MARIZYME INC - FORM 10-K/A

Attached files

file	filename
EX-31.1 - EXHIBIT 31.1 - MARIZYME INC	v306497_ex31-1.htm
EX-31.2 - EXHIBIT 31.2 - MARIZYME INC	v306497_ex31-2.htm
EX-32.2 - EXHIBIT 32.2 - MARIZYME INC	v306497_ex32-2.htm
EX-32.1 - EXHIBIT 32.1 - MARIZYME INC	v306497_ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

(Amendment No. 3)

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

For the fiscal year ended: March 31, 2011

¨ 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		(I.R.S. Employer Identification No.)
organization)

585 Molly Lane

Woodstock, GA 30189

(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)

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

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 (§ 232.405 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 x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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 Act. (Check one):

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

(Do not check if a smaller reporting company)

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

As of March 15, 2012, there were 27,252,958 shares of common stock, $0.001 par value per share, of the Registrant issued and outstanding.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $776,995 based on a closing sale price of $0.06 per share at September 30, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

		Page
PART I
Item 1	Business	2
Item 1A	Risk Factors	9
Item 1B	Unresolved Staff Comments	16
Item 2	Properties	16
Item 3	Legal Proceedings	16

PART II
Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 6	Selected Financial Data	18
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 7A	Quantitative and Qualitative Disclosure about Market Risk	27
Item 8	Financial Statements and Supplementary Data	27
Item 9	Change In and Disagreements with Accountants on Accounting and Financial Disclosure	67
Item 9A	Controls and Procedures	67
Item 9B	Other Information	69

PART III
Item 10	Directors, Executive Officers and Corporate Governance	69
Item 11	Executive Compensation	71
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72
Item 13	Certain Relationships and Related Transactions, and Director Independence	73
Item 14	Principal Accounting Fees and Services	73

PART IV
Item 15	Exhibits, Financial Statement Schedules	74
	Signatures	75

EXPLANATORY NOTE

The Registrant is filing this Form 10-K/A (Amendment No. 3) in response to comments received by the Commission regarding the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2011 filed on July 14, 2011, as amended. Unless otherwise noted, the information contained in this Form 10-K/A (Amendment No. 3) is as of March 31, 2011.

The Company reports segment information based on the “management” approach. Segment management is performed at the level of chief operating decision maker. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by Joerg Ott, the Company’s chief operating decision maker (CODM), in deciding how to allocate resources and assessing performance. Because of this management structure, the Company has only one reporting unit which is the same as an operating or reportable segment, which is no different, in this case, as the entity as a whole (entity or consolidated level). In summary, the Company presents its financial statements as a single reporting unit because it directly reflects the way the entity manages its operations through its chief operating decision maker. All of the Company’s operations are being performed in the area of software and services. Therefore, pricing models, gross margin and the nature of all business activities are similar. The Company groups its software and services into portfolios that are categorized into classes such as Applications, GroupLive/ Cloud Computing and Consulting/Expert Services to simplify market communication. The Company is managed as a single reporting unit, and all required financial segment information will be found in the consolidated financial statements.

Forward Looking Statements

This annual report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “plan,” “anticipate,” “believe”, “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” included herein that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. The safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to this annual report.

Unless otherwise noted, all references in this Annual Report on Form 10-K to “GBS Enterprises,” “GBS,” “GBSX,” the “Company,” “we,” “us,” “our” and similar terms and expressions shall mean the Registrant and its subsidiaries, including, but not limited to, GROUP Business Software AG.

PART I

Item 1. Business

GBS Enterprises Incorporated, a Nevada corporation (the “Company,” “GBS,” “GBSX,” “we,” “us,” “our” or similar expressions), through its subsidiaries is a global operating software and services company. We focus on cloud automation technology, commercial and governmental application modernization and migration, and business application development, deployment and management, primary in the IBM Lotus Notes and Domino space. We help customers, such as commercial and government organization IT departments, system integrators, ISV’s, Data Center providers, solve IT challenges such as

Shaping IT strategy & planning

Deploying, developing, maintaining and managing business applications

Automating business processes

Optimizing system & application performance

Managing messaging systems & ensuring messaging security & compliance

Simplifying application modernization, migration & deployment.

Migrating and integrating messaging and application systems

GBSX is pursuing an aggressive growth strategy based upon highly targeted mergers and acquisitions so as to build its portfolio of technologies, applications, and services.

The Company’s main activities are focused on serving IBM’s Lotus Notes & Domino market where it has become IBM’s worlds’ largest provider of business application solutions.

To serve the demand for modernization of the applications run worldwide on the Domino platform the major innovation developed by the Company’s concentration of talent are certain specific software tools that allows IBM Lotus Software Group and its partners to rapidly and cost-effectively convert their customers’ existing Lotus based rich-client applications into modern, web accessible and client independent 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 Transformer product suite) dramatically increases IBM’s Lotus Software solutions competitiveness against providers such as Google, Salesforce, Microsoft Sharepoint and others.

The Company’s specific software tools enable IBM, the IBM Lotus Notes/Domino partners, system integrators (SIs) or commercial or governmental organization-controlled service units to solve the industry needs for efficient modernization of a Lotus environment, specifically for the highly distributed and heavily used IBM Lotus Notes/Domino applications. The Company’s modernization tools span the complete set of customer requirements and demands for application modernization and migration:

Retire (automatically convert into full text searchable .pdf archived applications);

Renew (automatically convert into modern web 2.0 styled, access anywhere applications);

Rebuild (accelerate case-specific rebuilding into access anywhere applications); or

Replace (accelerate case-specific replacing with a different technology).

The Company has also developed an innovative Cloud Automation Platform (GroupLive) enabling the automation of the processes beyond virtualization or managing customer dedicated or shared infrastructure, such as networks, servers and clients; GroupLive extends process automation for legacy applications, including user management, user access and application deployment without the need of rewriting the entire application. Automation is supposed to decrease IT labor by more than 50%, especially for application management and maintenance. GroupLive supports IT consolidation, standardization, modernization, utilization and optimization, as well as centralization, monitoring, and reporting. Customers gain more efficiency, reduce cost and free IT labor to refocus on strategic tasks rather than on overwhelming current day-to-day workloads. GroupLive is deployed in IBM’s Data Centers in Germany and will be deployed in the US in the GBS data centers shortly.

Since January 6, 2011, the Company owns majority control (50.1%) of GROUP Business Software AG (“GROUP”), a Frankfurt listed publicly-traded company (INW). GROUP is headquartered in Eisenach, Germany. GROUP’s businesses served as the foundation for GBSX to achieve its strategic objectives. In 2011, GBS has added more companies to complete its cloud automation and application management focused offering. With Pavone AG and Groupware AG the portfolio now includes cloud-enabled workflow management, as well as cloud-enabled application archiving. With the acquisition of IDC Global, Inc., Chicago, a high end data center provider, GBSX will start offering the GroupLive technology in the United States in the next months. The acquisition of SD Holdings, Inc., a specialized company in the area of analytics, business intelligence, reporting and services, provides GBS with access to the Asian markets as well as access to cost-effective high quality consulting resources. In addition, GBS plans to leverage SD’s Indian subsidiary as the foundation for its strategic service delivery factory.

GBS will leverage its technologies, partnerships and customer base to develop its successful business strategy and existing operations in North America, Asia and Europe. In particular, the Company will concentrate on rapidly evolving as a major provider of Cloud Automation Platform Technology software and IBM Lotus Notes/Domino Application Modernization & Migration Services.

Furthermore, the Company 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 the Company and sell them as an integrated product solution through IBM sales channel. The Reseller Agreement would provide the Company with software license, subscription and service based revenues.

In addition to the significant growth potential anticipated through its multiple partnerships with IBM, the Company also has the potential for dramatic growth from large strategic partnerships such as with major OEM players, SIs, ISV’s, data centers, as well as a variety of large enterprise class and medium sized end users who are in the business of application modernization, migration and/or management.

General Corporate History

We were incorporated in Nevada on March 20, 2007 as SWAV Enterprises Ltd. (“SWAV”). SWAV was an importer and wholesaler of Chinese manufactured goods.

On April 26, 2010, SWAV purchased certain assets of Lotus Holdings Limited (“Lotus”) pursuant to an Asset Purchase Agreement in consideration for aggregate of 2,265,240 shares of SWAV common stock. 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 SWAV’s acquisition of Lotus, the SWAV stockholders sold an aggregate of 11,984,770 shares of SWAV common stock to Joerg Ott, our CEO and Chairman, for an aggregate purchase price of $370,000.

Upon the consummation of the acquisition, the then executive officers and directors of SWAV resigned and Joerg Ott was appointed as the Company’s Chief Executive Officer, President and Chairman of the Board of Directors. On September 6, 2010, SWAV’s name was changed to GBS Enterprises Incorporated. On October 14, 2010, the Company’s trading symbol on the OTC Bulletin Board was changed from SWAV to GBSX.

Effective December 30, 2010, the Company acquired approximately 28.2% of the issued and outstanding shares of common stock of GROUP Business Software AG, a Frankfurt-based German software company (“GROUP”), pursuant to Share Purchase Agreements between the Company and several of GROUP’s stockholders, including Mr. Joerg Ott (also the Company’s Chairman and Chief Executive Officer). Pursuant to the Share Purchase Agreements, the Company acquired an aggregate of 7,115,500 shares of common stock of GROUP in consideration for an aggregate of 3,049,489 shares of the Company’s common stock.

On January 6, 2011, the Company acquired an additional 5,525,735 shares of common stock of GROUP, representing approximately 21.9% of the issued and outstanding shares, from several additional GROUP stockholders in consideration for an aggregate of 2,355,922 shares of the Company’s common stock.

In total, the Company purchased an aggregate of 12,641,235 shares of common stock of GROUP from a total of nine GROUP stockholders in consideration for a total of 5,405,411 shares of common stock of the Company, resulting in the Company owning a controlling equity interest of approximately 50.1% in GROUP.

