5)


5,006



9,055Goodwill (Note 6)


84,405



181,981Deferred income taxes
    (Note 10)


252



11,151Other long-term assets
    (Note 7)


15,360



16,259Total assets

$
351,714


$
479,677LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
6,759


$
14,911Accrued liabilities


14,888



21,778Income taxes payable


6,698



3,565Total current liabilities


28,345



40,254Stockholders equity
    (Notes 8 and 9):Capital stock:Preferred stock:Authorized  5,000
    preferred shares, $0.001 par value issued and
    outstanding  none at March 31, 2007 and at
    March 31, 2006






Common stock:Authorized  100,000
    common shares, $0.001 par value issued and
    outstanding  37,097 shares at March 31,
    2007 and 35,899 shares at March 31, 2006


37



36Additional paid-in capital


465,744



441,197Cumulative other comprehensive loss


(94
)


(94
)Treasury shares


(833
)


Deferred stock-based compensation






(4,572
)Retained Earnings (deficit)


(141,485
)


2,856Total stockholders equity


323,369



439,423Total liabilities and
    stockholders equity

$
351,714


$
479,677Commitments and contingencies
    (Note 13)    F-4




---



##### Table of Contents



Genesis
    Microchip Inc.
  Consolidated Statements of Operations
  Year Ended March 31,2007


2006


2005(In thousands, except per share amounts)Revenues

$
214,617


$
269,506


$
204,115Cost of revenues(1)(2)


126,281



153,039



125,394Gross profit


88,336



116,467



78,721Operating expenses:Research and development(3)(5)


64,497



48,700



41,534Selling, general and
    administrative(4)


65,223



48,698



45,619Impairment of goodwill and
    intangible assets (Notes 5 and 6)


101,001







Total operating expenses


230,721



97,398



87,153Income (loss) from operations


(142,385
)


19,069



(8,432
)Interest and other income, net:Interest income


9,042



5,403



1,939Gain on sale of investment


3,217







Interest and other income, net


12,259



5,403



1,939Income (loss) before income taxes


(130,126
)


24,472



(6,493
)Provision for income taxes
    (Note 10)


14,215



6,082



2,954Net income (loss)

$
(144,341
)

$
18,390


$
(9,447
)Earnings (loss) per share
    (Note 12):Basic

$
(3.95
)

$
0.53


$
(0.29
)Diluted

$
(3.95
)

$
0.50


$
(0.29
)Weighted average number of common
    shares outstanding (Note 12):Basic


36,514



34,909



33,084Diluted


36,514



36,877



33,084(1) Amount includes
    amortization of acquired developed product technology

$



$
6,835


$
7,700(2) Amount includes stock-based
    compensation

$
1,338


$
63


$
(3) Amount includes stock-based
    compensation

$
8,454


$
421


$
1,941(4) Amount includes stock-based
    compensation

$
9,790


$
577


$
2,553(5) Amount includes
    amortization of acquired developed product technology

$
1,552


$
2,809


$
2,916    F-5




---



##### Table of Contents



Genesis
    Microchip Inc.
  Consolidated Statements of Stockholders Equity
  CumulativeAdditional





Other


Deferred


Retained


TotalCommon Shares


Paid-In


Treasury


Comprehensive


Stock-Based


Earnings/


StockholdersNumber


Amount


Capital


Shares


Loss


Compensation


(Deficit)


Equity(In thousands)Balances, March 31, 2004


32,653



32



395,837







(94
)


(2,833
)


(6,087
)


386,855Net loss


























(9,447
)


(9,447
)Issued under stock option and
    stock purchase plans


826



1



7,593



















7,594Stock-based compensation related
    to acceleration of vesting in terminations










2,000











(2,000
)






Stock-based compensation






















4,494







4,494Reversal of stock-based
    compensation related to terminations










(107
)










107







Balances, March 31, 2005


33,479



33



405,323







(94
)


(232
)


(15,534
)


389,496Net income


























18,390



18,390Issued under stock option and
    stock purchase plans


2,420



3



30,473



















30,476Stock-based compensation related
    to acceleration of vesting in terminations










62











(62
)






Unamortized portion of restricted
    stock units










5,342











(5,342
)






Stock-based compensation






















1,061







1,061Unrealized portion of stock-based
    compensation related to terminations










(3
)










3







Balances, March 31, 2006


35,899



36



441,197







(94
)


(4,572
)


2,856



439,423Net loss


























(144,341
)


(144,341
)Issued under stock option and
    stock purchase plans


1,198



1



9,537



















9,538Treasury stock














(833
)














(833
)Reversal of unamortized portion of
    restricted stock units










(4,572
)










4,572







Stock-based compensation










19,582



















19,582Balances, March 31, 2007


37,097


$
37


$
465,744


$
(833
)

$
(94
)

$



$
(141,485
)

$
323,369    F-6




---



##### Table of Contents



Genesis
    Microchip Inc.
  Consolidated Statements of Cash Flows
  Year Ended March 312007


2006


2005(In thousands)Cash flows from operating
    activities:Net Income (loss)

$
(144,341
)

$
18,390


$
(9,447
)Adjustments to reconcile net loss
    to cash used in operating activities:Depreciation and amortization


11,313



8,742



6,729Amortization of intangible assets


2,477



9,946



10,857Impairment of intangible assets


3,425







Goodwill impairment


97,576







Non-cash stock-based compensation


19,582



1,061



4,494Deferred income taxes


10,899



2,905



(2,773
)Gain on sale of investment


(3,217
)






Other


360



496



224Change in operating assets and
    liabilities, net of amounts acquired:Accounts receivable trade


16,729



(5,874
)


(1,985
)Inventories


751



382



1,216Prepaids and other


(290
)


(451
)


614Accounts payable


(8,152
)


2,867



2,196Accrued liabilities


(8,001
)


10,144



131Income taxes payable


3,133



447



598Net cash provided by operating
    activities


2,244



49,055



12,854Cash flows from investing
    activities:Purchase of short-term investments


(109,493
)


(102,482
)


(174,683
)Proceeds on sales and maturities
    of short-term investments


75,693



71,733



273,664Additions to property and equipment


(7,452
)


(8,597
)


(4,712
)Proceeds on sale of investment


3,919







Investments






(10,190
)


Additions to mask sets


(2,753
)


(3,673
)


(2,082
)Additions to intangible assets


(1,853
)


(1,736
)


(1,391
)Other


61



286



(728
)Net cash provided by (used in)
    investing activities


(41,878
)


(54,659
)


90,068Cash flows from financing
    activities:Proceeds from issue of common stock


8,705



30,477



7,594Net cash provided by financing
    activities


8,705



30,477



7,594Increase (decrease) in cash and
    cash equivalents


(30,929
)


24,873



110,516Cash and cash equivalents,
    beginning of year


154,630



129,757



19,241Cash and cash equivalents, end of
    year

$
123,701


$
154,630


$
129,757Supplemental cash flow information:Cash received for interest

$
8,879


$
5,365


$
1,994Cash paid for income taxes

$
121


$
3,218


$
5,687Supplemental disclosure of
    non-cash investing and financing activities:Stock-based compensation

$



$
(3
)

$
(107
)Additional paid-in capital

$



$
62


$
2,000    F-7




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to Consolidated Financial Statements
 (dollars in thousands, except per share amounts)
  1.
    NATURE OF
    OPERATIONS    2.
    SIGNIFICANT
    ACCOUNTING POLICIES  Basis
    of consolidation
    Critical
    accounting policies and estimates
     F-8




