Notes to Accounts of GSS Infotech Ltd.

Mar 31, 2018

Notes forming part of the financial statements

(All amounts in Indian Rupees, except share data and where otherwise stated)

information received and available with the Company. Further in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (''The MSMED Act'') is not expected to be material. The Company has not received any claim for interest from any supplier.

Particulars		31-Mar-18	31-Mar-17	01-Apr-16
a)	the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year.	NIL	NIL	NIL
b)	the amount of interest paid by the buyer in terms of section 16 of the MSMED Act, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year;	NIL	NIL	NIL
c)	the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this MSMED Act	NIL	NIL	NIL
d)	the amount of interest accrued and remaining unpaid at the end of each accounting year; and	NIL	NIL	NIL
	the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under section 23 of the MSMED Act.

35 Leases

Where the Company is a lessee:

The company has operating lease for office premises, which is renewable on a periadical bais and cancellable at its option.

i) Future minimum lease payments under non-cancellable operating leases are as follows:

Particulars	31-Mar-18	31-Mar-17	01-Apr-16
Not later than 1 year	-	1,686,825	13,147,625
Later than 1 year and not later than 5 years	8,662,500	-	7,021,875
Later than 5 years	-	-	-

ii) Amounts recognised in statement of profit and loss:

Particulars	31-Mar-18	31-Mar-17	01-Apr-16
Cancellable lease expense	4,050,000	-	-
Non - cancellable lease expense	5,096,088	11,253,103	17,597,192
Total	9,146,088	11,253,103	17,597,192

36 Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity Shares.

The following table sets out the computation of basic and diluted earnings per share:

Particulars	31-Mar-18	31-Mar-17
Profit / (Loss) for the year	44,753,421	(496,831,133)
Less: Preference dividend for the year	-	-
Less: Tax on preference dividend	-	-
Loss attributable to equity share holders	44,753,421	(496,831,133)
Shares
Weighted average number of equity shares outstanding during the year - basic and diluted	16,936,843	16,936,843
Earnings per share of par value 10 -basic and diluted	2.64	(29.33)

37 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company''s operations. The Company''s principal financial assets include inventory, trade and other receivables, cash and cash equivalents and refundable deposits that derive directly from its operations.The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ real estate risk. Financial instruments affected by market risk include loans and borrowings and refundable deposits. The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017. The sensitivity analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt.The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations; provisions.The below assumption has been made in calculating the sensitivity analysis:The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2018 and March 31, 2017.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily

to the Company''s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

	Increase/decrease in interest rate	Effect on profit before tax
March 31, 2018
INR	1%	-
INR	-1%	-
March 31, 2017
INR	1%	(289,517)
INR	-1%	289,517

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.

Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom credit has been granted after obtaining necessary approvals for credit. The collection from the trade receivables are monitored on a continuous basis by the receivables team.

The Company establishes an allowance for credit loss that represents its estimate of expected losses in respect of trade and other receivables based on the past and the recent collection trend. The maximum exposure to credit risk as at reporting date is primarily from trade receivables amounting to Rs. 92,844,422 (March 31,2017 : 297,785,516 ; April 1, 2016: 330,342,789). The movement in allowance for credit loss in respect of trade and other receivables during the year was as follows:

Allowance for credit loss	31-Mar-18	31-Mar-17	01-Apr-16
Opening balance	1,843,937	1,843,937	1,843,937
Credit loss provided/ (reversed)	-	-	-
Closing balance	1,843,937	1,843,937	1,843,937

No single customer accounted for more than 10% of the revenue as of March 31,2018, March 31,2017 and April 1,2016. There is no significant concentration of credit risk.

Credit risk on cash and cash equivalent is limited as the Company generally transacts with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

c) Liquidity risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

	On demand	Less than 3 months	3 to 12 months	1 to 5 years	>5 years	Total
Year ended March 31, 2018
Borrowings	-	-	-	-	-	-
Trade payables	4,926,184	5,451,906	-	-	-	10,378,090
Year ended March 31, 2017
Borrowings	-	9,000,000	19,951,700	-	-	28,951,700
Trade payables	7,589,999	2,115,054	-	-	-	9,705,053
As at April 1, 2016
Borrowings	-	7,500,000	27,000,000	29,000,000	-	63,500,000
Trade payables	2,740,338	61,700	-	-	-	2,802,038

38 Capital management

The Company''s policy is to maintain a stable capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors capital on the basis of return on capital employed as well as the debt to total equity ratio.

For the purpose of debt to total equity ratio, debt considered is long-term and short-term borrowings. Total equity comprise of issued share capital and all other equity reserves.

The capital structure as of March 31, 2018, March 31, 2017 and April 1, 2016 was as follows:

Particulars	31-Mar-18	31-Mar-17	01-Apr-16
Total equity attributable to the equity shareholders of the Company	1,068,559,138	1,023,550,391	1,548,111,098
As a percentage of total capital	100.00%	97.25%	96.06%
Long term borrowings including current maturities	-	28,951,700	63,500,000
Short term borrowings	-	-	-
Total borrowings	-	28,951,700	63,500,000
As a percentage of total capital	0.00%	2.75%	3.94%
Total capital (equity and borrowings)	1,068,559,138	1,052,502,091	1,611,611,098

39 Explanation on transition to Ind AS

As stated in Note 2.1, these are the first standalone financial statements prepared in accordance with Ind AS. For the year ended March 31, 2017, the Company had prepared its standalone financial statements in accordance with Companies (Accounting Standards) Rules, 2006 notified under section 133 of the Act and other relevant provision of the Act (''Previous GAAP''). For the purpose of transition from Previous GAAP to Ind AS, the Company has followed the guidance prescribed under Ind AS 101-First Time Adoption of Indian Accounting Standards ("Ind AS-101"), with effect from April 1,2016 (''transition date'').

The accounting policies set out in Note 3 have been applied in preparing these standalone financial statements for the year ended March 31,2018 including the comparative information for the year ended March 31,2017 and the opening standalone Ind AS Balance Sheet on the date of transition i.e. April 1, 2016

In preparing its Standalone Ind AS Balance Sheet as at April 1, 2016 and in presenting the comparative information for the year ended March 31, 2017, the Company has adjusted amounts reported previously in Standalone financial statement prepared in accordance with the Previous GAAP. This note explains how the transition from Previous GAAP to Ind AS has affected the Company''s financial position and financial performance.

A. Mandatory exceptions to retrospective application

The Company has applied the following exceptions to the retrospective application of Ind AS as mandatorily required under Ind AS 101 "First Time Adoption of Indian Accounting Standards".:

1) Estimates:

As per Ind AS 101, an entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with the Previous GAAP unless there is objective evidence that those estimates were in error.As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under Previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).The Company''s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the standalone financial statements that were not required under the Previous GAAP are listed below:- Impairment of financial assets based on the expected credit loss model.- Determination of the discounted value for financial instruments carried at amortised cost.

