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Directors Report of GSS Infotech Ltd.

Mar 31, 2014

Dear Members,

We are delighted to present the report on our business and operations for the financial year ended March 31, 2014

I. FINANCIAL RESULTS

The Company''s financial results (consolidated & standalone) for the year ended 31 st March 2014 is provided in the Annual Report

Consolidated Revenues of the Company for the year ended 31.03.2014 is INR 277.04 Crores and standalone revenues of the company is 52.19 Crores.

The Consolidated Profit after Tax of the company for the year ended 31.03.2014 is INR 6.31 Crores and Standalone Profit After Tax is INR 4.31 Crores.

GSS Infotech Limited GSS Infotech Limited (Standalone) and its subsidiaries (consolidated) Particulars Year ended Year ended (Rs.in Crores) (Rs.in Crores) 31.03.2014 31.03.2013 31.03.2014 31.03.2013

Total Income 52.19 41.91 277.04 296.46

Gross Profit 18.74 13.18 41.95 31.77

Profit ( )/Loss ( ) from Ordinary Activities 1.09 2.99 3.20 1.60 before tax

Net Profit ( )/ Loss ( ) from 4.31 (4.94) 6.31 (5.94) Ordinary Activities after tax

Paid up equity share capital 14.13 14.13 14.13 14.13 (Face Value. R10/ each)

Reserves and Surplus 274.30 270.04 325.40 293.66

Earnings Per Share 3.05 (3.49) 4.47 (4.20)



II. DIVIDEND

st The Directors did not recommend any dividend for the year ended 31 March 2014.

III. FIXED DEPOSITS

During the year under review, the Company has not accepted any deposit under Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

IV. DIRECTORS

Mr. Ramesh Yerramsetti and Mr. Madhukar C Seth, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re appointment.

During the Financial year under review, Mr. Farokh Kekhushroo Banatwalla resigned from the Board of Directors on 17.09.2013 due to his other pre-occupations.

V. AUDITORS

M/s. Sarath & Associates, Chartered Accountants, Statutory Auditors of the Company have offered themselves for re appointment at the ensuing Annual General Meeting and to hold the office from the conclusion of ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

M/s Sarath & Associates have also expressed their willingness to act as Auditors of the company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of section 224(1B) of the companies act, 1956.

VI. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in the Annexure A to this Report.

VII. AUDIT COMMITTEE

The Company has an Audit Committee comprising of three Directors namely, Mr. P.V.R.K. Prasad, Non Executive and Independent Director, Mr. Keerthy Jaya Tilak, Non Executive and Independent Director and Mr. Bhargav Marepally, promoter , CEO & Managing Director

VIII. PARTICULARS OF EMPLOYEES:

As required under the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out hereunder. The Ministry of Corporate Affairs, has amended the Companies (Particulars of Employees) Rules, 1975 to the effect that particulars of employees of companies engaged in Information Technology sector posted and working outside India not being directors or their relatives, drawing more than Rs. 6 million per financial year or Rs. 500,000 per month, as the case may be, need not be included in the statement but, such particulars shall be furnished to the Registrar of Companies. Accordingly, the statement included in this report does not contain the particulars of employees who are posted and working outside India.

Sl. Name Designation Qualification Age Previous Designation no. (years) employer at previous employment

1 Mr. Rajeev Designation BE Computer 44 Gatner Inc Offshore Banduni Chief Sales Science with Business Officer 20 years'' experience



Name Date of Remuneration joining (INR)

Mr. Rajeev Banduni 11th 42,50,000 February from April, 2013 2013 to September, 2013 (6 months) Resigned on 30.09.2013

IX. CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is set out as Annexure B and Annexure C to this Report

X. EMPLOYEES STOCK OPTION SCHEME (ESOS)

An application for in – principle approval for listing of 20,00,000 shares has been made to the stock exchanges under the new scheme GSS Infotech Limited Restricted Employee Stock Option Plan 2013 as per the scheme approved by the shareholders in the Annual General Meeting held on 19th July 2014.

XI. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on Management Discussion and Analysis is set out as Annexure D to this Report.

XII. CEO''s DECLARATION

Certificate from the ''Chief Executive Officer and Managing Director of the Company regarding the financial statements as per the Corporate Governance Norms is given as Annexure E to the report. Further, the declaration by the Managing Director of the Company declaring that all the members of the Board and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct of the Company is set out as Annexure F to the Report.

