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EX-32.2 - CERTIFICATION - GBS Enterprises Incexhibit32-2.htm
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EX-32.1 - CERTIFICATION - GBS Enterprises Incexhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-53223

GBS ENTERPRISES INCORPORATED
(Exact name of registrant as specified in its charter)

Nevada 27-3755055
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

302 North Brooke Drive
Canton, GA 30014
(Address of principal executive offices)

(404) 474-7256
Issuer’s telephone number

Securities registered under Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
None N/A

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 par value
(Title of class)

     Copies to:
The Sourlis Law Firm
Virginia K. Sourlis, Esq.
214 Broad Street
Red Bank, New Jersey 07701
T: (732) 530-9007
F: (732) 530-9008
www.SourlisLaw.com


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange ct. (Check one):

Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [ ] No [X]

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of February 22, 2011, there were 16,407,915 shares of common stock, par value $0.001 per share, of the Registrant issued and outstanding.


TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
  Balance Sheet
  Statement of Operations
  Statement of Cash Flows
  Notes to the Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4T. Controls and Procedures
   
PART II – OTHER INFORMATION:
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. [Removed and Reserved by the Securities and Exchange Commission]
Item 5. Other Information
Item 6. Exhibits
Signatures  


PART I — FINANCIAL INFORMATION

Item 1.

See Accompanying Notes



GBS Enterprises Incorporated
(Formerly SWAV Enterprises Ltd.)
(A Development Stage Company)
BALANCE SHEETS (Unaudited)
As at December 31, 2010 and March 31, 2010

    December 31,     March 31,  
    2010     2010  
ASSETS    
Current            
       Cash and cash equivalents $  14,586   $  507  
       Accounts receivable   -     744  
       Inventory   2     4,610  
    14,588     5,861  
             
Equity investment in related party - Note 3   3,898,000     -  
             
Intangible assets - contracts, licenses and software            
               Output! Ltd.   14,998     -  
               Bones HealthCare   35,000     -  
               Tool Box   115,000     -  
    164,998     -  
Total Assets $  4,077,586   $  5,861  
             
LIABILITIES    
Current            
       Accounts payable and accrued liabilities $  8,150   $  9,755  
       Due to related parties – Note 4   540,000     28,814  
Total Liabilities   548,150     38,569  
             
STOCKHOLDERS' EQUITY    
Capital Stock - Note 5            
      Authorized:
          25,000,000 common stock with a par value of $0.001
      Issued and outstanding
          14,499,910 common stock
          (12,234,670 common stock at March 31, 2010)
  14,500     12,235
Additional paid in capital   3,916,530     155,795  
Donated capital   41,422     41,422  
Accumulated other comprehensive loss   -     (9,572 )
Accumulated deficit   (209,452 )   (232,588 )
Defict accumulated during the development stage   (233,564 )   -  
Total Stockholders' Equity   3,529,436     (32,708 )
Total Liabilites and Stockholders' Equity $  4,077,586   $  5,861  

Going Concern - Note 2

See Accompanying Notes



GBS Enterprises Incorporated
(Formerly SWAV Enterprises Ltd.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the the three and nine months ended December 31, 2010 and 2009
And for the period from April 27, 2010 to December 31, 2010
(Unaudited)

                            Development  
                            stage from  
    For the three months     For the nine months     April 27, 2010  
    ended December 31,     ended December 31,     to Dec 31,  
    2010     2009     2010     2009     2010  
                               
Expenses                              
       Interest to related party $  2,500   $  -   $  2,500   $  -   $  2,500  
       Filing fees   -     -     -     1,620     -  
       Office and sundry   414     -     414     -     414  
       Professional fees   151,500     -     188,150     4,650     188,150  
       Travel   42,500     -     42,500     -     42,500  
    196,914     -     233,564     6,270     233,564  
Operating loss from continuing operations   (196,914 )   -     (233,564 )   (6,270 )   (233,564 )
Other Income                              
       Loss on sale of SWAV Holdings Inc.   -     -     (9,472 )   -     -  
       Debt foregiveness   -     -     32,608     -     -  
    -     -     23,136     -     -  
Loss from continuing operations   (196,914 )   -     (210,428 )   (6,270 )   (233,564 )
Loss from discontinued operations                              
       Note - 6   -     (919 )   -     (9,631 )   -  
Net loss for the period   (196,914 )   (919 )   (210,428 )   (15,901 )   (233,564 )
Other comprehensive income (expense)                              
       Foreign currency adjustment   -     (736 )   9,572     (3,926 )   -  
Comprehensive loss for the period $  (196,914 ) $  (1,655 ) $  (200,856 ) $  (19,827 ) $  (233,564 )
Basic and diluted income (loss) per share $  (0.014 ) $  -   $  (0.015 ) $  (0.001 )      
Weighted average number of shares outstanding   14,499,910     12,234,670     14,190,451     12,234,670        

See Accompanying Notes



GBS Enterprises Incorporated
(Formerly SWAV Enterprises Ltd.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
For the period from inception, March 20, 2007 to December 31, 2010

                                        Deficit        
                      Acummulated                 Accumulated        
                Additional     Other                 during the        
    Common Stock     Paid in     Comprenhsive     Donated     Accumulated     development        
    Shares     Amount     Capital     Income (Loss)     Capital     Deficit     stage     Total  
                                                 
May 31, 2006\ - Note 1   6,000,000   $  6,000   $  (6,229 ) $  (14,988 ) $  27,242   $  (72,243 ) $  -   $  (60,218 )
Issuance of shares for cash, March 30, 2007   2,900,000     2,900     72,562     -     -     -     -     75,462  
Net Loss for the year ended March 31, 2007 Other comprehensive loss for the   -     -     -     -     8,768     (25,437 )   -     (16,669 )
year ended March 31, 2007   -     -     -     2,746     -     -     -     2,746  
Balance, March 31, 2007   8,900,000     8,900     66,333     (12,242 )   36,010     (97,680 )   -     1,321  
Issuance of shares for cash,May 4, 2008   2,500,000     2,500     65,257     -     -     -     -     67,757  
Net Loss for the year ended March 31, 2008   -     -     -     -     -     (97,667 )   -     (97,667 )
Other comprehensive loss for the year ended March 31, 2008   -     -     -     6,274     -     -     -     6,274  
Balance, March 31, 2008   11,400,000     11,400     131,590     (5,968 )   36,010     (195,347 )   -     (22,315 )
Continued                                                

