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Moneycontrol.com India | Notes to Account > Computers - Software Medium & Small > Notes to Account from GSS Infotech - BSE: 532951, NSE: GSS
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GSS Infotech

BSE: 532951|NSE: GSS|ISIN: INE871H01011|SECTOR: Computers - Software Medium & Small
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Notes to Accounts Year End : Mar '16

1 NOTES TO ACCOUNTS:

1. Contingent Liabilities:

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

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

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

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

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

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

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

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

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

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

2. Advances to Subsidiaries:

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

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

3. Employee Stock Options:

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

4. Investments:

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

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

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

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

11. DUES OF MICRO AND SMALL ENTERPRISES:

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

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

13. Current Assets and Loans and Advances:

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

14. Leases:

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

17. Transactions with Related Parties:

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

i) Subsidiaries:

a) GSS Infotech Inc (A Delaware Company)

b) GSS IT Solutions Private Limited

c) GSS Healthcare IT Solutions Private Limited

ii) Step down Subsidiaries:

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

- Infovision Technologies, Inc

- GSS Infotech NY Inc (formerly ATEC Group)

- InfovistaTechnologies Inc

- Technovant Inc

- GCI Systems Inc

iii) Key Management Personnel:

Mr. Bhargav Marepally Chief Executive Officer And Managing Director

iv) Mr. Ramesh Yerramsetti Director

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

19. Rounding off & Regrouping:

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

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

Source : Dion Global Solutions Limited
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