Subsequent Acquisitions:

Effective April 1, 2011, the Company entered into an agreement to acquire 100% of the outstanding common shares of Pavone AG, a German corporation, for $350,000 in cash and 1,000,000 shares of its common stock. The fair value of the common stock was determined to be $4.90 per share, representing the market value at the end of trading on the date of the agreement. The total value of the investment, including the assumption of $11,261 in debt was $5,261,261. Pavone is a leader in business process management and optimization technologies. Pavone’s extensive workflow software for Lotus Notes and Domino along with their large customer base is well suited to GBS Enterprises portfolio strategy. This acquisition of Pavone complements GBS's majority ownership in GROUP and further strengthens their leading industry position on the IBM Lotus Platforms and expands their cloud computing technology offerings beyond the IBM Lotus market. Pavone currently has offices in Germany and the UK. They have over 2,500 customers and over 150,000 users worldwide. Some of their customers include Deutsche Bundes Bank, BMW, Linde AG, Philips, British Sugar and Mahle Industries.

Effective June 1, 2011, the Company acquired 100% of the outstanding common shares of GroupWare, Inc., a State of Florida corporation. As consideration the Company paid $250,000 and issued 250,000 shares of its common stock. The fair value of the common stock was determined to be $4.34 per share, representing the market value at the end of trading on the date of the agreement. The total value of the investment, including the assumption of $219,902 in debt was $1,554,902. Upon the consummation of the acquisition, the management and board of GroupWare resigned and Joerg Ott, the Company’s Chief Executive Officer and sole director, was appointed as the Chief Executive Officer and sole director of GroupWare. GroupWare is based in Lubeck, Germany with offices in St. Petersburg, Florida. GroupWare's ePDF server delivers centralized, network-wide PDF solutions for messaging, workflow, document, content and data management. This acquisition strengthens the GBS Transformer offering, which helps bring IBM Lotus Notes client applications to the web, by substituting traditional printing methods provided by the Notes client with simple-to-use print-to-PDF capabilities in the browser. In addition, GroupWare provides a solution for applications that are ready to be retired. With the ePDF Server, GBS customers can convert the entire contents of IBM Lotus Notes and Domino applications to a permanent and secure archive in PDF or PDF/A format, while preserving their ability to be full-text searched and ensuring that the critical application data is accessible in the future, when needed. GBS will deliver the application archiving capabilities via its GroupLive cloud, making it possible for customers and partners to take advantage of elastic cloud computing resources to rapidly process the application contents without the need to dedicate hardware on-site for temporary or intermittent processing jobs.

On July 25, 2011, the Company acquired 100% of the issued and outstanding shares of common stock of IDC Global, Inc. (IDC”), a Delaware corporation with offices in Chicago, New York, London and other key cities. Pursuant to the acquisition agreement of July 15, 2011, the Company agreed to issue the shareholders an aggregate of 800,000 shares of common stock and make a cash payment of $750,000. The agreement required an additional payment to the management shareholders of 80,000 shares of common stock and signing bonuses to personnel of $35,000. The Company also agreed to reimburse IDC up to $25,000 for incurred accounting and legal fees related to the transaction. The fair value of the common stock was determined to be $3.50 per share, representing the market value at the end of trading on the date of the agreement. The total value of the investment, including $883,005 of debt assumption was $4,713.005. IDC is a privately held company that provides nationwide network and data center services. IDC delivers customized, high availability technology solutions for WAN, Wireless Services, Co-location & Hosting, Managed Services, and Network Security. IDC has data centers in Chicago, New York and London and other key cities. IDC is helping customers make the transition from large, static and expensive on-premise computing to dynamic, flexible and cost-effective off-premise computing. The acquisition of IDC provides the Company with the infrastructure needed to provide a comprehensive end-to-end solution for all customers regardless of their platforms. It proves especially beneficial to IBM Lotus Domino and Notes customers who finally have the same options as other platforms.

On September 27, 2011, the Company entered into an acquisition agreement with SD Holdings Ltd. (“SYN”), a Mauritius corporation and the shareholders of SYN (the “Selling Shareholders”) owning 100% of issued and outstanding shares of SYN. Pursuant to the agreement, the Company purchased one hundred percent (100%) of the issued and outstanding shares of SYN (“SYN Shares”) effective November 1, 2011 in consideration for (i) 700,000 shares of common stock of GBS and (ii) $525,529. The fair value of the common stock was determined to be $2.05 per share, representing the market value at the end of trading on the date of the agreement.

As previously reported by the Company on a Form 8-K/A (Amendment No. 2) filed by the Commission on March 12, 2012, on February 27, 2012, the Company acquired an additional 883,765 shares of common stock of GROUP to maintain its 50.1% ownership of GROUP. On February 27, 2012, an outstanding loan of GROUP was converted into an aggregate of 1,750,000 shares of GROUP common stock, thereby increasing GROUP’s outstanding common stock to 26,982,000 shares. As a result of the foregoing increase in the number of outstanding shares of GROUP common stock, the Company increased its ownership of GROUP common stock to an aggregate of 13,525,000 shares, representing approximately 50.1% of the outstanding common stock of GROUP. The Company purchased the 883,765 shares of GROUP common stock from GAVF LLC for an average purchase price of $0.70 per share.

Our Products & Services

GBS has achieved significant growth by consolidating the fragmented Lotus Software market through the successful merger & acquisitions of companies with complementary product, technology or services offerings. Based on its organic growth and growth by acquisition GBS has continuously developed its software and service business to service and support GBS’s expanding Lotus customer base.

Historically, GROUP has achieved growth through acquisition by targeting attractive, yet underperforming companies with complimentary operations and leveraging GROUP’s expertise to successfully turnaround and integrate these targets.

Key success factors for this strategy are: enhanced portfolio, positioning GROUP as the ‘one-stop-shop’ for Lotus applications and services, expand customer support, fast code migration, and cloud enablement/XPages conversion of acquired applications.

Going forward, the Company will focus on potential acquisition targets in the following areas of software and services: Applications, Professional Services, Hosting/Outsourcing Services, Administration and IT services, and XPages expertise.

Core Business Division Overview

Messaging and Business Application Software & Solutions product lines

GBS Messaging and Business Application Software & Solutions product lines include software and advisory services for email and Instant Messaging (IM) Management, Security, Compliance, Archiving and Productivity, CRM Applications, Governance, Risk & Compliance (GRC) Management software, Workflow and Business Process Management software, ePDF Archiving & Document Management and e-Banking solutions.

GBS develops, sells and installs well known business process and management software suites based on Lotus Notes / Domino and IBM Portal technology, mainly for major international companies and medium-sized customers.

Through GBS’s comprehensive messaging software product lines and associated services, Lotus Notes, Microsoft Exchange or SMTP-based-email customers, as well as Lotus Sametime customers are able to provide their users with secure, efficient and centrally administered use of e-mail and IM while maintaining control over their compliance with current legal requirements and corporate guidelines.

Consulting Services

As a leader in the IBM Lotus Notes Software and Services business GBS provides high-end consulting services to its customers. GBS develops, sells and orchestrates customer-specific Lotus Domino strategy and consulting services, such as CIO and IT department leader Strategic Advisory Services, Managed Services, Outsourcing, Administration, Assessments and Implementations, Performance Improvements, Custom Application Development , Governance and Security, Technical Support, and Training, as well as Email Migration Services. The talented team at GBS Experts has outstanding skill sets in the areas of system architecture and evaluation, application integration, e-mail and Instant Messaging, administration, application development, application migration, middleware deployments and licensing, outsourcing and hosting.

Based on GBS’s unique concentration of industry talent and expertise, mainly in the areas inside and around IBM Lotus Notes/Domino, inside and around corporate messaging (IBM, Microsoft, SMTP) and inside and around IT environmental and application assessment, analysis and reporting, commercial and governmental customers, as well as SIs and channel partners are able to relay on the industry leading strategic and tactical advisory services for evaluating, planning, staffing and execution of any customer project. GBS Consulting Services’ global team of consultants use modern project management techniques, proprietary methodologies and GBS accelerator technologies to complete client projects on time and with reduced risk

GBS’s focus on recruiting and retaining top Lotus expertise, positions our team to offer leading-edge Lotus Notes / Domino subject matter knowledge to our customers. As a testament to this focus, GBS employs 10 of the top 20 most recognized ‘market experts’ and thought-leaders in Lotus development and administration. GBS consultants have an average of over 12 years’ experience each in Lotus Notes/Domino and its related products and are routinely asked to present at IBM Lotus events including Lotusphere, an annual conference hosted by IBM Lotus Software.

As a Premier IBM Business Partner - GBS is one of the few partners that can sell and support licenses for all five IBM software brands: Lotus, WebSphere, Rational, Tivoli, and DB2

Cloud Computing

As IT departments face continuous budget reductions and constant pressure for higher performance and efficiency, CIOs are focusing on modern technologies to support their need for increased scalability, flexibility and lower costs. GBS has identified this demand as a strategic growth opportunity for the company and has placed a significant focus on expanding its Cloud Computing and Modernizing/Migrating technology offerings. The strategic opportunities is served by GBS with two distinct offerings:

GROUP Live - Cloud Automation Platform / Cloud Platform-as-a-Service (PaaS) software and services. And

Transformer - Lotus Notes modernization/migration services and technology accelerators

GBS Cloud Computing activities are focused on cloud automation solutions and therefore the Company has made key acquisitions and R&D investments to create an award winning Cloud Platform-as-a-Service offering. Under the GROUP Live banner, the GBS PaaS offering has been sold to a variety of enterprise customers, which use the PaaS software to host internal corporate clouds (Private cloud) and applications as-a-service to their various internal user groups. GROUP Live has also be sold and implemented by a number of Independent Software Vendors (ISVs), which are leveraging the platform to deliver their own Software-as-a-Service (SaaS) applications to their respective customer bases.