2) Classification and measurement of financial assets:

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

B. Optional exemptions from retrospective application

Ind AS 101 "First time Adoption of Indian Accounting Standards" permits Companies adopting Ind AS for the first time to take certain exemptions from the full retrospective application of Ind AS during the transition. The Company has accordingly on transition to Ind AS availed the following key exemptions:

1) Property, plant and equipment:

The Company has elected to treat carrying values of Previous GAAP as deemed cost for all items of its property, plant and equipment.

2) Business combination:

Ind AS 101, provides the option to apply Ind AS 103, Business Combinations ("Ind AS 103") prospectively from the transition date or from a specific date prior to the transition date.The Company has elected to apply Ind AS 103 from transition date. Accordingly, business combinations occurring prior to the transition date have not been restated.

The following reconciliation provide the effect of transition to Ind AS from Previous GAAP in accordance with Ind AS 101:

(i) Reconciliation of total equity as at March 31, 2017 and April 1, 2016

Particulars	As at March 31, 2017	As at April 1, 2016
Equity as reported under previous GAAP	1,050,161,811	1,577,084,961
Impact on account of credit loss on debtors and other finacial assets	(18,214,365)	(18,214,365)
Prior period items	(9,034,447)	(11,396,890)
Taxes on above	637,392	637,392
Equity reported under Ind AS	1,023,550,391	1,548,111,098

(ii) Effect of Ind AS Adoption on the statement of profit and loss for the year ended March 31, 2017

Particulars	Year ended March 31, 2017
Net Profit under previous GAAP	(499,193,576)
Prior period items	2,362,442
Net Profit under Ind AS	(496,831,134)
Other comprehensive income
Actuarial gains/(losses) on post- employment benefit obligations	-
Total comprehensive income under Ind AS	(496,831,134)

40 Standards issued but not effective

The standards issued, but not effective up to the date of issuance of the financial statements is disclosed below: Ind AS 115 - Revenue from contracts with customers

In March 2018, the Ministry of Corporate Affairs has notified Ind AS 115, ''Revenue from Contracts with Customers'', which is effective for accounting periods beginning on or after 1 April 2018. This comprehensive new standard will supersede existing revenue recognition guidance, and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange

for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements.

Ind AS 115 is effective for annual reporting periods beginning on or after April 1, 2018. The Company intends to adopt Ind AS 115 effective April 1, 2018, using the modified retrospective method. The adoption of Ind AS 115 is not expected to have a significant impact on the Company''s recognition of revenues.

Other amendments to Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), on 28 March 2018, issued certain amendments to Ind AS. The amendments relate to the following standards:

Ind AS 21, The Effects of Changes in Foreign Exchange Rates - The amendment lays down the principle regarding advance payment or receipt of consideration denominated or priced in foreign currency and recognition of non-monetary prepayment asset or deferred income liability.

Ind AS 12, Income Taxes - The amendment explains that determining temporary differences and estimating probable future taxable profit against which deductible temporary differences are assessed for utilization are two separate steps and the carrying amount of an asset is relevant only to determining temporary differences.

Ind AS 28, Investments in Associates and Joint Ventures - The amendment clarifies when a venture capital, mutual fund, unit trust or similar entities elect to initially recognize the investments in associates and joint ventures.

Ind AS 112, Disclosure of Interests in Other Entities-The amendment clarifies that disclosure requirements for interests in other entities also apply to interests that are classified as Held for sale or discontinued operations in accordance with Ind AS 105.

Ind AS 40, Investment Property - The amendment clarifies when a property should be transferred to / from investment property.

The amendments are effective 1 April 2018. The Company believes that the aforementioned amendments will not materially impact the financial position, performance or the cash flows of the Company.

41 Previous year comparitives

The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year''s classification.

As Per Our Report of Even Date	For and on behalf of the Board of GSS Infotech Limited
For SARATH & ASSOCIATES	CIN: L72200TG2003PLC041860
Chartered Accountants
ICAI Firm Registration Number: 005120S
P. Sarath Kumar	Bhargav Marepally	A. Prabhakara Rao
Partner	CEO & Managing Director	Director
Membership No: 21755	DIN: 00505098	DIN: 02263908
Place: Hyderabad
Date : 28-May-2018	Sanjay Heda Chief Financial Officer	Mohammad Anwar ul haq Company Secretary

---

Mar 31, 2016

1 NOTES TO ACCOUNTS:

1. Contingent Liabilities:

i) Against Bank Guarantees issued by Banks towards financial and performance guarantees outstanding as at 31^st March, 2016 amounts Rs.70,99,015 (Previous Year: Rs. 2,29,97,751)

ii) The following disputed Tax Liabilities are not provided for in the books of accounts:-

a. Appeal pending before Income Tax Administrative Tribunal for the AY 2009-10, involving Tax Amount of Rs.28,28, 435

b. Based on the representation made for AY 2010-11 Hon''ble Income Tax Appellate Tribunal granted relief to the extent of Rs.3,10,06,829 out of the total demand of Rs.3,85,52,400 and directed Assessing Officer to have a relook at other consequential areas. Accordingly, the revised Contingent Liability for AY 201011 would be Rs.75,45,571, against which Company had sufficient MAT Credit.

c. Appeal pending before Hon''ble ITAT for AY 2011-12, the original amount of tax liability being Rs.5,84,75,130 and the Company, based on the relief received for AY 2010-11 on the same issues, expects the revised liability to be Rs.1,04,15,056, against which the Company has MAT Credit available.

d. Appeal pending before the Hon''ble Dispute Resolution Panel, Bangalore for the AY 2012-13, tax amount being Rs.1,51,36,700

e. Appeal pending before Hon''ble Dispute Resolution Panel, Bangalore, tax amount being Rs.2,37,82,029 which arose primarily on account of disallowances of carried forward losses of earlier assessment year

The above contingent liabilities are not provided in the Books of Account based on expert opinion of the Tax Advisors. Further, the Company has unutilized MAT Credit to the extent of Rs.8,44,15,444, which shall absorb any crystallized tax liability, if any on above final outcome of appeals.

iii) There was a Service Tax demand amounting to Rs.1,02,18,344 (for the years 2010-2012, 2012-13 & 2013-14) on the Company on account of the E-Procurement contract executed in Bangladesh for the Bangladesh government, treating as ''Import of Business Support Services'', against which Company filed appeal before CESTAT, Bangalore.

iv) The Company had filed application for compounding before the Reserve Bank of India for obtaining permissions under the FEMA provisions relating to transfer of funds to the Wholly Owned Subsidiary Company by the Branch which was returned back on procedural aspects. The Company had compiled the necessary information and is in the process of re-submitting the same through a subject expert.

2. Advances to Subsidiaries:

(a) The Company has given advances to its wholly owned subsidiary viz., GSS Infotech CTInc (Delaware), GSS Healthcare IT Solutions Private Limited and GSS IT Solutions Private Limited with no specific repayment schedule.

