GSS America Infotech

1.  We have audited the attached Balance Sheet of GSS AMERICA INFOTECH
 LIMITED, as at 31st March, 2008 and the related Profit And Loss Account
 and Cash Flow Statement attached thereto for the year ended on that
 date. These financial statements are the responsibility of the
 Company’s management. Our responsibility is to express an opinion on
 these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free from material misstatement.  An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor’s Report) Order, 2003, as
 amended by the Companies (Auditor’s Report) (Amendment ) Order, 2004
 issued by the Central Government of India, in terms of Sub Section (4A)
 of Section 227 of the Companies Act, 1956, and on the basis of such
 checks of the books and records of the Company as we considered
 appropriate and according to information and explanations given to us,
 we provide in the annexure a statement on the matters specified in
 paragraph 4 and 5 of the said order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that -
 
 a) We have obtained all the information and explanations which to the
 best of our knowledge and belief, were necessary for the purpose of our
 audit ;
 
 b) In our opinion, proper books of account as required by the Companies
 Act, 1956, have been kept by the Company so far as it appears from our
 examination of those books and proper returns ;
 
 c) The accounts of the Branch of the Company at USA are audited by us
 and proper returns adequate for the purpose of our audit are received
 from the branches not visited by us ;
 
 d) The Balance Sheet, Profit And Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 e) In our opinion the Balance Sheet, Profit And Loss Account and Cash
 Flow Statement dealt with by this report comply with the requirements
 of the accounting standards referred to in sub section (3c) of section
 211 of the Companies Act,1956.
 
 i) In our opinion and based on information and explanation given to us
 none of the Directors of the Company are disqualified as on 31-03-2008
 from being appointed as Directors in terms of clause (g) of sub-section
 (1) of section 274 of the Companies Act,1956.
 
 ii) In our opinion and to the best of our information, and according to
 the explanations given to us, the said Financial Statements read
 together with the notes there on give the information required by the
 Act and give a true and fair view in conformity with the accounting
 principles generally accepted in India.
 
 a) In case of balance sheet of the state of affairs of the Company as
 at 31st March 2008;
 
 b) In case of profit & loss A/c of the profit of the Company for the
 year ended as on that date; and
 
 c) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS’ REPORT
 
 [Referred to in paragraph 3 of the Auditors’ Report of even date to the
 members of GSS AMERICA INFOTECH LIMITED on the financial statements for
 the year ended March 31, 2008]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets are physically verified by the management
 according to a phased programme designed to cover all the items over a
 period of the year, which in our opinion, is reasonable having regard
 to the size of the Company and the nature of its assets. Pursuant to
 the programme, the fixed assets have been physically verified by the
 management during the year and no material discrepancies between the
 book records and the physical inventory have been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, fixed assets have not been disposed of by the Company
 during the year.
 
 2.  The Company has not granted/taken any loans, secured or unsecured,
 to/from companies, firms or other parties covered in the register
 maintained under Section 301 of the Act. As the Company has not
 granted/taken any loans, secured or unsecured, to/ from companies,
 firms or other parties listed in the register maintained under Section
 301 of the Act, clauses (iii)(b), (iii)(c), (iii)(d), (iii)(f) and
 (iii)(g) of paragraph 4 of the Companies (Auditor’s Report) Order,
 2003, as amended by the Companies (Auditor’s Report) (Amendment)
 Order,2004 are not applicable to the Company.
 
 3.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 do not exist for obtaining comparative quotations, there is an adequate
 internal control system commensurate with the size of the Company and
 the nature of its business for the purchase of fixed assets and for the
 sale of services. The activities of the Company do not involve purchase
 of inventory and sale of goods.  Further, on the basis of our
 examination of the books and records of the Company, and according to
 the information and explanations given to us, we have not come across
 nor have been informed of any continuing failure to correct major
 weaknesses in the aforesaid internal control system.
 
 4.  According to the information and explanations given to us, there
 have been no contracts or arrangements referred to in Section 301 of
 the Act during the year to be entered in the register required to be
 maintained under that section.
 
 5.  The Company has not accepted any deposits from the public within
 the meaning of sections 58A and 58AA of the Act and the rules framed
 there under.
 
 6.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 7.  (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing the undisputed statutory dues including
 income-tax, Professional tax, service tax, and other material statutory
 dues as applicable with the appropriate authorities.  According to the
 information and explanations given to us and the records of the Company
 examined by us excise duty and cess are not applicable to the Company
 for the current year.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of income-tax,
 sales tax, wealth tax, service tax, customs duty which have not been
 deposited on account of any dispute.
 
 8.  The Company does not have any accumulated losses as at March 31,
 2008 and has not incurred any cash losses in the financial year ended
 on that date or in the immediately preceding financial year.
 
 9.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 10.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 11.  In our opinion the Company is not a dealer or trader in the
 shares, securities, debentures and other investments.
 
 12.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 13.  The Company has not obtained any term loans.
 
 14.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 15.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 16.  During the year the Company has issued 34,97,495 shares of Rs.
 10/- each at a premium of Rs. 390/- and raised Rs. 13989.98 Lakhs. Out
 of the IPO proceeds received in March 2008, Rs. 1215.71 Lakhs are
 incurred towards issue expenses and the balance amounts are pending for
 utilization as per the prospectus.
 
 17.  During the course of our examination of the books and records of
 the Company carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
 The other clauses 4 (ii),(viii),(xiii), and (xix) of paragraph 4 of the
 Companies (Auditor’s Report) Order 2003, as amended by the Companies
 (Auditor’s Report) (Amendment) Order, 2004 are not applicable in the
 case of Company for the current year, since in our opinion there is no
 matter which arises to be reported in the aforesaid order.
 
                                                For BVR & ASSOCIATES
                                               Chartered Accountants
 
 Place: Hyderabad                                      B.V. RAMA RAO
 Date : April 28, 2008.                         Chartered Accountant