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Cash
    and cash equivalents
    Short-term
    investments
    Accounts
    receivable
    Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005Balance as of beginning of year

$
401


$
282


$
422Provision (recovery)


(401
)


259



(75
)Write offs






(140
)


(65
)Balance as of end of year

$



$
401


$
282     Inventories
  work-in-process first-in,
    Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005Balance as of beginning of year

$
3,665


$
2,954


$
3,243Increase to provision


2,293



1,080



883Write offs


(2,029
)


(369
)


(1,172
)Balance as of end of year

$
3,929


$
3,665


$
2,954  F-9




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Property
    and equipment
    Property and equipment

10% to 30% declining balanceSoftware

1 to 5 years straight-lineLeasehold improvements

Straight line over the term of the
    lease     Intangible
    assets
      Goodwill
      Asset
    impairments
     F-10




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Revenue
    recognition
    Warranty
    program
    Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005Balance as of beginning of year

$
164


$
230


$
200Increase to provision


442



157



288Write offs


(396
)


(223
)


(258
)Balance as of end of year

$
210


$
164


$
230   Royalties
  per-unit
  Currency
    translation
    Research
    and development expenses
   F-11




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Financial
    instruments and concentration of credit risk
      Earnings
    (loss) per share
    Stock-based
    compensation
       F-12




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Comprehensive
    income
    Income
    taxes
      Recent
    accounting pronouncements
  Standards
    adopted in 2007:
     F-13




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Standards
    issued but not yet adopted:
        3.
    INVENTORIES    March 31,


March 31,2007


2006Finished goods

$
11,596


$
10,717Work-in-process


8,757



10,12320,353



20,840Less reserve for obsolescence


(3,929
)


(3,665
)Total

$
16,424


$
17,175  F-14




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  4.
    PROPERTY
    AND EQUIPMENT    March 31,


March 31,2007


2006Property and equipment

$
19,697


$
17,429Software


24,711



21,632Leasehold improvements


4,280



6,21548,688



45,276Less accumulated amortization


(32,450
)


(28,817
)Total

$
16,238


$
16,459   5.
    INTANGIBLE
    ASSETS    March 31, 2007AccumulatedCost


Amortization


Impairment


NetAcquired technology

$
48,792


$
44,009


$
3,425


$
1,358Patents


5,132



1,484







3,648Other


500



500







Total

$
54,424


$
45,993


$
3,425


$
5,006   March 31, 2006AccumulatedCost


Amortization


Impairment


NetAcquired technology

$
47,953


$
42,029


$



$
5,924Patents


4,118



987







3,131Other


500



500







Total

$
52,571


$
43,516


$



$
9,055      F-15




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    For the Year Ended

March 312008

$
7382009


6882010


4672011


2572012


198Thereafter


2,658Total

$
5,006   6.
    GOODWILL      March 31, 2007


March 31, 2006Cost


Impairment


Net


Cost


Impairment


NetGoodwill

$
181,981


$
(97,576
)

$
84,405


$
181,981


$



$
181,981     7.
    OTHER
    LONG TERM ASSETS    March 31,


March 31,2007


2006Investments (at cost)

$
10,190


$
11,177Production mask sets, net of
    accumulated amortization of $2,729 in fiscal 2007, $2,775 in
    fiscal 2006


5,170



5,082Total

$
15,360


$
16,259    F-16




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      8.
    STOCKHOLDERS
    EQUITY  Authorized
    Capital Stock
    Common
    Stock
    Preferred
    Stock
    Preferred
    Stock Rights Agreement
     F-17




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    STOCK-BASED
    COMPENSATION          paid-in-capital.
    Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005Stock option plans:Risk-free interest rates


4.9
%


4.8
%


3.6
%Volatility


66
%


78
%


90
%Expected life (in years)


4.25



4.25



4.25Employee stock purchase plan:Risk-free interest rates


5.1
%


4.8
%


3.1
%Volatility


47
%


78
%


90
%Expected life (in years)


0.75



1.25



1.25    F-18




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Year Ended


Year EndedMarch 31,


March 31,2006


2005Net income (loss) attributable to
    common stockholders:As reported

$
18,390


$
(9,447
)Stock compensation, as reported


1,061



4,494Stock compensation, under
    SFAS 123


(22,432
)


(28,345
)Pro forma

$
(2,981
)

$
(33,298
)Basic earnings (loss) per share:As reported

$
0.53


$
(0.29
)Pro forma

$
(0.09
)

$
(1.01
)Diluted earnings (loss) per share:As reported

$
0.50


$
(0.29
)Pro forma

$
(0.08
)

$
(1.01
)     STOCK
    OPTION AND STOCK PURCHASE PLANS
  1997
    Employee Stock Option Plan
     F-19




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  1997
    Paradise Stock Option Plan
    1997
    Non-Employee Stock Option Plan
    2000
    Nonstatutory Stock Option Plan
    2001
    Nonstatutory Stock Option Plan
    2003
    Stock Plan
   F-20




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Sage
    Stock Option Plan
    Employee
    Stock Purchase Plan
     F-21




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Summary
    of Stock Options
    Weighted AverageNumber of


Exercise Price


Weighted AverageOptions


Per Share


Remaining Life(In thousands)





(Years)Outstanding, March 31, 2004


7,272


$
15.01



7.90Issued


2,729



14.93Exercised


(423
)


8.79Forfeited


(568
)


13.92Expired


(205
)


21.02Outstanding, March 31, 2005


8,805



15.22



7.49Issued


760



19.98Exercised


(2,065
)


12.66Forfeited


(291
)


14.00Expired


(82
)


22.55Outstanding, March 31, 2006


7,127



16.43



6.74Issued


1,276



11.17Exercised


(536
)


8.36Forfeited


(620
)


15.37Expired


(893
)


20.32Outstanding, March 31, 2007


6,354


$
15.61



5.90Exercisable, March 31, 2005


4,359


$
16.10



6.34Exercisable, March 31, 2006


4,267


$
16.67



6.10Exercisable, March 31, 2007


4,239


$
16.52



5.72        F-22




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Summary
    of Restricted Stock Units
    Weighted AverageGrant-DateNumber of RSUs


Fair Value(In thousands)Nonvested, March 31, 2005





$
Granted


270



19.93Forfeited


(4
)


19.80Nonvested, March 31, 2006


266



19.93Granted


609



11.47Vested


(112
)


11.12Forfeited


(74
)


15.06Nonvested, March 31, 2007


689


$
13.15       10.
    INCOME
    TAXES    Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005Current

$
3,316


$
3,177


$
6,386Deferred


10,899



2,905



(3,432
)Total

$
14,215


$
6,082


$
2,954  F-23




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005Basic federal rate applied to
    income before provision for (recovery of) income taxes

$
(44,244
)

$
8,320


$
(2,208
)Adjustments resulting from:State and provincial income taxes


(7,808
)


1,468



(390
)Non-deductible expenses and other
    permanent differences


5,293



324



2,672Non-deductible impairment of
    goodwill and intangible assets


40,400







Research and development
    deductions and investment tax credits


(3,740
)


(3,668
)


(1,276
)Foreign exchange and tax rate
    differences


(7,834
)