Both of these customer groups enjoy the comprehensive nature of this platform agnostic PaaS solution and its exceptional change management capabilities enabling resource flexibility, business agility, scalability and ease-of-use beyond that which is generally available in the market today.

2011 GBS and IBM sign strategic cooperation agreement to sell, deliver and support GROUP Live

2011 Experton positioned GBS (GROUP Live) in the Leaders Quadrant for Cloud Management in their report: Cloud Vendor Benchmark 2011

2011 IBM Best Seller Award Winner: Best Cloud Solution Partner

GBS Lotus Application Modernization and Migration activities are focused on the IBM Lotus / Domino applications market and the offering spans from expert services and accelerator technologies to modernize, web enable and migrate Lotus applications; and thus ultimately take the Lotus applications from legacy to the future. The foundation of the Transformer Suite Software offering is GBS’s significant R&D investment in a set of methodologies and key technology accelerators to automate the conversion of traditional Notes based client-server applications, into the IBM XPages framework which enables Domino applications to be run and accessed via the Lotus client, a web browser or on a mobile device. The patent-pending software that underpins Transformer was developed by GBS with the assistance and guidance from IBM Corporation’s Software Group to ensure alignment with future releases of the IBM Lotus / Domino and XPages technology.

When compared to manual redevelopment projects, Transformer 2.0 modernizes and web enables Notes applications at up to 55% lower cost, 75% time savings and with up to 80% fewer resources.

IBM has deemed the Transformer technology a “game changer,” and will be employing it to modernize their clients’ applications.

Revenue

GBS’ software and service operations and corresponding revenue streams are well diversified. For fiscal year 2012/ 2013, the Company expects to generate more than 85% of its revenue from a combination of license sales, services and maintenance. Service and maintenance revenues, which are recurring in nature and highly predictable year-over-year, account for nearly 60% of the Company’s total revenue. The Company’s service revenues include strategic consulting, high-end project and delivery management, cloud computing integration and enablement, offshore development, the design, implementation, integration and training for its collaboration management systems. Due to the custom designed nature of the Company’s products, essentially all clients utilize GBS’ skilled service team to implement its systems. The other major component of the Company’s recurring revenue, maintenance, is typically paid on an annual basis and is typically negotiated under contracts for two to three years. The Company estimates approximately 80% of its installed base maintain a maintenance contract for the Company’s solutions.

Our Customers

GBS, through its subsidiaries 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. The Company’s customers include Abbot, Ernst & Young, Deutsche Bank, Bayer, HBSC, Merck and Toyota.

Dependence on IBM

The Company is the world’s largest supplier of applications for IBM’s Lotus Notes and Domino markets. Should IBM choose not to promote the underlying platform technology and products (e.g. IBM Collaboration & Social Software, IBM Lotus Software, XPages, Connections), we might not achieve the revenue from our core business units we are anticipating and our business could be materially adversely affected as a result. GBS also markets its Cloud Automation Platform (GroupLive) and IBM Lotus/Notes Application Modernization & Migration tool set (Transformer) . We expect much of our growth in the near term to come from our strategic business units GroupLive and Transformer. Should IBM choose not to promote these products, we might not achieve the growth we are anticipating and our business could be materially adversely affected as a result.

Employees

Joerg Ott serves as the Chief Executive Officer and Chairman of our Company. Mr. Ott is also a Chief Executive Officer and director of GROUP. Markus R. Ernst serves as the Chief Financial Officer of the Company. Gary MacDonald serves in the capacity of Executive Vice President and Chief Development Officer of the Company as well as GROUP. There are no other persons who work for the Company.

The disclosure below pertains to the activities of all subsidiaries, including GROUP, our 50.1% subsidiary:

Employees

Joerg Ott serves as the Chief Executive Officer and Chairman of our Company. Mr. Ott is also a Co-Chief Executive Officer and director of GROUP. Ronald Everett served as the Chief Financial Officer of the Company from August 2, 2010 to February 24, 2012. On February 24, 2012, Markus R. Ernst was appointed as the Chief Financial Officer of the Company. Gary MacDonald serves in the capacity of Executive Vice President and Chief Development Officer of the Company as well as GROUP. There are no other persons who work for the Company.

The disclosure below pertains to the research and development activities of GROUP, our 50.1% subsidiary:

As of December 31, 2010, there were around 155 employees working at GROUP (previous year: 174 Employees). The decrease in the average number of employees has to do with the sale of GROUP Business Software Holding OY and its subsidiary Gedys IntraWare GmbH effective March 1, 2010. The average employee numbers include neither trainees nor Board members.

The breakdown into the individual segments can be taken from the following overview:

Capacity	Partial Capacity	Personnel As of December 31,
		2010		2009

Customer-Oriented Area	Service		48		59
	Sales		32		39
	Marketing		5		6
Total Customer-Oriented Area			85		103

Research and Development			53		51
Management and Administration			18		20
Total Corporation			155		174

Seasonal

Our business is not seasonal.

Intellectual Property

As of March 31, 2011, the Company does not have any patents, trademarks, licenses, franchises or concessions.

Research and Development

For the fiscal years ended March 30, 2011 and 2010, we did not spend any money in research and development.

The disclosure below pertains to the research and development activities of all subsidiaries, including GROUP, our 50.1% subsidiary:

The main focus of R&D in 2010 was to provide for the future success of the GBS offering. Development teams around the globe, namely in the U., Canada, Germany, the United Kingdom, Denmark and Bulgaria have been intensely working on the next generation offering, especially for GBS Transformer and Group Live.

The overall R&D spending by GROUP in 2010 was $4,924,148. Due to the sale of Gedys IntraWare GmBH’s business in early 2010, the amount in 2009 was slightly higher at $5,486,726.

Competition

In our core business units we compete in general with regionally organized and represented IBM Lotus channel partner and IBM Lotus specialized departments of more generic ISVs, or SIs. In principal, these competitors are ‘single’ solution focused and serve the same customer base as we do. The average size of our competitors is around $2-5 million overall in annual revenue and a staffing between 5 and 35 employees, including management, development, support and sales.

Our main competitive advantages are:

The collection of talent, expertise & knowledge,

Our unique position as the market innovator and leader.

Our long-term relationship with our customers.

The ability to address all needs of any customer regarding their IBL Lotus environment.

The capacity of top-end professional resources to serve multiple long-term projects.

Our global presence and multilingual support offering.

The Company’s ability to keep pace with IBM’s speed in developing new solutions for the Lotus market.

The market competition in which GBS operates is described as follows:

Essentially the market can seek out other Independent Software Vendors (ISVs) for 'point' solutions such as CRM. The Company’s strength is having the most complete portfolio of applications in the market coupled with the most Lotus Notes Applications experience in the industry that is devoted to applications.

As the Lotus market matures, IBM could incorporate new features into the Lotus platform with the consequence of providing some of the same functions that GBS is providing

There are many companies that offer professional Information Technology services including IBM ISSL and many regional players that contract out their programmers to provide application development services and support. The Company’s advantage is the extensive Lotus specific experience of our Experts who aside from having worked in this market for years are also some of the leading 'thought' leaders in the Lotus market (three of which were just recognized as "IBM Champions" by IBM for their knowledge, innovation and contribution to the Lotus market.

The competitive landscape in the cloud computing market is intense and changing, and we expect all of the very large, well-financed, and aggressive competitors, each bringing its own new class of products to address this new market. We also expect to see acquisitions, further industry consolidation, and new alliances among companies as they seek to serve the cloud computing market.

In terms of the Company’s cloud automation platform there are many competitors offering Cloud Management platforms including VMWare, HP, Novell, Amazon and Salesforce.com.

There is no single technology capability like the Transformer tool set on the market. The only alternative for a customer to convert from Lotus is to manually transform Lotus applications from Lotus into Java XPages. So competition in this market area is based on ‘brute-force’ development units provided by large SIs or offshore development vendors. Based on this environment, the customer sometimes becomes the only competition.

Growth Strategy

GBS was formed over the past 20 years through a series of mergers & acquisitions transactions, which developed the Company into the leading provider to IBM’s Lotus market. The Company expects to aggressively pursue acquisition opportunities to increase its suite of products, augment its market execution ability through highly educated professional service teams and to leverage its leadership in the IBM Collaboration & Social Software markets. GBS’management team has a track record of quickly integrating acquisitions and using additional products and functionality to drive growth among both new and existing customers. The Company provides a corporate umbrella of substantial industry experience and financial resources that serve as a solid foundation upon which smaller companies can grow. Management’s roll-up strategy of Lotus Notes & Domino application developers has earned the Company substantial incremental market share in Europe and the U.S. and the Company’s management sees significant potential for similar acquisitive growth in Asia and other parts of the Americas.

GBS is focused on continuing to grow its market share organically which will complement and enhance its acquisition strategy. To date, GBS, through its subsidiaries, has focused its marketing efforts to the North American and European market, the most highly penetrated Lotus Notes market. With approximately 3% of the worldwide Lotus Notes users (based on electronic mailboxes), GROUP’s organic growth strategy is to target the growing markets of Asia, where Lotus Notes has a strong market presence or even dominance

Regulatory Overview

None

Item 1A. Risk Factors

You should carefully consider the risks described below together with all of the other information included in this annual report before making an investment decision with regard to our securities.

Risks Related to Our Business

We have a limited operational history.

We have a limited history upon which an evaluation of our prospects and future performance can be made. Our proposed operations are subject to all business risks associated with new enterprises. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business operation in an emerging industry, and the continued development of advertising, promotions, and a corresponding customer base. There is a possibility that we could sustain losses in the future, and there are no assurances that we will ever operate profitably.

