Ar 2016 17
Ar 2016 17
Ar 2016 17
Ground Floor, Wing-B, N heights, Plot No. 12, TSIIC Software Units
Layout, Madhapur, Serilingampally Mandal, Rangareddy District,
Hyderabad – 500081, Telangana, India
Ph: +914044556600 Fax:+914040028703
Website: www.gssinfotech.com
Vision & Mission
To be a choice of providers in the SMB market segment for
cloud enablement services
Core values
v Entrepreneurship
v Integrity
v Pursuit of Excellence
v World-class delivery engine delivering solutions to Fortune 500 companies and Global 1000 Com-
panies
v SEI-CMMi Level-5 company, ITIL compliant processes, ISO 9001 and 27001 certifications
v Ranked in Forbes Asia’s best 200 under $ 1 billion companies in 2010 for the third consecutive year
after 2008 and 2009
v Global Operations Command Center (GOCC) and remote delivery center in Hyderabad, India
v Best-in-class top tier technology alliances and domain intensive Centers of Excellence
Corporate Information 4
Board’s Report 14
ITEM No 5 and 6:
Mr. Padmarao G.S. Lakkaraju and Mr. A Prabhakara Rao are Additional Directors (Independent) of the Company appointed in the
Board Meeting held on 08th August, 2017 and hold office up to the ensuing Annual General Meeting. Pursuant to the provisions of
Section 149 of the Act, every listed company is required to have at least one-third of the total number of directors as Independent
Directors, who are not liable to retire by rotation and shall hold office for a term up to five consecutive years on the Board of the
Company. Accordingly, it is proposed to seek approval of the Members to appoint Mr. Padmarao G.S. Lakkaraju and Mr. A Prabhakara
Rao as Independent Directors of the Company under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement,
for a term up to five consecutive years as set out in the accompanying Notice. As required under Section 160 of the Act, the Company
has received notices in writing from members along with the requisite amount of deposit proposing the candidature of Mr. Padmarao
G.S. Lakkaraju and Mr. A Prabhakara Rao as Independent Directors of the Company. Mr. Padmarao G.S. Lakkaraju and Mr. A Prabhakara
Rao are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013 and have consented
to act as Directors of the Company. The Company has also received declarations from them that they meet with the criteria of
independence as prescribed both under Section 149(6) of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, with the Stock Exchanges. In the opinion of the Board, both of them fulfill the conditions specified
in the Act and the Rules made thereunder and also under the Listing Agreement for appointment as Independent Director and they are
independent of the management. Keeping in view the contributions made by them during their association with the Company, the
Board considers that it shall be in the best interests of the Company to continue to have their benefit and knowledge. The Nomination
and Remuneration Committee of the Board of Directors of the Company has recommended the appointment of Mr. Padmarao G.S.
Lakkaraju and Mr. A Prabhakara Rao as Independent Directors for a term up to five consecutive years. None of the Independent
Directors hold any shares in the Company. A brief resume of Mr. Padmarao G.S. Lakkaraju and Mr. A Prabhakara Rao, nature of their
expertise in specific functional areas and name of the Companies in which they hold directorship and memberships / chairmanships
of Board Committees, shareholding in the Companies as stipulated under Clause 49 of the Listing agreement with the Stock Exchanges,
are provided in the Corporate Governance report forming part of the Annual Report. Copies of the draft letters for the appointment Mr.
Padmarao G.S. Lakkaraju and Mr. A Prabhakara Rao as Independent Directors setting out the terms and conditions of the Appointment
and the notices received under Section 160(1) of the Companies Act, 2013 from the Members are kept open for inspection by Members
at the Registered Office of the Company. A brief profile of each Director is annexed hereto forming part of the Notice. Save and except
Mr. Padmarao G.S. Lakkaraju and Mr. A Prabhakara Rao and their relatives, to the extent of their shareholding interest, if any, in the
Company, none of the other Directors or Key Managerial Personnel of the Company or their relatives are concerned or interested in
the resolutions set out at item nos. 5 and 6 of the Notice. The Board recommends the Ordinary Resolutions set out in Item No. 5 and
6 of the Notice for approval by the shareholders.
BRIEF PROFILE OF THE DIRECTORS
As per the requirement of SEBI (Listing Obligations and Disclosure Requirements) on Corporate Governance and the Companies
Act, 2013, for appointment of the Directors / re-appointment of the retiring Directors, a statement containing details / brief
profile of the concerned Directors are given below:
ITEM No 7:
The members of the Company, at the twelfth Annual General Meeting held on 30th September, 2015, had passed a special resolution
authorising the Board of Directors of the Company to borrow any sum or sums of money for the business of the Company, from time
to time, in Indian or Foreign currency or both, whether by way of cash credit, advance or deposit, loans or bill discounting or
otherwise or by way of issue of debentures/bonds or any other security(ies), from time to time from any Bank(s)/Financial Institutions(s)
or any other Institution(s), firms, body corporate(s) or other person(s), in India or abroad from any one or more of the Company’s
Bankers and / or from any one or more other persons, firms, bodies corporate or financial institutions and whether unsecured or
secured by mortgage, charge, hypothecation or lien or pledge of the Company’s assets and properties whether movable, immovable
including intangibles, or stock-in-trade (including raw materials, stores, spare parts and components in stock or in transit) and
work-in-progress and all or any of the undertakings of the Company not withstanding that the moneys to be borrowed together with
the moneys already borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in the ordinary
course of business) will or may exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say reserves
not set apart for any specific purpose but, so however, that the total amount upto which the moneys may be borrowed by the Board
of Directors and outstanding at any time shall not exceed Rs. 500 Crores (Rupees Five Hundred Crores only).
Pursuant to the above authorisation, the Company has decided to make private placement of redeemable non-convertible
debentures. The Board may, at an appropriate time, consider offering or inviting subscriptions for secured/ unsecured redeemable
non-convertible debentures, in one or more series / tranches, on private placement, issuable / redeemable at par, in order to
augment long-term resources for financing inter alia the ongoing capital expenditure and for general corporate purposes.
Section 71 of the Act which deals with the issuance of debentures read with Section 42 of the Act which deals with the offer or
invitation for subscription of securities of a company on private placement and Rule 14 of the Companies (Prospectus and
Allotment of Securities) Rules, 2014 provide that a company which intends to make a private placement of its non-convertible
debentures, shall, before making an offer or invitation for subscription, obtain approval of its shareholders by means of a
special resolution. It shall be sufficient if the company passes a special resolution only once in a year for all the offers or
invitations for such non-convertible debentures during the year.
Keeping in view the above, consent of the members is sought for passing the Special Resolution as set out at Item No. 7 of the
Notice. This enabling resolution authorises the Board of Directors of the Company to offer or invite subscription for redeemable
non-convertible debentures, as may be required by the Company, from time to time and as set out herein, for a year from the
date of passing this resolution.
The Board commends the Special Resolution set out at Item No. 7 of the Notice for approval by the members.
Notes:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING (AGM) OF THE COMPANY MAY APPOINT A
PROXY TO ATTEND AND ON A POLL, VOTE INSTEAD OF HIMSELF/ HERSELF. A Proxy need not be a member of the Company. The
instrument appointing the proxy should be deposited at the Registered Office of the Company not less than forty-eight
hours before commencement of the AGM i.e. by 10.30 a.m. on Thursday, 28th September, 2017. Proxies submitted on
behalf of companies, societies, etc., must be supported by an appropriate resolution/authority, as applicable. Pursuant
to the provisions of Section 105 of the Companies Act, 2013, a person shall not act as a proxy for more than 50 (fifty)
members and holding in aggregate not more than 10% (ten percent) of the total share capital of the Company. However, a
single person may act as a proxy for a member holding more than 10% (ten percent) of the total share capital of the
Company provided that such person shall not act as a proxy for any other person.
2. Relevant documents referred to in the accompanying Notice and the statement pursuant to Section 102(1) of the Companies
Act, 2013 are available for inspection at the Registered Office of the Company during business hours on all days except
Saturdays, Sundays and Public Holidays up to the date of the AGM.
3. The Register of Members and Share Transfer Books of the Company will remain closed from 23rd September, 2017 to 30th
September, 2017 (both days inclusive).
4. Members holding shares in electronic form are requested to inform any changes in address/bank mandate directly to
their respective Depository Participants.
5. Members are requested to hand over the enclosed Attendance Slip, duly signed in accordance with their specimen signature(s)
registered with the Company for admission to the meeting hall where the AGM is proposed to be held. The Members are
requested to fill the details i.e. folio number in case of physical shares and DP ID and Client ID numbers for identification.
6. Corporate members intending to send their authorized representatives to attend the AGM pursuant to Section 113 of the
Companies Act, 2013 are requested to send a duly certified copy of the Board Resolution together with their specimen
signatures authorizing their representative(s) to attend and vote on their behalf at the AGM, to the Company’s Registrar
and Transfer Agent or to the Company’s Registered office by 10.30 a.m. on Thursday, 28th September, 2017.
7. In terms of Section 125 of the Companies Act, 2013 and Sections 205A and 205C of the Companies Act, 1956 (including any
statutory modification(s) or re-enactment(s) for the time being in force), (including any statutory modification(s) or re-
enactment(s) for the time being in force), the Company is required to transfer the amount of dividend remaining unclaimed
for a period of seven years from the date of transfer to the unpaid dividend account to the Investor Education and
Protection Fund (IEPF). Members are requested to ensure that they claim the dividend(s) from the Company before
transfer of the said amounts to the IEPF.
8. The Securities and Exchange Board of India (SEBI) has mandated submission of Permanent Account Number (PAN) by every
participant in the securities market. Members holding shares in electronic form are requested to submit PAN to their
Depository Participant(s) with whom they are maintaining their Demat accounts. Members holding shares in physical form
can submit their PAN details to the Company’s Registrar and Share Transfer agent or at the Company’s registered office.