(9,870
)


(9,371
)Tax on repatriation from foreign
    subsidiary










3,701Change in valuation allowance


30,174



9,403



9,745Other items


1,974



105



81Total

$
14,215


$
6,082


$
2,954         March 31,


March 31,2007


2006Acquisition-related intangibles

$
(1,864
)

$
(1,864
)Net operating loss carryforwards


69,563



55,616Research tax credit carryforwards


23,916



20,317Net capital loss carryforwards


6,157



7,137Other


5,727



2,596Net deferred tax asset


103,499



83,802Less valuation allowance


(103,247
)


(72,651
)Total

$
252


$
11,151  F-24




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        11.
    RELATED
    PARTY TRANSACTIONS       F-25




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  12.
    EARNINGS
    (LOSS) PER SHARE    Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005Numerator for basic and diluted
    earnings (loss) per share:Net income (loss)

$
(144,341
)

$
18,390


$
(9,447
)Denominator for basic earnings
    (loss) per share
    (in thousands):Weighted average common shares


36,514



34,909



33,084Basic earnings (loss) per share

$
(3.95
)

$
0.53


$
(0.29
)Denominator for diluted earnings
    (loss) per share
    (in thousands):Weighted average common shares


36,514



34,909



33,084Stock options






1,968



Shares used in computing diluted
    earnings (loss) per share


36,514



36,877



33,084Diluted earnings (loss) per share

$
(3.95
)

$
0.50


$
(0.29
)Anti-dilutive potential common
    shares excluded from above calculation (in thousands):


6,837



5,804



8,251     13.
    COMMITMENTS
    AND CONTINGENCIES  Lease
    commitments
    2008

$
4,9582009


4,4642010


2,5292011


1,8632012


1,065Thereafter


Total

$
14,879    F-26




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Legal
    proceedings
    Supply
    arrangements
    Guarantees
    and indemnifications
    14.
    SEGMENT
    INFORMATION    Geographic
    information
      Year Ended


Year Ended


Year EndedMarch 31,


March 31,


March 31,2007


2006


2005United States

$
1,180


$
3,493


$
8,803China


83,707



115,016



78,167Japan


24,005



27,356



15,289South Korea


53,256



51,487



52,871Taiwan


20,307



28,704



28,824Europe


24,705



31,131



13,334Rest of world


7,457



12,319



6,827Total

$
214,617


$
269,506


$
204,115  F-27




---



##### Table of Contents



Genesis
    Microchip Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    March 31,


March 31,2007


2006United States

$
94,716


$
197,561Rest of world


10,933



9,934Total

$
105,649


$
207,495   Concentration
    information
    Year EndedMarch 31,2007


2006


2005Customer A


16
%


15
%


15
%Customer B


10
%


10
%


Customer C


10
%


10
%


Customer D










10
%     Year Ended March 31,2007


2006Customer 1


36
%


22
%Customer 2


13
%


12
%Customer 3






12
%Customer 4






11
%   15.
    COMPARATIVE
    FIGURES   F-28




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation of disclosure controls and
    procedures.
  Managements Report on Internal Control Over Financial
    Reporting. Form 10-K/A,
  Changes in internal control over financial
    reporting.
  ITEM 9B.
    OTHER
    INFORMATION    PART III
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  DIRECTORS
    DirectorName

Age

Position

SinceClass III Directors Whose
    Terms Expire at the 2007 Annual MeetingJon Castor(1)(4)


55


Director


2004Chieh Chang(2)(3)


55


Director


2004Jeffrey Diamond(2)(4)


55


Chairman of the Board


2001Class I Directors Whose
    Terms Expire at the 2008 Annual Meeting:Tim Christoffersen(1)(3)


65


Director


2002Robert H. Kidd(1)(4)


63


Director


2002Class II Directors Whose
    Terms Expire at the 2009 Annual Meeting:Chandrashekar M. Reddy(2)(3)


47


Director


2002Elias Antoun


51


President, Chief Executive
    Officer and Director


2004     (1)
    
    Member of the Audit Committee.(2)
    
    Member of the Compensation Committee. 36




---



##### Table of Contents



(3)
    
    Member of the Corporate Governance Committee.(4)
    
    Member of the Nominating Committee.  Jon Castor
  Chieh Chang
  Jeffrey Diamond
  Tim Christoffersen
  Robert H. Kidd
 37




---



##### Table of Contents



Chandrashekar M. Reddy
  Elias Antoun
  The
    Board of Directors, its Committees and Meetings
  Board of Directors.
      Compensation Committee.
    Audit Committee.
 38




---



##### Table of Contents



www.gnss.com.
  Nominating Committee.
  
    The current size, composition and needs of the Board of
    Directors and its committees;
    such factors as judgment, independence, character and integrity,
    area of expertise, diversity of experience, length of service,
    and potential conflicts of interest of candidates; and
    such other factors as the Nominating Committee may consider
    appropriate.       39




---



##### Table of Contents



www.gnss.com.
  Corporate Governance Committee.
  www.gnss.com.
  Corporate
    Governance.
    Corporate Governance Guidelines. www.gnss.com
  Code of Ethics. http://www.gnss.com,
        Form 8-K
  Director attendance at annual
    meetings.
  Director continuing education.
 40




---



##### Table of Contents



EXECUTIVE
    OFFICERS
    Name

Age

PositionElias Antoun


51


President, Chief Executive Officer
    and DirectorMichael Healy(1)


45


Chief Financial Officer and Senior
    Vice President, FinanceBehrooz Yadegar(2)


47


Senior Vice President, Product
    DevelopmentHildy Shandell(3)


51


Senior Vice President, Corporate
    DevelopmentAnders Frisk(4)


51


Executive Vice PresidentErnest Lin


53


Senior Vice President, Worldwide
    SalesJeffrey Lin(5)


34


General CounselAva Hahn(6)


34


Associate General Counsel and
    Secretary     (1)
    
    On May 16, 2007, Michael Healy terminated employment.(2)
    
    On May 16, 2006, Behrooz Yadegar joined the company.(3)
    
    On September 12, 2006, Hildy Shandell joined the company.(4)
    
    In June 2007, Anders Frisk resigned from the company and will
    terminate employment on July 31, 2007.(5)
    
    On June 8, 2007, Jeffrey Lin was appointed Secretary of the
    company.(6)
    
    In May 2007, Ava Hahn resigned from the company and will
    terminate employment on June 12, 2007.  Elias Antoun
  Michael Healy
  Behrooz Yadegar
  Hildy Shandell
 41




---



##### Table of Contents



Anders Frisk
  Ernest Lin
  Jeffrey Lin
  Ava Hahn
  Item 11.
    EXECUTIVE
    COMPENSATION  REPORT OF
    THE COMPENSATION COMMITTEE
  Form 10-K/A.
  Compensation Committee
    42




---



##### Table of Contents



COMPENSATION
    DISCUSSION AND ANALYSIS
  Executive
    Compensation Program Objectives and Philosophy
    
    Offer compensation opportunities that attract and retain
    executives whose abilities are critical to our long-term success;
    Motivate executives to perform at their highest level and reward
    outstanding achievement;
    Maintain a significant portion of the executives total
    compensation at risk, tied to achievement of financial,
    organizational and management performance goals; and
    Encourage executives to manage from the perspective of owners
    with an equity stake in Genesis.  Determination
    of Compensation
  Form 10-K/A,
     43