Ongoing uncertainty regarding the duration and extent of the recovery from the recent economic downturn and in global economic conditions generally may reduce information technology spending below current expectations and therefore adversely impact our revenues, impede end user adoption of new products and product upgrades and adversely impact our competitive position.

Our business depends on the overall demand for information technology and on the economic health of our current and prospective customers. The purchase of our products is often discretionary and may involve a significant commitment of capital and other resources. Weak economic conditions or significant uncertainty regarding the recovery from the recent economic downturn could adversely impact our business, financial condition and results of operations in a number of ways, including by lengthening sales cycles (for example, ELAs), lowering prices for our products and services, reducing unit sales, decreasing or reversing quarterly growth in our revenues, reducing the rate of adoption of our products by new customers and the willingness of current customers to purchase upgrades to our existing products.

The recent global economic disruption also resulted in general and ongoing tightening in the credit markets, lower levels of liquidity and increases in the rates of default and bankruptcy, while the potential for extreme volatility in credit, equity and fixed income markets continues. As a result, current or potential customers may be unable to fund software purchases, which could cause them to delay, decrease or cancel purchases of our products and services. Even if customers are willing to purchase our products and services, if they do not meet our credit requirements, we may not be able to record accounts receivable or deferred revenue or recognize revenues from these customers until we receive payment, which could adversely affect the amount of revenues we are able to recognize in a particular period.

Our business could be adversely impacted by conditions affecting the information technology market.

The demand for our products and services depends substantially upon the general demand for business-related computer appliances and software, which fluctuates based on numerous factors, including capital spending levels, the spending levels and growth of our current and prospective customers, and general economic conditions. Fluctuations in the demand for our products and services could have a material adverse effect on our business, results of operations and financial condition. Moreover, the purchase of our products is often discretionary and may involve a significant commitment of capital and other resources. Future economic projections for the information technology sector are uncertain as companies continue to reassess their spending for technology projects. If an uncertain environment for information technology spending continues, it could negatively impact our business, results of operations and financial condition.

We face intense competition, which could result in fewer customer orders and reduced revenues and margins.

We sell our products in intensely competitive markets. Some of our competitors and potential competitors have significantly greater financial, technical, sales and marketing and other resources than we do. As the markets for our products and services continue to develop, additional companies, including companies with significant market presence in the computer appliances, software and networking industries, could enter the markets in which we compete and further intensify competition. In addition, we believe price competition could become a more significant competitive factor in the future. As a result, we may not be able to maintain our historic prices and margins, which could adversely affect our business, results of operations and financial condition.

We are highly dependent on the services of Joerg Ott, our President, CEO and Chairman.

Our success depends and will depend on the efforts and abilities of key personnel, such as high qualified software developers, service consultants and management, especially Mr. Joerg Ott, our President, Chief Executive Officer and Chairman. The loss of Mr. Ott would have a material adverse effect on us.

If we lose key personnel or cannot hire enough qualified employees in certain areas of our business, our ability to manage our business could be adversely affected.

Our success depends, in large part, upon the services of a number of key employees in certain areas of our business. Except for certain key employees, we do not have long-term employment agreements with any of our key personnel. Any officer or employee can terminate his or her relationship with us at any time. The effective management of our growth, if any, could depend upon our ability to retain our highly-skilled managerial, technical, sales and services, finance and marketing personnel in certain areas of our business. If any of those employees leave, we will need to attract and retain replacements for them. We also may need to add key personnel in the future, including in certain key areas of our business. The market for these qualified employees is competitive. We could find it difficult to successfully attract, assimilate or retain sufficiently qualified personnel in sufficient numbers. Furthermore, we may hire key personnel in connection with our future acquisitions; however, any of these employees will be able to terminate his or her relationship with us at any time. If we cannot retain and add the necessary staff and resources for these acquired businesses, our ability to develop acquired products, markets and customers could be adversely affected. Also, we may need to hire additional personnel to develop new products, product enhancements and technologies. If we cannot add the necessary staff and resources, our ability to develop future enhancements and features to our existing or future products could be delayed. Any delays could have a material adverse effect on our business, results of operations and financial condition.

We are highly dependent on IBM.

We, through our 50.1% ownership of GROUP Business Software AG, are the world’s largest supplier of applications for IBM’s Lotus Notes and Domino markets. GROUP also markets its Cloud Automation Platform (CAP) and Domino Application Transfer (DAT) software which automatically transforms applications to the Cloud. We expect much of our growth in the near term to come from our CAP and DAT solutions. Should IBM choose not to promote these products, we might not see the growth we are anticipating and our business could be materially adversely affected resulting in the loss of some or all of your investment in our Common Stock.

We may not be able to manage our growth effectively.

We must continually implement and improve our products and/or services, operations, operating procedures and quality controls on a timely basis, as well as expand, train, motivate and manage our work force in order to accommodate anticipated growth and compete effectively in our market segment. Successful implementation of our strategy also requires that we establish and manage a competent, dedicated work force and employ additional key employees in corporate management, product design, client service and sales. We can give no assurance that our personnel, systems, procedures and controls will be adequate to support our existing and future operations. If we fail to implement and improve these operations, there could be a material, adverse effect on our business, operating results and financial condition.

If we do not develop new products and services or enhancements to our existing products and services, our business, results of operations and financial condition could be adversely affected.

The markets for our products and services are characterized by:

•

rapid technological change;

•

evolving industry standards;

•

fluctuations in customer demand;

•

changes in customer requirements; and

•

frequent new product and service introductions and enhancements.

Our future success depends on our ability to continually enhance our current products and services and develop and introduce new products and services that our customers choose to buy. If we are unable to keep pace with technological developments and customer demands by introducing new products and services and enhancements, our business, results of operations and financial condition could be adversely affected. Our future success could be hindered by:

•

delays in our introduction of new products and services;

•

delays in market acceptance of new products and services or new releases of our current products and services; and

•

our, or a competitor’s, announcement of new product or service enhancements or technologies that could replace or shorten the life cycle of our existing product and service offerings.

In order for a number of our products to succeed in the future, we believe the demand for technology will need to shift from the types of products and services we and our competitors have sold in the past to a new generation of products we now offer. We cannot guarantee that we will be able to respond effectively to technological changes or new product announcements by others. If we experience material delays or sales shortfalls with respect to our new products and services or new releases of our current products and services, those delays or shortfalls could have a material adverse effect on our business, results of operations and financial condition.

We may be unable to effectively control our operating expenses, which could negatively impact our profitability.

Although we endeavor to effectively control our operating expenses, these expenses, which are based on estimated revenue levels, are relatively fixed in the short term. We cannot assure you that our operating expenses will be lower than our estimated or actual revenues in any given quarter or that we will not incur unanticipated expenses. If we experience a shortfall in revenue in any given quarter or if we incur material unanticipated expenses, we likely will not be able to further reduce operating expenses quickly in response. Any significant shortfall in revenue or the incurrence of material unanticipated expenses could immediately and adversely affect our results of operations for that quarter. Also, due to the fixed nature of many of our expenses and the challenges for revenue growth in the current environment, our income from operations and cash flows from operating and investing activities could be lower than in recent years.

In addition, to the extent our revenue grows, if at all, we believe that our cost of revenues and certain operating expenses could also increase. We believe that we could incur additional costs as we develop, license or buy new technologies or enhancements to our existing products and services. These added costs and royalties could increase our cost of revenues and operating expenses and lower our gross margins. However, we cannot currently quantify the costs for such transactions that have not yet occurred or of these developing trends in our business. In addition, we may need to use a substantial portion of our cash and investments or issue additional shares of our common stock to fund these additional costs.

Acquisitions present many risks, and we may not realize the financial and strategic goals we anticipate at the time of an acquisition.

Our growth is dependent upon market growth, our ability to enhance existing products and services, and our ability to introduce new products and services on a timely basis. We intend to continue to address the need to develop new products and services and enhance existing products and services through acquisitions of other companies, product lines and/or technologies. However, acquisitions, including those of high-technology companies, are inherently risky. We cannot provide any assurance that any of our previous acquisitions, including our acquisition of the assets of Lotus Holdings and 50.1% GROUP, or future acquisitions will be successful in helping us reach our financial and strategic goals either for that acquisition or for us generally or that the combined company resulting from any acquisition will continue to support the growth achieved by the companies separately.

The risks we may encounter in managing and integrating acquisitions are:

difficulties and delays integrating the operations, technologies, and products of the acquired companies;

undetected errors or unauthorized use of a third-party’s code in products of the acquired companies;

the diversion of management’s attention from normal daily operations of the business;

potential difficulties in completing projects associated with purchased in-process research and development;

entry into markets in which we have no or limited direct prior experience and where competitors have stronger market positions and which are highly competitive;

the potential loss of key employees of the acquired company; and

an uncertain revenue and earnings stream from the acquired company, which could unexpectedly dilute our earnings.

Our failure to manage growth effectively and successfully integrate acquired companies due to these or other factors could have a material adverse effect on our business, results of operations and financial condition.

Attractive acquisition opportunities may not be available to us, which could negatively affect the growth of our business.

Our business strategy includes the selective acquisition of businesses and technologies, such as our acquisition of GROUP in November 2010 and January 2011. We plan to continue to seek opportunities to expand our product portfolio, customer base, technology, and technical talent through acquisitions. However, we may not have the opportunity to make suitable acquisitions on favorable terms in the future, which could negatively impact the growth of our business. We expect that other companies in our industry will compete with us to acquire compatible businesses. This competition could increase prices for businesses and technologies that we would likely pursue, and our competitors may have greater resources than we do to complete these acquisitions.

We could change our licensing programs or subscription renewal programs, which could negatively impact the timing of our recognition of revenue.