See Accompanying Notes



GBS Enterprises Incorporated
(Formerly SWAV Enterprises Ltd.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
For the period from inception, March 20, 2007 to December 31, 2010

                                        Deficit        
    Common Stock           Acummulated                 Accumulated        
                Additional     Other                 during the        
                Paid in     Comprenhsive     Donated     Accumulated     development        
    Shares     Amount     Capital     Income (Loss)     Capital     Deficit     stage     Total  
Continued                                                
Balance, March 31, 2008   11,400,000     11,400     131,590     (5,968 )   36,010     (195,347 )   -     (22,315 )
Issuance of shares for cash, December 31, 2008   834,670     835     24,205     -     -     -         25,040  
Net Loss for the year ended March 31, 2009   -     -     -     -     2,662     (19,261 )   -     (16,599 )
Other comprehensive loss for the year ended March 31, 2009   -     -     -     698     -     -     -     698  
Balance, March 31, 2009   12,234,670     12,235     155,795     (5,270 )   38,672     (214,608 )   -     (13,176 )
Net Loss for the year ended March 31, 2010   -     -     -     -     2,750     (17,980 )       (15,230 )
Other comprehensive loss for the year ended March 31, 2010   -     -     -     (4,302 )   -     -     -     (4,302 )
Balance, March 31, 2010   12,234,670     12,235     155,795     (9,572 )   41,422     (232,588 )   -     (32,708 )
Net profit for the period ended April 26, 2010               9,572     -     23,136         32,708  
Issuance of shares for assets, April 26, 2010   2,265,240     2,265     162,735     -     -     -         165,000  
Purchase of shares for $300,000, November 5, 2010   -3,043,985     (3,044 )   (296,956 )                   (300,000 )
Exchange of shares for 7,115,500 shares of GROUP Business Software AG, November 5, 2011   3,043,985     3,044     3,894,956                     3,898,000  
Net loss for the period from April 27, 2010 to December 31, 2010   -     -     -     -     -     -     (233,564 )   (233,564 )
Balance, December 31, 2010   14,499,910   $  14,500   $  3,916,530   $  -   $  41,422   $  (209,452 ) $  (233,564 ) $  3,529,436  

See Accompanying Notes



GBS Enterprises Incorporated
(Formerly SWAV Enterprises Ltd.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the the three and nine months ended December 31, 2010 and 2009
and for the period from April 27, 2010 to December 31, 2010
(Unaudited)

                Development  
                stage from  
    For the nine months     April 27, 2010  
    ended December 31,     to Dec 31,  
    2010     2009     2010  
Operating activities                  
   Net loss for period from continuing operations $  (210,428 ) $  (6,270 ) $  (233,564 )
   Non – cash items                  
         Loss on sale of subsidiary   9,472     -        
   Changes in non-cash working capital balances                  
         Accounts receivable   744     -        
         Inventory   4,610     -        
         Accounts payable and accrued liabilities   (1,645 )   (5,875 )   8,150  
Cash provided by (used in) operating activities from continuing operations   (197,247 )   (12,145 )   (225,414 )
Cash provided by (used in) operating activities from discontinued operations   40     (11,469 )   -  
Cash provided by (used in) operating activities   (197,207 )   (23,614 )   (225,414 )
                   
Investing Activities                  
   Purchase of stock from existing shareholder   (300,000 )         (300,000 )
   Proceeds from sale of subsidiary   100     -     -  
Net cash provided by investing activities   (299,900 )   -     (300,000 )
Financing Activities                  
   Increase (decrease) in related party liability   511,186     22,377     540,000  
   Decrease (increase) in related party receivable   -     2,959     -  
Net cash proved by Financing Activities   511,186     25,336     540,000  
                   
Foreign exchange translation   -     (3,926 )   -  
                   
Increase (decrease) in cash and cash equivalents during the period   14,079     (2,204 )   14,586  
Cash and cash equivalents, beginning of the period   507     944     -  
Cash and cash equivalents, end of the period $  14,586   $  (1,260 ) $  14,586  
                   
Supplemented disclosure of cash flow information:                  
   Non-cash Financing Activities                  
         Issue of 3,043,985 shares for equity investment in related party $  3,898,000   $  -   $  3,898,000  
         Issue of 2,265,240 common shares for assets $  165,000   $  -   $  165,000  
   Cash paid for:                  
         Interest $  2,500   $  -   $  2,500  
         Income taxes $  -   $  -   $  -  

See Accompanying Notes


NOTE 1 - OPERATIONS AND RESTRUCTURING

SWAV Enterprises Ltd. (the predecessor to GBS Enterprises Incorporated) (“the Company”) was incorporated in the State of Nevada on March 20, 2007 and did not have any operations until April 1, 2007. On that date, the Company completed an agreement to acquire 100% of the outstanding common shares of SWAV Holdings Inc. for an aggregate of 8,900,000 authorized but heretofore unissued shares of common stock, par value $.001 per share. For accounting purposes, the acquisition was treated as a recapitalization of SWAV Holdings Inc. with SWAV Holdings Inc as the acquirer (reverse take-over). Accordingly, the accompanying financial statements reflect the historical financial statements of SWAV Holdings Inc., the accounting acquirer, as adjusted for the exchange of shares on its equity accounts, the inclusion of the net liabilities of the accounting subsidiary as of the date of the merger on their historical basis and the inclusion of the accounting subsidiary’s results of operations from that date to the date of the sale of the subsidiary, April 26, 2010. During this period, the company provided management services and imported Chinese manufactured goods.