---



##### Table of Contents



and/or
      Elements
    of Executive Compensation
  and/or
    Base
    Salary
    Executive
    Bonus Plan
     44




---



##### Table of Contents



management-by-objective
        FINANCIAL
    COMPONENT BONUS AMOUNTS
  Operating Plan Performance

<90%


90%


100%


110%Elias Antoun


0
%


12.5
%


25
%


50
%Michael Healy(1)


0
%


6.25
%


12.5
%


25
%Behrooz Yadegar


0
%


6.25
%


12.5
%


25
%Hildy Shandell


0
%


6.25
%


12.5
%


25
%Raphael Mehrbians(1)


0
%


6.25
%


12.5
%


25
%Tzoyao Chan(1)


0
%


6.25
%


12.5
%


25
%Anders Frisk(1)


0
%


6.25
%


12.5
%


25
%     (1)
    
    No longer employed by the Company   45




---



##### Table of Contents



MBO
    COMPONENT BONUS AMOUNTS
  Operating Plan Performance

<90%


90%


100%


110%Elias Antoun


0
%


25
%


25
%


50
%Michael Healy(1)


0
%


12.5
%


12.5
%


25
%Behrooz Yadegar


0
%


12.5
%


12.5
%


25
%Hildy Shandell


0
%


12.5
%


12.5
%


25
%Raphael Mehrbians(1)


0
%


12.5
%


12.5
%


25
%Tzoyao Chan(1)


0
%


12.5
%


12.5
%


25
%Anders Frisk(1)


0
%


12.5
%


12.5
%


25
%     (1)
    
    No longer employed by the Company        Long-Term
    Equity Incentive Compensation
     46




---



##### Table of Contents



and/or
    Change of Control and Severance Benefits Potential
    Payments on Termination or Change of Control
  Change
    of Control and Severance Benefits
  and/or and/or
 47




---



##### Table of Contents



case-by-case Potential Payments on Termination or Change of Control
  Other
    Compensation and Perquisites
    CEO
    Compensation for Fiscal 2006
    Actual FY 2006Target Growth in

Performance as aFY2006 Over FY 2005

Percentage of FY2006Metric

Results

TargetsRevenue


20
%


110
%Non-GAAP Operating Margin


200
%


176
%       Cash compensation:Base salary

$
350,004Cash bonus(1)

$
297,500Year-end incentive equity
    award:Restricted stock units(2)(3)

$
11,564Stock options(2)(4)

$
1,488,567Retirement benefits:401(k) Plan Company match(5)

$
2,982Other fiscal 2006 compensation
    as reported in the summary compensation table:Other compensation(6)

$
5,400Total

$
2,156,017     (1)
    
    Fiscal 2006 bonus amount paid in early fiscal 2007 pursuant to
    the Fiscal 2006 Executive Bonus Plan.(2)
    
    Awarded in early fiscal 2007 for performance in fiscal 2006.
    This amount is also disclosed in the following Fiscal Year
    2007 Summary Compensation Table. 48




---



##### Table of Contents



(3)
    
    Indicates the amount in dollars recognized for financial
    statement reporting purposes for the fiscal year ended
    March 31, 2007 in accordance with FAS 123R
    disregarding forfeiture assumptions of $21,170. See Note 9
    of the Notes to Consolidated Financial Statements for the
    assumptions used by the Company in calculating these amounts.(4)
    
    Indicates the amount in dollars recognized for financial
    statement reporting purposes for the fiscal year ended
    March 31, 2007 in accordance with FAS 123R
    disregarding forfeiture assumptions of $69,826. See Note 9
    of the Notes to Consolidated Financial Statements for
    assumptions used by the Company in calculating these amounts.(5)
    
    401(k)plan matching contributions were paid to executives at the
    same rates as other eligible employees and capped at $3,000 in
    fiscal 2006.(6)
    
    Consisted of car allowance, which was discontinued effective
    January 23, 2007.  Potential Payments on Termination or Change of
    Control
  Executive
    Compensation Tables
  Form 10-K/A.
  FISCAL
    YEAR 2007 SUMMARY COMPENSATION TABLE
  Stock

Option

Non-Equity

All OtherAwards

Awards

Incentive Plan

CompensationName and Principal Position

Year

Salary ($)

Bonus ($)

($)(7)

($)(8)

Compensation ($)

($)(9)

Total ($)Elias Antoun,


2007



364,001



0



11,564



1,488,567



0



23,723



1,887,855President & CEOMichael Healy,


2007



241,384



0



9,406



790,324



0



24,043



1,065,157formerly Sr. VP Finance and CFO(1)Behrooz Yadegar,


2007



229,174



75,000
(2)


86,759



119,878



0



20,128



530,939Sr. VP Product DevelopmentHildy Shandell,


2007



144,002



100,000
(3)


166,571



64,550



28,500
(3)


9,561



513,184Sr. VP Corporate DevelopmentRaphael Mehrbians,


2007



168,807



0



10,510



418,969



0



185,258



783,544formerly Sr. VP Product Marketing(4)Tzoyao Chan,


2007



102,120



0



10,510



401,431



0



233,371



747,432formerly Sr. VP Product
    Development(5)Anders Frisk,


2007



275,834



0



8,294



476,065



0



24,377



784,570Executive Vice President(6)     (1)
    
    Mr. Healy terminated employment with the Company on
    May 16, 2007.(2)
    
    Mr. Yadegar commenced employment on May 16, 2006 and
    received a $75,000 sign-on bonus.(3)
    
    Ms. Shandell commenced employment on September 12,
    2006 and, pursuant to her offer letter, received a $100,000
    sign-on bonus and a guaranteed bonus of $28,500 under our
    Executive Bonus Plan. The Other 49




---



##### Table of Contents



Compensation column includes $5,658 in reimbursement for
    legal fees incurred in connection with her offer letter.(4)
    
    Mr. Mehrbians terminated employment with the Company on
    October 31, 2006. The Other Compensation column
    includes $164,736 in severance pay and $8,667 in COBRA
    reimbursement pursuant to Mr. Mehrbianss separation
    agreement.(5)
    
    Mr. Chan terminated employment with the Company on
    July 31, 2006. The Other Compensation column
    includes $208,472 in severance pay and $16,251 in COBRA
    reimbursement pursuant to Mr. Chans separation
    agreement.(6)
    
    Mr. Frisk terminated employment on July 31, 2007.(7)
    
    The amounts in this column for Stock Awards indicate
    the amount in dollars recognized for financial statement
    reporting purposes for the fiscal year ended March 31, 2007
    in accordance with FAS 123R disregarding forfeiture
    assumptions of $21,170. See Note 9 of the Notes to
    Consolidated Financial Statements for the assumptions used by
    the Company in calculating these amounts.(8)
    
    The amounts in this column for Option Awards
    indicate the amount in dollars recognized for financial
    statement reporting purposes for the fiscal year ended
    March 31, 2007 in accordance with FAS 123R
    disregarding forfeiture assumptions of $69,826. See Note 9
    of the Notes to Consolidated Financial Statements for
    assumptions used by the Company in calculating these amounts.(9)
    
    See All Other Compensation and
    Perquisites tables.    FISCAL
    YEAR 2007 ALL OTHER COMPENSATION TABLE
  Perquisites