(b) Information pursuant to clause 32 of Listing Agreement with Stock exchanges w.r.t. Loan and Advances in the nature of loans to wholly owned subsidiaries is as given below:

3. Employee Stock Options:

An application for in - principle approval for listing of 20,00,000 shares has been made to the stock exchanges under the name & style "GSS Infotech Limited Restricted Employee Stock Option Plan 2013", which got approved by the members at AGM held on 19.7.2013 and subsequently got approved by NSE & BSE. However, during the year under review, there was no grant of options by the Board to the eligible employees.

4. Investments:

The Company has an investment in the form of 1500 Equity Shares (Previous year : 1,500 equity shares) in M/s GSS Infotech Inc (Delaware), which is a Wholly Owned Subsidiary Company, amounting to Rs.87,34,80,744 (Previous Year : Rs.87,34,80,744). The Company evaluates the carrying cost of Investment based on Audited Financials of the US Subsidiary Company, which is done by the local Auditor in US. During the previous year 2014-15, there was impairment of goodwill in US step down subsidiaries which resulted in loss to the extent of Rs.134,92,99,076. The value of these investments were taken on record, based on the Audited Financials of the US Subsidiary Company, as certified by the US local Auditor. As there was diminution in the value of investments in the Wholly Owned Subsidiary Company, the Company had made a provision to the extent of Rs. 134,92,99,076 during the immediately preceding financial year 2014-15. There are no such instances during the current financial year under reporting.

9. The Company had given certain advances to its fully owned subsidiary Company M/s GSS Healthcare towards business activity with US Client through its US Subsidiary, M/s GSS Infotech Inc. Subsequently, the US Client failed to pay the amounts due, despite several steps taken to collect the same in US. These amounts have been written off in US books, which are duly audited thereon. Consequently, the wholly owned subsidiary had also written off in its books these amounts and the Company had also written off these advances paid to the wholly owned Indian subsidiary amounting to Rs.10,04,51,239 which is duly approved by the Board.

Considering all the facts, the Board had passed resolution confirming the write offs and certain written back''s during the current year in the Books of Account.

10. Prior period items include amounts paid towards Service Tax consequent upon Audit taken up by the concerned Department which pertain to earlier periods and also certain Income Tax payments.

11. DUES OF MICRO AND SMALL ENTERPRISES:

The information as required to be disclosed under Schedule III of the Act, w.r.t. Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (Act) is as given below and the information mentioned at Note no. 7- Trade Payables w.r.t. dues of Micro and Small Enterprises, has been determined to the extent such parties have been identified on the basis of information available with the Company and relied on by the auditors:

12. The Balances of Trade receivables, Loans and Advances and Trade payables are subject to confirmation and consequential adjustment if any required.

13. Current Assets and Loans and Advances:

In the opinion of the Board of Directors the Current assets, Loans and advances have a value realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities has been made.

14. Leases:

The Company has operating lease for office premises, which is renewable on a periodical basis and cancellable at its option. Rental expenses for operating lease recognized in Statement of Profit and Loss is Rs.1,75,97,192/- (Previous Year: Rs. 1,19,65,965/-)

17. Transactions with Related Parties:

The List of Related parties with whom transactions have taken place and nature of relationship is: A) List of Related Parties:

i) Subsidiaries:

a) GSS Infotech Inc (A Delaware Company)

b) GSS IT Solutions Private Limited

c) GSS Healthcare IT Solutions Private Limited

ii) Step down Subsidiaries:

- GSS Infotech CT Inc (Formerly known as System Dynamix Corporation)

- Infovision Technologies, Inc

- GSS Infotech NY Inc (formerly ATEC Group)

- InfovistaTechnologies Inc

- Technovant Inc

- GCI Systems Inc

iii) Key Management Personnel:

Mr. Bhargav Marepally Chief Executive Officer And Managing Director

iv) Mr. Ramesh Yerramsetti Director

18. The other particulars as required are not given as the same are not applicable to the Company for the Current Year.

19. Rounding off & Regrouping:

The figures are rounded off to the nearest rupee and previous year''s figures have been regrouped where necessary to correspond with current year''s figures.

20. The Notes referred to in the financial statements form an integral part of Accounts.

---

Mar 31, 2015

1. Terms/rights attached to equityshares

The Company has only one class of equity shares having a par value of Rs.10/- each. Each share holder of equity shares is entitled to one vote per share

2. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts and the distribution in proportion to the number of equity shares held by the shareholders.

3. The Company has a 2013 RSU Plan which provides for the grant ofrestricted stock units (RSUs) to eligible employees ofthe Company. The Board ofDirectors recommended establishment of the 2013 Plan to the shareholders on May30, 2013 and the shareholders approved the recommendation of the Board of Directors on July 19, 2013. The maximum aggregate number of shares that may be awarded under the 2013 Plan is 20,00,000 (currently held by the GSS America ESOP Trust ) and the plan shall continue in effect for a term of 10 years from the date of initial grant under the plan. The RSUs will be issued at par value of the equity share. The 2013 Plan is administered by the compensation committee (now 'the Remuneration Committee') and through GSS America ESOP Trust ('the trust'). The committee comprises independent members of the Board of Directors.

4. Corporate information:

GSS Infotech (GSS) is one of the fast growing managed IT Services companies, headquartered at Hyderabad, India. GSS operates worldwide through its offices in India and USA. A pioneer in managed IT Services, GSS offers Cloud Enablement Services Remote Infrastructure and Application management services to customers across the globe. Over the years, GSS has established itself as a choice of providers with over 40 Fortune global customers covering Financial Services, Insurance, HealthCare, Education and Government industry segments.

A CMMi Level 5 company, GSS helps its customers reduce their CAPEX on infrastructure and helps convert it to manageable operational expense, leveraging its premier partnerships with leading technology providers such as Microsoft, CISCO, HP, Symantec, VMWARE, BMC and NetApp. GSS Infotech offers consulting services to help customers choose the right cloud deployment models, migrates application portfolio to the cloud environment, ensures functional and performance equivalence of applications through its independent validation and verification services and also offers remote application & infrastructure monitoring and management services through its Global Operations Command Center in Hyderabad, India. GSS Infotech, with an ambitious inorganic growth strategy, has been very successful through a spate of acquisitions in the USA. The company has been successful in integrating all of its overseas acquisitions and creating a globally integrated Infrastructure Management Services practice. GSS is now well positioned to capitalize on the emerging technology trends in the cloud computing arena leveraging its unparalleled expertize in Infrastructure Virtualization, Remote Infrastructure Management, Cloud Consulting and Migration services. The company offers world class services propelled by over 700 consultants consisting of MCSE's, BS-25999 certified professionals, VMware VCP's, Remedy CA, CCNA, CCNP, CCSE, CCVP, CCIE, CISSP, BMC Control-M professionals with Consulting, Deployment and Management expertise.

GSS Infotech provides pragmatic and unique solutions to customers looking for excellence and high-quality. Our Thought Leadership, Responsiveness, Passion and Professionalism to work as a 'Virtual Extension' to customer's business has always been acknowledged to be a great strength, by our customers.

5. Basis of Preparation:

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. The Company has prepared the financial statements to comply in all material respects with the Accounting Standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and also the guidelines issued by the Securities and Exchange Board of India (SEBI).