Effective April 26, 2010, the Company sold its ownership of SWAV Holdings Ltd. for $100. At the same time the Company entered into an Asset Purchase Agreement with Lotus Holdings Limited pursuant to which the Company issued an aggregate of 2,265,240 authorized but heretofore unissued shares of its common stock in consideration for 100% of certain assets of Lotus Holdings Ltd. Simultaneously, the existing shareholders sold 11,984,770 shares to the managing director of Lotus Holdings Ltd. Accordingly, the Asset Purchase Agreement was a non-arms length transaction, and the value of the assets acquired was recorded according the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”) topic 845.10 Non monetary transactions. That guidance stipulates the value is the carrying value of the vendor when neither the assets received nor the assets relinquished are determinable within reasonable limits.

Subsequent to April 26, 2010, the Company entered the development stage as management has been devoting substantially all its efforts to establishing a new business and planned principal operations have not commenced. According to FASB Codification topic 915, Developing Stage Entities, all operations during this period are appropriately considered as part of the Company’s development stage activities.

On September 6, 2010, the articles of incorporation were amended to change the Company’s name from SWAV Enterprises to GBS Enterprises Incorporated.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are the representations of the Company’s management, who is responsible for their integrity and objectivity.

Interim reporting

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, they include all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as the Company’s audited March 31, 2010 financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s March 31, 2010 financial statements.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Interim reporting - continued

Operating results for the nine months ended December 31, 2010 are not necessarily indicative of the results that can be expected for the year ending March 31, 2011.

Basis of Presentation

The Company’s financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America

Going concern

These financial statements have been prepared on the going concern basis, which presumes that the Company will continue operations for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of business. The Company has accumulated losses of $443,016 as at December 31, 2010 and has not generated sufficient cash flow from operations to fund its activities. There can be no assurance that a self-supporting level of operation will ever be achieved. Further, it requires additional capital in order to continue. The continuation of the Company is dependent on its ability to obtain the necessary capital to achieve profitability and to meet the requirements, from time to time, of lenders, if any, who are willing to provide this financing. Management believes that as a result of the asset purchased, it will generate additional funds and that it will be able to obtain additional capital as required to meet projected operational requirements.

These financial statements do not reflect the adjustments or reclassifications to the assets and liabilities which would be necessary if the Company was unable to continue its operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.

Comprehensive Income (Loss)

The Company adopted FASB Codification topic 220, Reporting Comprehensive Income, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. Since inception, the Company’s other comprehensive income represents foreign currency translation adjustments


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, management considers liquid investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2010, the Company did not have any cash equivalents ($nil –2009).

Net Income per Common Share

FASB Codification topic 260, Earnings per share, requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive. There were no adjustments required to net income for the period presented in the computation of diluted earnings per share.

Fair Value Measurements

The Company follows FASB Codification topic 820, Fair Value Measurements and Disclosures, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. This new accounting standard establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

The Company has adopted FASB Codification topic 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Company has not elected the fair value option for any eligible financial instruments.

Financial Instruments

The fair value of accounts payable and accrued liabilities and due to related parties were estimated to approximate their carrying values based on the short-term maturity of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Equity investment in related parties has been recorded at fair value as at the acquisition date of November 5, 2010. The determination of fair value is described in Note 3 – Equity Investment in Related Party. The measurement resulted in a value using level 1 inputs, the highest priority indication of fair value according to the fair value measurement hierarch described above.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Revenue Recognition

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition. Under these guidelines, revenue is recognized when persuasive evidence of an arrangement exists, shipment has occurred or services rendered, the price is fixed or determinable and payment is reasonably assured. Customers take ownership at point of sale and bear the costs and risks of delivery.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with FASB Codification topic, 360.10, Property, Plant and Equipment, Impairment or Disposal of Long-Lived Assets. This guidance requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. No impairment has been recognized in the accounts.

Intangible Assets and Amortization

The Company has capitalized intangible assets in accordance with accounting policies described in Note 1. The Company follows FASB Codification topic 985.20, software, costs of software to be sold, leased or marketed, on the basis that the assets have finite lives and will be amortized, once the assets are ready for general release. As this has not yet eventuated, no amortization has been recorded in the accounts.

Foreign Currency Translation

As a result of the Asset Purchase Agreement and the shares issued thereon, the functional currency of the Company has changed from Canadian dollars to US dollars Previous to this event, for financial reporting purposes, the financial statements of the Company were translated into US dollars. Assets and liabilities were translated at the exchange rates at the balance sheet dates and revenue and expenses were translated at the average exchange rates and stockholders’ equity was translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.

Deferred Taxes

Income taxes are provided in accordance with FASB Codification topic 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss-carry forwards.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that, some portion or all of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.

Long term investment

The equity investment in related party has been accounted for in accordance with FASB Codification topic 805 Business Combinations as this is the first step in a step by step acquisition of control. For acquisition purposes, the Company has been identified as the acquirer.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Recent Accounting Pronouncements

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.

NOTE 3 – EQUITY INVESTMENT IN RELATED PARTY

On November 5, 2010, the Company acquired approximately 28.2% of the outstanding common shares of GROUP Business Software AG, (“GROUP”) a German company, trading on the Frankfurt Stock Exchange under the symbol INW. The acquisition was a two step transaction, culminating in a share exchange. The Company purchased 3,043,985 of its own shares for $300,000 and then exchanged those shares for 7,115,500 shares of common stock of GROUP. Their fair value was calculated at $.0579 per share as determined by an independent valuator. The basis of the valuation was the quoted share price on the Frankfurt Stock Exchange, using a 10 day volume weighted average price (“VWAP”) ending on the valuation day. This level 1 input was then assessed, using level 2 and 3 inputs – market and income approaches.

