BOARD'S REPORT

Dear Members,

We are delighted to present the report on our business and operations for the financial year ended March 31, 2015.

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 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement 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.

III. SUBSIDIARIES

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

IV. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overall industry structure, developments, performance and state of affairs of the Company's various businesses during the financial year is enclosed as "Annexure [F]" to this report.

V. CORPORATE GOVERNANCE REPORT

In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance forms an integral 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 31st March 2015.

VII. PUBLIC DEPOSITS

During the financial year 2014-15, your Company has not accepted any deposit within the meaning 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. Patri VenkataRamakrishna Prasad, Non-Executive Director, is liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible has offered himself for re­appointment. Appropriate resolutions for his re-appointment are being placed for your approval at the ensuing AGM. The brief resume of the Directors and other related information has been detailed in the Notice convening the 12th AGM of your Company. Your Directors recommend his re-appointment as Non-Executive Director of your Company.

During the financial year 2014-15, Mr. Javed Faizullah Tapia, resigned as a Director of the Company with effect from 29th May, 2014 due to his personal preoccupations and Mrs. Nagajayanthi Das Juttur Ragavendra was appointed as Additional Non-Executive Independent Director of your Company at the meeting of the Board of Directors held on 10th February, 2015 and she shall hold office up to the ensuing Annual General Meeting.

Mr. Keerthy Jaya Tilak was appointed as an Independent Director of the Company subject to retirement by rotation under the Companies Act, 1956.

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. Keerthy Jaya Tilak and Mrs. Nagajayanthi Das Juttur Ragavendra as Independent Directors of the Company

Annual Evaluation of Board's Performance:

In terms of the provisions of the Companies Act, 2013 read with Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board/Director(s) for the financial year 2014-15.

Key Managerial Personnel:

• Mr. Lalit Kumar Tiwari, Company Secretary (Key Managerial Personnel) of the Company was appointed at the Board meeting held on 10th February, 2015.

• Mr. Sanjay Heda, Chief Financial Officer (Key Managerial Personnel) of the Company was appointed at the Board meeting held on 30th May, 2015.

• Mr. Sai Krishna Narla, due to his personal reasons, resigned as a Company Secretary of the Company with effect from 28th January, 2015.

• Mr. Mahesh Joshi, due to his personal reasons, resigned as Chief Financial Officer of the Company with effect from 26th May, 2014.

The Key Managerial personnel have been appointed in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

IX. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of the number of Board and Audit Committee meetings of your Company are set out in the Corporate Governance Report which forms an integral part of this Report.

X. DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement.

XI. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable Accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2015 and of the profit and loss of the Company for the financial year ended 31st March, 2015;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other 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 the Company and that such internal Financial controls are adequate and were operating effectively; and

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

XII. AUDITORS AND AUDITOR'S REPORT

At the 11th AGM of your Company, M/s. Sarath and Associates, Chartered Accountants (Firm Registration No. 005120S) were appointed as the Auditors to hold office till the conclusion of the 12th AGM of your Company.

The Audit Committee and Board of Directors at the meetings held on 10th August, 2015 recommended the appointment of M/s. Sarath and Associates, Chartered Accountants, (Firm Registration No. 005120S), retiring Auditor, to continue to act as the Statutory Auditors of your Company till the conclusion of the 13th AGM of your Company.

M/s. Sarath and Associates, Chartered Accountants, (Firm Registration No. 005120S), who retire at the ensuing AGM of your Company are eligible for re-appointment. Your Company has received written consent and a certificate stating that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued thereunder. As required under Clause 49 of the Listing Agreement, M/s. Sarath and Associates, Chartered Accountants, have also confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

The Audit Committee and the Board of Directors recommend the appointment of M/s. Sarath and Associates, Chartered Accountants, (Firm Registration No. 005120S), as the Auditors of your Company for the financial year 2015- 16 till the conclusion of the next AGM. The Auditors' Report for the financial year 2014-15, contains Emphasis of matter and Audit qualification for which the reply of Directors is as follows :

Reply to emphasis of matter:

The Company had provided an amount of Rs. 134, 92,99,076/- towards provision for diminution in the value of investments in respect of its investment in the wholly owned subsidiary M/s. GSS Infotech Inc. (Delaware) which arose due to losses incurred by the WOS upon writing off of goodwill in the step down subsidiaries.Based on a combination of factors that occurred during the year 31st March, 2015, including the operating results of each step-down subsidiary, it was concluded that an interim goodwill impairment triggering event had occurred, and accordingly performed a testing of the carrying value of the goodwill in the step down subsidiaries. The Company compared the average estimated undiscounted cash flows of each step down subsidiary unit multiplied by an Average multiple similar companies are sold to the carrying value of each step down subsidiary. After this testing, management concluded that the carrying value of each of the step down subsidiary exceeded the fair value of the each of the step down subsidiary. The implied fair value of the goodwill of each of the step down subsidiary was calculated by allocating fair values of substantially all of its individual assets, liabilities and identified intangible assets as if each step down subsidiary unit had been acquired in a business combination.

