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GSS Infotech Ltd.

BSE: 532951 Sector: IT
NSE: GSS ISIN Code: INE871H01011
BSE 00:00 | 14 Jan 146.15 6.95
(4.99%)
OPEN

146.15

HIGH

146.15

LOW

141.00

NSE 00:00 | 14 Jan 145.50 6.90
(4.98%)
OPEN

145.50

HIGH

145.50

LOW

142.50

OPEN 146.15
PREVIOUS CLOSE 139.20
VOLUME 59803
52-Week high 152.70
52-Week low 38.00
P/E
Mkt Cap.(Rs cr) 248
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 146.15
CLOSE 139.20
VOLUME 59803
52-Week high 152.70
52-Week low 38.00
P/E
Mkt Cap.(Rs cr) 248
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GSS Infotech Ltd. (GSS) - Director Report

Company director report

Dear Members

We are delighted to present the report on our business and operations for the financialyear ended 31 March 2019

FINANCIAL RESULTS

The Company's Financial results (standalone & consolidated) for the year ended 31March 2019 is provided in the Annual Report.

(Rs. in Lakhs)
Particulars Consolidated Standalone
2018-19 2017-18 2018-19 2017-18
Net sales/income from operations 15786.42 14177.47 3086.14 2275.13
Less: Direct cost 1513.51 1713.41 417.78 319.40
Indirect Cost 13044.11 11742.60 1867.33 1609.99
Profit / (Loss) from operations before other income finance costs and exceptional items

1228.80

721.46

801.03

345.74

Other income 100.56 7.85 100.56 0.99
Profit / (Loss) from ordinary activities before finance costs and exceptional items

1329.36

729.31

901.59

346.73

Finance costs 98.14 106.60 8.12 28.31
Profit / (Loss) from ordinary activities after finance costs but before exceptional items 1231.22 622.71 893.47 318.42
Exceptional items* - - - -
Profit / (Loss) from ordinary activities before tax 1231.22

622.71

893.47

318.42

Tax expense 68.62 (109.37) 60.13 (129.12)
Net Profit / (Loss) from ordinary activities after tax

1162.60

732.08

833.34

447.54

Net Profit / (Loss) for the period

1162.60

732.08

833.34

447.54

There are no material changes and commitments affecting the financial position of yourCompany which have occurred between the end of the financial year ended 2018-19 and thedate 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 revenuecontributor has been Professional Services. We continue to execute our business operationsunder the same units as last year. As we continue to meet customers we remain convincedof the huge potential our company has given the services we offer today. We not onlyintend to leverage on our existing customer base to drive growth we will also be focusingon emerging technologies in the Business Intelligence and Analytics areas which will bedriving transformation and be within the demand circle.

II. CONSOLIDATED ACCOUNTS

The consolidated financial statements of your Company for the financial year 2018-19are prepared in compliance with applicable provisions of the Companies Act 2013 IndianAccounting Standards (Ind AS) and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as prescribed by the Securities and Exchange Board of India (SEBI). Theconsolidated financial statements have been prepared on the basis of audited financialstatements of the Company its subsidiary companies as approved by their respective Boardof Directors.

III. SUBSIDIARIES

A separate statement (Form No. AOC-1) containing the salient features of financialstatements of all subsidiaries of your Company forms part of consolidated financialstatements in compliance with Section 129 and other applicable provisions if any of theCompanies Act 2013. The financial statements of the subsidiary companies and relatedinformation are available for inspection by the members at the Registered Office of yourCompany during business hours on all days except Saturdays Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of theCompanies Act 2013. Any member desirous of obtaining a copy of the said financialstatements may write to the Company Secretary at the Registered Office of your Company.The financial statements including the consolidated financial statements of subsidiariesand all other documents required to be attached to this report have been uploaded on thewebsite of your Company www.gssinfotech.com

IV. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis forms an integral part of this Report and givesdetail of the overall industry structure developments performance and state of affairsof the Company's various businesses during the financial year ended 31 March 2019 isenclosed as Annexure [F] to this report.