Companyand Other





Contributions to


SeverancePersonal


Insurance


Retirements and


Payments/Benefits


Premiums


401(k) Plans


AccrualsName

Year


($)(1)


($)(4)


($)(4)


($)


Total ($)Elias Antoun


2007



5,700



15,023



3,000



0



23,723Michael Healy(2)


2007



5,700



15,343



3,000



0



24,043Behrooz Yadegar


2007



5,100



15,028



0



0



20,128Hildy Shandell(3)


2007



8,358



1,203



0



0



9,561Raphael Mehrbians(2)


2007



4,200



6,497



1,158



173,403



185,258Tzoyao Chan(2)


2007



2,400



5,024



1,224



224,723



233,371Anders Frisk(2)


2007



5,700



15,677



3,000



0



24,377     (1)
    
    Consists of car allowance, which was discontinued effective
    January 23, 2007.(2)
    
    No longer employed by the Company.(3)
    
    Consists of car allowance, which was discontinued effective
    January 23, 2007, and reimbursement for legal fees incurred
    in connection with negotiating Ms. Shandells offer of
    employment.(4)
    
    Insurance premiums and 401(k) plan contributions are paid to
    executives at the same rates as other eligible employees.   50




---



##### Table of Contents



FISCAL
    YEAR 2007 PERQUISITES TABLE
  Financial


Total PerquisitesCar Allowances


Planning/Legal Fees


and Other PersonalName

Fiscal Year


($)(1)


($)(2)


Benefits ($)Elias Antoun


2007



5,700



0



5,700Michael Healy(3)


2007



5,700



0



5,700Behrooz Yadegar


2007



5,100



0



5,100Hildy Shandell


2007



2,700



5,658



8,358Raphael Mehrbians(3)


2007



4,200



0



4,200Tzoyao Chan(3)


2007



2,400



0



2,400Anders Frisk(3)


2007



5,700



0



5,700     (1)
    
    The car allowance was discontinued for all executives effective
    January 23, 2007.(2)
    
    Paid pursuant to offer letter.(3)
    
    No longer employed by the Company.    FISCAL
    YEAR 2007 GRANTS OF PLAN-BASED AWARDS TABLE
  All OtherAll Other

Option





GrantStock

Awards:

Exercise



Date FairAwards:

Number of

or Base

Closing

Value ofEstimated Future Payouts Under Equity Incentive Plan

Number

Securities

Price of

Price on

Stock &Estimated Future Payouts Under Non-Equity Incentive Plan
    Awards(3)

Awards

of Shares

Underlying

Option

Grant

OptionGrant

Approval



Target





Target



of Stock or

Options

Awards

Date

AwardsName

Date

Date

Threshold ($)

($)

Maximum ($)

Threshold ($)

($)

Maximum ($)

Units (#)(4)

(#)(5)

($/Sh)(6)

($/Sh)

($)(7)Elias Antoun


5/30/2006



5/30/2006































60,000



12.27



11.82



430,0625/30/2006



5/30/2006



























4,300







0



11.82



52,761136,500



182,000



364,000



n/a



n/a



n/aMichael Healy(1)


5/30/2006



5/30/2006































25,000



12.27



11.82



179,1935/30/2006



5/30/2006



























1,430







0



11.82



17,54645,260



60,346



120,692



n/a



n/a



n/aBehrooz Yadegar


5/5/2006



5/5/2006































70,000



12.97



13.08



530,3695/5/2006



5/5/2006



























30,000







0



13.08



389,10042,970



57,294



114,587Hildy Shandell(2)


10/27/2006



9/12/2006































45,000



10.23



10.14



245,64610/27/2006



9/12/2006



























50,000







0



10.14



600,50048,751



65,001



130,002



n/a



n/a



n/aRaphael Mehrbians(1)


5/30/2006



5/30/2006































25,000



12.27



11.82



179,1935/30/2006



5/30/2006



























1,430







0



11.82



17,546n/a



n/a



n/a



n/a



n/a



n/aTzoyao Chan(1)


5/30/2006



5/30/2006































20,000



12.27



11.82



143,3545/30/2006



5/30/2006



























1,430







0



11.82



17,546n/a



n/a



n/a



n/a



n/a



n/aAnders Frisk(1)


5/30/2006



5/30/2006































20,000



12.27



11.82



143,3545/30/2006



5/30/2006



























1,430







0



11.82



17,54651,719



68,958



137,917



n/a



n/a



n/a     (1)
    
    No longer employed by the Company.(2)
    
    Options were approved during a closed trading window under the
    companys Insider Trading Policy, and were therefore not
    granted until the trading window reopened.(3)
    
    Potential payments as calculated pursuant to the fiscal year
    2007 Executive Bonus Plan. See Executive Bonus Plan
    discussion on page 42. Actual payments were zero, except to
    Ms. Shandell, who earned a guaranteed 51




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##### Table of Contents



$28,500 bonus payment in accordance with her offer letter. The
    company did not achieve its minimum corporate revenue and
    operating income goals, and as a result, no bonus payments were
    made pursuant to the fiscal year 2007 Executive Bonus Plan other
    than to Ms. Shandell.(4)
    
    These restricted stock units vest over four years from the date
    of grant, except for Ms. Shandells grant, which vests
    over three and a half years from the date of grant.(5)
    
    These stock options vest over four years from the date of grant,
    except for Ms. Shandells options, which vest over
    three and a half years from the date of grant.(6)
    
    The exercise price is higher than the closing price on the date
    of grant because the awards were priced in accordance with the
    then-current policy of using the closing price of the day before
    grant. The company currently prices awards at the closing price
    on the date of grant.(7)
    
    Amount reflects the full grant date fair value of the awards as
    of March 31, 2007, as computed in accordance with
    FAS 123R. The assumptions used to calculate the amounts in
    this column are set forth under Note 9 of the Notes to
    Consolidated Financial Statements.    FISCAL
    YEAR 2007 OPTION EXERCISES AND STOCK VESTED TABLE
  Option Awards


Stock AwardsNumber





Numberof Shares


Value


of Shares


ValueAcquired on


Realized on


Acquired on


RealizedExercise


Exercise


Vesting


on VestingName

(#)


($)


(#)


($)Elias Antoun


0



0



0



0Michael Healy(1)


0



0



469



5,629Behrooz Yadegar


0



0



0



0Hildy Shandell


0



0



12,500



99,000Raphael Mehrbians(1)


35,000



198,800



402



5,303Tzoyao Chan(1)


104,284



209,767



322



4,221Anders Frisk(1)


0



0



376



4,514     (1)
    
    No longer employed by the Company. 52




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##### Table of Contents



FISCAL
    YEAR 2007 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
    TABLE
  Option Awards

Stock AwardsNumber of

Number of





Number

MarketSecurities

Securities





of RSUs

Value ofUnderlying

Underlying

Option



That Have

RSUs ThatUnexercised

Unexercised

Exercise

Option

Not

Have NotOptions (#)

Options (#)

Price

Expiration

Vested

VestedName

Exercisable

Unexercisable

($)

Date

(#)

($)Elias Antoun(4)(5)


291,667



208,333



16.895



11/29/2014



4,300



39,9470



60,000



12.270



5/30/2012Michael Healy(1)(4)(5)


154,167



45,833



18.830



2/4/2014



602



5,5939,740



11,510



19.500



10/25/2011



1,430



13,2850



25,000



12.270



5/30/2012Behrooz Yadegar(4)(5)