We continually re-evaluate our licensing programs and subscription renewal programs, including specific license models, delivery methods, and terms and conditions, to market our current and future products and services. We could implement new licensing programs and subscription renewal programs, including promotional trade-up programs or offering specified enhancements to our current and future product and service lines. Such changes could result in deferring revenue recognition until the specified enhancement is delivered or at the end of the contract term as opposed to upon the initial shipment or licensing of our software product. We could implement different licensing models in certain circumstances, for which we would recognize licensing fees over a longer period, including offering additional products in a software-as-a-service model. Changes to our licensing programs and subscription renewal programs, including the timing of the release of enhancements, upgrades, maintenance releases, the term of the contract, discounts, promotions and other factors, could impact the timing of the recognition of revenue for our products, related enhancements and services and could adversely affect our operating results and financial condition.

As our international sales and operations grow, we could become increasingly subject to additional risks that could harm our business.

We conduct significant sales and customer support, development and engineering operations in countries outside of the United States. Our continued growth and profitability could require us to further expand our international operations. To successfully expand international sales, we must establish additional foreign operations, hire additional personnel and recruit additional international resellers. In addition, there is significant competition for entry into high growth markets, such as China. Our international operations are subject to a variety of risks, which could cause fluctuations in the results of our international operations. These risks include:

•

compliance with foreign regulatory and market requirements;

•

variability of foreign economic, political and labor conditions;

•

changing restrictions imposed by regulatory requirements, tariffs or other trade barriers or by U.S. export laws;

•

longer accounts receivable payment cycles;

•

potentially adverse tax consequences;

•

difficulties in protecting intellectual property;

•

burdens of complying with a wide variety of foreign laws; and

•

as we generate cash flow in non-U.S. jurisdictions, if required, we may experience difficulty transferring such funds to the U.S. in a tax efficient manner.

Our results of operations are also subject to fluctuations in foreign currency exchange rates. In order to minimize the impact on our operating results, we generally initiate our hedging of currency exchange risks one year in advance of anticipated foreign currency expenses for those currencies to which we have the greatest exposure. When the dollar is weak, foreign currency denominated expenses will be higher, and these higher expenses will be partially offset by the gains realized from our hedging contracts. If the dollar is strong, foreign currency denominated expenses will be lower. These lower expenses will in turn be partially offset by the losses incurred from our hedging contracts. There is a risk that there will be fluctuations in foreign currency exchange rates beyond the one year timeframe for which we hedge our risk.

Our success depends, in part, on our ability to anticipate and address these risks. We cannot guarantee that these or other factors will not adversely affect our business or operating results.

Security vulnerabilities in our products could have a material adverse impact on our results of operations.

Maintaining the security of computing devices and networks is a critical issue for us and our customers. We devote significant resources to address security vulnerabilities in our products and services through engineering more secure products and services, enhancing security and reliability features in our products and services, deploying security updates to address security vulnerabilities and seeking to respond to known security incidents in sufficient time to minimize any potential adverse impact. The cost of these measures could reduce our operating margins. Despite these efforts, actual or perceived security vulnerabilities in our products and systems may lead to claims against us and harm our reputation, and could lead some customers to seek to return products, to stop using certain products or services, to reduce or delay future purchases of our products or services, or to use competing products or services. Customers may also increase their expenditures on protecting their existing computer systems from attack, which could delay adoption of new technologies. Further, if our customers suffer any losses or are otherwise harmed in connection with a security incident related to our products or services, we could be subject to liability claims from our customers. Any of these actions by customers could adversely impact our results of operations.

Our products, including products obtained through acquisitions, could infringe third-party intellectual property rights, which could result in material litigation costs.

We are increasingly subject to infringement claims and may in the future be subject to claims alleging the unauthorized use of a third-party’s code in our products. This may occur for a variety of reasons, including the expansion of our product lines through product development and acquisitions; an increase in patent infringement litigation commenced by non-practicing entities; the increase in the number of competitors in our industry segments and the resulting increase in the number of related products and the overlap in the functionality of those products; and the unauthorized use of a third-party’s code in our product development process. Companies and inventors are more frequently seeking to patent software despite recent developments in the law that may discourage or invalidate such patents. As a result, we could receive more patent infringement claims. Responding to any infringement claim, regardless of its validity, could result in costly litigation costs, monetary damages or injunctive relief or require us to obtain a license to intellectual property rights of those third parties. Licenses may not be available on reasonable terms, on terms compatible with the protection of our proprietary rights, or at all. In addition, attention to these claims could divert our management’s time and attention from developing our business. If a successful claim is made against us and we fail to develop or license a substitute technology or negotiate a suitable settlement arrangement, our business, results of operations, financial condition and cash flows could be materially and adversely affected. In particular, a material adverse impact on our financial statements could occur in the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable.

Security and reliability is the number one concern of Cloud Computer users.

Lack of control augments consumers’ perception of Cloud Computing security and reliability, including connectivity outages which could cause large lack of productivity and financial losses. Although security risks may be minimized by having cloud computing in a smaller cloud, having a smaller cloud or clouds would likely negate to many extents the cost and scalability effects of cloud computing. Cloud Computing flaws, whether actual or perceived, could hinder our ability grow our Company’s business.

Risks related to the disclosure of confidential information of core technology.

The independently developed technologies by us, contracts with partners and agreements with cooperated system integrators are all confidential information. We have established strict access limitation level for the personnel in the Company to review and use such information by signing Non-disclosure Agreements with relevant people. The usage and disclosure of such information have been managed stringently by the Company. We also sign a long-term engagement contract with the core technical people who may hold major technologies of the Company. Despite the foregoing measurements adopted by the Company, we cannot assure the confidential information will not be disclosed definitely.

Systems failures could harm our business.

Temporary or permanent outages of our computers or software equipment could have an adverse effect on our business. Although we have not experienced any catastrophic outages to date, we currently do not have fully redundant systems for our web sites and other services at an alternate site. Therefore, our systems are vulnerable to damage from break-ins, unauthorized access, vandalism, fire, earthquakes, power loss, telecommunications failures and similar events. Although we maintain insurance against fires, earthquakes and general business interruptions, the amount of coverage we have might be insufficient.

Experienced computer programmers seeking to intrude or cause harm, or hackers, may attempt to penetrate our network security from time to time.

Although we have not experienced any catastrophic security breaches to date, if a hacker were to penetrate our network security, they could misappropriate proprietary information, cause interruptions in our services, dilute the value of our offerings to customers and damage customer relationships. We might be required to expend significant capital and resources to protect against, or to alleviate, problems caused by hackers. We also may not have a timely remedy against a hacker who is able to penetrate our network security. In addition to purposeful security breaches, the inadvertent transmission of computer viruses could expose us to system damage, operational disruption, loss of data, litigation and other risks of loss or harm.

We depend on continued performance of and improvements to our computer network.

Any failure of our computer systems that causes interruption of our services could result in a loss of business. If sustained or repeated, these performance issues could reduce the attractiveness of our services to consumers and our subscription products and services. Increases in the volume of our web site traffic could also strain the capacity of our existing computer systems, which could lead to slower response times or system failures. We may not be able to project accurately the rate, timing or cost of any increases in our business, or to expand and upgrade our systems and infrastructure to accommodate any increases in a timely manner.

Internet commerce security threats could pose a risk to our online sales and overall financial performance.

A significant barrier to online commerce is the secure transmission of confidential information over public networks. We rely on encryption and authentication technology to provide the security and authentication necessary to effect secure transmission of confidential information. There can be no assurance that advances in computer capabilities; new discoveries in the field of cryptography or other developments will not result in a compromise or breach of the algorithms used by us and our partners to protect consumer’s transaction data. If any such compromise of security were to occur, it could have a materially adverse effect on our business, prospects, financial condition and results of operations. A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations. We may be required to expend significant capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches. Concerns over the security of transactions conducted on the Internet and the privacy of users may also hinder the growth of online services generally, especially as a means of conducting commercial transactions. To the extent that our activities, our partners or third-party contractors involve the storage and transmission of proprietary information, such as credit card numbers, security breaches could damage our reputation and expose us to a risk of loss or litigation and possible liability. There can be no assurance that our security measures will not prevent security breaches or that failure to prevent such security breaches will not have a materially adverse effect on our business, prospects, financial condition and results of operations.

Risk of Capacity Constraints; Reliance on Internally Developed Systems; System Development Risks.

A key element of our strategy is to generate a high volume of traffic on, and use of, our services across our network infrastructure and systems. Accordingly, the satisfactory performance, reliability and availability of our software systems, transaction-processing systems and network infrastructure are critical to our reputation and our ability to attract and retain customers, as well as maintain adequate customer service levels. Our revenues depend on the number of visitors who sign up for our services. Any systems interruptions that result in the unavailability of our software systems or network infrastructure would reduce the volume of sign ups and the attractiveness of our service offerings. We may experience periodic systems interruptions from time to time. Any substantial increase in the volume of traffic on our software systems or network infrastructure will require us to expand and upgrade further our technology, transaction-processing systems and network infrastructure. There can be no assurance that we will be able to accurately project the rate or timing of increases, if any, in the use of our Web site or timely expand and upgrade our systems and infrastructure to accommodate such increases. We will use a combination of industry supplied software and internally developed software and systems for our search engine, distribution network, and substantially all aspects of transaction processing, including order management, cash and credit card processing, and accounting and financial systems. Any substantial disruptions or delays in any of our systems would have a materially adverse effect on our business, prospects, financial condition and results of operations.

Storage of personal information about our customers could pose a security threat.

Our policy is not to willfully disclose any individually identifiable information about any user to a third party without the user’s consent. This policy is accessible to users of our services when they initially register. Despite this policy, however, if third persons were able to penetrate our network security or otherwise misappropriate our users’ personal information or credit card information, we could be subject to liability. These could include claims for unauthorized purchases with credit card information, impersonation or other similar fraud claims. They could also include claims for other misuses of personal information, such as for unauthorized marketing purposes. These claims could result in litigation. In addition, the Federal Trade Commission and other states have been investigating certain Internet companies regarding their use of personal information. We could incur additional expenses if new regulations regarding the use of personal information are introduced or if they chose to investigate our privacy practices.