V. CORPORATE GOVERNANCE REPORT

In compliance with the Regulations 34 of Listing Regulations a separate report onCorporate Governance along with a certificate from the Auditors on its compliance forms anintegral part of this Report and is enclosed as Annexure [G] to this report.

VI. DIVIDEND

The Board of Directors did not recommend dividend for the financial year ended 31March 2019.

VII. PUBLIC DEPOSITS

During the financial year 2018-19 your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read together with the Companies(Acceptance of Deposits) Rules 2014.

VIII. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Bhargav Marepally Managing Director is liable to retire by rotation at the ensuingAGM pursuant to the provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and being eligible haveoffered himself for re-appointment. Appropriate resolution for his re-appointment is beingplaced for your approval at the ensuing AGM. Your Directors recommend the re-appointmentof Mr. Bhargav Marepally (DIN 00505098) as Managing Director of your Company.

Mr. Sanjay Heda has resigned as Chief Financial Officer of the Company with effect from01st June 2018.

Mr. Vishnubhatla Ravikumar Jatavallabha appointed as Chief Financial Officer of theCompany with effect from 04th June 2018.

Mr. Rambabu Sampangi Kaipa and Mr. Saikiran Satya Surya Raghavendra Gundu appointed asan additional directors Non – Executive with effect from 13th February 2019 subjectto approval members at the ensuing annual general meeting.

Key Managerial Personnel:

• Mr. Bhargav Marepally is the Chief Executive Officer and Managing Director ofthe Company.

• Mr. Vishnubhatla Ravikumar Jatavallabha is the Chief Financial Officer of theCompany.

• Mr. Mohammad Anwar ul haq Abdul Mannan is the Company Secretary and ComplianceOfficer of the Company.

The Key Managerial Personnel have been appointed in accordance with the provisions ofsection 2(51) 203 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. Mr. Bhargav Marepally CEO &Managing Director Mr. Vishnubhatla Ravikumar Jatavallabha CFO and Mr. Mohammad Anwar ulhaq Abdul Mannan Company Secretary & compliance officer are the Key ManagerialPersonnel of your Company in accordance with the provisions of Sections 2(51) 203 of theCompanies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 (including any statutory modification(s) or re-enactment(s) for thetime being in force).

Annual Evaluation of Board's Performance:

In terms of the provisions of the Companies Act 2013 read with Rules issued thereunderand the Listing Regulations the Board of Directors on recommendation of the Nominationand Remuneration Committee have annually evaluated the effectiveness of theBoard/Director(s) for the financial year 2018-19.

IX. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES:

The remuneration paid to the Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of the Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force). The salient aspects covered in theNomination and Remuneration Policy has been outlined in the Corporate Governance Reportwhich forms part of this report. None of the Directors draw remuneration from the Companyother than sitting fees paid to the eligible directors.

The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors of your Company is set out in Annexure [B] to this report and is also availableon the website of your Company (www.gssinfotech.com).

X. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of the number of Board and Audit Committee meetings of your Company are setout in the Corporate Governance Report Annexure [G] which forms an integral part of thisReport.

XI. DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013 read with the Schedules and Rules issued thereunder as well asListing Regulations.

XII. DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force) the Directors of yourCompany confirm that:

(a) In the preparation of the annual accounts for the financial year ended 31 March2019 the applicable Indian Accounting Standards (Ind AS) and Schedule III of theCompanies Act 2013 (including any statutory modification(s) or re-enactment(s) for thetime being in force) have been followed and there are no material departures from thesame;

(b) The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31 March 2019 and of the profitand loss of the Company for the financial year ended 31 March 2019;

(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the Provisions of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force)for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(d) The annual accounts have been prepared on a 'going concern' basis;

(e) Proper Internal Financial Controls laid down by the Directors were followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively; and

(f) Proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.

XIII. AUDITORS AND AUDITOR'S REPORT

The Statutory Auditors of the Company M/s. Sarath and Associates CharteredAccountants (Firm Registration No. 005120S) were re-appointed by the members at the 13thAGM held on 30th September 2016 for a term of three (3) years till the conclusion of the16th Annual General Meeting of your company to be held in 2019 in accordance with section139 of the Companies Act 2013.