NOTE 4 – RELATED PARTY TRANSACTIONS AND BALANCES

    December 31     March 31  
    2010     2010  
             
Due to a director and shareholder, unsecured demand
                note payable, bearing interest at 5%, due Mar 1, 2011
 
$ 135,000
   
 
Due to Lotus Holdings Ltd., a sharehoder, demand notes payable,
bearing interest at 5%, due October 31, 2011
 
   
 
               - note secured by shares in GROUP Business Software AG   300,000        
               - secured by OUTPUT software   105,000        
Due to shareholder, unsecured, non-interest bearing, payable
               on demand
 
-
   
$ 28,814
 
             
  $  540,000   $  28,814  

In addition to the share transactions described in Note 3, the Company had the following transactions with related parties for the nine months ending December 31, 2010 and 2009:

    2010     2009  
Income received from related parties            
                               Gain on sale of subsidiary $  100   $  -  
                               Forgiveness of debt $  32,608   $  -  
Interest payable to related party $  2,500   $  -  
Services donated by related parties (shown as donated capital)            
                             Administration fees $  -   $  709  

The transactions between the Company and the parties were consummated at the price agreed upon between the parties.


NOTE 5 - CAPITAL STOCK

On March 20, 2007 the Company issued 8,900,000 shares in aggregate for $75,462 of debt.

On May 4, 2007, the Company completed a private placement, issuing 2,500,000 shares for $67,757 in cash.

On June 30, 2008, the Company completed a private placement, issuing 834,670 shares for $25,040 in cash.

On April 26, 2010, the Company issued 2,265,240 shares in aggregate for inventory, licenses, customer lists and computer software valued at $165,000.

On November 5, 2010, the Company purchased 3,043,985 from an existing shareholder for $300,000. Thereupon it exchanged those shares for 7,115,500 common shares of GROUP Business Software AG, a German Company, the fair value of which was determined to be $3,898,000.

As at December 31, 2010, there were no shares subject to options, warrants or other agreements.

NOTE 6 – DISCONTINUED OPERATIONS

On April 26, 2010, the Company sold its operating subsidiary, SWAV Holdings Inc. for $100. The Company has neither continuing liabilities nor potential contingent liabilities as a result of the sale. Discontinued operations and their results of operations, financial position and cash flows are shown separately for all periods presented. Summarized financial information for discontinued operations is set forth below:

Summarized Balance Sheet:            
    December 31,     March 31,  
    2010     2010  
             
Current assets $  -   $  5,354  
Current Liabilities $  -   $  5,314  
             
Summarized Income Statement            

    three months     nine months  
    period ended December 31, 2009  
Sales $  -   $  1,981  
Cost of sales   -     -  
Gross profit   -     1,981  
Consulting revenue   -     9,610  
Income before selling and operating expenses   -     11,591  
Selling expenses - sales commission   -     357  
Income before operating expenses   -     11,234  
Operating expenses   919     20,865  
Net loss for the period $  (919 ) $  (9,631 )


NOTE 7 - SUBSEQUENT EVENT

On January 6, 2011, the Company acquired an additional aggregate of 5,525,735 shares of common stock of GROUP in exchange for 1,908,005 shares of common stock of the Company. The acquisition represents approximately 21.9% of the issued and outstanding shares of GROUP. The effect of this transaction is that the Company gained a 50.1% controlling interest of GROUP with an aggregate of 12,641,235 common shares. The value of this additional purchase, using the same techniques as the previous acquisition, was $2,796,000, based on a value of $0.506 per share.

The allocation of the purchase price has not be disclosed as the Company has not yet completed its valuation of the fair value of the assets and liabilities of GROUP and the fair value of the non-controlling interest. The valuation is expected to be completed by March 31, 2011.


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

We were incorporated on March 20, 2007, in the State of Nevada under the name “SWAV Enterprises Ltd.”

As previously reported on a Form 8-K filed on April 26, 2010 and as amended on May 7, 2010 and July 12, 2010, on April 26, 2010, SWAV Enterprises Ltd. (“SWAV”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Lotus Holdings Limited (“Lotus”) pursuant to which SWAV issued an aggregate of 2,265,240 shares of SWAV’s common stock to Lotus in consideration for 100% of certain assets of the Lotus (the “Acquisition”).

Lotus is a holding company specializing in software technology and training services, particularly in the areas of advanced software development tools, innovative point-of-care electronic health record (EHR) software, and sales training.

Simultaneously with the consummation of the Acquisition, the Selling Stockholders named in those certain Stock Purchase Agreements, dated April 26, 2010, sold an aggregate of 11,984,770 shares of their SWAV common stock for an aggregate purchase price of $370,000.

Also, on April 26, 2010, SWAV consummated the sale of 100% of SWAV Holdings, Inc., a wholly-owned subsidiary of SWAV, to Pui Shan Lam, the former Chief Executive Officer and Director of SWAV, pursuant to a Subsidiary Stock Purchase Agreement, dated April 26, 2010, for a purchase price of $100.

As reported on Form 8-K filed with the Securities and Exchange Commission on August 30, 2010, on August 20, 2010, SWAV Enterprises Ltd. filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Nevada therein changing its name from SWAV Enterprises Ltd. to GBS Enterprises Incorporated (the “Company”), effective September 6, 2010.

On October 14, 2010, the trading symbol of the Company’s common stock on the OTC Bulletin Board was changed from “SWAV” to “GBSX.”

List of Lotus’ Assets Acquired by SWAV Enterprises Ltd.

Asset
Business
Percentage
Transferred
Tool Box Assets


IPR’s
- Software development tools
- Social media software
Customer base
100%


“Bones” Assets


IPR’s
- Software for HealthCare
- Medical/HealthCare database
Contracts
100%


OUTPUT! Ltd



Adult Education/Training
- Sales
- Marketing
Customer base
Contracts
100%



The following is a description of the Lotus assets purchased by SWAV:

Tool Box Assets

1.

Carousel

Visual image rendering plug-in for Notes 8+. Modeled on iTunes.

Written in: Eclipse SWT

Component assets: Java animation, dynamic image manipulation Implementing customers: None



2.