We have agreed to indemnify our officers and directors against lawsuits to the fullest extent of the law.

We are a Nevada corporation. Nevada law permits the indemnification of officers and directors against expenses incurred in successfully defending against a claim. A summary of Nevada law with respect to indemnification is summarized below.

We currently do not maintain any insurance coverage. In the event that we are found liable for damage or other losses, we would incur substantial and protracted losses in paying any such claims or judgments. We have not maintained liability insurance in the past, but intend to acquire such coverage immediately upon resources becoming available. There is no guarantee that we can secure such coverage or that any insurance coverage would protect us from any damages or loss claims filed against it.

We may engage in transactions that present conflicts of interest.

Our officers and members of our Board of Directors may enter into agreements with the Company from time to time which may not be equivalent to similar transactions entered into with an independent third party. A conflict of interest arises whenever a person has an interest on both sides of a transaction. While we believe that it will take prudent steps to ensure that all transactions between the Company and any officer or director is fair, reasonable, and no more than the amount it would otherwise pay to a third party in an “arms-length” transaction, there can be no assurance that any transaction will meet these requirements in every instance.

Risks Related to our Common Stock

The application of the “penny stock” rules could adversely affect the market price of our common stock and increase your transaction costs to sell those shares.

The Securities and Exchange Commission adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. If the trading price of our common stock falls below $5.00 per share, the open-market trading of our common stock is subject to the penny stock rules, which imposes additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

The price of our shares of common stock in the future may be volatile.

The market price of our common stock could be volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including: technological innovations or new products and services by us or our competitors; additions or departures of key personnel; sales of our common stock; our ability to integrate operations, technology, products and services; our ability to execute our business plan; operating results below expectations; loss of any strategic relationships; industry developments; economic and other external factors; and period-to-period fluctuations in our financial results. Because we have a very limited operating history with no revenues to date, you may consider any one of these factors to be material. Our stock price may fluctuate widely as a result of any of the above. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

Stockholders should have no expectation of any dividends.

The holders of our common stock are entitled to receive dividends when, as and if declared by the Board of Directors out of funds legally available therefore. To date, we have not declared or paid any cash dividends. The board of directors does not intend to declare any dividends in the foreseeable future, but instead intends to retain all earnings, if any, for use in our business operations.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

We are subject to reporting obligations under the U.S. securities laws. The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company’s internal controls over financial reporting in its Annual Report, which contains management’s assessment of the effectiveness of our internal controls over financial reporting. Our management may conclude that our internal controls over our financial reporting are not effective. Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future. Effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our stock. Furthermore, we anticipate that we will incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.

Item 1B. Unresolved Staff Comments

Not applicable

Item 2. Properties

The Company’s principal executive offices are located at 585 Molly Lane, Woodstock, GA 30189. This space is provided to us free of charge from an employee of GROUP.

In August 2011, the Company intends to relocate its executive offices to a 10,000 square foot space located at 585 Molly Lane, Woodstock, Georgia 30189 pursuant to a lease agreement, dated June 16, 2011, between GROUP and Thomas Hall Fowler/Fowler Corporate Partners, a non-affiliate of the Company. The term of the lease is from August 1, 2011 to January 31, 2015. The rent from August 1, 2011 to August 31, 2011 is $8,333.33. From September 1, 2011 to December 31, 2011, the monthly rent is $4,166.67. From January 1, 2012 to July 21, 2012, the monthly rent is $8,333.33. From August 1, 2012 to July 31, 2013, the monthly rent is $8,750. From August 1, 2013 to January 31, 2015, the monthly rent is $9,166.67.

GROUP’s principal executive office in Germany is located in an approximately 5,828 square foot office located at Hospitalstrasse 6, 99817 Eisenach, Germany. GROUP’s lease agreement for this office is from July 1, 2006 to June 30, 2013 for an annual rent of $46,589 and which can be renewed by GROUP.

Item 3. Legal Proceedings

As of March 31, 2011, we know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

We were incorporated in Nevada on March 20, 2007 as SWAV Enterprises Ltd. (“SWAV”). SWAV was an importer and wholesaler of Chinese manufactured goods.

The following table sets forth, for the periods indicated, the reported high and low closing bid quotations for our Common Stock as reported on the OTCBB. The bid prices reflect inter-dealer quotations, do not include retail markups, markdowns or commissions and do not necessarily reflect actual transactions.

Fiscal Quarter	High		Low
2009
January 2nd through March 31st	$	0.05	$	0.03
April 1st through June 30th	$	--	$	--
July 1st through September 30th	$	--	$	--
October 1st through December 31st	$	--	$	--

2010
January 4th through March 31st	$	0.01	$	0.01
April 1st through June 30th	$	0.075	$	0.01
July 1st through September 30th	$	0.10	$	0.075
October 1st through December 31st	$	1.70	$	0.075

2011
January 3rd through March 31st	$	4.95	$	1.35

Description of Common Stock

We are authorized to issue 75,000,000 shares of $0.001 par value common stock of which 22,544,000 shares were issued and outstanding as of March 31, 2011. Holders of common stock are entitled to one vote per share on each matter submitted to a vote at any meeting of stockholders. Shares of common stock do not carry cumulative voting rights and, therefore, holders of a majority of the outstanding shares of common stock will be able to elect the entire board of directors, and, if they do so, minority stockholders would not be able to elect any members to the board of directors. Our board of directors has authority, without action by the stockholders, to issue all or any portion of the authorized but unissued shares of common stock, which would reduce the percentage ownership of the stockholders and which may dilute the book value of the common stock.

Stockholders have no pre-emptive rights to acquire additional shares of common stock. The common stock is not subject to redemption and carries no subscription or conversion rights. In the event of liquidation, the shares of common stock are entitled to share equally in corporate assets after satisfaction of all liabilities. The shares of common stock, when issued, will be fully paid and non-assessable.

Holders of common stock are entitled to receive dividends as the board of directors may from time to time declare out of funds legally available for the payment of dividends. We have not paid dividends on common stock and do not anticipate that it will pay dividends in the foreseeable future.

All shares of the Common Stock now outstanding are duly authorized, fully paid and non-assessable. The shares of Common Stock issuable upon exercise of the warrants are duly authorized and upon payment of the exercise price will be fully paid and non-assessable.

Preferred Stock

The Company is currently authorized to issue up to 25,000,000 “blank check” preferred stock with all designations, rights and privileges as the Company’s Board of Directors may decide, from time to time, without stockholder approval. As of March 31, 2011, there are no shares of Preferred Stock designated or issued.

Transfer Agent

Our transfer agent is Action Stock Transfer, 7069 South Highland Drive, Salt Lake City, UT 84121; Phone: 801-274-1088; Fax: 801-274-1099.

Holders

As of March 31, 2011, we had 72 record holders of our common stock (not including beneficial owners who hold shares at broker/dealers in “street name”).

Dividend Policy

While there are no restrictions that limit our ability to pay dividends, we have not paid, and do not currently intend to pay cash dividends on our Common Stock in the foreseeable future. Our policy is to retain all earnings, if any, to provide funds for operation and expansion of our business. The declaration of dividends, if any, will be subject to the discretion of our Board of Directors, which may consider such factors as our results of operations, financial condition, capital needs and acquisition strategy, among others.

Securities Authorized for Issuance under Equity Compensation Plans

At March 31, 2011, the Company did not have an Equity Compensation Plan.

Issuer Purchases of Equity Securities

None

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this annual report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the “Risk Factors”, “Cautionary Notice Regarding Forward-Looking Statements” and “Description of Business” sections and elsewhere in this annual report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” “predict,” and similar expressions to identify forward-looking statements. Although we believe the expectations expressed in these forward-looking statements are based on reasonable assumptions within the bound of our knowledge of our business, our actual results could differ materially from those discussed in these statements. Factors that could contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this annual report. We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available or other events occur in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this annual report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations, and prospects.

OVERVIEW

GBS Enterprises Incorporated, a Nevada corporation (the “Company,” “GBSX,” “we,” “us,” “our” or similar expressions), conducts its primary business through its 50.1% owned subsidiary, GROUP Business Software AG (“GROUP”), a German-based public-company whose stock trades on the Frankfurt Exchange under the stock symbol INW. GROUP’s core business is focused on serving IBM’s Lotus Notes and Domino market where it has become IBM’s largest provider of software and services business solutions worldwide. 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 IBM Lotus Notes/Domino Application and Transformation technology, and related Cloud Computing technology. Headquartered in Eisenach, Germany the Company has offices throughout Europe and North America.

General Corporate History

We were incorporated in Nevada on March 20, 2007 as SWAV Enterprises Ltd. (“SWAV”). SWAV was an importer and wholesaler of Chinese manufactured goods.

Simultaneously with SWAV’s acquisition of Lotus, the SWAV stockholders sold an aggregate of 11,984,770 shares of SWAV common stock for an aggregate purchase price of $370,000.

On September 6, 2010, SWAV’s name was changed to GBS Enterprises Incorporated. On October 14, 2010, the Company’s trading symbol on the OTC Bulletin Board was changed from SWAV to GBSX.

Effective December 30, 2010, the Company acquired approximately 28.2% of the issued and outstanding shares of common stock of GROUP, pursuant to Share Purchase Agreements between the Company and several of GROUP’s stockholders, including Mr. Joerg Ott (also the Company’s Chairman and Chief Executive Officer). Pursuant to the Share Purchase Agreements, the Company acquired an aggregate of 7,115,500 shares of common stock of GROUP in consideration for an aggregate of 3,043,985 shares of the Company’s common stock.

On January 6, 2011, the Company acquired an additional aggregate of 5,525,735 shares of common stock of GROUP in exchange for 2,361426 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.