The Auditors' Report issued by the Statutory Auditors for the financial year ended 31March 2019 forms part of this Report and does not contain any Audit qualification forwhich the reply of Directors is required.

The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force).

XIV. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed Mr. Sunil Kumar Kacham from M/s. SUNIL KACHAM AND ASSOCIATES PracticingCompany Secretaries (Membership No.: 46155 and CP No: 16820) Hyderabad to conduct theSecretarial Audit of your Company. The Secretarial Audit Report is annexed herewith asAnnexure [C] to this Report. The Secretarial Audit report issued by the SecretarialAuditor for the financial year ended 31 March 2019 forms part of this report and does notcontain any Audit Qualifications for which the reply of the Directors is required.

XV. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as Annexure [D] to thisReport.

XVI. RELATED PARTY TRANSACTIONS

During the financial year 2018-19 your Company has entered into transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013 read withCompanies (Specification of Definitions Details) Rules 2014 which were in the ordinarycourse of business and on arms' length basis and in accordance with the provisions of theCompanies Act 2013 Rules issued thereunder and Listing Regulations. During the financialyear 2018-19 there were no transactions with related parties which qualify as materialtransactions under the Listing Agreement.

The details of the related party transactions as required under Indian AccountingStandard - 24 are set out in point 30 of the notes to the Standalone Financial Statementsforming part of this Annual Report.

The Form AOC-2 pursuant to Section 134 (3) (h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 is set out as Annexure [E] to thisReport.

XVII. LOANS AND INVESTMENTS

The details of loans guarantees and investments under Section 186 of the CompaniesAct 2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 are asfollows:

A. Details of investments made by the Company.

(i) Investments in Equity Instruments in wholly owned Subsidiaries as at 31 March2019:

(In Indian `)
Particulars 31 March 2019 31 March 2018
GSS Infotech Inc (Delaware)
GSS Infotech Inc (Delaware)
1500 (31 March 2018: 1500) equity shares of $ 1 each fully paid up in GSS Infotech Inc (Delaware) GSS Healthcare IT Solutions Private Limited 890940578 736185789
9990 (31 March 2018: 9990) Equity Shares of Rs. 10/- Each fully paid up in GSS Healthcare IT Solutions Private Limited. GSS IT Solutions Private Limited 99900 99900
9990 (31 March 2018: 9990) Equity Shares of Rs. 10/- Each fully paid up in GSS IT Solutions Private Limited. 99900 99900

(ii) Investments in Debt Instruments by the Company as at 31 March 2019: Nil

B. Details of Amounts advanced to Subsidiary Companies by the Company pursuant toclause 32 of the Listing Agreement as at 31 March 2019:

(In Indian `)
Name of Subsidiary Balance as at 31.03.2019 Balance as at 31.03.2018
GSS Infotech Inc (Delaware) 0.00 144221972
GSS IT Solutions Pvt. Ltd 0.00 0.00
GSS Healthcare IT Solutions Pvt. Ltd 600.00 0.00

These amounts are advanced to fully owned subsidiaries towards carrying out theprincipal business activities of the subsidiaries. These funds are utilized in the regularcourse of business by the subsidiaries and shall be received back. Interest is not chargedsince these amounts are advanced to subsidiaries for the purpose of overall growth of thebusiness of the GSS Group.

C. There are no guarantees issued by your Company in accordance with Section 186 of theCompanies Act 2013 read with the Rules issued thereunder.

XVIII. EMPLOYEE STOCK OPTION SCHEME:

The Stock exchanges accorded in-principal approval for listing of 2000000 sharesunder the GSS Infotech Limited Restricted Employee Stock Option Plan 2013. However noshares were granted to the eligible employees during the financial year ended 31 March2019.

XIX. VIGIL MECHANISM

Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (10) of the Companies Act 2013 andRegulation 22 of the SEBI Listing Regulation. The policy provides for a framework andprocess whereby concerns can be raised by its employees against any kind ofdiscrimination harassment victimization or any other unfair practice being adoptedagainst them. More details on the vigil mechanism and the Whistle Blower Policy of yourCompany have been outlined in the Corporate Governance Annexure [G] report which formspart of this report.