XIII. DIRECTORS'' RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, and after due enquiry, confirm:

a. That in preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

b. That the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2014 and of the profit of the Company for the year ended on that date;

c. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. That the annual accounts have been prepared on a going concern basis.

XIV. DIRECTORS COMMENTS ON RESERVATION(S) BY AUDITORS IN THEIR REPORT

With reference to Point No 3(b) in The Annexure referred to in Paragraph 1 under "Report on Other Legal and Regulatory Requirement'' section of Auditor''s report (standalone) of even date, the amounts are advanced to wholly owned subsidiaries of the company and the details thereof are as under:

Name of Subsidiary Balance as on 31.03.2014 Balance as on 31.03.2013

Gss Infotech Inc 13,53,54,979 12,24,95,132

GSS IT Solutions Pvt Ltd 18,50,000 2,43,92,064

GSS Healthcare IT Solutions Pvt Ltd 3,04,88,945 0

Total: 16,76,93,924 14,68,87,196

These amounts are advanced to subsidiaries towards working capital requirements and are given out of non interest bearing funds. These funds are utilized in the regular course of business by the subsidiaries and shall be received back. Interest is not charged since these amounts are advanced to subsidiaries for the purpose of overall growth of the business of the Group.

XV. STATEMENT PURSUANT TO EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT, 1956

As per the provisions of the Companies Act, 1956 we are required to attach the Director''s report, Balance Sheet and Profit and Loss account of our subsidiaries. The Ministry of Corporate Affairs, Government of India Vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with section 212, provided such companies publish the audited consolidated financial statements in the annual report. Accordingly the annual report 2013 14 does not contain the financial statements of our subsidiaries.

The audited annual accounts and related information of our subsidiaries, where applicable will be made available upon request. These documents will also be available for inspection during business hours at registered office of the company.

The same will also be published in our website. www.gssinfotech.com

XV. GREEN INITIATIVE

During the financial year we started a sustainability initiative with the aim of being green and minimizing our impact on the environment.

XVI. ACKNOWLEDGEMENTS:

We thank our customers, vendors, investors and bankers for their continued support during the year. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We thank the governments of various countries where we have our operations. We also thank the Government of India, the Central and State Governments and their various agencies, particularly, the Ministry of Communication & Information Technology, FAPCCI, Software Technology Parks of India, Departments of Customs and Central Excise, MCA, SEBI, Stock Exchanges, Reserve Bank of India, and other Governmental Agencies for extending their support during the year and look forward to their continued support.

By Order of the Board of GSS Infotech Limited

Sd/- Sd/- Place: Hyderabad Bhargav Marepally Ramesh Yerramsetti Date: 09.08.2014 CEO & Managing Director Director


Mar 31, 2013

Dear Members,

The are delighted to present the report on our business and operations for the financial year ended March 31, 2013

I. FINANCIAL RESULTS

The Company''s financial results (consolidated & standalone) for the year ended 31st March 2013 is provided in the Annual Report.

Consolidated Revenues of the Company for the year ended 31.03.2013 is R294.30 Crores and standalone revenues of the company is R39.88 Crores.

The Consolidated Profit After Tax of the company for the year ended 31.03.2013 is R(5.94) Crores and Standalone Profit After Tax is R(4.94)Crores.

GSS Infotech Limited GSS Infotech Limited (Standalone) and its subsidiaries (consolidated) Particulars Year ended Year ended (Rs.in Crores) (Rs.in Crores) 31.03.2013 31.03.2012* 31.03.2013 31.03.2012*

Total Income 41.91 46.45 296.46 296.86

Gross Profit 13.18 6.84 31.77 31.19

Profit ( )/Loss (-) from Ordinary Activities 2.99 (6.42) 1.60 (9.30) before tax

Net Profit ( )/ Loss (-) from (4.94) (15.49) (5.94) (50.98) Ordinary Activities after tax

Paid-up equity share capital (Face Value. 14.13 14.13 14.13 14.13 R10/- each)

Reserves and Surplus 270.04 274.99 293.66 285.25

Earnings Per Share (3.49) (10.96) (4.20) (36.06)

*for the nine months ended 31st March 2012

II. DIVIDEND

The Directors did not recommend any dividend for the year ended 31st March 2013.

III. FIXED DEPOSITS

During the year under review, the Company has not accepted any deposit under Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (acceptance of Deposits) Rules, 1975.