9. Electronic copy of the Annual Report containing the Notice of the Annual General Meeting along with the Attendance Slip
and Proxy Form are being sent to the members who have registered their email ids with the Company/Depository
Participant(s). For members who have not registered their email ids, physical copies of the aforementioned documents
are being sent in the permitted mode.
11. As a measure of austerity, copies of the Annual Report will not be distributed at the AGM. Members are, therefore,
requested to bring their copies of the Annual Report to the Meeting.
12. Members holding shares in single name are advised to avail the facility of nomination in respect of shares held by them
pursuant to the provisions of Section 72 of the Companies Act, 2013 read with the Rules issued thereunder. Members
holding shares in physical form desiring to avail this facility may send their nomination in the prescribed Form No. SH-
13 duly filled to the Company’s Registrar and Share Transfer agent i.e. Bigshare Services Private Limited. Members holding
shares in electronic form may contact their respective Depository Participant(s) for availing this facility.
13. Members who wish to obtain any information on any item of business of this meeting are requested to forward the same
before 23 rd September, 2017, to the Company Secretary at the Registered Office of the Company, email :
company.secretary@gssinfotech.com, so that the same may be attended appropriately. Relevant documents referred to in
the accompanying notice are open for inspection by the members at the Registered Office of the Company on all working
days i.e. Monday to Friday up to 29th September, 2017.
14. E-Voting:
In compliance with the provisions of section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and
Administration) Rules, 2014 as amended by the Companies (Management and Administration) Amendment Rules, 2015
‘(Amended Rules 2015’) and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015,
E-voting facility is being provided to Members to exercise their right to vote on the resolutions proposed to be passed at the
14th AGM by electronic means. The Members, whose names appear in the Register of Members/list of Beneficial Owners as
on the 27th September, 2017 at 9:00 A.M. and will end on 29th September, 2017 at 5:00 P.M. During this period shareholders’
of the Company, holding shares either in physical form or in dematerialized form, as on the record date i.e. 23rd September,
2017 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter. In addition, the
facility for voting through ballot paper shall also be made available at the venue of AGM and the Members attending the 14th
AGM who have not cast their vote by e-voting shall be eligible to cast their vote at the 14th Annual General Meeting venue.
170901082 27th September, 2017 at 9:00 A.M. 29th September, 2017 at 5:00 P.M.
c) Members holding shares in Physical Form should enter Folio Number registered with the Company.
iv. Next enter the Image Verification as displayed and Click on Login.
vi. If you are a first-time user follow the steps given below:
viii. Members holding shares in physical form will then directly reach GSS Infotech Limited selection screen. However,
members holding shares in Demat form will now reach ‘Password Creation’ menu wherein they are required to
mandatorily enter their login password in the new password field. Kindly note that this password is to be also used
by the Demat holders for voting for resolutions of any other company on which they are eligible to vote, provided
that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with
any other person and take utmost care to keep your password confidential.
ix. For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained
in this Notice.
x. Select the “EVEN” (EVSN 170901082) of GSS Infotech Limited. Members can cast their vote online from 27th September,
2017 at 9.00 A.M. to 29th, September, 2017 at 5.00 P.M. e-Voting shall not be allowed beyond the said time.
xi. On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting.
xii. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO
Implies that you dissent to the Resolution
xiii. Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
xiv. After selecting the resolution, you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed.
xv. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify
your vote. Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(` in Lakhs)
Particulars Consolidated Standalone
2016-17 2015-16 2016-17 2015-16
Net sales/income from operations 15,486.22 21,372.71 2,339.53 2,982.82
Less: Direct cost 3,091.81 7459.56 279.15 220.04
Indirect Cost 12,239.12 13,508.58 2,098.71 2,379.05
Profit / (Loss) from operations before other 155.29 404.57 (38.32) 383.73
income, finance costs and exceptional items
Other income 86.85 226.29 78.13 222.37
Profit / (Loss) from ordinary activities 242.14 630.86 39.80 606.10
before finance costs and exceptional items
Finance costs 157.15 217.52 76.12 139.57
Profit / (Loss) from ordinary activities after 84.99 413.34 (36.32) 466.53
finance costs but before exceptional items
Exceptional items* 5,284.38 - 4,324.49 -
Profit / (Loss) from ordinary activities before tax (5,199.40) 413.34 (4360.80) 466.53
Tax expense 637.97 43.30 631.14 25.84
Net Profit / (Loss) from ordinary activities after tax (5,837.36) 370.04 (4,991.94) 440.69
Net Profit / (Loss) for the period (5,837.36) 370.04 (4,991.94) 440.69
*In the Financial Year 2016-17, the Company had provided for Rs. 3,329.58 lakhs towards diminution in the value of
Company’s Investment in Wholly owned foreign subsidiaries, consequent upon sale of one of the step down WOS as per
the audited financials of WOS. Further, exceptional items include old advances not recoverable amounting to Rs.800
lakhs and reversal of lapsed advance tax of Rs.194.90 lakhs.
There are no material changes and commitments affecting the financial position of your Company which have occurred
between the end of the financial year ended 2016-17 and the date of this report.
I. STATE OF COMPANY’S AFFAIRS
GSS primary focus is in the ADMS (Application Development and Maintenance Services), IMS (Infrastructure Management
Services) and Healthcare services, while our major revenue contributor has been Professional Services. We continue to
execute our business operations under the same units as last year. As we continue to meet customers, we remain
convinced of the huge potential our company has given the services we offer today. We not only intend to leverage on our
existing customer base to drive growth we will also be focusing on emerging technologies in the Business Intelligence and
Analytics areas, which will be driving transformation and be within the demand circle.
II. CONSOLIDATED ACCOUNTS
The consolidated financial statements of your Company for the financial year 2016-17, are prepared in compliance with
applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, as prescribed by the Securities and Exchange Board of India (SEBI). The consolidated
financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiary
companies, as approved by their respective Board of Directors.
B. Details of Amounts advanced to Subsidiary Companies by the Company pursuant to clause 32 of the Listing Agreement
as at 31st March 2017:
(In Indian `)
Name of Subsidiary Balance as at 31.03.2017 Balance as at 31.03.2016
GSS Infotech Inc (Delaware) 14,37,78,485 14,93,85,953
GSS IT Solutions Pvt. Ltd 18,50,000 18,50,000
GSS Healthcare IT Solutions Pvt. Ltd 1,48,21,533 1,48,11,533
These amounts are advanced to fully owned subsidiaries towards carrying out the principal business activities of
the subsidiaries. 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 GSS Group.
C. There are no guarantees issued by your Company in accordance with Section 186 of the Companies Act, 2013 read
with the Rules issued thereunder.
XVIII. EMPLOYEE STOCK OPTION SCHEME:
The Stock exchanges accorded in-principal approval for listing of 20,00,000 shares under the GSS Infotech Limited
Restricted Employee Stock Option Plan 2013. However, no shares were granted to the eligible employees during the
financial year ended 31st March, 2017.
The financial performances of each of the subsidiaries included in the consolidated financial statements are detailed below:
Amount in ‘ (Lakhs)
A Subsidiaries:
1 GSS Infotech Inc*, (A Delaware Company) 13,770.46 18,081.85 (4,157.23) 46.72 (4,164.47) 29.07
3 GSS Healthcare IT Solutions Private Limited - 43.84 (1.15) (87.47) (1.15) (87.28)
*Pursuant to the applicable provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the members of GSS Infotech Limited in their 12th Annual General Meeting held on 30th September, 2015 had
given their consent to the Board for disposal of the entire investment of the Company held through its wholly owned subsidiary
GSS Infotech Inc (Delaware), in its non-profit making step down wholly owned subsidiary i.e. GSS Infotech NY Inc, also a
material subsidiary of the Company. GSS Infotech NY Inc. located in 1762, Central Avenue, Albany, NY 12205 has been sold on
July 1st 2016, at such terms and conditions agreed for, and would not form part of the financials of the Company with effect from
July 1st 2016.
Notes:
1. The information provided above is on standalone basis.
2. The aforesaid details are calculated on the basis of remuneration for the financial year 2016-17.
3. The remuneration to Directors is only the sitting fees paid to them for the financial year 2016-17. The sitting fees for
attending each of the Board and other Committee meetings is Rs. 20,000/- respectively. The sitting fees for attending
Independent Directors meeting is Rs. 10,000/-.