0



70,000



12.970



5/5/2012



30,000



278,700Hildy Shandell(6)


11,250



33,750



10.230



10/27/2012



37,500



348,375Raphael Mehrbians(2)(4)(5)


9,031



0



19.500



12/31/2007



0



0Tzoyao Chan(3)(4)(5)


0



0











0



0Anders Frisk(4)(5)(7)


33,917



0



22.560



2/17/2010



481



4,46810,834



0



22.560



2/17/2010



1,430



13,28513,750



0



17.000



8/2/20106,500



0



17.000



8/2/201014,375



0



7.500



7/22/201231,667



0



12.390



2/18/20138,334



833



16.800



5/16/2013377



5,297



15.620



5/26/201417,956



6,370



15.620



5/26/20147,792



9,208



19.500



10/25/20110



20,000



12.270



5/30/2013     (1)
    
    Terminated employment May 16, 2007.(2)
    
    Terminated employment October 31, 2006.(3)
    
    Terminated employment July 31, 2006.(4)
    
    Options vest over four years from the date of grant, with 25%
    vesting after one year, and monthly vesting thereafter.(5)
    
    Restricted stock units vest 25% after one year, with annual
    vesting thereafter.(6)
    
    Pursuant to Ms. Shandells offer letter, options and
    restricted stock units vest over three and a half years from the
    date of grant, with 25% vesting after six months of employment
    and the balance vesting monthly in equal amounts over the
    following thirty-six months.(7)
    
    Terminated employment on July 31, 2007.  Change
    of Control and Severance Benefits
  Tier 1
    Change of Control Agreement with CEO
   53




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##### Table of Contents



Tier 1
    Change of Control Agreement with CFO
    Tier 2
    Change of Control Agreement with Other Executives
    
    Behrooz Yadegar, Sr. VP, Product Development
    Ernest Lin, Sr. VP, Worldwide Sales
    Jeffrey Lin, General Counsel
    Ava Hahn, former Associate General Counsel & Secretary      Change of
    Control Agreement with Hildy Shandell
   54




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##### Table of Contents



Employment
    Agreements
  Offer
    Letter with Behrooz Yadegar
     55




---



##### Table of Contents



Offer
    Letter with Hildy Shandell
       56




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##### Table of Contents



POTENTIAL
    PAYMENTS ON TERMINATION OR CHANGE OF CONTROL
  Payment Trigger

Salary


Bonus


Benefits/


Equity


TotalName

Event

Severance


Severance(1)


Perquisites


Acceleration


ValueElias Antoun

Involuntary

$
0


$
0


$
0


$
0


$
0Termination Unrelated to
    Change-of-ControlInvoluntary

$
364,001


$
182,001


$
16,800


$
19,974


$
582,776Termination Related to
    Change-of-ControlMichael Healy(2)

Involuntary

$
0


$
0


$
0


$
0


$
0Termination Unrelated to
    Change-of-ControlInvoluntary

$
241,384


$
60,346


$
16,800


$
9,439


$
327,969Termination Related to
    Change-of-ControlBehrooz Yadegar

Involuntary

$
125,004


$
0


$
8,400


$
69,675


$
203,079Termination Unrelated to
    Change-of-ControlInvoluntary

$
125,004


$
0


$
8,400


$
139,350


$
272,754Termination Related to
    Change-of-ControlHildy Shandell

Involuntary

$
260,004


$
65,000


$
16,800


$
116,125


$
457,929Termination Unrelated to
    Change-of-ControlInvoluntary

$
260,004


$
65,000


$
16,800


$
174,188


$
515,992Termination Related to
    Change-of-ControlAnders Frisk(2)

Involuntary

$
91,945


$
0


$
5,600


$
0


$
97,545Termination Unrelated to
    Change-of-ControlInvoluntary

$
91,945


$
0


$
5,600


$
0


$
97,545Termination Related to
    Change-of-Control     (1)
    
    This is the maximum bonus amount payable pursuant to the Change
    of Control agreements. The actual bonus amount paid, if any,
    would be prorated based on number of days served in the fiscal
    year.(2)
    
    No longer employed by the Company.   57




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##### Table of Contents



Tax
    and Accounting Considerations
      Compensation
    of Directors
           58




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##### Table of Contents



FISCAL
    YEAR 2007 DIRECTOR COMPENSATION TABLE
  Fees Earnedor Paid


Optionin Cash


Awards


All Other


TotalName

($)(1)


($)(2)


Compensation ($)


($)Jon Castor(3)


54,500



188,171



0



242,671Chieh Chang(4)


56,000



188,171



0



244,171Tim Christoffersen(5)


57,000



136,716



0



193,716Jeffrey Diamond(6)


72,000



136,716



0



208,716Robert H. Kidd(7)


57,500



136,716



0



194,216Chandrashekar M. Reddy(8)


59,250



119,434



0



178,684     (1)
    
    Shows amounts earned through March 31, 2007.(2)
    
    This column reflects the dollar amount of option awards
    recognized in accordance with FAS 123R for financial
    statement reporting purposes for the fiscal year ended
    March 31, 2007 disregarding forfeiture assumptions of
    $5,055. The assumptions used to calculate the numbers in this
    column are set forth under Note 9 of the Notes to
    Consolidated Financial Statements.(3)
    
    Mr. Castor held options to purchase 43,000 shares
    outstanding at fiscal year end. The grant date fair value of the
    options to purchase 15,000 shares of our common stock that
    were granted to each non-employee director in fiscal 2007 was
    $94,208, as computed in accordance with FAS 123R.(4)
    
    Mr. Chang held options to purchase 53,000 shares
    outstanding at fiscal year end. The grant date fair value of the
    options to purchase 15,000 shares of our common stock that
    were granted to each non-employee director in fiscal 2007 was
    $94,208, as computed in accordance with FAS 123R.(5)
    
    Mr. Christoffersen held options to purchase
    65,500 shares outstanding at fiscal year end. The grant
    date fair value of the options to purchase 15,000 shares of
    our common stock that were granted to each non-employee director
    in fiscal 2007 was $94,208, as computed in accordance with FAS
    123R.(6)
    
    Mr. Diamond held options to purchase 115,500 shares
    outstanding at fiscal year end. The grant date fair value of the
    options to purchase 15,000 shares of our common stock that
    were granted to each non-employee director in fiscal 2007 was
    $94,208, as computed in accordance with FAS 123R.(7)
    
    Mr. Kidd held options to purchase 70,500 shares
    outstanding at fiscal year end. The grant date fair value of the
    options to purchase 15,000 shares of our common stock that
    were granted to each non-employee director in fiscal 2007 was
    $94,208, as computed in accordance with FAS 123R.(8)
    
    Mr. Reddy held options to purchase 67,167 shares
    outstanding at fiscal year end. The grant date fair value of the
    options to purchase 15,000 shares of our common stock that
    were granted to each non-employee director in fiscal 2007 was
    $94,208, as computed in accordance with FAS 123R.     59




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##### Table of Contents



Compensation
    Committee Interlocks and Insider Participation
   60




---



##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Equity
    Compensation Plan Information
      Number ofSecuritiesAvailable forNumber of