Reply to point no. (iii) (b) of Annexure to Independent Auditors Report (standalone) :

The loans were given to the fully owned subsidiaries for carrying out principal business activities and for the commercial expediency of the GSS Group. The loans advanced were in the overall interest of the GSS Group. 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 business growth of the GSS Group.

XIII. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. Someswara Rao and Associates, Practicing Company Secretaries to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure - [C]" to this Report. The Board of Directors reply to the comments/qualifications/observations by the Secretarial Auditor are as follows:

a) Observation: In the matter of delay in appointment of CFO by 5.5 months in violation of Section 203 of the Companies Act 2013. The CFO was appointed on 30th may 2015.

Reply: The Company was putting its best efforts to identify a suitable candidate who has experience on Indian and International Accounting Standards. In this process, the appointment was delayed by 5.5 months. Finally the Company appointed Mr. Sanjay Heda, as the Chief Financial Officer of the Company as on 30th May

b) Observation: Based on the examination of the records it is noticed that there was non-compliance of Clause 41 of the Listing agreement and Clause 31 of the listing agreement for which fines were levied and the same have been paid by the Company.

Reply: Due to technical difficulties there was delay in finalization of the accounts of the overseas subsidiary companies because of which the accounts for the financial year 31st March 2015 could not be approved within the deadlines as stipulated in the listing agreement entered with the stock exchanges. As a result the Company had paid a fine of Rs. 270000/- to National Stock Exchange of India Limited and a fine of Rs. 75000/- to BSE Limited for violation of clause 41 of the listing agreement. Further a fine of Rs. 3000/- to National Stock Exchange of India Limited for inadvertent delay in submission of Annual Report 2014 under clause 31 of the Listing Agreement.

c) The Composition of the Board was not in conformity with Clause 49 of the Listing Agreement and the Companies Act, 2013 for a part of the year from 10th February 2015 to 31st March 2015.

Reply: Due to change in the Independent Status of Mr. Patri Venkata Ramakrishna Prasad, from Independent Director to Non- Independent Director of the Company the composition of the board is not in order. The Company is making utmost efforts to bring the composition in order to have an appropriate mix of Independent and Non-Independent Directors and to ensure Compliance with Clause 49 of the Listing Agreement and the Companies Act, 2013.

XIV. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 in accordance 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 this Report.

XV. RELATED PARTY TRANSACTIONS

During the financial year 2014-15, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Clause 49 of the Listing Agreement. During the financial year 2014-15, there were no transactions with related parties which qualify as material transactions under the Listing Agreement.

The details of the related party transactions as required under Accounting Standard - 18 are set out in Point 19 of the notes to the standalone financial statements forming part of this Annual Report.

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

XVII. 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, 2015.

XVIII. VIGIL MECHANISM

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report.

XIX. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

i. Details of Conversation of Energy:

Your Company's operations consume very low levels of energy. It is pleasure to announce that your Company's technology center has latest technology energy management system based on human occupancy. As the cost of energy consumed by the Company forms a very small portion of the total costs, the impact of changes in energy cost on total costs is insignificant.

ii. Technology, absorption, adaptation and innovation

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

Your Company's quality systems are ISO 9001:2008 and ISO 27001:2005 certified, which reflects a high degree of technology absorption, adoption and innovation across various operating layers within the Company. During the year technology absorption activities have 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 are geared to increase the business of software exports in different products and markets.

XX. INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956, to the extent applicable. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

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

Your Company, in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/validate them as and when appropriate. The basis of such judgments and estimates are also approved by the Auditors and Audit Committee.

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

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

XXI. Risk Management

The Board regularly discusses the significant business risks identified by the Management and the mitigation process to be adopted by the Company. At present there exists no element of risk which threaten 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 or Tribunals impacting the going concern status of your Company and its operations in future.

XXIII. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR provisions under Section 135 of the Companies Act, 2013 are not applicable to your Company.

XXIV. REPORTING UNDER SEXUAL HARRASEMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

XXV. APPRECIATION

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

Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

Keerthy Jaya Tilak  

Chairman

Bhargav Marepally

CEO and Managing Director

Date: 10th August, 2015

Place: Hyderabad