Alpheus

Mail file analyzer/replication manager

Written in: Lotusscript

Component assets: Cross-replica analyzer, Mail file contents analyzer
Implementing customers: PGA Tour, Bay Area Hospital

3.

Squawk™ Lightweight Social Networking Solution

Domino micro-blogging system

Written in: Java/Xpages

Component assets: “Wingman” concept, dynamic charting, digest-based data model, branding, forced UNIDs

Implementing customers: None

Squawk™ is the revolutionary lightweight social networking solution. Like Twitter™ for the enterprise, it is a simple, yet incredibly powerful collaboration solution. Based on Lotus Domino Xpages technology, it is easy to deploy, highly scalable, and integrated with the rest of the Lotus portfolio, including Domino, Quickr, Connections, Sametime, and Websphere Portal.

Often referred to as micro-blogging, the purpose of Squawk™ is to share knowledge and collaborate in a community with similar interests in near real-time. Squawk™ has the brevity and immediacy of instant messaging with the value of continuity and open collaboration.

Squawk™ can be installed in your environment in just seconds, or it is available as a web service that can be integrated with and even embedded into your existing applications. Since it is based on Lotus Domino, the application can be replicated to multiple servers and synchronized or even clustered for distributed processing and high availability supporting tens of thousands of users.

The business value of Squawk:

Lets key individuals, such as C-level executives, easily post short, meaningful updates and maintain a connection to their employees.
     
Facilitates connections between employees who don’t know each other and the adoption of other business social networking technologies.
     
  Individuals can post ideas and get both immediate and compound feedback.
     
  Identify key subject matter experts to build powerful teams, committees, or communities of interest.
     
  Attract and retain talent. The younger workforce expects these tools.
     
Use Squawk™ in conjunction with live presentations to gather instant feedback from participants and provide a transcript of the interactions.
     
  Provides a mechanism for internal marketing or R&D and feedback.
     
  Allows for employee self-service support.



  Reduces communications costs.

Key Features:

Squawking: Post a short statement about what you are doing, a question you have, a topic you want to discuss, or a response to any of the above.

Profile Integration: Maintain and share information about yourself that is relevant to the community.
My Replies: Track responses to your squawks.
My Flock: Filter squawks to the individuals that you want to follow.

Polling: Post a question and allow other users to vote for or against it, then view real-time responses in a live chart, or track more detailed responses over time.

Knowledge Discovery: Filter or search squawks for past or current topics and find subject matter experts based on key words.

Portability: Most Squawk™ features can be embedded into other collaborative applications, such as blogs or discussions, or easily accessed from mobile devices.

Hosted Service: Squawk™ can be installed inside your firewall or easily integrated into your organization as a hosted service.

Bidding: Post an item and allow other users to respond with a specific format, such as a bid on an item, then report on progress and a final result, such as a progressive bid, the current leader, and an eventual winner.

Squawk Live™: Integrates with Lotus Sametime to provide presence awareness, instant messaging, group chat, and instant meeting capabilities.

Pricing:

Up to 30 users: $999 + $10 for each additional user. OR
$5,000 per server cluster for unlimited users. OR

As little as $1 per user per month hosted.

4.

Blueprint

Notes client application framework

Written in: Lotusscript

Component assets: Dynamic interface construction, dynamic validation engine, abstract workflow engine, dynamic data modeling engine, DXL/CSS compatible design element structure, rules-based view constructor

5.

Crowded Wisdom™ Engage. Envision. Empower.™

Social decision engine/Social link tracker

Written in: Xpages

Component assets: Stack ranking model, Dual-axis evaluation, Branding, Write-Behind Cache, Reputation scoring, Q&A rating engine, Link tracking


Crowded Wisdom™ is a social idea management and business decision support solution. Featuring a sophisticated Web 2.0 interface, Crowded Wisdom allows employees, customers, vendors and partners to share ideas that can then be quickly and easily evaluated on multiple criteria by the defined community. Ideas can be contributed by anyone at any time, and become immediately available for other users to add to their personal Wishlist.

But the wisdom of crowds doesn't end there. Participants can organize their wishlists by ranking and rating ideas with simple drag & drop gestures. By sorting ideas in order of priority, users can express not simply that they like an idea, but where they rank it among other ideas they like. They can also rate ideas independent of their ranking, creating a deeper understanding of priorities and preferences.

Site administrators can group ideas together into Scorecards, which are then made available to crowd participants. Scorecards can be limited to a preset collection of ideas, or be open-ended. Once participants have submitted their scores, administrators can see rankings and ratings for all the ideas. Administrators can also assign weighting values to participants, which will differentiate their scoring, allowing key customers and users to have a stronger voice.

For example, imagine you are a major fast food chain and want to seek ideas from your customer base about what products or services to offer. You could start by having an open collection of ideas, letting people feed off of and rate each other's ideas, building a loyal community of interest. Then you can create a targeted Scorecard of the highest rated ideas that are actually feasible and publish that to the community to prioritize and rate ideas AGAINST each other, giving you valuable market intelligence about what changes you could make that would have the highest impact to your community. That is the power of Crowded Wisdom.

Built on the latest Domino technology, Crowded Wisdom™ can be deployed and managed on one server or across multiple clustered servers in just minutes, and can be easily integrated into other web applications for maximum exposure and business value.

Pricing:

Up to 25 users: $999 + $12 for each additional user. OR
$10,000 per server cluster for unlimited users. OR
$3 to $5 per user per month hosted.

6.

TruePresence™ Unified Communications & Collaboration

UC2 for Foundations

Written in: Java

Component assets: Asterisk dial plan assembler, SIP presence tracking, Sametime click-to-call plugin, Sametime Bluetooth binding plugin Implementing customers: None

TruePresence™ PBX: No need to implement a separate and expensive phone system. Just plug in the appliance or install the software on your existing server hardware, configure it for your network, and plug in the IP phones of your choice (and/or softphones), and you have an advanced phone system with all the features you would expect and no recurring annual fees.