The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous year, except for the change in accounting policy relating to Depreciation which arose on account of applicability as per the provisions of Companies Act, 2013.

6. In the current year, the gains on account of exchange fluctuations on advances have been credited to the exchange fluctuation reserve account, as the management feels that the gains are of temporary nature and have occurred in a magnitude disproportionate to the normal course of business. This was as a result of adopting a conservative approach to enable consistency in the reported earnings for the period.

7. Contingent Liabilities:

i) Against Bank Guarantees issued by Banks towards financial and performance guarantees outstanding as at 31st March, 2015 amounts Rs. 2,29,97,751/- (Previous Year: Rs. 2,59,55,752/-)

ii) Appeal pending before Income Tax Administrative Tribunal for the AY 2009-10, involving Tax Amount of Rs. 28,28, 435/-

iii) Appeal pending before Income Tax Tribunal for the AY 2010-11, involving net tax payable amount of Rs. 3,85,52,400/-, including interest of Rs. 1,30,03,002/- (against which Company has MAT Credit of Rs. 2,30,19,382/-).

iv) Appeal pending before Income Tax Tribunal for the AY 2011-12, involving Net Tax payable amount of Rs. 5,84,75,130/-, including interest of Rs. 1,99,44,576/-.

v) There was a Service Tax demand amounting to Rs. 102.17 Lakhs (for the years 2010-2012, 2012-13 & 2013-14) on the Company on account of the E-Procurement contract executed in Bangladesh for the Bangladesh government, treating as 'Import of Business Support Services', against which Company filed appeal before CESTAT, Bangalore.

vi) The Company had filed application for compounding before the Reserve Bank of India for obtaining permissions under the FEMA provisions in relation to transfer of funds to the Fully Owned Subsidiary Company by the Branch which was returned back on procedural aspects and the Company is in the process of re-submitting the same.

8. Advances to Subsidiaries:

a) The Company has given advances to its wholly owned subsidiary viz., GSS Infotech CT Inc (Delaware), GSS Healthcare IT Solutions Private Limited and GSS IT Solutions Private Limited with no specific repayment schedule.

9. Employee Stock Options:

An application for in - principle approval for listing of 20,00,000 shares has been made to the stock exchanges under the name & style "GSS Infotech Limited Restricted Employee Stock Option Plan 2013", which got approved by the members at AGM held on 19.7.2013 and subsequently got approved by NSE & BSE. However, there was no grant of options by the Board to the eligible employees.

10. Investments:

The Company has an investment in the form of 1500 Equity Shares (Previous year : 1,500 equity shares) in M/s GSS Infotech Inc (Delaware), which is a 100% Subsidiary Company, amounting to Rs.87,34,80,744/-(Previous Year : Rs. 222,27,79,820/-). The Company evaluates the carrying cost of Investment based on audited financials of the US Subsidiary Company, which is done by the local Auditor in US. During the year under review, there was impairment of goodwill in US step down subsidiaries which resulted in loss to the extent of Rs. 134,92,99,076/-. The value of these investments are taken on record, based on the audited financials of the US Subsidiary Company, as certified by the US local Auditor. As there was diminution in the value of investments in the Wholly Owned Subsidiary Company, the Company had made a provision to the extent of Rs. 134,92,99,076/- for the year under review.

11. Employee Benefits:

Defined Contribution Schemes:

The Contributions to Employees Provident Funds and Miscellaneous Provisions Act, 1952 made and charged off during the year is Rs. 59,51,739/- (Previous Year: Rs. 67,33,666/-)

Gratuity:

The Present value of obligation in respect of Gratuity to employees on termination is determined based on actuarial valuation using Projected Unit Credit Method.

The Company has created GSS Infotech Ltd Employee Group Gratuity Assurance Scheme Trust (GSSGGAST) to implement gratuity scheme and contributions are being made to the designated scheme operated by LIC of India.

12. Tax Expense:

i) Current Income tax represents tax on income payable as per relevant statutes of the respective countries recognized and provided.

ii) Minimum Alternate Tax Credit, where there is certainty in availing the tax credit against the taxes on income paid, are recognized and shown as "MAT Credit Entitlement" under Loans and Advances in the financial statements.

13.. The Company had provided the amounts payable's of Rs. 9,86,617/- in the previous years, now written off to Statement of Profit and Loss as it is not payable to the parties. Further the company also as written back the advances refundable of Rs.2,82,000/- as Income.

Considering all the facts, the Board had passed resolution confirming the write offs and written back's during the current year in the Books of Account.

14. The company has written off Accounts Receivables pertaining to UIDAI project of Setu Maharshtra to the extent of Rs. 22,12,607/-, on account of contractual clauses.

15. There are no dues to Micro and Small Enterprises specified under the Micro, Small and Medium Enterprises Development Act, 2006 as on 31st March, 2015, to the extent such parties have been identified on the basis of information available with the Company and relied on by the auditors

16. The Balances of Trade receivables, Loans and Advances and Trade payables are subject to confirmation and consequential adjustment if any required.

17. Current Assets and Loans and Advances:

In the opinion of the Board of Directors the Current assets, Loans and advances have a value realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities has been made.

18. The Ministry of Corporate Affairs, Government of India, vide General circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with Section 211 of the Companies Act, 2013. Subject to fulfillment of conditions stipulated in the circular, the Company has satisfied the conditions stipulated in the circular and hence entitled to exemption. Necessary information relating to subsidiaries has been included in Consolidation of Financial statements.

19. Leases:

The Company has operating lease for office premises, which is renewable on a periodical basis and cancellable at its option. Rental expenses for operating lease recognized in Statement of Profit and Loss is Rs.1,19,65,965/-(Previous Year: Rs.1,34,59,034/-)

20. Deprecation charge for the current year came to Rs.1,24,86,332/- as compared to Rs. 1,19,91,191/- during the last year. During the year Rs. 9,94,585/- was adjusted against the Reserves and Surplus on account changes in the useful life as specified in Schedule II to the Companies Act, 2013 which came into effect from 1st April, 2014. Depreciation for the year is higher as the company was required to adopt the charging of depreciation on fixed assets according to the useful life as specified in Schedule II to the Companies Act, 2013 which came into effect from 1st April, 2014.

21. Transactions with Related Parties:

The List of Related parties with whom transactions have taken place and nature of relationship is: A) List of Related Parties:

i) Subsidiaries:

a) GSS Infotech Inc (A Delaware Company)

b) GSS IT Solutions Private Limited

c) GSS Healthcare IT Solutions Private Limited

ii) Step down Subsidiaries:

* GSS Infotech CT Inc (Formerly known as System Dynamix Corporation)

* Infovision Technologies, Inc

* GSS Infotech NY Inc (formerly ATEC Group)

* Infovista Technologies Inc

* Technovant Inc

* Global Computronics Inc (GCI)

iii) Key Management Personnel:

Mr. Bhargav Marepally Chief Executive Officer And Managing Director

iv) Mr. Ramesh Yerramsetti Director

22. Rounding off & Regrouping:

The figures are rounded off to the nearest rupee and previous year's figures have been regrouped where necessary to correspond with current year's figures.