4. Median remuneration of the Company for all its employees is Rs. 3,84,000 for the financial year 2016-17.
B. Details of percentage increase in the remuneration of each Director, CFO & Company Secretary in the financial year 2016-
17 are as follows*:
(Amount in ‘)
Name of the Director/ Designation Remuneration Increase/
Chief Financial Officer/ (Decrease) (%)
Company Secretary
2016-17 2015-16
Mr. Bhargav Marepally Managing Director Nil Nil Nil
Mr. Ramesh Yerramsetti Director 80,000 60,000 25.00
Mr. Madhukar Sheth Director 1,20,000 1,00,000 (00.00)
Mr. Mark Silgardo Director Nil Nil Nil
Mr. Patri VenkataRamakrishna Prasad Director 80,000 80,000 (00.00)
Mr. Keerthy Jaya Tilak Director 2,10,000 1,90,000 10.00
Mrs. Nagajayanthi Das Juttur Ragavendra Director 2,10,000 1,90,000 10.00
Mr. Lalit Kumar Tiwari* CS 1,64,863 4,88,311 *
(resigned on 05.08.2016)
Ms. Esha Sinha* CS 2,48,909 - *
(appointed on 13.08.2016) *
Mr. Sanjay Heda* CFO 2,745,832 23,25,964 *
D. Number of permanent employees on the rolls of the Company as on 31st March 2017:
Executive/Manager cadre 15
Staff 186
Operators/Workmen 3
Total 204
E. Comparison of average percentage increase/decrease in salary of employees other than the key managerial personnel
and the percentage increase in the key managerial remuneration:
(Amount in `)
2016-17 2015-16 Increase/Decrease (%)
Average Salary of all employees other than
Key Managerial Personnel 2,98,561 2,54,449 17.34
Salary of CEO & MD (Key Managerial Personnel) Nil Nil Nil
Salary of CFO & CS* (Key Managerial Personnel) 31,59,604 28,14,275 *
2. Employees employed throughout the financial year 2016-17, who were in receipt of remuneration which in aggregate was
not less than Rs. 1.02 Crores: NIL
3. Employees employed for part of the financial year 2016-17, who were in receipt of remuneration which in aggregate was
not less than Rs. 8.50 lakhs per month: NIL
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014]
To,
The Members
GSS Infotech Limited
Ground Floor, Wing-B,
N heights, Plot No. 12,
TSIIC Software Units Layout,
Madhapur, Serilingampally Mandal,
Rangareddy District,
Hyderabad – 500081.
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by GSS Infotech Limited (hereinafter called ‘the Company’). Secretarial Audit was conducted in a manner that provided
me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained
by the Company and also the information provided by the Company, its officers, agents and authorized representatives during
the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the
financial year ended on 31st March, 2017 (“Audit Period”) complied with the statutory provisions listed hereunder and also
that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to
the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by GSS Infotech Limited
for the financial year ended on 31st March, 2017 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made there under;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Overseas Direct
Investment (Foreign Direct Investment and External Commercial Borrowings are not Applicable to the Company during the
Audit Period);
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI
Act’) viz.: -
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (Upto 14th May 2015
and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (Effective 15th May
2015)
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; - not
applicable during the audit period.
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
notified on 28th October, 2014. (Not applicable to the Company during the Audit Period); - not applicable during the
audit period
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; - not applicable
during the audit period.
‘Annexure A’
To,
The Members
GSS Infotech Limited
Ground Floor, Wing-B,
N heights, Plot No. 12,
TSIIC Software Units Layout,
Madhapur, Serilingampally Mandal,
Rangareddy District,
Hyderabad – 500081.
1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to
express an opinion on the secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the
correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts
are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis
for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.
4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations
and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility
of management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the company.
b. Individuals
i. Individual 1588338 1 1588339 9.38 2477167 1 2477169 14.63 5.25
Shareholders
holding
nominal share
capital upto
Rs. 1 lakh
ii. Individual 8505702 - 8505702 50.22 7435808 - 7435808 43.90 (6.32)
Shareholders
holding
nominal share
capital in
excess of
Rs. 1 lakh
c. Others (specify)
i. Non-Resident 195788 - 195788 1.16 93634 - 0.55 (0.61)
Indian
ii. Overseas - - - - - - -
Corporate
Bodies
iii. Foreign - - - - - - - - -
Nationals
iv. Clearing
Members 9864 - 9864 0.05 13327 - 13327 0.08 0.03
v. Trust - 350000 350000 2.07 - 350000 350000 2.07 -
vi. Foreign
Bodies - - - - - - - - -
vii. Corporate
Body
NBFC
registered
with RBI - - - - 15115 - 15115 0.09
Sub-Total (B) (2) 12919541 350001 13269542 78.35 10922061 350001 11272062 66.56 (11.80)
Total Public
Shareholding
(B)= (B) (1) + (B)(2) 13721136 350001 14071137 83.08 13676161 350001 14026162 82.82 (0.26)
C. Shares held by - - - - - - - - -
Custodian for
GDRs & ADRs
Grand Total
(A+B+C) 16586842 350001 16936843 100.00 16586842 350001 16936843 100.00 0.00
*The % of shares pledged/encumbered represents % of shares pledged/encumbered as a % of the total shares of the
Promoter and Promoter Group Holding
The term “encumbrance” has the same meaning as assigned to it in regulation 28(3) of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011.
*Date of transfer has been considered as the date on which the beneficiary position was provided by the Depositories to
the Company.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(Amount in `)
Secured Unsecured Deposits Total
Loans Loans indebtedness
(excluding
deposits)
Indebtedness at the beginning of the financial year
(As at 01.04.2016)
i) Principal Amount 63,500,000 - - 63,500,000
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 63,500,000 - - 63,500,000
Change in Indebtedness during the financial year
• Addition - - - -
• Reduction (Repayment) 34,548,300 - - 34,548,300
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES (under the Companies Act, 2013):
No penalties/punishment/compounding of offences were levied under the Companies Act, 2013.
(Pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014) Form
for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in Section
188(1) of the Companies Act, 2013 including certain arms’ length transactions under third proviso thereto:
GSS Infotech has been a leading player in IT industry and has always strived to deliver high value to customers in an ever
evolving IT landscape. We have always made strategic investment into the new areas to create new competencies and help our
customers adopt transformative stance towards technology.
Over a period of time, we have created a cultural and process eco-system to keep on re-inventing ourselves, so that we can help
our customers with the adoption of cutting edge technology infrastructure and stay ahead. We have also strived for creating
strategic advantage for our customers by providing solutions and services, which are smart, cost efficient and cutting edge. We
believe that we have the right combination of capability, process, people and frameworks to help our customers get maximum
value out of existing IT infrastructure and adopt the new solutions, which can take the quality and efficiency of the infrastructure
to the next level.
With the recent shifts in information technology, and, corresponding potential benefits which our customers can gain, we are
aligning our strategy and direction, and, creating new competencies, models and capacities. Some of the new areas, which are
of key focus to us are cloud, security, Internet of Things, mobility, automation and big data.
Some of our strategic drivers as we further evolve our capabilities, are following.
Strategic Drivers for GSS
• Build high margin IP driven business
• Develop business models with built-in scale factors
• Create market positioning around packaged and branded offerings
We are adopting a strategic business framework to focus on IP driven services. We will continue delivering value to customers
with our current range of services, but, will evolve our portfolio to have technology IP pieces, which can help us deliver even
higher value to customer.
Our adoption of technology, to deliver our IT infrastructure management services is to follow a set of basic premises.
1. Scalability in services using the technology
2. An ability to design new services using intellectual property
3. Keep on investing in creating technology IP which can be used to launch new services
We have been offering services to our customers all across IT segment. We have traditionally tapped into market opportunities
as they have evolved and offered relevant services. Given the new and merging landscape, we are transforming ourselves, and,
focusing on some selected areas, where we think, we can deliver higher value and a larger scale. These areas have been selected
after careful consideration of IT market in US and India.
Our selection of these significant areas is based on market opportunities, and, also based on scalability of those opportunities.
We intend to create unique packaged and well-structured services in each of these areas. Our focus is to identify specific
opportunities within these areas, and, offer super scalable, packaged, platform delivered services in these areas. We want to
take the complexity out of managing an IT infra while adopting new formats and paradigms for our customers. Our packaged
and catalog driven services will be offered to customers to make selection and usage of services simple. Following are some of
the key areas, where GSS intends to create packaged and platform driven services for our esteemed customers.
Significant Areas/Segments for GSS Roadmap
• Infrastructure Management
• Service Desk
• Security Management
• Product Engineering (R&D)
We have created a roadmap in alignment to our objectives. This roadmap has been designed with following considerations.
GSS is planning to develop various technology components and platforms, which can form the basis of developing more
services beyond 2018. Some of the key things GSS will be taking up during build up, launch and sustenance of the portfolio
during 2017 and 2018, are, following.
• Build platforms for each of the service areas/segment (tMaaS Cloud Platform for Security, UniDESK Cloud Platform for
Service Desk and IMS)
• Create automation factors on platform to simplify and automate delivery of basic elements of service
• Build components in the platforms for launching value adding services in security and service desk
v Value Added Services for Security
q Vulnerability assessments on a program basis
q Risk assessments on a recurring frequency basis
q Configuration audit on a recurring frequency basis
v Value Added Services for Service Desk
q Infra analytic services
q SOP/Knowledgebase as a hosted service
q Orchestrated/approved triggering of tasks
• Develop systems/machine learning capabilities in the platforms (tMaaS Cloud Platform and UniDESK Cloud Platform) to
enable predictive and pre-emptive services
v Automatic detection and response services
v Autonomic computing
v Predictive healing for IT infra services
• Build teams which can deliver further value adding services with predictive and pre-emptive elements
1. IT Industry Experts
20+ Years in Enterprise IT |
700+ Dedicated IT Consultants |
250+ consultants in the US
The philosophy of governance has been deeply rooted in the culture of GSS Infotech Limited over a long period of time. Your
Company continues to deliver value to its various stakeholders. The practice of responsible governance has enabled your
Company to achieve sustainable growth, while meeting the expectations of all stakeholders and the society at large. Besides
complying with Listing Regulations, your Company has adopted various practices and set responsible standards of business.
Your Company endeavors to improve upon aspects like transparency, professionalism, accountability and fair disclosures, on
an ongoing basis and takes necessary steps towards growth and enhancing value for its shareholders.
The Securities and Exchange Board of India (“SEBI”) on 2nd September, 2015, issued SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (hereinafter referred to as the “Listing Obligations”) with an aim to consolidate and stream-
line the provisions of the Listing Regulations for different segments of capital markets to ensure better enforceability. The
Listing Regulations were effective from 01st December 2015. Accordingly all the listed companies were required to enter into the
Listing Agreement with the Stock Exchanges within six months from the effective date. Your company has entered into listing
agreement with BSE Limited and National Stock Exchange of India Limited on 20th November, 2015.