IBM Lotus Sametime Real-time Collaboration: The TruePresence™ appliance includes an integrated Sametime server with enterprise instant messaging and public chat network interoperability, VoIP services, mobile access, video chats, and web conferencing capabilities all with the security features required for business use. The Sametime Chat client is an extensible application platform that exposes all of these services and runs on Windows, Macintosh, and even Linux desktops. But many of these features can also be easily accessed from everyday applications such as Lotus Notes, Symphony, Quickr, Websphere Portal, Microsoft Office, Sharepoint, Microsoft Outlook, web browsers, and even mobile devices. TruePresence™ for Sametime adds the powerful integration to truly unify your communications and collaboration solutions. Features such as Phone Status Awareness (e.g., "on the phone"), Instant Phone Conference Bridge from Sametime, Instant Web Meetings with Integrated Telephony Services.


Strong security with content and identity control: The Lotus Sametime Instant Messaging server can be connected to public instant messaging networks such as AOL, Yahoo!, and GoogleTalk, allowing you to control your users' identities, log all activity, and encrypt confidential communications rather than have a “free-for-all” of unsecured public tools.

IP Telephony Integration: TruePresence™ for Sametime can be used with the TruePresence™ PBX or customized to work with your telephony system of choice.

TruePresence™ Ultimate Small Business Server: This all-in-one solution based on Lotus Foundations™ includes all of the TruePresence™ features on a secure Linux-based server with email, collaborative applications, instant messaging, IP telephony PBX, directory, file & print services, firewall, anti-virus, anti- spam, integrated backup, automatic updates, autonomic recovery, and remote access.

The business value of UCC

   • Streamline business processes to improve productivity and reduce costs.
   • Empower employees to improve responsiveness to boost customer satisfaction and loyalty.
   • Fast access to subject matter experts without having to know who they are.
   • Lay a scalable, adaptable foundation for added functionality.
   • Gain control over the unmanaged use of public networks.
   • Provide multiple communications options in the context of their regular activities.
   • Lower telephony and travel costs.

Pricing:

As low as $490 for first 10 users + $49 for each additional user. OR
$3 to $5 per user per month hosted.

7.

Envoy

DXL-based version tracking/control/assembler

Written in: Lotusscript

Component assets: DXL assembler, version mapper, CSS style applier, Domino source searching Provides change tracking, rollback, dependency checking, compliance monitoring and automated test builds for Notes/Domino applications. Currently in beta as part of our Beyond the Cloud ™ hosting service.

“Bones” Health Care

‘Bones’ Health Care is a electronic health recording (EHR) technology designed to be used at point-of-care, such as a hospital, clinic, or physician’s office. Based around a sophisticated touch sensitive interface, it allows the patient and physician to securely enter data (HIPPA / CCHIT compliant), interact with patient history information, and various data bases (such as prescription drug information) and in parallel, will automatically codes and bills the encounter to the appropriate insurance provider. ‘Bones’ provides a multitude of advantages including increasing physician efficiency, and where the product is a self contained technology, it reduces or eliminates the need for IT support.


OUTPUT! Ltd.

OUTPUT! Ltd (Professional Trainers for Sales) provides uniquely customized sales, negotiation, CRM utilization, customer care and sales management training to companies and individuals across the U.S. and the EU to help sales organizations become more productive in their sales communication with their customers. Through the quick & easy implementation of our unique sales methodology and systems, we help our clients’ entire sales staff to increase sales effectiveness which has proven to increase top line revenue while lowering costs and increasing margins. OUTPUT! focuses on Telecommunications, Telemarketing and Software Sales Organizations. OUTPUT! is currently working with 65 customers in Europe and the US.

Purchase of 50.1% of GROUP Business Software AG

On November 5, 2010, the Company entered into a Share Exchange Agreement (the "Agreement") with major shareholders of GROUP Business Software AG, a Frankfurt-based German software company (“GROUP”), namely: Mr. Joerg Ott (also the Company’s Chairman and Chief Executive Officer), Lotus Holdings Limited, Mr. Tuomo Tilman, Mr. Jyrki Saliminen, and the European insurance company, LVM (Landwirtschaftlicher Versicherungsverein Muenster AG) (collectively, the “Stockholders”).

Pursuant to the Agreement, the Company acquired an aggregate of 7,115,500 shares of common stock of GROUP (representing approximately 28.2% of the issued and outstanding shares of GROUP) from the Stockholders in consideration for an aggregate of 3,049,489 shares of common stock of the Company.

On January 6, 2011, the Company entered into a second Share Exchange Agreement (the "Second Agreement") with several GROUP’s stockholders (collectively, the “Stockholders”). Pursuant to the Second Agreement, the Company acquired an additional aggregate of 5,525,735 shares of common stock of GROUP (representing approximately 21.9% of the issued and outstanding shares of GROUP) from the Stockholders in consideration for an aggregate of 1,908,005 shares of common stock of the Company. The Company now owns controlling interest of 50.1% of GROUP or an aggregate of 12,641,235 common shares.

GROUP is a Frankfurt listed publicly-traded company (INW) headquartered in Eisenach, Germany whose core business is focused on serving IBM’s Lotus Notes & Domino market where it has become IBM’s worlds’ largest provider of business application solutions. GROUP has also developed a ‘market changing’ Cloud Automation Platform (GroupLive) that is deployed in IBM’s Data Centers and has also developed certain IBM specific software tools that allow IBM Lotus Software Group and its partners to rapidly and cost-effectively convert their customers existing Lotus based applications, avoiding any data migration and enable their customers to improve user experience. The use of modern XPages based Lotus Software applications allows customers to leverage self-service capabilities, benefit from IBM’s latest Lotus release features, and to be automatically ‘cloud’ ready. This Application Transformation technology (GBS Evolution™ product suite) dramatically increases IBM’s Lotus Software solutions competitiveness against providers such as Google, Salesforce, and others.