23. The Notes referred to in the financial statements form an integral part of Accounts.

---

Mar 31, 2014

1. Corporate information:

GSS Infotech (GSS) is one of the fast growing managed IT Services companies, headquartered at Hyderabad, India. GSS operates worldwide through its offices in India, Middle East and the USA. A Pioneer in managed IT Services, GSS offers Cloud Enablement Services Remote Infrastructure and Application management services to customers across the globe. Over the years, GSS has established itself as a choice of providers with over 40 Fortune global customers covering Financial Services, Insurance, HealthCare, Education and Government industry segments.

A CMMi Level 5 company, GSS helps its customers reduce their CAPEX on infrastructure and helps convert it to manage- able operational expense, leveraging its premier partnerships with leading technology providers such as Microsoft, CISCO, HP, Symantec, VMWARE, BMC and NetApp. GSS Infotech offers consulting services to help customers choose the right cloud deployment models, migrates application portfolio to the cloud environment, ensures functional and per- formance equivalence of applications through its independent validation and verification services and also offers remote application & infrastructure monitoring and management services through its Global Operations Command Center in Hyderabad, India.

GSS Infotech, with an ambitious inorganic growth strategy, has been very successful through a spate of acquisitions in the USA. The company has been successful in integrating all of its overseas acquisitions and creating a globally integrated Infrastructure Management Services practice. GSS is now well positioned to capitalize on the emerging technology trends in the cloud computing arena leveraging its unparalleled expertize in Infrastructure Virtualization, Remote Infrastructure Management, Cloud Consulting and Migration services. The company offers world class services propelled by over 700 consultants consisting of MCSE''s, BS-25999 certified professionals, VMware VCP''s, Remedy CA, CCNA, CCNP, CCSE, CCVP, CCIE, CISSP, BMC Control-M professionals with Consulting, Deployment and Management expertise.

GSS Infotech provides pragmatic and unique solutions to customers looking for excellence and high-quality. Our Thought Leadership, Responsiveness, Passion and Professionalism to work as a ''Virtual Extension'' to customer''s business has always been acknowledged to be a great strength, by our customers.

2. Basis of Preparation:

The financial statements are prepared in accordance with Indian Generally Accepted Principles (GAAP) under the historical cost convention on the accrual basis. The Company has prepared the financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and relevant provisions of the Companies Act,1956.

1. In the current year, the gains on account of exchange fluctuations on advances have been credited to the exchange fluctuation reserve account, as the management feels that the gains are of temporary nature and have occurred in a magnitude disproportionate to the normal course of business. This was as a result of adopting a conservative approach to enable consistency in the reported earnings for the period.

2. Contingent Liabilities:

i.) Against Bank Guarantees issued by Banks towards financial and performance guarantees outstanding as at 31st March, 2014 amounts Rs.2,59,55,752/- (Previous Year: Rs.3,66,23,266/-)

ii.) Appeal pending before Income Tax Appellate Tribunal for the AY 2009-10, involving Tax Amount of Rs.28.21 Lakhs; and Appeal pending before Dispute Resolution Panel for the AY 2010-11, involving Tax amount of Rs.16.02 Lakhs;

iii.) There was a Service Tax demand amounting to Rs.79.38 Lakhs on part of the e''procurement contract executed in Bangladesh for the Bangladesh government, treating as ''Import of Business Support Services'' , against which Company filed appeal before CESTAT, Bangalore.

iv.) The Company had filed application for compounding before the Reserve Bank of India for obtaining permissions under the FEMA provisions in relation to transfer of funds to the Fully Owned Subsidiary Company by the Branch.

3. Claims Not Acknowledged as Debts :

On account of disputed Income Tax demand, not acknowledged as debt by the company Rs.NIL (Previous Year : Rs.NIL).

4. Advances to Subsidiaries:

a) The Company has given advances to its wholly owned subsidiary viz., GSS Infotech CT Inc (Delaware), GSS Healthcare IT Solutions Private Limited and GSS IT Solutions Private Limited with no specific repayment schedule.

b) Information pursuant to clause 32 of Listing Agreement with Stock exchanges w.r.t. Loan and Advances in the nature of loans to wholly owned subsidiaries is as given below:

5. Employee Stock Options:

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.

6. Investments:

The Company has an investment in the form of 1500 Equity Shares (Previous year : 1,500 equity shares) in M/s GSS Infotech Inc (Delaware), which is a 100% Subsidiary Company, amounting to Rs.222,27,79,820. The Company evaluates the carrying cost of Investment based on Audited Financials of the US Subsidiary Company, which is done by the local Auditor in US. During the year under review, the value of these investments are taken on record, based on the Audited Financials of the US Subsidiary Company, as certified by the US local Auditor.

Gratuity:

The Present value of obligation in respect of Gratuity to employees on termination is determined based on actuarial valuation using Projected Unit Credit Method.

The Company has created GSS Infotech Ltd Employee Group Gratuity Assurance Scheme Trust (GSSGGAST) to implement gratuity scheme and contributions are being made to the designated scheme operated by LIC of India.

9. Tax Expense:

i) Current Income tax represents tax on income payable as per relevant statutes of the respective countries recognised and provided.

ii) Minimum Alternate Tax Credit, where there is certainty in availing the tax credit against the taxes on income paid, are recognised and shown as "MAT Credit Entitlement" under Loans and Advances in the financial statements.

10. The Company had given an advance amounting to Rs.3,93,16,028/- to certain parties towards fulfillment of certain obligations. However, the said obligation was not fulfilled and the Company, despite its best efforts, could not realize Rs. 3,93,16,028/- hence these amounts accordingly became unrealizable. Further the company also as written back of the advance payable of Rs. 1,45,86,557/- which was not payable to the party.

Considering all the facts, the Board had passed resolution confirming the write offs and written back''s during the current year in the Books of Account.

11. The company has written off Accounts Receivables pertaining to branches to the extent of Rs. 2,60,59,254/- which were not recoverable, despite its best efforts to collect the same.

12. The company has written off Accounts Receivables pertaining to UIDAI project of Gujarat Social Infrastructure Develop- ment Board to the extent of Rs. 1,34,96,255/- , for non fulfillment of conditions mentioned in the agreement.

13. There are no dues to Micro and Small Enterprises as on 31st March, 2014.

14. The Balances of Trade receivables, Loans and Advances and Trade payables are subject to confirmation and consequen- tial adjustment if any required.

15. Current Assets and Loans and Advances:

In the opinion of the Board of Directors the Current assets, Loans and advances have a value realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities has been made.

16. The Ministry of Corporate Affairs, Government of India, vide General circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 211 of the Companies Act, 1956. Subject to fulfillment of conditions stipulated in the circular, the Company has satisfied the conditions stipulated in the circular and hence entitled to exemption. Necessary information relating to subsidiaries has been included in Consolidation of Financial statements.