Subsequent Event:

Products and Services

Messaging and Business Applications Software & Solutions

Consulting Services

As a Premier IBM Business Partner - GBS is one of the few partners that can sell and support licenses for all five IBM software brands: Lotus, WebSphere, Rational, Tivoli, and DB2.

Cloud Computing

GROUP Live - Cloud Automation Platform / Cloud Platform-as-a-Service (PaaS) software and services. And

Transformer - Lotus Notes modernization/migration services and technology accelerators

GBS Cloud Computing activities are focused on cloud automation solutions and therefore the Company has made key acquisitions and R&D investments to create an award winning Cloud Platform-as-a-Service offering. Under the GROUP Live banner, the GBS PaaS offering has been sold to a variety of enterprise customers, which use the PaaS software to host internal corporate clouds (Private cloud) and applications as-a-service to their various internal user groups. GROUP Live has also be sold and implemented by a number of Independent Software Vendors (ISVs), which are leveraging the platform to deliver their own Software-as-a-Service (SaaS) applications to their respective customer bases.

GBS Lotus Application Modernization and Migration

GBS Lotus Application Modernization and Migration activities are focused on the IBM Lotus / Domino applications market and the offering spans from expert services and accelerator technologies to modernize, web enable and migrate Lotus applications; and thus ultimately take the Lotus applications from legacy to the future. The foundation of the Transformer Suite Software offering is GBS’s significant R&D investment in a set of methodologies and key technology accelerators to automate the conversion of traditional Notes based client-server applications, into the IBM XPages framework which enables Domino applications to be run and accessed via the Lotus client, a web browser or on a mobile device. The patent-pending software that underpins Transformer was developed by GBS with the assistance and guidance from IBM Corporation’s Software Group to ensure alignment with future releases of the IBM Lotus / Domino and XPages technology.

IBM has deemed the Transformer technology a “game changer,” and will be employing it to modernize their clients’ applications.

Competition

The competitive landscape in the enterprise data center market is intense and changing, and we expect there will be a new class of very large, well-financed, and aggressive competitors, each bringing its own new class of products to address this new market. We also expect to see acquisitions, further industry consolidation, and new alliances among companies as they seek to serve the enterprise data center market.

The Company is focused on developing a portfolio of Cloud Computing software technologies and Application Services to address the needs of ISV’s, Data Center providers, as well as commercial and government organizations. GBSX is pursuing an aggressive growth strategy based upon highly targeted mergers and acquisitions so as to build its portfolio of technologies, applications, and services.

Results of Operations

Fiscal Year Ended March 31, 2011 Compared to Fiscal Year Ended March 31, 2010

Assets

Total Assets increased from $73,641,857 at March 31, 2010 to $76,865,929 at March 31, 2011. Total Assets consists of Total Current Assets and Total Non-Current Assets.

At March 31, 2011, our Total Current Assets were $17,875,353, compared to $18,949,425 at March 31, 2010. Our cash and cash equivalents increased from $1,744,965 at March 31, 2010 to $8,530,864 at March 31, 2011. The increase was primarily due to the Company’s private placement offering consummated in March 2011. On March 11, 2011 and March 29, 2011, the Company consummated a private placement offering of an aggregate of 6,044,000 Units at a purchase price of $1.25 per Unit, for gross proceeds of $7,555,000. Accounts Receivable increased from $2,821,958 at March 31, 2010 to $5,698,321 at March 31, 2011. This increase was primarily due to the fact of that two more business units are included in the basis of consolidation. Inventories decreased from $114,172 at March 31, 2010 to $0 at March 31, 2011. Deferred Tax Assets decreased from $12,284 at March 31, 2010 to $0 at March 31, 2011. Prepaid Expenses decreased from $1,550,634 at March 31, 2010 to $1,423,281 at March 31, 2011 and consisted of a down payment toward a share of sales in a basic technology of $1,201,779. The decrease from 2010 to 2011 was primarily due to the expenditure of material. Other receivables consisted of a receivable for anticipated compensation for damage, security deposits, tax refund claims and increased from $332,812 at March 31, 2010 to $2,222,887 at March 31, 2011. The increase was primarily due to the compensation for damages of $1,901,522. Assets Held for Sale consist of the outgoing assets associated with the sale of the two subsidiaries, Gedys IntraWare GmbH and GROUP Business Software Holding OY, and decreased from $12,372,600 at March 31, 2010 to $0 at March 31, 2011. The decrease from 2010 to 2011 was due to the sale of the two companies on February 28, 2010.

At March 31, 2011, our Total Non-Current Assets were $58,990,576, compared to $54,692,432 at March 31, 2010. Our Financial Assets increased from $99,273 at March 31, 2010 to $837,481 at March 31, 2011 and consists of the value of the 50% interest in an associated company and the amount still outstanding from the purchaser of GEDYS IntraWare GmbH due for monthly repayments. The increase from 2010 to 2011 was primarily due to the recording of an obligation of $984,239 from the purchaser of GEDYS IntraWare GmbH. Our Deferred Tax Assets decreased $4,968,740 at March 31, 2010 to $1,136,135 at March 31, 2011 and consisted of Deferred Tax Assets derived from Financial Assets and Losses carried forward. The decrease from 2010 to 2011 was primarily due to losing the benefit of a tax carry forward because of change in ownership in GROUP Business Software AG. Goodwill increased from $35,767,273 at March 31, 2010 to $39,688,966 at March 31, 2011 and consisted of the Goodwill associated with eleven Business Units. The increase from 2010 to 2011 was primarily due to the purchase of Permessa Corp. on September 22, 2010 with Goodwill of $2,387,444. Software increased from $13,028,818 at March 31, 2010 to $16,514,894 at March 31, 2011 and consist capitalized development cost, product rights and licenses. The increase from 2010 to 2011 was primarily due to the purchase of assets of two Business Units. Other Assets increased from $175,900 at March 31, 2010 to $223,630 at March 31, 2011 and consisted of the reinsurance relating to pension obligations. The increase from 2010 to 2011 was primarily due to rising mortality estimates, based on actuarial assumptions.

Liabilities

Total Liabilities increased from $23,815,824 at March 31, 2010 to $24,285,794 at March 31, 2011. Total Liabilities consists of Total Current Liabilities and Total Non-Current Liabilities.

At March 31, 2011, our Total Current Liabilities were $16,345,732, compared to $13,531,969 at March 31, 2010. Notes Payable increased from $0 at March 31, 2010 to $1,440,295 at March 31, 2011 and consisted of the external capital components of a convertible bond issue. The increase was based on the reclassification from non-current to current because the term of the convertible bonds ends on December 31, 2011. Liabilities to Bank decreased from $83,793 at March 31, 2010 to $50,073 at March 31, 2011 and consisted of a line of credit. The decrease from 2010 to 2011 was primarily due to a reduction from the bank liabilities. Accounts Payable and Accrued Liabilities increased from $3,532,004 at March 31, 2010 to $4,996,748 at March 31, 2011 and consists of Trade payables, Tax accruals and other accruals. The increase from 2010 to 2011 was primarily due to the fact that two more business units are included in the corporate consolidation. Other Liabilities increased from $1,982,916 at March 31, 2010 to $2,820,002 at March 31, 2011 and consists of the liabilities from the Purchase of assets, Tax liabilities, Loans and others. The increase from 2010 to 2011 was primarily due to the Purchase of Assets from Lotus 911, Fastworks, Permessa and Salesplace. Deferred Income increased from $5,919,527 at March 31, 2010 to $6,208,458 at March 31, 2011 and consists mainly of maintenance income collected in advance for the period after the end of the fiscal year. The increase from 2010 to 2011 was primarily due to the fact of two more business units are included in the corporate consolidation. Liabilities Held for Sale decreased from $2,013,729 at March 31, 2010 to $0 at March 31, 2011 and consists of the outgoing assets associated with the sale of the two subsidiaries Gedys IntraWare GmbH and GROUP Business Software Holding OY. The decrease from 2010 to 2011 was primarily due to sale of the two companies on February 28, 2010. Due to related parties increased from $0 in 2010 to $830,156 in 2011 as explained in detail in Note 27 to the Consolidated Financial Statements.

At March 31, 2011, our Total Non-Current Liabilities were $7,940,062, compared to $10,283,855 at March 31, 2010. Notes Payable decreased from $1,549,490 at March 31, 2010 to $0 at March 31, 2011. The decrease from 2010 to 2011 was primarily due to the reclassification to current liabilities. Liabilities to Banks decreased from $3,231,405 at March 31, 2010 to $780,277 at March 31, 2011 and consisted a long-term liabilities vis-à-vis Baden-Württembergische Bank. The decrease from 2010 to 2011 was primarily due to a positive cash-flow based on the sales of the two subsidiaries Gedys IntraWare GmbH and GROUP Business Software Holding OY. Deferred Tax Liabilities decreased from $926,357 at March 31, 2010 to $878,450 at March 31, 2011 and consists of the Deferred Tax Liabilities from of capitalization of software expenses and Allocation of Assets from a purchase price allocation. The decrease from 2010 to 2011 was primarily due to depreciation of Assets. Retirement Benefit Obligation increased from $150,276 at March 31, 2010 to $153,962 at March 31, 2011, and consisted of retirement benefit obligations. Other Liabilities increased from $4,426,326 at March 31, 2010 to $6,127,373 at March 31, 2011 and consisted of liabilities relating to the purchase of business assets. This increase from 2010 to 2011 was primarily due to the purchase of assets from Lotus 911, Fastworks, Permessa and Salesplace.

Revenues

For the fiscal year ended March 31, 2011, our Net Sales decreased to $27,707,226 from $31,584,732 for the fiscal year ended March 31, 2010. The Company generates nets sales by Licenses, Maintenance, Services, Third-Party Products and Others. The resulting effect on the product sales has been overcompensated through additional revenues. Our Product revenue increased from $12,479,629 to $12,848,954. The decrease of Service revenue from $19,105,103 to $14,848,272 is mainly the result of the disposal of GROUP Business Software Holding Oy and its subsidiary Gedys IntraWare GmbH. The sale was completed on March 1, 2010.