GROUP’s ongoing businesses will serve as the foundation for the Company to achieve its strategic objectives. The Company will leverage its technologies, partnerships and customer base to develop GROUP’s successful business strategy and operations in North America and Asia and expand its existing European operations. In particular, the Company will concentrate on rapidly evolving GROUP as a major provider of Cloud Automation Platform (CAP) Technology software and IBM Lotus Notes/Domino Application Transformation Services.

GROUP caters primarily to mid-market and enterprise size organizations having over 3,500 customers in thirty-eight countries spanning four continents, representing more than 5,000,000 active users of its products. GROUP’s customers include Abbot, Ernst & Young, Deutsche Bank, Bayer, HBSC, Merck and Toyota. GROUP provides Cloud Computing technology, IBM Lotus Notes/Domino Application Transformation technology, Email Management software, Lotus Software Services, Customer Relationship Management software and Risk & Compliance Management solutions. Headquartered in Eisenach, Germany the Company has offices throughout Europe and North America.

GROUP’s market changing’ Cloud Automation Platform (Group Live) is deployed in IBM’s Data Centers and it’s specific software tools that allows IBM and the IBM Lotus Notes/Domino partners to automatically convert their customers Lotus based applications automatically into modern web 2.0 styled, ‘cloud’ ready applications.

GROUP is in the stages of finalizing an OEM contract with IBM’s Global Services Outsourcing Division which is expected, although no assurances can be made, that would result in a positive effect on the Company’s revenues. Beginning in the first quarter of 2011, GROUP Live will be available for IBM to target a direct customer base of 3,000 European midsized companies. The anticipated roll out is planned to begin in mid-year 2011 in IBM’s Data Centers, which, has an estimated target market of an additional 10,000 customers.

Furthermore, GROUP is currently negotiating a Reseller Agreement with IBM’s Lotus Software Division that would make it possible for IBM to bundle specific technology developed by GROUP and sell them as an integrated product solution through IBM sales channel. This bundle will allow IBM to provide its cloud based Lotus email solution customer base (IBM Lotus Live) to transform and run all their existing Lotus based applications in the cloud. The Reseller Agreement would provide GROUP with ongoing subscription and service based revenues.


In addition to the significant growth potential anticipated through its multiple partnerships with IBM, GROUP also has the potential for dramatic growth from large strategic partnerships such as with major OEM players, data centers, ISV’s as well as a variety of large enterprise class and medium sized end users who are interested in having their own private clouds. GROUP also intends pursue highly attractive opportunities with a wide variety of other vendors including Computer Associates, Dell, HP, Accenture, and Amazon, as well as with specialized distributors and system integrators.

Liquidity & Capital Resources

Our financial condition as at December 31, 2010 and March 31, 2010 and the changes between those periods for the respective items are summarized as follows:

Working Capital            
    At December 31, 2010     At March 31, 2010  
             
Current Assets $  4,077,586   $  5,861  
Current Liabilities   548,150     38,569  
Working Capital (deficiency) $  3,529,436   $  (32,708 )

At December 31, 2010, we had $14,586 cash on hand, compared to $507 at March 31, 2010. The Company has accumulated losses of $443,016 as at December 31, 2010 and has not generated sufficient cash flow from operations to fund its activities. Our financial statements have been prepared on the going concern basis, which presumes that the Company will continue operations for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of business. There can be no assurance that a self-supporting level of operation will ever be achieved. Management believes that our Company’s cash at December 31, 2010 will not be sufficient to meet our working capital requirements for the next twelve month period. The continuation of the Company is dependent on its ability to obtain the necessary capital to achieve profitability and to meet the requirements, from time to time, of lenders, if any, who are willing to provide this financing. Management believes that as a result of the assets purchased to date, it will generate additional funds and that it will be able to obtain additional capital as required to meet projected operational requirements.

These financial statements do not reflect the adjustments or reclassifications to the assets and liabilities which would be necessary if the Company was unable to continue its operations.

Cash Flows      
    Nine Months Ended  
    December 31,  
    2010     2009  
Net cash provided by (used in) operating activities $  (197,207 )   (23,614 )
Net cash proved by Financing Activities $  511,186     25,336  
Foreign exchange translation $  --     (3,926 )
Increase (decrease) in cash and cash equivalents during the period $  14,079     (2,204 )
Cash and cash equivalents, beginning of period $  507     944  
Cash and cash equivalents, end of period $  14,586     (1,260 )

Results of Operations

Three Months Ended December 31, 2010 Compared to Three Months Ended December 31, 2009

Revenues

We had no revenues or costs of sales during the three month periods ended December 31, 2010 and 2009.


Expenses

Our expenses for the three months ended December 31, 2010 and 2009 were as follows:

    Three Month Period Ended  
    December 31,  
    2010     2009  
Expenses:            
Interest to related party $  2,500   $  --  
Filing Fees $  --   $  --  
Office and sundry $  414   $  919  
Professional Fees $  151,500   $  --  
Travel $  42,500   $  --  
             
Total $  196,914   $  919-  

We had a loss from continuing operations for the three months ended December 31, 2010 of $(196,914), compared to $0 for the three months ended December 31, 2009. We had a loss from discontinued operations for the three months ended December 31, 2010 of $0 compared to $(919) for the three months ended December 31, 2009. We had a net loss of $(196,914) for the three months ended December 31, 2010, compared to a net loss of (919) for the three months December 31, 2009.


Nine Months Ended December 31, 2010 Compared to Nine Months Ended December 31, 2009

Revenues

During the nine months ended December 31, 2010, we generated $0 in revenue, compared to $1,981 for the nine months ended December 31, 2009. The cost of sales for the nine months ended December 31, 2010 and 2009 were $0. We also generated $0 in consulting revenue and had $0 in selling commissions for the nine months ended December 31, 2010, compared to $9,610 in consulting revenue and $357 in selling expenses for the nine months ended December 31, 2009.