17. Leases:

The Company has operating lease for office premises, which is renewable on a periodical basis and cancellable at its option. Rental expenses for operating lease recognized in Profit and Loss account is Rs.13,459,034/- (Previous Year Rs.15,070,872/- )

20. Transactions with Related Parties:

The List of Related parties with whom transactions have taken place and nature of relationship is:

A) List of Related Parties:

i) Subsidiaries:

a) GSS Infotech CT Inc (A Delaware Company)

b) GSS IT Solutions Private Limited

c) GSS Healthcare IT Solutions Private Limited

ii) Step down Subsidiaries:

- GSS Infotech Holdings Inc

- GSS Infotech Inc

- Infovision Technologies, Inc

- Infospectrum Consulting Inc

- System Dynamix Corporation

- GSS Infotech NY Inc (formerly ATEC Group)

- Infovista Technologies Inc

- Technovant Inc

- GCI Systems Inc

- Veloce Group LLC

iii) Key Management Personnel:

Mr. Bhargav Marepally Chief Executive Officer and Managing Director

23. Rounding off & Regrouping:

The figures are rounded off to the nearest rupee and previous year''s figures have been regrouped where necessary to correspond with current year''s figures.

---

Mar 31, 2013

1. Corporate information:

GSS Infotech (GSS) is one of the fast growing managed IT Services companies, headquartered at Hyderabad, India. GSS operates worldwide through its offices in India, Middle East and the USA. A Pioneer in managed IT Services, GSS offers Cloud Enablement Services Remote Infrastructure and Application management services to customers across the globe. Over the years, GSS has established itself as a choice of providers with over 40 Fortune global customers covering Financial Services, Insurance, HealthCare, Education and Government industry segments.

A CMMI Level 5 company, GSS helps its customers reduce their CAPEX on infrastructure and helps convert it to manageable operational expense, leveraging its premier partnerships with leading technology providers such as Microsoft, CISCO, HP, Symantec, VMWARE, BMC and NetApp. GSS Infotech offers consulting services to help customers choose the right cloud deployment models, migrates application portfolio to the cloud environment, ensures functional and performance equivalence of applications through its independent validation and verification services and also offers remote application & infrastructure monitoring and management services through its Global Operations Command Center in Hyderabad, India.

GSS Infotech, with an ambitious inorganic growth strategy, has been very successful through a spate of acquisitions in the USA. The company has been successful in integrating all of its overseas acquisitions and creating a globally integrated Infrastructure Management Services practice. GSS is now well positioned to capitalize on the emerging technology trends in the cloud computing arena leveraging its unparalleled expertize in Infrastructure Virtualization, Remote Infrastructure Management, Cloud Consulting and Migration services. The company offers world class services propelled by over 700 consultants consisting of MCSE''s, BS-25999 certified professionals, VMware VCP''s, Remedy CA, CCNA, CCNP, CCSE, CCVP, CCIE, CISSP, BMC Control-M professionals with Consulting, Deployment and Management expertise.

GSS Infotech provides pragmatic and unique solutions to customers looking for excellence and high-quality. Our Thought Leadership, Responsiveness, Passion and Professionalism to work as a ''Virtual Extension'' to customer''s business has always been acknowledged to be a great strength, by our customers.

2. Basis of Preparation:

The financial statements are prepared in accordance with Indian Generally Accepted Principles (GAAP) under the historical cost convention on the accrual basis. The Company has prepared the financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and relevant provisions of the Companies Act, 1956.

3. Closure of Accounting Year

For the current period the company closed its financial year as of 31st March, 2013 for a period of 12 months. The company closed the previous year financial statements for 9months ended 31, March, 2012. Therefore the figures as of 31st March, 2013 are not comparable to the previous years figures.

4. The figures are rounded off to the nearest rupee and figures of the previous year are regrouped and reclassified wherever necessary to confirm to the current year figures.

5. In the current year, the gains on account of exchange fluctuations on advances have been credited to the exchange fluctuation reserve account, as the management feels that the gains are of temporary nature and have occurred in a magnitude disproportionate to the normal course of business. This was as a result of adopting a conservative approach to enable consistency in the reported earnings for the period.

6. Contingent Liabilities:

i.) Against Bank Guarantees issued by Banks towards financial and performance guarantees outstanding as at 31st March, 2013 amounts R3,66,23,266/-/- (Previous Year: R6,59,02,266-)

7. Claims Not Acknowledged as Debts :

On account of disputed Income Tax demand, not acknowledged as debt by the company RNIL (Previous Year '' NIL).

8. Advances to Subsidiaries:

a) The Company has given advances to its wholly owned subsidiary viz., GSS Infotech Inc and GSS IT Solutions Private Limited with no specific repayment schedule.

b) Information pursuant to clause 32 of Listing Agreement with Stock exchanges w.r.t. Loan and Advances in the nature of loans to wholly owned subsidiaries is as given below:

9. Employee Stock Options:

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.

10. Employee Benefits: Defined Contribution Schemes:

The Contributions to Employees Provident Funds and Miscellaneous Provisions Act, 1952 made and charged off during the year is R52,75,500/- (Previous Year: R43,05,601/-)

Defined Benefit Plans: Leave Encashment:

The Present value of obligation in respect of Earned Leave Encashment payable to employees on termination is determined, recognized and charged off during the year are as under:

Gratuity:

The Present value of obligation in respect of Gratuity to employees on termination is determined based on actuarial valuation using Projected Unit Credit Method.

The Company has created GSS Infotech Ltd Employee Group Gratuity Assurance Scheme Trust (GSSGGAST) to implement gratuity scheme and contributions are being made to the designated scheme operated by LIC of India.

Tax Expense:

i) Current Income tax represents tax on income payable as per relevant statutes of the respective countries recognised and provided.

ii) Minimum Alternate Tax Credit, where there is certainty in availing the tax credit against the taxes on income paid, are recognised and shown as "MAT Credit Entitlement" under Loans and Advances in the financial statements.

11. Note on Exceptional Item:

"The Company had given an advance amounting to R9,27,50,000 to certain parties towards fulfilment of certain obligations. However, the said obligation was not fulfilled and the Company, despite its best efforts and initiating legal action , could not realize R7,79,50,000/- hence these amounts accordingly became unrealizable.

Considering all the facts, the Board had passed resolution confirming the write offs during the current year in the Books of Account.

12. There are no dues to Micro and Small Enterprises as on 31st March, 2013.

13. The Balances of Trade receivables, Loans and Advances and Trade payables are subject to confirmation and consequential adjustment if any required.

14. Current Assets and Loans and Advances:

In the opinion of the Board of Directors the Current assets, Loans and advances have a value realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities has been made.

15. The Ministry of Corporate Affairs, Government of India, vide General circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 211 of the Companies Act, 1956. Subject to fulfillment of conditions stipulated in the circular, the Company has satisfied the conditions stipulated in the circular and hence entitled to exemption. Necessary information relating to subsidiaries has been included in Consolidation of Financial statements.