IV. DIRECTORS

Mr. Keerthy Jaya Tilak and Mr.Mark Silgardo, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

During the financial year Mr.Javed Faizullah Tapia appointed as an Additional Director on the Board with effect from 14 February 2013 and holds office up to the commencement of forthcoming Annual General Meeting and in respect of whom the company has received a notice in writing from a member under section 257 of the Companies Act 1956 proposing his candidature to the office of the Director of the company be and is hereby appointed as a Director of the company who shall be liable as retire by rotation.

V. AUDITORS

M/s. Sarath & Associates, Chartered Accountants, Statutory Auditors of the Company have offered themselves for re - appointment at the ensuing Annual General Meeting and to hold the office from the conclusion of ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

M/s Sarath & Associates have also expressed their willingness to act as Auditors of the company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of section 224(1B) of the companies act, 1956.

VI. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are set out in the Annexure A to this Report.

VII. AUDIT COMMITTEE

The Company has an Audit Committee comprising of three Directors namely, Mr.P.V.R.K. Prasad, Non-Executive and Independent Director, Mr. Keerthy Jaya Tilak, Non-Executive and Independent Director and Mr. Bhargav Marepally, promoter , CEO & Managing Director

VIII. PARTICULARS OF EMPLOYEES:

As required under the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out hereunder. The Ministry of Corporate Affairs, has amended the Companies (Particulars of Employees) Rules, 1975 to the effect that particulars of employees of companies engaged in Information Technology sector posted and working outside India not being directors or their relatives, drawing more than Rs. 6 million per financial year or Rs. 500,000 per month, as the case may be, need not be included in the statement but, such particulars shall be furnished to the Registrar of Companies. Accordingly, the statement included in this report does not contain the particulars of employees who are posted and working outside India.

IX. CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is set out as Annexure B and Annexure C to this Report

X. EMPLOYEES STOCK OPTION SCHEME (ESOS)

The Board proposed to introduce the new ESOS scheme 2013 in place of ESOS 2010 being non vesting of options by the eligible employees due to the share price fallen drastically during the financial year and all eligible employees surrendered their options.

Thus, the board decided to scrap the existing ESOS 2010 scheme.

XI. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on Management Discussion and Analysis is set out as Annexure D to this Report.

XII. CEO''s DECLARATION

Certificate from the ''Chief Executive Officer and Managing Director of the Company regarding the financial statements as per the Corporate Governance Norms is given as Annexure E to the report. Further, the declaration by the Managing Director of the Company declaring that all the members of the Board and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct of the Company is set out as Annexure F to the Report.

XIII. DIRECTORS'' RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, and after due enquiry, confirm:

a. That in preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

b. That the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2013 and of the profit of the Company for the year ended on that date;

c. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. That the annual accounts have been prepared on a going concern basis.

XIV. STATEMENT PURSUANT TO EXEMPTION UNDER SECTION 212(8) OF THE COMPANIES ACT 1956

As per the provisions of the companies act 1956 we are required to attach the Director''s report, Balance Sheet and Profit and Loss account of our subsidiaries. The Ministry of Corporate Affairs, Government of India Vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with section 212, provided such companies publish the audited consolidated financial statements in the annual report. Accordingly the annual report 2012-13 does not contain the financial statements of our subsidiaries.

The audited annual accounts and related information of our subsidiaries, where applicable will be made available upon request. These documents will also be available for inspection during business hours at registered office of the company.

The same will also be published in our website. www.gssinfotech.com

XV. GREEN INITIATIVE

During the financial year we started a sustainability initiative with the aim of being green and minimizing our impact on the environment.

XVI. ACKNOWLEDGEMENTS:

We thank our customers, vendors, investors and bankers for their continued support during the year.. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We thank the governments of various countries where we have our operations. We also thank the Government of India, the Central and State Governments and their various agencies, particularly, the Ministry of Communication & Information Technology, FAPCCI, Software Technology Parks of India, Departments of Customs and Central Excise, MCA, SEBI, Stock Exchanges, Reserve Bank of India, and other Governmental Agencies for extending their support during the year and look forward to their continued support.

By Order of the Board of GSS Infotech Limited

Sd/- Sd/-

Place: Hyderabad Mr. Bhargav Marepally Mr. Ramesh Yerramsetti

Date: 30th May 2013 CEO & Managing Director Director

 
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