GOVERNANCE FRAMEWORK
Your Company’s Governance structure consists of Board of Directors, its Committees and the Senior Management.
Board Structure:
Board Leadership: Your Company has a well-balanced Board of Directors with members from diverse backgrounds who have
years of experience and expertise in various fields. Out of 7 members on the Board, 2 are Independent Directors who are well
known for their wealth of experience, high standards of governance and independence. 2 out of 7 members are Promoter
Directors. The Managing Director & CEO is responsible for the overall management of the affairs of the Company under the
supervision of the Board of Directors. The Board over the period of years has created a culture of leadership to provide long-
term vision and policy approach to improve performance and quality of governance in your Company. It has played a primary
role in providing strategic direction to the management coupled with giving responsibility and accountability to deliver value
with highest level of transparency and integrity.
Mr. Patri Venkataramakrishna Prasad has resigned from the Board of Directors of the Company with effect from 08th August, 2017.
Mr. Keerthy Jaya Tilak has resigned as Chairman and Independent Director of the Company with effect from 10th August, 2017.
Mr. Padmarao G.S. Lakkaraju and Mr. A Prabhakara Rao have been appointed as Non-Executive Independent Additional Direc-
tor of the Company with effect from 08th August, 2017 till the ensuing Annual General Meeting and recommend their appoint-
ment to the shareholders as a Non-Executive Independent Director of the Company for a term of 5 years.
Board Committees: Committees have been constituted by the Board with specific terms of reference and have an optimum
representation of Board members. These Committee members meet at such frequency as is necessary to address the responsi-
bilities and tasks assigned to them. Presently there are three (3) Committees of the Board viz., Audit Committee,
Nomination and Remuneration Committee, and Stakeholders Relationship Committee.
Management Structure:
Managing Director & CEO: The Managing Director & CEO is responsible for the overall management of the affairs of the
Company under the supervision of the Board. He drives the initiatives as approved by the Board of Directors of the Company
and provides direction to achieve the same.
BOARD OF DIRECTORS
Composition:
• The Composition of the Board of GSS Infotech Limited comprises of 7 Directors as stated below:
*Mr. Keerthy Jaya Tilak has resigned as Chairman and Independent Director of the Company with effect from 10th August,
2017.
**Mr. Patri Venkataramakrishna Prasad has resigned from the Board of Directors of the Company with effect from 08th
August, 2017.
• The Chairman of the Company is Mr. Keerthy Jaya Tilak who is a Non-executive and Independent Director of the Company.
Hence the Company should have one-third of the composition of the Board as Independent Directors.
• Mr. Patri VenkataRamakrishna Prasad was an Independent Director of the Company, but with effect from 10th February,
2015, his status has been changed to Non-independent Director. Before the said date, the Composition of the Board was
in order and in compliance with Regulation 17 of LODR Regulation and Section 149 of the Companies Act, 2013.
• After the change in status of Mr. Prasad, the Company has been eagerly looking for a candidate as a Director who can
contribute to the operations and sales segment of the Company. GSS Infotech limited is an Information Technology
Company and in view of tremendous volatility in the IT markets which are very dynamic in nature, it was decided and
deliberated by the Board that the Candidate should be familiar with the business of the Company who can bring outside
Independent perspective/Knowledge to the Company and thus contribute to the growth of the Company and increase the
shareholder wealth.
• The Board is putting its best efforts to get on board an independent Director, who can fill the gap that exists in the
operations segment of the Company, who can bring Independent perspective about the latest technologies prevalent in
the market, the skill set that our employees should possess to cater to a wide range of projects across of the world and the
best practices prevalent in the world of Technology.
• During the financial year 2016-17, the Composition of the Board was not in order as required under Regulation 17 of the
Listing Regulations and Section 149 of the Companies Act, 2013.
• Mr. Patri Venkataramakrishna Prasad has resigned from the Board of Directors of the Company with effect from 08th
August, 2017.
• Mr. Keerthy Jaya Tilak has resigned as Chairman and Independent Director of the Company with effect from 10th August,
2017.
• Mr. Padmarao G.S. Lakkaraju has been appointed as Non-Executive Independent Additional Director of the Company with
effect from 08th August, 2017 till the ensuing Annual General Meeting and recommend his appointment to the sharehold-
ers as a Non-Executive Independent Director of the Company for a term of 5 years.
• Mr. A Prabhakara Rao has been appointed as Non-Executive Independent Additional Director of the Company with effect
from 08th August, 2017 till the ensuing Annual General Meeting and recommend his appointment to the shareholders as
a Non-Executive Independent Director of the Company for a term of 5 years.
• The Composition of the Board is in order as required under Regulation 17 of the Listing Regulations and Section 149 of the
Companies Act, 2013.
Independent Directors:
• The Independent Directors of your company have been appointed for a tenure of 5 (five) years up to 29th March, 2020.
Their appointment was approved by the shareholders of your Company at their AGM held on 30th September, 2015. The
Independent Directors have submitted declarations that they meet the criteria of Independence laid down under the
Companies Act, 2013 and the Listing Regulations and have confirmed that they do not hold directorship in more than the
prescribed limit in the Listing Regulations. Your Company has also issued formal appointment letters to all the Indepen-
dent Directors in the manner provided under the Companies Act, 2013. A sample letter of appointment is available on the
website of your Company and can be assessed through the link:
http://www.gssinfotech.com/about/compliance-under-clause-49.html
Mr. Keerthy Jaya Tilak has resigned as Chairman and Independent Director of the Company with effect from 10th August,
2017.
Mr. Padmarao G.S. Lakkaraju and Mr. A Prabhakara Rao have been appointed as Additional Independent Director of the
Company with effect from 08th August, 2017 till the ensuing Annual General Meeting and recommend their appointment
to the shareholders as a Non-Executive Independent Director of the Company for a term of 5 years.
During the year under review, the Independent Directors met on 10th February, 2017, without the attendance of Non-Independent
Directors and members of the management, inter alia, to discuss on the following:
• To review the performance of the Non-Independent Directors and the Board as a whole;
• Review the performance of the chairperson of your Company, taking into account views of Executive/Non-Executive
Directors; and
• Assess the quality, quantity and timeliness of flow of information between your Company’s management and the Board
that was necessary for the Board to effectively and reasonably perform the duties.
Mr. Bhargav Marepally Managing Director and CEO ** * - Mr. Bhargav Managing Director
Marepally and CEO
Mr. Ramesh Yerramsetti Non-Executive and Promoter ** * 1 Mr. Ramesh Non-Executive and
Director Yerramsetti Promoter Director
Mr. Patri Non-Executive and Mr. Patri Non-Executive and
VenkataRamakrishna Non- Independent Director ** * 1 VenkataRamakrishna Non- Independent
Prasad Prasad Director
Mr. Mark Silgardo Non-Executive and Mr. Mark Silgardo Non-Executive and
Non-Independent Director ** * 1 Non-Independent
Director
Mr. Madhukar Sheth Non-Executive and Mr. Madhukar Sheth Non-Executive and
Non-Independent Director ** * - Non-Independent
Director
Mr. Keerthy Jaya Tilak Non-Executive and ** * - Mr. Keerthy Non-Executive and
Independent Director Jaya Tilak Independent
Director
Mrs. Nagajayanthi Non-Executive and ** * - Mrs. Nagajayanthi Non-Executive and
Das Juttur Ragavendra Independent Director Das Juttur Independent
Ragavendra Director
* Excludes directorship in GSS Infotech Limited. Also excludes directorship in private limited companies, foreign compa-
nies, companies incorporated under Section 8 of the Companies Act, 2013 and Alternate Directorships
** For the purpose of considering the limit of committee memberships and chairmanships of a Director, Audit Committee
and Stakeholders Relationship Committee of public limited companies have been considered
*** No inter – se relationship with any of the Directors of the Company.
Number of Board Meetings:
During the financial year ended 31st March, 2017, Four (4) meetings of the Board of Directors were held and the maximum time
gap between two (2) meetings did not exceed one hundred and twenty days. The dates of the Board meetings are as under:
Details of their attendance at Board Meetings and at the AGM held during the year ended 31st March, 2017 are as follows:
Shareholding of the Non-Executive Directors of the Company in GSS Infotech Limited as on 31st March, 2017 is as follows:
Mr. Bhargav Marepally, CEO and Managing Director holds 4992 equity shares of the Company as on 31st March 2017.
Board Procedures:
The Board meets at least once in a quarter to review financial results and operations of the Company. In addition to the above,
the Board also meets as and when necessary to address specific issues concerning the businesses of your Company. The Board
Meetings are governed by a structured Agenda. The Agenda along with detailed explanatory notes and supporting material are
circulated in advance before each meeting to all the Directors for facilitating effective discussion and decision making. The
Board members are, on a quarterly basis, appraised by the Managing Director on the overall performance of the Company
through presentations and detailed notes.
Presentations are also made by the members of the Senior Management on the Company’s plans, performance, operations and
other matters on a periodic basis. The Board has complete access to any information within your Company which includes the
information as specified in Regulation 17 of the Listing Regulation and they are updated about their roles and responsibilities
in the Company.
The Companies Act, 2013 read with the relevant rules issued thereunder, now facilitate conducting meetings of Board and its
Committees through permitted audio-visual means or video-conferencing. Accordingly, during the year, the Board members
were, in accordance with the provisions of the Companies Act, 2013 and the Companies (Meetings of Board and its Powers)
Familiarization Programme:
Your Company has put in place a structured induction and familiarization programme for all its Directors including the
Independent Directors. The Company through such programme familiarizes not only the Independent Directors but any new
appointee on the Board, with a brief background of the Company, their roles, rights, responsibilities in the Company, nature of
the industry in which the Company operates, business model, operations of the Company, etc. They are also informed of the
important policies of the Company including the Code of Conduct for Board Members and Senior Management Personnel and
the Code of Conduct to Regulate, Monitor and Report Trading by Insiders, etc.