16. Leases:

The Company has operating lease for office premises, which is renewable on a periodical basis and cancellable at its option. Rental expenses for operating lease recognized in Profit and Loss account is R15,070,872/- (Previous Year R13,284,850/- )

17. Segment Reporting: Business Segments:

The Company operates in a single business segment i.e., Software Services.

18. Transactions with Related Parties:

The List of Related parties with whom transactions have taken place and nature of relationship is:

A) List of Related Parties:

i) Subsidiaries:

a) GSS Infotech Inc (A Delaware Company)

b) GSS IT Solutions Private Limited

ii) Step down Subsidiaries:

- Infovision Technologies, inc

- Infospectrum Consulting Inc

- GSS Infotech CT Inc (formerly System Dynamix Corporation )

- GSS Infotech NY Inc (formerly ATEC Group)

- Infovista TechnologiesInc

- Technovant Inc

- GCI Systems Inc

- Veloce Group LLC

iii) Key Management Personnel:

a) Mr. Bhargav Marepally Chief Executive Officer

And Managing Director

b) Mr. Ramesh Yerramsetti Director

19. The other particulars as required are not given as the same are not applicable to the Company for the Current Year.

20. Rounding off & Regrouping:

The previous year''s figures have been regrouped where necessary to correspond with current year''s figures. The figures are rounded off to the nearest rupee. The financial statements are prepared as per the Revised Schedule VI effective from 1st April 2011 for preparation of financial statements, which has significant impact on the disclosures and presentations made in the financial statements. There are, however, no material issues requiring presentation of specific reconciliation statements.

21. The Notes referred to in the financial statements form an integral part of Accounts.

---

Mar 31, 2012

A. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- each. Each share holder of equity shares is entiltled to one vote per share

Cash credit from banks is secured against the margin money deposits. Tangible assets and secured charge of trade receivables. Cash credit will be repayable on demand and carries interest @ 14.25%

1.1. COMPANY OVER VIEW:

GSS Infotech (GSS) is one of the fast growing managed IT Services companies, headquartered at Hyderabad, India. GSS operates worldwide through its offices in India, Middle East and the USA. A Pioneer in managed IT Services, GSS offers Cloud Enablement Services Remote Infrastructure and Application management services to customers across the globe. Over the years, GSS has established itself as a choice of providers with over 40 Fortune global customers covering Financial Services, Insurance, HealthCare, Education and Government industry segments.

A CMMI Level 5 company, GSS helps its customers reduce their CAPEX on infrastructure and helps convert it to manageable operational expense, leveraging its premier partnerships with leading technology providers such as Microsoft, CISCO, HP, Symantec, VMWARE, BMC and NetApp. GSS Infotech offers consulting services to help customers choose the right cloud deployment models, migrates application portfolio to the cloud environment, ensures functional and performance equivalence of applications through its independent validation and verification services and also offers remote application & infrastructure monitoring and management services through its Global Operations Command Center in Hyderabad, India.

GSS Infotech, with an ambitious inorganic growth strategy, has been very successful through a spate of acquisitions in the USA. The company has been successful in integrating all of its overseas acquisitions and creating a globally integrated Infrastructure Management Services practice. GSS is now well positioned to capitalize on the emerging technology trends in the cloud computing arena leveraging its unparalleled expertize in Infrastructure Virtualization, Remote Infrastructure Management, Cloud Consulting and Migration services. The company offers world class services propelled by over 700 consultants consisting of MCSE's, BS-25999 certified professionals, VMware VCP's, Remedy CA, CCNA, CCNP, CCSE, CCVP, CCIE, CISSP, BMC Control-M professionals with Consulting, Deployment and Management expertise.

GSS Infotech provides pragmatic and unique solutions to customers looking for excellence and high-quality. Our Thought Leadership, Responsiveness, Passion and Professionalism to work as a 'Virtual Extension' to customer's business has always been acknowledged to be a great strength, by our customers.

2.1 Closure of Accounting Year

For the current period the company closed its financial year as of 31st March, 2012 for a period of 9 months. The company closed the previous year financial statements for the year ended 30th June, 2011. Therefore the figures as of 31st March, 2012 represent transactions for the period of 9 months from 1st Jul, 2011 to 31st March, 2012 and are not comparable to the previous figures.

2.2 On March 30, 2012, pursuant to approval from the Board and a Stock Purchase and Contribution Agreement, the Company, exchanged 100% shares of its two subsidiaries GSS Infotech Inc., Illinois ( 279,000 shares ) and GSS Infotech Holdings Inc. ( 1500 shares ) for 100% shares of GSS Infotech Inc., a Delaware Company( 1500 shares ) at cost.

2.3 The figures are rounded off to the nearest rupee and figures of the previous year are regrouped and reclassified wherever necessary to confirm to the current year figures.

2.4 In the current year, the gains on account of exchange fluctuations pertaining to the loans given to the Wholly owned Subsidiary GSS Infotech Inc, have been credited to the exchange fluctuation reserve account, as the loans given have been converted into equity during the year.

2.5 Contingent Liabilities:

i) Against Bank Guarantees issued by Banks towards financial and performance guarantees outstanding as at 31st March, 2012 amounts R10,66,11,450/-(Previous Year: R4,77,80,153/-)

ii) The company's income tax assessment for the previous year relevant to the Assessment year 2008.09 resulted in additional tax payable to the extent of R19,45,642/- which is disputed and appealed. Refund of taxes resulting from favorable appellate decisions on same grounds for the earlier financial years 2004.05 and 2006.07 amounting to R17,14,730/- are adjusted against the said demand. The remaining balance amounting to R2,30,912/- is not provided in the books since the dispute is same as it was in the earlier years where departmental appeals in the Income Tax Appellate Tribunal are decided in favor of the company

2.6 Claims Not Acknowledged as Debts :

On account of disputed Income Tax demand, not acknowledged as debt by the company R NIL (Previous Year Rs. NIL).

2.7 Advances to Subsidiaries:

a) The Company has given advances to its wholly owned subsidiary viz., GSS Infotech Inc and GSS IT Solutions Private Limited with no specific repayment schedule.

b) Information pursuant to clause 32 of Listing Agreement with Stock exchanges w.r.t. Loan and Advances in the nature of loans to wholly owned subsidiaries is as given below:

2.8 Employee Stock Options:

The Company had issued 200,000 Options to its employees during the previous year under ESOP, 2010 B Scheme, which can be exercisable at the market price and doesn't involve any compensation cost to be accounted.The outstanding stock options as on 31.03.2012 are 91,000 (Previous year as on 30.06.2011 are 2,00,000). The decrease in number of stock options are due to separation of employees from the organization and lapsed shares are added back to the pool account.

2.9 Employee Benefits: Defined Contribution Schemes:

The Contributions to Employees Provident Funds and Miscellaneous Provisions Act, 1952 made and charged off during the year is R 43,05,601/- (Previous Year: R 48,49,419/-)

Gratuity:

The Present value of obligation in respect of Gratuity to employees on termination is determined based on actuarial valuation using Projected Unit Credit Method.