Expenses

Our expenses for the nine months ended December 31, 2010 and 2009 were as follows:

          Nine Month Period Ended  
          December 31,  
    2010     2009  
Expenses:            
Interest to related party $  2,500   $  --  
Filing Fees $  --   $  1,620  
Office and sundry $  414   $  12,968  
Professional Fees $  188,150   $  4,650  
Travel $  42,500   $  7,897  
             
Total $  233,564   $  27,135  

We had a loss from continuing operations for the nine months ended December 31, 2010 of $(210,428), compared to $(6,270) for the nine months ended December 31, 2009. We had a loss from discontinued operations for the ninth months ended December 31, 2010 of $0 compared to $(9,631) for the nine months ended December 31, 2009. We had a net loss of $(210,428) for the nine months ended December 31, 2010, compared to a net loss of (15,901) for the nine months December 31, 2009.

Plan of Operations and Cash Requirements

All project obligations for calendar year 2010 have been satisfied.

Off-Balance Sheet Arrangements

As of December 31, 2010, we had no off-balance sheet arrangements, including any outstanding derivative financial statements, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Critical Accounting Policies and Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.

Comprehensive Income (Loss)

The Company adopted FASB Codification topic 220, Reporting Comprehensive Income, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. Since inception, the Company’s other comprehensive income represents foreign currency translation adjustments.


Net Income per Common Share

FASB Codification topic 260, Earnings per share, requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations. Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive. There were no adjustments required to net income for the period presented in the computation of diluted earnings per share.

Financial Instruments

The fair value of financial instruments consisting of accounts payable and accrued liabilities and due to related parties were estimated to approximate their carrying values based on the short-term maturity of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Fair Value Measurements

The Company follows FASB Codification topic 820, Fair Value Measurements and Disclosures, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. This new accounting standard establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

The Company has adopted FASB Codification topic 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Company has not elected the fair value option for any eligible financial instruments.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of its fixed assets and other assets in accordance with FASB Codification topic, 360.10,

Property, Plant and Equipment, Impairment or Disposal of Long-Lived Assets. This guidance requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows, it is considered to be impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. No impairment has been recognized in the accounts.

Revenue Recognition

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition. Under these guidelines, revenue is recognized when persuasive evidence of an arrangement exists, shipment has occurred or services rendered, the price is fixed or determinable and payment is reasonably assured. Customers take ownership at point of sale and bear the costs and risks of delivery.

Foreign Currency Translation

As a result of the Asset Purchase Agreement and the shares issued thereon, the functional currency of the Company has changed from Canadian dollars to US dollars. Previous to this event, for financial reporting purposes, the financial statements of the Company were translated into US dollars. Assets and liabilities were translated at the exchange rates at the balance sheet dates and revenue and expenses were translated at the average exchange rates and stockholders’ equity was translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.


Deferred Taxes

Income taxes are provided in accordance with FASB Codification topic 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss-carry forwards.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that, some portion or all of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.

Long term investment

The equity investment in related party has been accounted for in accordance with FASB Codification topic 805 Business Combinations as this is the first step in a step by step acquisition of control. For acquisition purposes, the Company has been identified as the acquirer.

Recent Accounting Pronouncements

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any recently issued, but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

None

Item 4T. Controls and Procedures.

Evaluation of Controls and Procedures.

In accordance with Exchange Act Rules 13a-15 and 15d-15, our management is required to perform an evaluation under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period.

Evaluation of Disclosure Controls and Procedures

Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2010, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in this Report was (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and instructions for Form 10-Q.

Changes in Internal Controls.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended December 31, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company presently is not a party to, nor is management aware of, any pending, legal proceedings.

Item 1A. Risk Factors.

The disclosure required under this item is not required to be reported by small reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On November 5, 2010, the Company entered into a Share Exchange Agreement (the "Agreement") with major shareholders of GROUP Business Software AG, a Frankfurt-based German software company (“GROUP”), namely: Mr. Joerg Ott (also the Company’s Chairman and Chief Executive Officer), Lotus Holdings Limited, Mr. Tuomo Tilman, Mr. Jyrki Saliminen, and the European insurance company, LVM (Landwirtschaftlicher Versicherungsverein Muenster AG) (collectively, the “Stockholders”).

Pursuant to the Agreement, the Company acquired an aggregate of 7,115,500 shares of common stock of GROUP (representing approximately 28.2% of the issued and outstanding shares of GROUP) from the Stockholders in consideration for an aggregate of 3,049,489 shares of common stock of the Company.

The Company issued the above-referenced 3,049,489 shares of common stock of the Company pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded the Company under Section 4(2) of the Securities Act due to the fact that the issuance did not involve a public offering of securities.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved by the Securities and Exchange Commission).

Item 5. Other Information.

Subsequent Event

As previously reported by the Company on a Form 8-K filed on January 6, 2011 with the SEC, on January 6, 2011, the Company acquired an additional aggregate of 5,525,735 shares of common stock of GROUP in exchange for 1,908,005 shares of common stock of the Company. The acquisition represents approximately 21.9% of the issued and outstanding shares of GROUP. The effect of this transaction is that the Company gained a 50.1% controlling interest of GROUP with an aggregate of 12,641,235 common shares.

The Company issued the above-referenced shares of common stock of the Company pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded the Company under Section 4(2) of the Securities Act due to the fact that the issuance did not involve a public offering of securities.

Item 6. Exhibits.

No. Description
   
31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive Officer
   
31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Financial and Accounting Officer
   
32.1 Section 1350 Certification of Principal Executive Officer
   
32.2

Section 1350 Certification of Principal Financial and Accounting Officer



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  GBS ENTERPRISES INCORPORATED
   
Date: February 22, 2011  By: /s/ Joerg Ott
   Joerg Ott
   President and Chief Executive Officer
   (Principal Executive Officer)
   
Date: February 22, 2011  By: /s/ Ronald Everett
   Ronald Everett
   Chief Financial Officer
   (Principal Financial and Accounting Officer)