The Managing Director, CFO, business heads and other senior officials of the Company make presentations to the Board
members on a periodical basis, briefing them on the operations of the Company, strategy, risks, new initiatives, etc.
The familiarization programme for Independent Directors in terms of provisions of Listing Regulations for the financial year
ending is uploaded on the website of the Company and can be accessed through the following link:
http://www.gssinfotech.com/images/downloads/compliance-under-clause/familiarization-programme-and-meeting-of-inde-
pendent-directors.pdf
In terms of provisions of the Companies Act, 2013 read with Rules issued thereunder and Listing Regulations, the Board of
Directors, on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board.
Accordingly, the performance evaluation of the Board, each Director and the Committees was carried out for the financial year
ended 31st March, 2017. The evaluation of the Directors was based on various aspects which, inter alia, included the level of
participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company along with the
environment and effectiveness of their contribution via-a-vis their responsibilities.
The Board of Directors at its meeting held on 08th August, 2017, has noted the overall feedback on the performance of the
Directors and the Board as a whole and its Committees.
The overall outcome of this exercise to evaluate effectiveness of the Board and its Committees was positive and members
expressed satisfaction.
The Committees constituted by the Board play a very important role in the governance structure of the Company. The terms of
reference of these Committees are approved by the Board and are in line with the requirements of Companies Act, 2013 and
Listing Regulations. The minutes of Committee meetings are tabled at the Board meetings and the Chairperson of each Commit-
tee briefs the members of the Board on the important deliberations and decisions of the respective Committees. The minutes of
the proceedings of the Committee Meetings are captured in the same manner as the Board Meetings and in accordance with the
provisions of the Companies Act, 2013. Currently, there are three (3) Committees of the Board, viz., Audit Committee, Nomina-
tion and Remuneration Committee and Stakeholder’s Relationship Committee.
Audit Committee:
The Audit Committee has played an important role in ensuring the financial integrity of the Company. The Audit Committee’s
role includes oversight of the financial reporting process, the audit process, the adequacy of internal controls, transactions
with related parties and compliance with applicable laws and regulations.
The composition of the Audit Committee of the Board of Directors of the Company along with the details of the meetings held
and attended during the financial year ended 31st March, 2017, are detailed below:
The Chairman of the Audit Committee was present at the last AGM held on 30th September, 2016:
The scope of activities and terms of reference of the Audit Committee is governed by a Charter which is in line with the
provisions of Section 177 of the Companies Act, 2013 and Listing Regulations.
The role of the Audit Committee, inter alia, includes the following:
1. Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure that the
financial statements are correct, sufficient and credible;
2. Reviewing with the management the quarterly, half-yearly, nine-monthly and annual financial statements, standalone as
well as consolidated, before submission to the Board for approval;
3. Reviewing the Management Discussion and Analysis of the financial condition and results of operations;
4. Reviewing with the management, the annual financial statements and auditor’s report thereon before submission to the
Board for approval, with particular reference to:
a. Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s report as per
Section 134(3)(c) of the Companies Act, 2013;
b. Changes in the accounting policies and practices and the reasons for the same, major accounting entries involving
estimates based on the exercise of judgment by management and significant adjustments made in the financial
statements arising out of audit findings;
c. Compliance with listing and other legal requirements relating to financial statements;
d. Disclosure of any Related Party Transactions (RPTs); and
e. Qualifications in the draft audit report, if any.
5. Reviewing the financial statements of unlisted subsidiary companies (including joint ventures) and investments made by
the unlisted subsidiary companies (including joint ventures);
In accordance with the Nomination and Remuneration Policy, the Nomination and Remuneration Committee has, inter alia, the
following responsibilities:
1. Formulate the criteria for appointment as a Director: The Committee shall formulate criteria, and review them on an
ongoing basis, for determining qualifications, skills, expertise, qualities, positive attributes required to be a Director of
the Company.
2. Identify persons who are qualified to be Directors: The Committee shall identify persons who are qualified to become
Directors and who satisfy the criteria laid down. The process of identification shall include ascertaining, meeting,
screening and reviewing candidates for appointment as Directors, whether Independent, Non-Executive or Executive.
3. Nominate candidates for Directorships subject to the approval of Board: The Committee recommends to the Board the
appointment of potential candidates as Non-Executive Director or Independent Director or Executive Director, as the case
may be.
4. Approve the candidates required for senior management positions: The Committee shall lay down criteria including
qualifications, skills, expertise and qualities required for senior management positions like Managing Director & CEO,
CFO and Company Secretary and members of the Executive Council of the Company.
5. Evaluate the performance of the Board: The Committee shall determine a process for evaluating the performance of every
Director, Committees of the Board and the Board. The Committee may seek the support and guidance of external experts
and agencies for this purpose.
6. Evaluate the performance of the Managing Director or Whole-time Director and determine the Executive Compensation.
The Committee shall evaluate the performance of the Managing Director by setting his Key Performance Objectives at the
beginning of the each financial year. The Committee shall also approve his/her/their compensation package(s) in accor-
dance with applicable laws, in line with the Company’s objectives, shareholders’ interests, comparable with industry
standards and which shall have an adequate balance between fixed and variable component.
7. Review performance and compensation of senior management: The Committee shall review the performance of the senior
management of the Company. The Committee shall ensure that the remuneration to the Key Managerial Persons and
Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance
objectives appropriate to the working of the Company and its goals.
8. Recommend to the Board, commission to the Non-Executive Directors: The Committee shall recommend the commission
payable to the Non-Executive Directors, including Independent Directors, to the Board of Directors of the Company after
considering their contribution to the decision making at meetings of the Board/Committees, participation and time spent
as well as providing strategic inputs and supporting the highest level of corporate governance and Board effectiveness.
It shall be within the overall limits fixed by the shareholders of the Company.
During the financial year ended 31st March, 2017, Mr. Bhargav Marepally, Managing Director, did not draw any remuneration
from the Company.
During the financial year ended 31st March, 2017, the Company paid Rs. 20,000/- (Rupees Twenty thousand only) as sitting fees
for attending each of the Board and other Committee meetings to the Non-Executive Directors (except Mr. Mark Silgardo –
Nominee Director) of the Company.
(Amount in `)
Name of the Director Salary Perquisites Sitting fees Commission Total
Mr. Bhargav Marepally - - - - Nil
Mr. Ramesh Yerramsetti - - 80,000 - 80,000
Mr. Patri VenkataRamakrishna Prasad - - 80,000 - 80,000
Mr. Mark Silgardo - - - - -
Mr. Madhukar Sheth - - 1,20,000 - 1,20,000
Mr. Keerthy Jaya Tilak - - 2,10,000 - 2,10,000
Mrs. Nagajayanthi Das Juttur Ragavendra - - 2,10,000 - 2,10,000
Details pertaining to the number of complaints received and responded and status thereof during the financial year ended 31st
March, 2017, is given below:
SUBSIDIARY COMPANIES
Your Company does not have any material non-listed Indian subsidiary company in terms Regulation 16 of the Listing Regula-
tions. The minutes of the Board meetings of the subsidiary companies are placed at the meeting of the Board of Directors of the
Company on periodical basis. The Audit Committee reviews the financial statements including investments made by the
unlisted subsidiary companies of the Company.
The Board of Directors of the Company have approved a policy for determining “material” subsidiaries. The said Policy has
been placed on the website of the Company and can be accessed through the following link:
http://www.gssinfotech.com/images/downloads/compliance-under-clause/policy-for-determining-material-subsidiary.pdf
All special resolutions set out in the notices for the Annual General Meetings were passed by the shareholders at the respective
meetings with requisite majority.
The monthly high and low prices and volumes of the Company’s shares at BSE and NSE for the financial year ended 31st
March, 2017 are as under:
Month BSE NSE
High Low Volume High Low Volume
(in `) (in `) (No. of Shares) (in `) (in `) (No. of Shares)
April-16 27.95 24.40 43,060 29.00 24.15 65,495
May-16 26.00 22.25 26,421 26.95 22.45 46,928
June-16 25.50 20.85 75,981 25.00 20.20 115,742
July-16 26.80 20.05 58,683 26.45 20.85 120,018
August-16 25.00 22.00 25,890 26.40 20.65 52,806
September-16 32.55 22.00 428,968 32.50 21.80 905,624
October-16 38.40 26.00 239,804 38.50 26.00 514,619
November-16 37.00 21.55 74,648 35.90 24.25 263,591
December-16 32.95 22.80 54,068 30.95 24.10 204,335
January-17 31.70 25.20 45,682 29.90 25.80 182,682
February-17 29.30 23.60 75,337 26.95 23.55 184,512
March-17 28.00 22.00 154,668 25.65 22.00 341,640
Note: High and low are in per traded share. Volume is the total monthly volume of trade (in numbers) in GSS Infotech
Limited shares on BSE and NSE
The Chart below shows the comparison of your Company’s share price movement on BSE vis-à-vis the movement of the BSE
Sensex for the financial year ended 31st March, 2017 (based on month end closing):
The share transfer activities in respect of the shares in physical mode are carried out by the Company’s Registrar and
Transfer Agent (RTA). The shares lodged for transfer are processed and share certificates duly endorsed are returned
within the stipulated time, subject to documents being valid and complete in all respects.
The Board of Directors of the Company have delegated the authority to approve the transfer of shares, transmission of
shares or requests for deletion of name of the shareholder, etc., to the Company Secretary of the Company. A summary of
all the transactions in respect of issue of duplicate share certificates, split, rematerialisation, consolidation and re-
newal of share certificates are placed from time to time for the information and noting by the Board of Directors of the
Company.