The Company has created GSS Infotech Ltd Employee Group Gratuity Assurance Scheme Trust (GSSGGAST) to implement gratuity scheme and contributions are being made to the designated scheme operated by LIC of India.

2.10 Tax Expense:

i) Current Income tax represents tax on income payable as per relevant statutes of the respective countries recognised and provided.

ii) Minimum Alternate Tax Credit, where there is certainty in availing the tax credit against the taxes on income paid, are recognised and shown as "MAT Credit Entitlement" under Loans and Advances in the financial statements.

2.11 Note on Exceptional Item:

During the year, the company provided depreciation/amortization of software that was purchased in the year 2009-10. However, over the last 2 years, owing to various developments in-house and changes in implementation of various modules with the help of other management and reporting tools, the management, as at the year end, came to a conclusion that this software along with all its modules, post implementation, had outlived its useful life and hence the written down value was depreciated fully. This was treated as an exceptional item in the profit and loss account.

2.12 Conversion of loan into equity:

The company, pursuant to an agreement entered in the year 2009-10, made advances of R140,61,32,909.50(USD 26,398,320) to its wholly owned subsidiary i.e. GSS Infotech Inc till 31st December 2011 under the automatic approval route, for various corporate purposes including acquisitions and working capital requirements. On March 30, 2012, pursuant to approval from the Board, the company, converted the above advance into equity share capital, in order to strengthen GSS Infotech Inc's balance sheet and its financial position. The company, has made necessary filings with the relevant authorities in India

2.13 There are no dues to Micro and Small Enterprises as on 31st March, 2012.

2.14 The Balances of Trade receivables, Loans and Advances and Trade payables are subject to confirmation and consequential adjustment if any required.

2.15 Current Assets and Loans and Advances:

In the opinion of the Board of Directors the Current assets, Loans and advances have a value realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities has been made.

2.16 The Ministry of Corporate Affairs, Government of India, vide General circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 211 of the Companies Act, 1956. Subject to fulfillment of conditions stipulated in the circular, the Company has satisfied the conditions stipulated in the circular and hence entitled to exemption. Necessary information relating to subsidiaries has been included in Consolidation of Financial statements.

2.17 Leases:

The Company has operating lease for office premises, which is renewable on a periodical basis and cancellable at its option. Rental expenses for operating lease recognized in Profit and Loss account is R3,284,850/- (Previous Year R1,63,61,297/-).

2.18 Transactions with Related Parties:

The List of Related parties with whom transactions have taken place and nature of relationship is: A) List of Related Parties:

i) Subsidiaries:

a) GSS Infotech Inc (A Delaware Company)

b) GSS IT Solutions Private Limited

ii) Step down Subsidiaries:

- GSS Infotech Holdings Inc

- GSS Infotech Inc

- Infovision Technologies, inc

- System Dynamix Corporation

- GSS Infotech NY Inc (formerly ATEC Group)

- Infovista Technologies Inc

- Technovant Inc

- GCI Systems Inc

- Veloce Group LLC

iii) Key Management Personnel:

a) Mr. Bhargav Marepally CEO & Managing Director

b) Mr. Ramesh Yerramsetti Director

6. The other particulars as required are not given as the same are not applicable to the Company for the Current Year.

2.19 Rounding off & Regrouping:

The previous year's figures have been regrouped where necessary to correspond with current year's figures. The figures are rounded off to the nearest rupee. The financial statements are prepared as per the Revised Schedule VI effective from 1st April 2011 for preparation of financial statements, which has significant impact on the disclosures and presentations made in the financial statements. There are, however, no material issues requiring presentation of specific reconciliation statements.

2.20 The Notes referred to in the financial statements form an integral part of Accounts.

---

Jun 30, 2010

(A) Company Overview

GSS America Infotech Ltd (GSSAIL) is one of the fastest growing IT consulting and Software Development Company, specializing in providing solutions for collaborative virtual enterprise, focused on providing scalable and cost-effective IT Solutions using Global Delivery Model. The Company has expanded its overseas operations to Dubai for Middle East region, Singapore and Bangladesh for APAC region.The services for the US geography are being provided through its branch at USA and through its wholly owned subsidiaries GSS America Inc and GSS Infotech Holdings Inc and step down subsidiaries Infospectrum Consulting Inc, System Dynamix Corporation and ATEC Group. GSSAIL is a SEI-CMMi - level 3, ISO 9001 and 27001 certified Company. The Company also has a dedicated Network Operations Centre (NOC). GSSAIL is intending to enter into BPO Segment through its Indian wholly Owned Subsidiary GSS IT Solutions Private Limited. GSS Americas ideas and services have resulted in technology-intensive transformations that have met the most stringent international quality standards.

1. The figures are rounded off to the nearest rupee and figures of the previous year are regrouped and reclassified wherever necessary to confirm to the current year figures.

2. As the current financial year is for a period of 12 months from July 1, 2009 to June 30, 2010 against its previous financial year of 15 months from April 1,2008 to June 30,2009, the current year figures are, strictly, not comparable to the corresponding figures of the previous financial year.

3. Contingent Liabilities:

Against Bank Guarantees issued by Banks towards financial and performance guarantees outstanding as at 30th June, 2010 amounts Rs. 4,83,26,387/- (Previous Year Rs. 22, 51,138/-)

4. Claims Not Acknowledged as Debts :

On account of disputed Income Tax Liability-Rs. 4,79,380/-(Previous Year Rs. 4,79,380/-)

5. Buy Back of Shares

In accordance with the scheme of buy back of shares through open market operations using the stock exchanges route approved by the Board of Directors during the financial year 2008-09, the company has, during the current financial year, bought back 3229 Equity Shares (Previous Year 5,59,928 Equity Shares) of Rs. 10/- each of the Company.

6. Tax Expense:

i) Current Income tax represents tax on income payable as per relevant statutes of the respective countries recognised and provided.

ii) Tax Credits, where there is certainty in availing the tax credit against the taxes on income paid, are recognised and shown as "Tax Credit Entitlements"under Loans and Advances in the financial statements.

7. Managerial Remuneration:

The Managerial Remuneration to Whole Time Directors for the year is Rs. 72,00,000/- ( Previous year- Rs. 90,00,000/-)

8. In the view of Management, no event has taken place to triggerthe need for testing its assets for impairment. Accordingly, as per the managements assessment, the carrying values of its assets as at the Balance sheet date are not higher than their corresponding recoverable amounts.

9. Leases:

The Company has operating lease for office premises, which is renewable on a periodical basis and cancellable at its option. Rental Expenses for operating lease recognized in Profit and Loss account is Rs. 3,12,42,177/- (Previous Year 4,23,16,994/-)

10. Transactions with Related Parties:

The List of Related parties with whom transactions have taken place and nature of relationship is: A) List of Related Parties:

i) Key Management Personnel:

a) Mr.BhargavMarepally C.E.O.& Managing Director

b) Mr.RameshYerramsetti Managing Director

11. The Schedules referred to in the financial statements form an integral part of Accounts.