IssuanceSecurities to


Weighted-


Under Equitybe Issued


Average


CompensationUpon Exercise


Exercise Price


Plansof


of


(ExcludingOutstanding


Outstanding


SecuritiesOptions,


Options,


Reflected inWarrants and


Warrants and


the FirstPlan Name and Type

Rights


Rights


Column)Equity compensation plans
    approved by stockholders1997 Employee Stock Purchase
    Plan*(1)


N/A



N/A



215,0851997 Employee Stock Option
    Plan(2)(3)


2,100,310



13.71



1,855,8491997 Non-Employee Stock Option Plan


160,480



14.25



69,675Equity compensation plans not
    formally approved by stockholders2000 Non-Statutory Stock Option
    Plan(3)


2,664,685



15.22



1,475,2782001 Non-Statutory Stock Option
    Plan(2)


260,864



21.97



106,9012003 Stock Plan(2)


865,000



17.15



118,750Equity compensation plans
    assumed on acquisitions1997 Paradise Stock Option Plan


557



0.66



Sage Stock Option Plan(2)


301,871



23.15



     *
    
    The number of securities to be issued upon exercise of
    outstanding rights under the 1997 Employee Stock Purchase Plan
    and the weighted average exercise price of those securities is
    not determinable. The 1997 Employee Stock Purchase Plan
    provides that shares of our common stock may be purchased at a
    per share price equal to 85% of the fair market value of the
    common stock on the beginning of the offering period or a
    purchase date applicable to such offering period, whichever is
    lower. The closing price per share of our common stock on the
    Nasdaq Global Market on June 29, 2007 (the last trading day
    of the most recent offering period) was $9.36.(1)
    
    Under this plan, the number of shares which may be issued is
    subject to an annual increase to be added on each anniversary
    date of the adoption of the plan equal to the lesser of
    (i) the number of Shares needed to restore the maximum
    aggregate number of Shares available for sale under the plan to
    500,000, or (ii) a lesser amount determined by the Board.(2)
    
    This plan explicitly permits repricing of options granted under
    the plan.(3)
    
    Under this plan, the number of shares which may be issued is
    subject to an annual increase to be added on the first day of
    each fiscal year equal to the lesser of
    (1) 2,000,000 shares, (ii) 3.5% of the
    outstanding shares of common stock on such date or (iii) an
    amount determined by the Board. 61




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##### Table of Contents



2000
    Non-Statutory Stock Option Plan
  Purpose
    Administration
    Eligibility
    to Participate in the Plan
    Number
    of Shares Covered by the Plan
    Awards
    Permitted Under the Plan
    Terms
    of Options
    Terms
    of Stock Appreciation Rights
    Capital
    Changes
   62




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##### Table of Contents



Dissolution
    or Liquidation
    Merger,
    Asset Sale or Change of Control
      Nonassignability
    Amendment
    and Termination of the Plan
    Certain
    United States Federal Income Tax Information
     63




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##### Table of Contents



2001
    Non-Statutory Stock Option Plan
  Purpose
    Administration
    Eligibility
    to Participate in the Plan
    Number
    of Shares Covered by the Plan
    Awards
    Permitted Under the Plan
    Terms
    of Options
    Capital
    Changes
   64




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##### Table of Contents



Dissolution
    or Liquidation
    Merger,
    Asset Sale or Change of Control
    Nonassignability
    Amendment
    and Termination of the Plan
    Certain
    United States Federal Income Tax Information
        2003
    Stock Plan
      grant-by-grant
 65




---



##### Table of Contents



and/or
  split-up,
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    
    each of our current directors, as well as our Chief Executive
    Officer, former Chief Financial Officer and our other three most
    highly compensated executive officers who were executive
    officers during the fiscal year ended March 31, 2007;
    all of our current directors and named executive officers as a
    group; and
    all persons known by us to be beneficial owners of more than
    five percent (5%) of our outstanding stock.  Rule 13d-3 Rule 13d-3,
 66




---



##### Table of Contents



c/o Genesis
  Number ofShares ofCommon StockIssuablePursuant to


Total NumberOptions and


of Shares ofRestricted


Common Stock


Percentage ofStock


Beneficially


OutstandingName

Units


Owned


Common StockDeutscheBank AG(1)
    Taunusanlage 12 
    D-60325 Frankfurt am Main 
    Federal Republic of Germany






3,174,886



8.5
%Sonar Capital Management LLC(1)
    75 Park Plaza, 2nd Floor 
    Boston, MA 02116






2,295,345



6.1
%Elias Antoun


374,167



394,650



1.1
%Michael Healy(2)(7)


0



5,201




*Behrooz Yadegar


24,792



26,264




*Hildy Shandell


17,813



29,345




*Raphael Mehrbians(3)(7)


9,031



11,773




*Tzoyao Chan(4)(7)


0



16,690




*Anders Frisk(5)(6)(7)


142,542



145,815




*Jon Castor


42,583



42,583




*Chieh Chang


52,583



66,320




*Tim Christoffersen


65,500



65,500




*Jeffrey Diamond(8)


115,500



130,054




*Robert H. Kidd


70,500



70,500




*Chandrashekar M. Reddy


67,167



198,722




*Directors and Named Executive
    Officers as a group (13 persons)(5)(8)


982,178



1,203,417



3.2
%     *
    
    Less than one percent (1%)(1)
    
    Based on information contained in a Schedule 13F filed
    June 30, 2007.(2)
    
    Terminated employment May 16, 2007.(3)
    
    Terminated employment October 31, 2006.(4)
    
    Terminated employment July 31, 2006.(5)
    
    Includes 3,273 shares of common stock held by
    Mr. Frisk.(6)
    
    Terminated employment July 31, 2007.(7)
    
    Total number of shares of common stock beneficially owned based
    on information available as of termination date.(8)
    
    Includes 14,554 shares owned by Diamond Family Trust, a
    trust established for the benefit of Mr. Diamond and his
    family. 67




---



##### Table of Contents



SECTION 16(A)
    BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
    ITEM 13.
    CERTAIN
    RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE        ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    2007


2006Audit Fees

$
901,017


$
815,790Audit-Related Fees


120,503



180,183Tax Fees


341,246



333,483All Other Fees


0



0Total Fees

$
1,362,766


$
1,329,456   Audit Fees.
  Audit-Related Fees.
 68




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##### Table of Contents



Tax Fees.
      PART IV
  ITEM 15.  EXHIBITS
    AND FINANCIAL STATEMENT SCHEDULES:
  Documents filed with this report:
  Consolidated Financial Statements.
  