The Company obtains a half-yearly compliance certificate from a Company Secretary in Practice as required under the
Listing Regulations and files a copy of the said certificate with Stock Exchanges.
Shareholders who continue to hold shares in physical form are requested to dematerialize their shares at earliest and avail
various benefits of dealings in securities in electronic/dematerialized form. For any clarification, assistance or information,
please contact the Registrar and Share Transfer Agent of the Company.
(x) Outstanding GDRs/ADRs/Warrants/Convertible Instruments and their impact on equity
The Company does not have any outstanding GDRs/ADRs/Warrants/Convertible Instruments as on 31st March 2017.
(xi) The Company does not have plant locations.
(xii) Address for Correspondence
Bigshare services Private Limited
E-2 & 3, Ansa Industrial Estate, Saki-Vihar Road, Saki Naka,
Andheri (E), Mumbai – 400072. India
Tel: 022 - 40430200, Fax : 022 – 28475207
For the benefit of shareholders, documents will continue to be accepted at the Registered Office of the Company: For any
queries relating to the shares of the Company, correspondence may please be addressed to:
GSS Infotech Limited
CIN: L72200TG2003PLC041860
Ground Floor, Wing-B, N heights, Plot No. 12,
TSIIC Software Units Layout, Madhapur, Serilingampally Mandal, Rangareddy District, Hyderabad – 500081, Telangana,
India Ph No. : 040 - 445556600 Website: www.gssinfotech.com
Shareholders are requested to quote their folio no. / DP ID & Client ID, e-mail address, telephone number and full address
while corresponding with the Company and its Registrar & Share Transfer Agent.
(xiii) Transfer of unclaimed dividend to Investor Education and Protection Fund:
In terms of Sections 125 of the Companies Act, 2013, the Company is required to transfer the amount of dividend
remaining unclaimed for a period of seven years from the date of transfer to the unpaid dividend account to the Investor
Education and Protection Fund (IEPF). The Company would be transferring the unpaid dividend for the financial year
ended 31st March, 2010 to the Investor Education and Protection Fund (IEPF) before the due date. Shareholders are
requested to ensure that they claim the dividend(s) from the Company before transfer to the IEPF. The unpaid dividend as
on 31st March, 2017 is as follows:
(xv) For any correspondence relating to Annual Report Kindly write to:
I hereby confirm that the Company has obtained from all the members of the Board and Senior Management Personnel,
affirmation(s) that they have complied with the Code of Conduct for Board Members and Senior Management Personnel in
respect of the financial year ended 31st March, 2017.
We hereby certify that for the financial year ended 31st March, 2017, on the basis of the review of the financial statements and
the cash flow statement and to the best of our knowledge and belief that:
1. These statements do not contain any materially untrue statement or omit any material fact or contain statements that
might be misleading;
2. These statements together present a true and fair view of the Company’s affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
3. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year 2016-17,
which are fraudulent, illegal or violative of the Company’s code of conduct.
4. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have
evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and have
disclosed to the auditors and the Audit Committee those deficiencies, of which we are aware, in the design or operation
of the internal control systems and that we have taken the required steps to rectify these deficiencies, if any.
a) There have been no significant changes in internal control over financial reporting during the year 2016-17; and
b) There have been no significant changes in accounting policies during the year 2016-17; and
c) There have been no materially significant fraud of which we have become aware and the involvement therein, of manage-
ment or an employee having a significant role in the Company’s internal control system over financial reporting.
Place: Hyderabad
Date: 08th August, 2017
I have examined the compliance of conditions of Corporate Governance by GSS InfoTech Limited (‘the Company’), for the year
ended 31st March, 2017, as per the relevant provisions of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations 2015, (‘Listing Regulations’) as referred to in Regulation 15(2) of the Listing Regulations
for the period 1st April, 2016 to 31st March, 2017.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited
to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has
complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement / Listing
Regulations, as applicable except the composition of the Board which is not in order as required under Regulation 17 of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and Clause 49 of the
listing agreement for the financial year ended 31st March, 2017.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
To,
The Board of Directors of
GSS INFOTECH LIMITED
P Sarath Kumar
Place: Hyderabad Partner
Date: 29.05.2017 M.No.:021755
P Sarath Kumar
Place: Hyderabad Partner
Date: 29.05.2017 M.No.:021755
Schedules referred to above and notes attached there to form an integral part of Statement of Profit & Loss
P. Sarath Kumar
Partner Sanjay Heda Esha Sinha
Membership No: 21755 Chief Financial Officer Company Secretary
Hyderabad
29.05.2017
Note:
1. Figures in bracket indicate cash out flow
2. The above cash flow statement has been prepared under indirect method as set out in Accounting Standard-3 notified
under the Companies Act, 2013 as per Revised Schedule-II format.
3. Previous year figures have been regrouped/ re-classified wherever necessary to confirm to current year classification
As Per Our Report of Even Date For and on behalf of the Board
For SARATH & ASSOCIATES
Chartered Accountants
Firm Regn No:005120S Bhargav Marepally Keerthy Jaya Tilak
CEO & Managing Director Chairman
P. SARATH KUMAR
Partner
Membership No: 21755 Sanjay Heda Esha Sinha
Chief Financial Officer Company Secretary
Hyderabad
29.05.2017
General Reserve
Balance as per the last financial statements 24,001,603 24,001,603
Add: Transferred by appropriation from profits - -
Closing balance 24,001,603 24,001,603
Note No-9. Fixed Assets: 31st March, 2017 31st March, 2016
Tangible
(i) Gross Block 114,114,172 132,438,268
(ii) Depreciation 110,679,323 120,766,225
(iii) Net Block 3,434,849 11,672,043
In Tangible
(i) Gross Block 903,106,693 1,409,599,885
(ii) Depreciation - -
(iii) Net Block 903,106,693 1,409,599,885
Total 906,541,542 1,421,271,928
A TANGIBLE ASSETS:
Computer Equipment 47,070,377 550,541 1,045,507 46,575,411 43,785,964 964,719 - 44,750,682 1,824,729 3,284,414
Furniture And Fixtures 11,796,362 - 7,760,142 4,036,220 9,185,318 151,710 5,676,258 3,660,770 375,450 2,611,044
Vehicles 12,187,568 - 1,241,990 10,945,578 10,962,908 664,404 1,179,890 10,447,422 498,156 1,224,659
Plant and Machinery 10,049,871 171,452 6,213,269 4,008,055 7,909,775 415,080 4,733,651 3,591,204 416,851 2,140,097
Total (A) 81,104,178 721,993 16,260,908 65,565,264 71,843,965 2,195,913 11,589,799 62,450,078 3,115,185 9,260,214
B INTANGIBLE ASSETS:
Software 9,478,754 - 2,785,182 6,693,572 9,136,757 20,793 2,783,640 6,373,910 319,662 341,997
Total (B) 1,460,933,975 19,144,841 528,423,214 951,655,601 48,922,261 2,090,625 2,783,640 48,229,246 903,426,355 1,412,011,714
GRAND TOTAL 1,542,038,154 19,866,834 544,684,122 1,017,220,865 120,766,225 4,286,538 14,373,439 110,679,323 906,541,542 1,421,271,928
Previous Year Total 1,460,603,745 81,434,408 - 1,542,038,153 107,620,137 13,146,088 - 120,766,225 1,421,271,928 1,352,983,608
79
Annual Report 2016-17
GSS INFOTECH LIMITED
NOTES FORMING PART OF THE CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2017
` `
Note - 14: Revenue from Operations
Sale of services
a) Revenue from Operations 1,548,621,869 2,137,270,879
1,548,621,869 2,137,270,879
8,685,049 22,629,424
309,180,815 745,956,278
1,086,366,411 1,184,580,690
133,258,855 153,130,965
Note - 20: Tax Expenses:
Current Tax (MAT) 62,547,890 8,600,969
Current Tax Relating to Previous Years A/c - -
Less: MAT Credit Entitlements - (2,302,066)
Net Current Tax 62,547,890 6,298,903
Deferred Tax 1,248,906 (1,969,023)
63,796,796 4,329,880
USD in Million
INR In Lakhs
Sr. Name of the Subsidiary/ Reporting Share Reserves Total Total Investments Turnover/ Profit/(Loss) Provision Profit/(Loss) Proposed %of
No Joint Venture Company Currency Capital &Surplus Assets Libailities Total Before for After Dividend Shareholding
Income Taxation Taxation Taxation
1 GSS Infotech Inc*(Delaware) USD 45.53 (37.21) 18.98 18.98 - 20.53 (6.20) 0.01 (6.21) - 100%
2 GSSIT Solutions
PrivateLimited INR 1.00 (7.15) 13.47 13.47 - - (1.15) - (1.15) - 100%
91
* Subsidiaries includes stepdown subsidiaries
P Sarath Kumar
Place: Hyderabad Partner
Date: 29.05.2017 M.No.:021755
1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation
of fixed assets;
(b) The Fixed Assets have been physically verified by the management during the year, which in our opinion, is reason-
able having regard to the size of the company and nature of its business. There were no discrepancies noticed on
such verification.
(c) The Company does not have any immovable property. Accordingly the provisions of clause 3 (i)( c ) of the order are
not applicable to the company during the current year.
2) As per the information and explanations given to us, the company is a Service Company primarily rendering Information
Technology Services, and as its business does not involve maintenance of inventories Viz. Finished, Stores, Spare Parts,
Goods in Process and Raw materials, the provisions of Clause 3(ii) of the Order are not applicable to the Company for the
current year.