XX. INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate Internal Financial Controls with reference tothe financial statements some of which are outlined below: Your Company has adoptedaccounting policies which are in line with the Indian Accounting Standards (Ind AS)prescribed in the Companies (Indian Accounting Standards) Rules 2015 that continue toapply under Section 133 and other applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions ofthe Companies Act 1956 to the extent applicable. These are in accordance with GenerallyAccepted Accounting Principles (GAAP) in India. Changes in policies if any are approvedby the Audit Committee in consultation with the Auditors.

The policies to ensure uniform accounting treatment are prescribed to the subsidiariesof your Company. The accounts of the subsidiary companies are audited and certified bytheir respective Auditors for consolidation.

Your Company in preparing its financial statements makes judgments and estimates basedon sound policies and uses external agencies to verify/validate them as and whenappropriate. The basis of such judgements and estimates are also approved by the Auditorsand Audit Committee.

The Management periodically reviews the financial performance of your Company againstthe approved plans across various parameters and takes necessary action wherevernecessary.

Your Company has a code of conduct applicable to all its employees along with a WhistleBlower Policy which requires employees to update accounting information accurately and ina timely manner. Any non-compliance noticed is to be reported and actioned upon in linewith the Whistle Blower Policy. Your Company gets its standalone accounts audited everyquarter by its Internal Auditors.

XXI. RISK MANAGEMENT

The Board regularly discusses the significant business risks identified by theManagement and the mitigation process to be adopted by the Company. At present thereexists no element of risk which threatens the existence of the Company.

XXII. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.

XXIII. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board of Directors have constituted the CSR Committee at its meeting held on 29thMay 2019 pursuant to the provisions of Section 135 of the Companies Act 2013 and therules thereunder as applicable to your Company.

Composition of the CSR Committee is:

Particulars Category Designation
1 Mr. Rambabu Sampangi Kaipa Non-Executive – Non Independent Director Chairman
2 Mrs. Nagajayanthi Das Juttur Ragavendra Non-Executive - Independent Director Member
3 Mr. Prabhakara Rao Alokam Non-Executive - Independent Director Member

XXIV. REPORTING UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has in place Sexual Harassment Policy in line with the requirements of theSexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013. Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.

XXV. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO i. Details of Conservation of Energy:

Your Company's operations consume very low levels of energy. It is pleasure to announcethat your Company's technology center has latest technology energy management system basedon human occupancy. As the cost of energy consumed by the Company forms a very smallportion of the total costs the impact of changes in energy cost on total costs isinsignificant. ii. Technology absorption adaptation and innovation

Your Company is a technology driven organization and understands the importance oftechnical expertise from time to time. It has successfully built such expertise over aperiod of years and shall continue to with emerging technologies to be on a leading edgeto offer its customers the state of art solutions.

Your Company's quality systems are ISO 9001:2008 and ISO 27001:2005 certified whichreflects a high degree of technology absorption adoption and innovation across variousoperating layers within the Company. During the year technology absorption activitieshave mainly created on:

• Network Operations Center

• Disaster Recovery Center

• IT Infrastructure Management

• Offshore Development Center using BOT delivery model

• Software Testing Service using SaaS Model

• Wholly owned subsidiary rendering BPO healthcare services in India.

iii. Foreign Exchange Earnings and Outgo a. Activities relating to Exports:

The Company is in the business of software exports. All efforts of the Company aregeared to increase the business of software exports in different products and markets.

b. Total Foreign Exchange Earnings used and earned:

Particulars 2018-19 (`) 2017-18 (`)
Foreign Exchange expenditure (on Accrual basis) 64148284 45739897
Foreign Exchange earned (on Accrual basis) 192623691 136794306

XXVI.APPRECIATION

Your Directors wish to convey their gratitude and place on record their appreciationfor all the employees at all levels for their hard work solidarity cooperation anddedication during the year.

Your Directors sincerely convey their appreciation to customers shareholders vendorsbankers business associates regulatory and government authorities for their continuedsupport.

Place: Hyderabad Bhargav Marepally Prabhakara Rao Alokam
Date: 13th August 2019 CEO & Managing Director Director
DIN: 00505098 DIN: 02263908

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