    Report of Independent Registered Public Accounting firm.
    Consolidated Balance Sheets at March 31, 2007 and 2006.
    Consolidated Statements of Operations for the years ended
    March 31, 2007, March 31, 2006 and March 31, 2005.
    Consolidated Statements of Stockholders Equity for the
    years ended March 31, 2007, March 31, 2006 and
    March 31, 2005.
    Consolidated Statements of Cash Flows for the years ended
    March 31, 2007, March 31, 2006 and March 31, 2005.
    Notes to Consolidated Financial Statements  Consolidated Financial Statement
    Schedules.
  Exhibits.
 69




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##### Table of Contents



SIGNATURES
      By:
    /s/  Elias
    Antoun      By:
    /s/  Linda
    Millage         Name

Title

Date/s/  Elias
    AntounElias
    Antoun

President, Chief Executive Officer
    and Director

September 4, 2007**Jon
    Castor

Director

September 4, 2007**Chieh
    Chang

Director

September 4, 2007**Tim
    Christoffersen

Director

September 4, 2007**Jeffrey
    Diamond

Chairman of the Board

September 4, 2007**Robert
    H. Kidd

Director

September 4, 2007**Chandrashekar
    M. Reddy

Director

September 4, 2007**Power of AttorneyBy:

/s/  Jeffrey
    LinJeffrey
    Lin, as attorney in fact  70




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Exhibit Description2
.1(1)

Agreement and Plan of Merger and
    Reorganization, dated as of September 27, 2001, by and between
    Genesis Microchip Incorporated and Sage, Inc.2
.2(1)

Share Exchange and Arrangement
    Agreement and Plan of Arrangement by and among the Registrant,
    Genesis Microchip Nova Scotia Corp., and Genesis Microchip
    Incorporated.2
.3(2)

Agreement and Plan of Merger,
    dated as of March 17, 2003, among Genesis Microchip Inc.,
    Display Acquisition Corporation and Pixelworks, Inc. (with Forms
    of Voting Agreements).3
.1(1)

Certificate of Incorporation of
    the Registrant.3
.2(3)

Amended and Restated Bylaws of the
    Registrant.3
.3(4)

Certificate of Designation of
    Rights, Preferences and Privileges of Series A Participating
    Preferred Stock of the Registrant.4
.1(1)

Form of Common Stock Certificate
    of the Registrant.4
.2(4)

Preferred Stock Rights Agreement,
    dated as of June 27, 2002, between the Registrant and Mellon
    Investor Services, L.L.C., as amended on March 16, 2003.10
.1(5)*

Offer Letter of Employment with
    Anders Frisk, dated February 15, 2000.10
.2(5)*

Separation Agreement and Release
    with Chandrashekar Reddy.10
.3(5)*

Consulting Agreement with
    Chandrashekar Reddy.10
.4(6)*

1987 Stock Option Plan.10
.5

Intentionally omitted.10
.6(21)*

1997 Employee Stock Purchase Plan,
    as last amended on August 24, 2005.10
.7(21)*

1997 Non-Employee Stock Option
    Plan.10
.8(21)*

2000 Nonstatutory Stock Option
    Plan.10
.9(21)*

2001 Nonstatutory Stock Option
    Plan.10
.10(6)*

Paradise Electronics, Inc. 1997
    Employee Stock Option Plan.10
.11(6)*

Sage, Inc. Second Amended and
    Restated 1997 Stock Plan.10
.12(6)*

2001 Employee Stock Purchase Loan
    Plan (for non-officers).10
.13(7)*

Offer Letter with Michael Healy.10
.14(8)*

CFO Tier 1 Change of
    Control Severance Agreement with Michael Healy.10
.15(8)*

CEO Tier 1 Change of
    Control Severance Agreement with Elias Antoun.10
.15(8)*

Form of director and officer
    indemnification agreement.10
.16(9)*

2003 Stock Plan.10
.17(10)*

Form of 2000 Nonstatutory Stock
    Option Plan Stock Option Agreement with Nonemployee Directors.10
.18(10)*

Form of 2000 Nonstatutory Stock
    Option Plan International Stock Option Agreement.10
.19(10)*

Form of 2000 Nonstatutory Stock
    Option Plan Stock Option Agreement for China.10
.20(11)*

Amendment No. 1 to Separation
    Agreement and Release with Chandrashekar Reddy, dated November
    10, 2004.10
.21(12)*

Offer Letter of Employment with
    Elias Antoun, dated November 10, 2004.10
.22(13)*

1997 Employee Stock Option Plan,
    as amended on September 19, 2005, and form of Notice of Grant of
    Restricted Stock Units.10
.24(14)*

Offer Letter with Behrooz Yadegar,
    dated April 11, 2006.10
.25(15)*

Fiscal Year 2007 Executive Bonus
    Plan, dated June 10, 2006.10
.26(16)*

Separation Agreement and Release
    with Tzoyao Chan, dated July 27, 200610
.27(17)*

Offer Letter with Hildy Shandell,
    dated August 30, 200610
.28(17)*

Change in Control Severance
    Agreement with Hildy Shandell, dated September 12, 2006 71




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##### Table of Contents



ExhibitNumber

Exhibit Description10
.29(18)

Lease Agreement and Lease Rider
    Agreement with Transamerica Occidental Life Insurance Company,
    dated September 18, 2006.10
.30(19)*

Separation Agreement and Release
    with Raphael Mehrbians, dated October 20, 2006.10
.31(20)

Settlement and License Agreement
    with Silicon Image, Inc., dated December 21, 2006.10
.32(8)*

Tier 2 Change of
    Control Agreement with Anders Frisk.10
.33(8)*

Form of Tier 2 Change
    of Control Severance Agreement.21


Subsidiaries.23
.1

Consent of Independent Registered
    Accounting Firm.31
.1

Certification of Chief Executive
    Officer, as required by Rule 13a-14(a) or Rule 15d-14(a) of the
    Securities Exchange Act of 1934.31
.2

Certification of Principal
    Accounting Officer, as required by Rule 13a-14(a) or Rule
    15d-14(a) of the Securities Exchange Act of 1934.32
.1

Certification of Chief Executive
    Officer and Principal Accounting Officer, as required by Section
    1350 of Chapter 63 of Title 18 of the United States Code
    (18 U.S.C. 1350).     (1)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-4
    (File
    No. 333-72202)
    filed with the Securities and Exchange Commission on
    October 25, 2001, as amended.(2)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    March 20, 2003.(3)
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-K
    filed with the Securities and Exchange Commission on
    July 1, 2002, as amended.(4)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form 8-A12G
    filed with the Securities and Exchange Commission on
    August 5, 2002, as amended by the Registrants
    Statement on
    Form 8-12G/A
    filed with the Securities and Exchange Commission on
    March 31, 2003.(5)
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-K
    filed with the Securities Exchange Commission on June 20,
    2003.(6)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-8
    filed with the Securities Exchange Commission on
    February 21, 2002.(7)
    
    Incorporated by reference to the Registrants Quarterly
    Report on Form
    10-Q filed
    with the Securities Exchange Commission on February 13,
    2004.(8)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    March 7, 2007.(9)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-8
    filed with the Securities Exchange Commission on
    October 15, 2003.(10)
    
    Incorporated by reference to the Registrants Quarterly
    Report on Form
    10-Q filed
    with the Securities Exchange Commission on November 9, 2004.(11)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on
    November 15, 2004.(12)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on
    November 19, 2004.(13)
    
    Incorporated by reference to the Registrants Quarterly
    Report on Form
    10-Q filed
    with the Securities Exchange Commission on November 8, 2005.(14)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on May 10,
    2006.(15)
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-K
    filed with the Securities Exchange Commission on June 14,
    2006. 72




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##### Table of Contents



(16)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on August 1,
    2006.(17)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on
    September 18, 2006.(18)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on
    September 19, 2006.(19)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on
    October 23, 2006.(20)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    filed with the Securities Exchange Commission on
    December 22, 2006.(21)
    
    Incorporated by reference to the Registrants Annual Report
    on Form 10-K filed with the Securities Exchange Commission on
    June 12, 2007.*
    
    Identifies a management contract or compensatory plan of
    arrangement required to be filed as an exhibit to this report
    pursuant to Item 14(c) of this report. 73