3) (a) As per the information and explanations given to us, the Company had granted advances to three parties covered in
the Register maintained under Section 189 of the Act, year end outstanding being Rs. 16,04,50,018/-.
(b) As per the information and explanations given to us, in our opinion, the above loans are given to fully owned
subsidiary companies and does not carry interest or do not specify any specific repayment schedule and hence is
generally repayable on demand. Considering the principal business activities carried out by these fully owned
subsidiaries, which are in line with Company’s own business, we are on the opinion that the terms and conditions
on which these interest free loans have been granted to parties listed in the register maintained under Section 189
of the Companies Act, 2013 are, prima facie, not prejudicial to the interests of the Company.
(c) As per the information and explanations given to us, these loans do not carry any specific repayment schedule and
accordingly do not warrant any comments under Clauses 3 (iii) (b) of the Order for the current year.
(d) As per the information and explanations given to us, as these loan do not carry any specific repayment schedule
and consequently does not warrant any comments under Clause 3(iii)(c ) relating to Overdues.
4) In our opinion and according to the information and explanations given to us, the company has complied with the
provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India
and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of
Deposit) Rules, 2016 with regard to the deposits accepted from the public are not applicable.
6) The maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148
of the Act, in respect of the activities carried on by the company.
7) (a) According to the information and explanations given to us and on the basis of our examination of the records of the
Company, there are no dues in respect of amounts deducted/ accrued in the books of account in respect of undis-
puted statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of Customs,
Value Added Tax and Cess with the appropriate authorities during the year and other material statutory dues
applicable to the Company and in respect of this dues, there are no outstanding dues as on 31.03.2017 which are
outstanding more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of wealth tax, duty of customs and cess
which have not been deposited with the appropriate authorities on account of any dispute, except as stated
hereunder:-
i. Appeal pending before Income Tax Appellate Tribunal for the AY 2009-10, 2010-11 & 2011-12, involving Tax
Amounts of Rs.28,28,435/-, Rs. 75,45,571/- & Rs. 1,04,15,056/- respectively.
P. Sarath Kumar
Place: Hyderabad Partner
Date: 29.05.2017 M.No.:021755
We have audited the Internal Financial Controls over financial reporting of GSS INFOTECH LIMITED as of March 31, 2017 in
conjunction with our audit of the financial statements of the Company for the year ended on that date.
The Company’s management is responsible for establishing and maintaining Internal Financial Controls based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India. These responsibilities include the design, implementation and maintenance of adequate Internal Financial
Controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to
company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Company’s Internal Financial Controls over financial reporting based on our
audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies
Act, 2013, to the extent applicable to an audit of Internal Financial Controls, both applicable to an audit of Internal Financial
Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate Internal Financial Controls over financial reporting was established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the Internal Financial Controls
system over financial reporting and their operating effectiveness. Our audit of Internal Financial Controls over financial
reporting included obtaining an understanding of Internal Financial Controls over financial reporting, assessing the risk that
a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the Company’s Internal Financial Controls system over financial reporting.
A company’s Internal Financial Control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s Internal Financial Control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) 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 of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) 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.
Because of the inherent limitations of Internal Financial Controls over financial reporting, including the possibility of collusion
or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the Internal Financial Controls over financial reporting to future periods are subject to
the risk that the Internal Financial Control over financial reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate Internal Financial Controls system over financial
reporting and such Internal Financial Controls over financial reporting were operating effectively as at March 31, 2017, based
on the internal control over financial reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the
Institute of Chartered Accountants of India.
P. Sarath Kumar
Place: Hyderabad Partner
Date: 29.05.2017 M.No:021755
As Per Our Report of Even Date For and on behalf of the Board
For SARATH & ASSOCIATES
Chartered Accountants
Firm Regn No:005120S Bhargav Marepally Keerthy Jaya Tilak
CEO & Managing Director Chairman
P. Sarath Kumar
Partner
Membership No: 21755 Sanjay Heda Esha Sinha
Chief Financial Officer Company Secretary
Hyderabad
29.05.2017
P. Sarath Kumar
Partner
Membership No:21755 Sanjay Heda Esha Sinha
Chief Financial Officer Company Secretary
Hyderabad
29.05.2017
Note:
1. Figures in bracket indicate cash out flow
2. The above cash flow statement has been prepared under indrect method as set out in Accounting Standard-3 notified under the Companies Act,2013 as per Revised Schedule-II format.
3. Previous year figures have been regrouped/ re-classified wherever necessary to confirm to current year classification
As Per Our Report of Even Date For and on behalf of the Board
For SARATH & ASSOCIATES
Chartered Accountants
Firm Regn No:005120S Bhargav Marepally Keerthy Jaya T ilak
CEO & Managing Director Chairman
P. Sarath Kumar
Partner
Membership No: 21755 Sanjay Heda Esha Sinha
Chief Financial Officer Company Secretary
Hyderabad
29.05.2017
a. Reconciliation of shares outstanding at the beginning and at the end of reporting period Equity shares
31st March, 2017 31st March, 2016
No. of shares AmountIn Rs. No. of shares AmountIn Rs.
At the beginning of the period 16,936,843 169,368,430 16,936,843 169,368,430
Issued during the period - - - -
Outstanding at the end of the period 16,936,843 169,368,430 16,936,843 169,368,430
c. 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.
d. The Company has a 2013 RSU Plan which provides for the grant of restricted stock units (RSUs) to eligible employees of the Company. The Board of Directors recommended
establishment of the 2013 Plan to the shareholders on May 30, 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.
Note No-2: Reserves and Surplus 31st March, 2017 31st March, 2016
Securities Premium Account
Balance as per the last financial statements 2,052,380,129 2,052,380,129
Add: Additions during the year - -
Less: Amounts utilised during the year - -
Closing balance 2,052,380,129 2,052,380,129
Term Loan from banks is secured against the margin money deposits, Tangible assets.
In Tangible
(i) Gross Block 48,291,361 51,076,543
(ii) Depreciation 47,983,443 48,697,251
(iii) Net Block 307,918 2,379,292
540,722,138 873,680,544
Note No-12. Trade Receivables: 31st March, 2017 31st March, 2016
(Unsecured, Considered Good)
Outstanding for a period exceeding Six Months 238,718,790 276,352,555
Others 60,910,664 55,834,171
299,629,453 332,186,726
A. TANGIBLE ASSETS:
B INTANGIBLE ASSETS:
5 Goodwill - - - - - - - - - -
6 Software 9,221,207 - 2,785,182 6,436,025 8,911,747 - 2,783,640 6,128,107 307,918 309,460
7 Copyrights 41,855,336 - - 41,855,336 39,785,504 2,069,832 - 41,855,336 - 2,069,832
Total (B) 51,076,543 - 2,785,182 48,291,361 48,697,251 2,069,832 2,783,640 47,983,443 307,918 2,379,292
GRAND TOTAL 100,284,174 171,452 15,473,591 84,982,036 94,695,341 2,769,394 14,373,439 83,091,296 1,890,740 5,588,833
Previous Year Total 99,003,041 1,281,133 - 100,284,174 84,012,245 10,683,096 - 94,695,341 5,588,833 14,990,796
106
Annual Report 2016-17
GSS INFOTECH LIMITED
NOTES FORMING PART OF THE STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31ST MARCH, 2017
As Per Our Report of Even Date For and on behalf of the Board
For Sarath & Associates
Chartered Accountants
Firm Regn No: 005120S
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 550
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 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,
including changes made consequent to applicability of Companies Act 2013 mandated requirements.
2.1 Summary of significant accounting policies: Presentation and disclosure of financial statements
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions
that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as
at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such
estimates include provision for doubtful debts, future obligations under employee retirement benefit plans, income
taxes, and the useful lives of fixed assets and intangible assets
a) Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the
disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based on the
management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates
Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. All
costs, directly attributable to bringing the asset to the present condition for its intended use of assets, are capitalized.
Intangible assets are stated at the cost of acquisition /development of such assets and are carried at cost less
accumulated amortization and impairment.
Capital work in progress would comprise the cost of fixed assets that are not yet ready for their intended use at the
balance sheet date.
Depreciation on fixed assets is provided to the extent of depreciable amount on the written down value (WDV)
method and depreciation on assets acquired during the year is provided on pro-rata basis. Depreciation is provided
based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
Intangible assets are amortized over their respective individual estimated useful lives on a straight line basis
commencing from the date the asset is available to the Company for its use.
The Company assesses at each reporting date whether there is an indication that the assets are impaired. If any
indication exists or when an annual impairment testing for an asset is required, the Company estimates the asset’s
recoverable amount. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value.
An impairment loss is charged to the Profit and Loss statement in the year in which an asset is identified as
impaired.
The carrying amount of assets are being tested on annual basis for impairment so as to determine the provision
required for impairment loss, if any, or for reversal of the provision, if any required on account of impairment loss
recognized in previous periods.
e) Revenue recognition:
Revenue from Software Development on fixed-price, fixed time frame contracts, where there is no uncertainty as to
the measurement or collectability of consideration is recognized as per the percentage of completion method. On
time and material contracts, revenue is recognized as the related services are rendered. Provision for estimated
losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on
the current estimates. Annual technical services revenue and revenue from fixed price maintenance contracts are
recognized proportionately over the period in which services are rendered.
Profit on sale of investments is recorded on transfer of title from the company and is determined as the difference
between the sales price and the then carrying value of the investment. Dividend income is recognised where the
company’s right to receive dividend is established. Interest and Other Income is recognised on accrual basis and on
time proportion basis taking into account the amount outstanding and the rate applicable.
All items of expenditure are accounted on accrual basis. Provisions are made for all known losses and liabilities,
which involves substantial degree of estimation in measurement and when there is present obligation as a result of
past events and it is probable that there will be an outflow of resources.
Investments are classified into current investments and non-current Investments. Current investments are carried
at the lower of cost or market value. Any reduction in carrying amount and any reversals of such reduction are
charged or credited to the Statement of Profit and Loss. Non-Current investments are carried at cost less provision
made to recognize any decline, other than temporary, in the value of such investments.
Revenue from overseas clients and collections deposited are recorded at the exchange rate as at the date of the
respective transactions. Expenditure in foreign currency during the year is accounted at the exchange rate prevalent
when such expenditure is incurred. The exchange differences arising on the foreign currency transactions during
the year are recognized as income or expenses in the period in which they arise.
Non-Monetary assets and liabilities are translated at the rate on the date of the transaction.
Non Current Assets denominated in foreign currency are translated at the exchange rate prevalent at that date of the
Balance Sheet. The resulting differences are shown under the Foreign Exchange Translation Reserve.
Current Assets and Current Liabilities denominated in foreign currency are translated at the exchange rate prevalent
at that date of the Balance Sheet. The resulting differences are also recorded in the Statement of Profit and Loss.
The operations of foreign branches of the company which are integral in nature and the financial statements of
these branches are translated using the same principles and procedures of the Head Office. The resulting net
exchange difference on translation is recorded in the Statement of Profit and Loss.
i) Taxes on Income:
Tax expense comprises current year income tax, deferred income tax charges or credit and MAT/ credit Entitlement
for the year.
i. Current year income tax charge will be calculated based on assessable profits of the company determined in
accordance with the provisions of Income Tax Act, 1961. It also includes, income tax charge provided if any,
for such disallowances made on completion of assessment proceedings pending appeals, as considered
appropriate depending on the merits of each case.
ii. Deferred income tax charge or credit pertaining to future tax consequences attributable to timing difference
between the financial statement determination of income and their recognition for tax purposes will be recognised.
The effect of a change in tax rates on deferred tax assets and liabilities is recognised in income using the tax rates
and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are
recognized and carried forward only to the extent that there is a reasonable virtual certainty that sufficient
future taxable income will be available against which such deferred tax assets can be realised.
iii. Minimum Alternate Tax (MAT) credit is recognized, as an Asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the specified year. In the year in which the
Minimum Alternate tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the
recommendation contained in Guidance Note issued by the Institute of Chartered Accountants of India, the
said asset is created by way of a credit to the Statement of profit and loss and shown as MAT Credit
Entitlement.Such Assets are reviewed as at each Balance Sheet and written down to reflect the amount that will
not be available as a credit to be set off in future, based on the applicable taxation law then in force.
Short Term Employee Benefits, at the undiscounted amount in the year in which the services have been rendered, are
charged off to the Statement of Profit and Loss.
Eligible employees receive benefit in the form of matching contribution from the employer to Government
Provident Fund Scheme, which is a defined benefit plan. Both the employee and company make monthly
contributions to the Provident Fund plan equal to specified percentage of the employee’s salary.
ii) Gratuity:
In accordance with Payment of Gratuity Act 1972, the company provides for Gratuity, a defined benefit plan
covering eligible employees. The Gratuity plan provides a lump sum payment to eligible employees on retirement,
death, incapacitation or termination of employment, of an amount based on the respective employee salary
and the tenure of the employment with company. In this regard the Company is contributing its liability to the
Gratuity Fund maintained under a master policy with Life Insurance Corporation of India, as advised from
time to time. The provision is made for difference if any, between the liabilities determined under actuarial
valuation carried out under Projected Unit Credit Method and the value of funds at the balance sheet date, in
accordance with Accounting Standard-15 “Employee Benefits”, issued by ICAI.
The company provides for unutilized encashable earned leave based on the undiscounted value of such leave
balance eligible for carry forward as per the policy of the company.
k) Borrowing Costs:
Borrowing costs that are attributable to the acquisition of a qualifying asset are capitalized as part of cost of such
asset till such time as the asset is ready for its intended use. Other borrowing costs are recognized as expense for
the period.
l) Leases:
Lease of assets under which all the risks and rewards of ownership are effectively retained by the Lessor are
classified as operating leases. Lease Payments under operating leases are recognized as an expense on a straight
line basis over the period of lease.
m) Proposed Dividend:
Dividends, if any as recommended by the Board of Directors are accounted in the books of account, pending
approval of the members at the Annual General Meeting.
The basic earnings per share are calculated considering the weighted average number of equity shares outstanding
during the year.
The diluted earnings per share is calculated considering the effects of potential equity shares on net profits after
tax for the year and weighted average number of equity shares outstanding during the year.
Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is
probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.
Contingent Assets are neither recognized not disclosed in the financial statements.
p) Measurement of EBITDA
The Company has opted to present earnings before interest, tax, depreciation and amortization (EBITDA) as a
separate line item on the face of statement of profit and loss. The Company measures EBITDA on the basis of profit/
(loss) from continuing operations. In its measurement the Company does not include depreciation and amortization
expense, finance cost and tax expenses.
Cash and cash equivalents are short-term, highly liquid investments that are readily convertible into cash with original
maturities of three months or less. Cash and cash equivalents consist principally of cash on deposits with banks.
1. Contingent Liabilities:
i) Against Bank Guarantees issued by Banks towards financial and performance guarantees outstanding as at
31st March, 2017 amounts Rs.13,64,952/- (Previous Year: Rs.70,99,015/-)
ii) The following disputed Tax Liabilities are not provided for in the books of accounts: -
a) Appeal pending before Income Tax Appellate Tribunal for the AY 2009-10, 2010-11 & 2011-12, involving
Tax Amounts of Rs.28,28,435/-, Rs. 75,45,571/- & Rs. 1,04,15,056/- respectively.
b) Appeal pending before Income Tax Appellate Tribunal for the AY 2012-13 involving Tax amount of
Rs. 1,45,39,953/-.
c) Appeal pending before Hon’ble Dispute Resolution Panel, Bangalore, for AY 2013-14 involving tax amount
of Rs. 2,64,94,839/- & for AY 2014-15 involving tax amount of Rs. 2,01,99,151/- on account of disallowance
of losses.
During the year the company had MAT Credit entitlement to the extent of Rs 8,44,15,714/-. Considering the above
tax demands and also tax provisions restricting the life of MAT entitlement an amount of Rs 6,18,23,855/- is
determined by the company as not reflective of the amount to be carried forward and accordingly the said
amount is written off during the year, which is shown under Current Tax in the Statement of Profit and Loss.
Based on Expert opinion, the unutilized Minimum Alternate Tax Credit to the extent of Rs.2,25,91,589/- amply
covers any further amount that may crystallize on account of the above Income tax liabilities arises if any.
iii) There was a Service Tax demand amounting to Rs.85,19,526/- (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.
The Contributions to Employees Provident Funds and Miscellaneous Provisions Act, 1952 made and charged
off during the year is Rs. 45,84,907/- (Previous Year: Rs. 60,27,289/-)
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:
iii) 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.
8. 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.
Movement of provision for Deferred Tax for the year ended 31.03.2017 is as given below:
Further, exceptional items include old advances not recoverable/adjustable amounting to Rs.8,00,00,000/- and
reversal of lapsed advance tax of Bangladesh of Rs.1,94,90,102/-.
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. 5- 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:
11. The Balances of Trade receivables, Loans and Advances and Trade payables are subject to confirmation and
consequential adjustment if any required.
12. 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.
13. 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.11,253,103/- (Previous
Year: Rs. 1,75,97,192/-)
The future minimum lease payments are as given below:
Particulars 2016-17 2015-16
` `
Not later than one year 16,86,825 1,31,47,625
Later than one year and not later than five years —NIL— 70,21,875
Later than five years —NIL— —NIL—
Business Segments:
Geographical Segments:
2016-17 2015-16
Particulars Amount During Outstanding as at Amount During Outstanding as at
the year 31.03.2017 the year 31.03.2016
Managerial remuneration to
Key Management Personnel - - - -
Investment in capital of
Subsidiaries - 54,07,22,138 - 87,36,80,544
Advances to Subsidiaries (55,97,468) 16,04,50,018 (7,51,83,493) 16,60,47,486
Sales to Subsidiaries 6,25,35,473 26,31,45,653 7,29,00,085 25,61,25,786
Loan Received 6,02,768 7,28,048
Repayment of Loan Received 1,25,280 6,43,797
Disclosures in respect of transactions which are more than 10% of the total transactions of the same type with
related party during the year.
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.
21. The Notes referred to in the financial statements form an integral part of Accounts.
Ordinary Resolution:
5. Appointment of Mr. Padmarao G.S. Lakkaraju as an Independent Director of the Company for a period of 5 years.
6. Appointment of Mr. A Prabhakara Rao as an Independent Director of the Company for a period of 5 years.
Special Resolution
7. Approval of offer or invitation to subscribe to Non Convertable Debentures on Private placement.
Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the
Company, not less than 48 hours before the commencement of the Meeting. (i.e., by 10.30 a.m. on Thursday, 28th September, 2017)
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Name of Proxy
I hereby record my presence at the AGM of the Company held on 30th September, 2017 at 10.30 A.M. at Ellaa Suites, Lotus
Hall, Hill Ridge Springs, 25 Kancha, Gachibowli, ISB Road, Hyderabad - 500 032.
Note: This form should be signed and handed over at the meeting venue. No duplicate attendance slip will be issued
at the meeting hall. You are requested to bring the attendance slip at the venue of the annual general
meeting.
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Ground Floor, Wing-B, N heights, Plot No. 12, TSIIC Software Units
Layout, Madhapur, Serilingampally Mandal, Rangareddy District,
Hyderabad – 500081, Telangana, India
Ph: +914044556600 Fax:+914040028703
Website: www.gssinfotech.com