Cost of Goods Sold

For the fiscal year ended March 31, 2011, our Cost of Goods Sold increased to $14,082,494 from $11,323,991 for the fiscal year ended March 31, 2010. Cost of Goods Sold consists of Cost for Services, Cost for Third-Party Products and Cost for Software Licenses. The increase from 2010 to 2011 was on the one hand due to raising the Cost for Software Licenses based on a higher sales volume. Thereof the COGS for Products increased from $5,361,372 to $7,016,189. On the other hand the Cost of Goods Sold for Services is higher in 2011 compared to 2010 and increased from $5,962,619 to $7,066,305 because of the increase in salaries and related expenses to fulfill our business objectives in GROUP Live, our cloud application platform, and our Transformer portfolio. As of March 31, 2011, there were 158 people employed by the Company (2010: 190). Approximately 33% (2010: 29%) were employed in programming activities due to the extensive Lotus software development and licensing business transacted by GBS AG.

The cost of goods sold is, in total, approximately USD $2,759,000 higher than the previous year without the financial impact of the Gedys subsidiary for 10 months due to its disposal on March 1, 2010. If we eliminate the Gedys cost of goods sold as reflected in the table below, the difference in our cost of goods sold between 2009 and 2010 reflects an increase in the amount of USD $4,926,000. The reason for this increase was the increase relating to 3rd party Lotus Notes sales volume and the corresponding increase in COGS of USD 3,704,000, as well as the additional COGS relating to the Group Live business in an amount of USD $967,000.

Operating Expenses

For the fiscal year ended March 31, 2011, our Operating Expenses decreased to $15,918,290 from $19,032,719 for the fiscal year ended March 31, 2010. Operating Expenses consist of Selling Expenses, Administrative Expenses and General Expenses. For the fiscal year ended March 31, 2011, our Selling Expenses decreased to $10,610,545 from $13,847,697 for the fiscal year ended March 31, 2010. Selling Expenses consist of costs for the Sales, Marketing and Service units. The decrease of $3,2 million in Selling Expenses and $0.6 million in Administrative Expenses was due primarily to the disposal of GROUP Business Software Holding Oy and its subsidiary Gedys IntraWare GmbH on March 1, 2010. For the fiscal year ended March 31, 2011, our Administrative Expenses decreased to $3,853,532 from $4,481,893 for the fiscal year ended March 31, 2010. Administrative Expenses consist of costs for the management and administration units. The reason for the decrease from 2010 to 2011 was primarily due to the reduction of consultancy, investor relation and travel expenses. For the fiscal year ended March 31, 2011, our General Expenses increased to $1,454,213 from $703,129 for the fiscal year ended March 31, 2010. General Expenses were approximately $0.8 million higher than the previous year's amount. These expenses include the legal, accounting and consulting costs relating to the merger and consolidation of two publicly-traded companies (the Company and GROUP).

Liquidity & Capital Resources

At March 31, 2011, we had $8,530,864 in cash and cash equivalents, compared to $1,774,965 at March 31, 2010.. On March 11, 2011 and March 29, 2011, the Company consummated a private placement offering of an aggregate of 6,044,000 Units at a purchase price of $1.25 per Unit, for gross proceeds of $7,555,000. Each Unit was comprised of one share of Common Stock and one three-year Warrant to purchase one share of Common Stock at an exercise price of $1.50 per share. The Warrants are only exercisable by the payment of cash. Pursuant to the terms of the Warrants, the holders of the Warrants are required to exercise their Warrants in the event our Common Stock trades at an average of at least $3.00 per share for a period of not less than 20 consecutive trading days. Also, throughout the three year exercise period of the Warrants, the Company has the right to redeem the Warrants for $0.05 per share. The Company has agreed to register the 6,044,000 shares of Common Stock issuable upon the exercise of the Warrants under the Securities Act of 1933, as amended, on a Registration Statement on Form S-1. This prospectus is a part of such S-1 Registration Statement. As of March 31, 2011, none of the Warrants have been exercised or redeemed. Upon the full exercise of the Warrants, the Company would receive gross proceeds of $9,066,000.

We intend to use the net proceeds of the private placement offering of Units to increase our marketing, advertising and Cloud and Transformer service development teams, acquisitions and for general corporate working purposes.

Management believes that the Company’s cash at March 31, 2011 will be sufficient to meet the Company’s working capital requirements for the next 12 month period. 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.

Cash Flows

	Fiscal Year Ended
	March 31,
	2011			2010
Cash provided by operating activities	$	2,638,109		$	4,330,788
Net cash provided by (used in) Investing Activities	$	(3,193,099	)	$	(6,553,395	)
Net cash provided by (used in) Financing Activities	$	7,484,947		$	137,908
Effect of exchange rate changes on cash	$	(144,058	)	$	77,097
Net increase (decrease) in cash and cash equivalents during the period	$	6,785,899		$	(2,007,602	)
Cash and cash equivalents, beginning of period	$	1,744,965		$	3,752,567

Cash and cash equivalents, end of period	$	8,530,864		$	1,744,965

Cash provided by operating activities was approximately $2.64 million, which is about $1.69 million below the previous year's amount of $4.33 million. This change is primarily due to the investments made by the Company in developing the GROUP Live business segment, amounting to $3.2 million in 2011 (2010: $0.9 million). The cash used in investing activities in 2010 was approximately $6.55 million, compared to cash used in investing activities in 2011 of about $3.2 million. In addition, the Company received cash proceeds (net of expenses) of $6.7 from a private placement, as explained above, which accounts for most of the increase in Net cash provided by Financing Activities in 2011 compared to 2010 .

The Company had no significant planned commitments for capital expenditures and does not anticipate using either internal or external sources of funds for capital expenditure programs. As a software and services firm, the Company is not capital intensive and historically has had minimal or no planned capital expenditures. Therefore, the present or expected future impact on the Company’s liquidity for capital expenditure purposes is minimal and not material.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical Accounting Policies and 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 areas where critical estimates were made that have significant importance to the financial statements are as follow:

(a)

Allowance for doubtful accounts. The company provides for potential bad debts on an account by account basis. Bad debts have not been significant and our allowance has been accurate. Non trade receivables are also scrutinized and allowed for based on expected recovery. One significant item ($1,902,000) which was previously written off was re-evaluated and reinstated during fiscal 2011. The amount was subsequently paid.

(b)

Allocation of the price paid when acquiring subsidiaries. When the Company acquires subsidiary companies an allocation of the purchase is required. The allocation is based on management’s analysis of the value of the net assets, and is based on estimated future cash flows that each component will produce. Such components might include software, customer lists and other intangible assets that are not readily determinable. The allocation will have significant impact on the future earnings of the Company as certain assets, customer lists for example, must be amortized and charged to operations over time, while other assets, notably goodwill, does not.

(c)

Impairment testing on intangibles and goodwill. As noted in more detail below, these areas involve numerous estimates as to expected cash flows, expected rates of return and other factors that are difficult to determine and are often out of the Company’s direct control. Accordingly, the Company adopts a conservative approach and has experienced better than projected results for the most part.

(d)

Valuation of deferred tax credits. The Company provides an allowance for tax recoveries arising from the application of losses carried forward. An allowance is provided where management has determined that it is less than likely that the loss will be applied and income taxes recovered.

Comprehensive Income (Loss)

The Company adopted FASB Codification topic (“ASC”) 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 (“ASC”) 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. Accordingly, although the diluted weighted average number of common stock outstanding is disclosed on the statements of operation, the calculated net loss per share is the same for bother basic and diluted as both are based on the basic weighted average of common stock outstanding. There were no adjustments required to net income for the period presented in the computation of diluted earnings per share.

Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable, financial assets, notes payable, liabilities to banks, accounts payable and accrued liabilities and other liabilities. As of the financial statement date, the Company does not hold any derivate financial instruments. Financial assets and liabilities are measured upon first recognition and reviewed at the financial statement date. Changes in fair value are recognized through profit and loss. 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.

Currency Risk

We use the US dollar as our reporting currency. The functional currencies of our significant foreign subsidiaries are the local currency, which includes the Euro and the British pound. Accordingly, some assets and liabilities are incurred in those currency and we are subject to foreign currency risks.

Fair Value Measurements

The Company follows FASB Codification topic (“ASC”) 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 (“ASC”) 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.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

Inventories

Pursuant to ASC 330 (Inventories), inventories held for sale are recognized under inventories. Inventories were measured at the lower of cost or market. Cost is determined on a first-in-first out basis, without any overhead component.

Intangible Assets

Intangible assets predominately comprise goodwill, acquired software and capitalized software development services. Intangible assets acquired in exchange for payment are reflected as acquisition costs. If the development costs can be capitalized per ASC 985-20-25, these are reflected as ascribable personnel and overhead costs.

Company created software can be intended for sale to third parties or used by the Company itself. If the conditions for capitalization are not met, the expenses are recorded with their effect on profit in the year in which they were incurred.

GROUP amortizes intangible assets with a limited useful life to the estimated residual book value in accordance with ASC regulations. In addition, in special circumstances according to ASC 350-30, a recoverability test is performed and, if applicable, unscheduled amortization is considered.

The useful life of acquired software is between three and five years and three years for Company-designed software.

Intangible assets obtained as part of an acquisition which do not meet the criteria for a separate entry are identified as goodwill and are reviewed once a year as to their recoverability in the form of an impairment test. If they are no longer recoverable, an unscheduled amortization expense entry is performed.

In addition, an impairment test, whereby the appraised fair value of the invested capital of the reporting segment, (as described in Note 14,) is compared with the carrying (book) value of its invested capital amount, including goodwill.

If the appraised value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to be impaired. If the carrying amount of the reporting unit exceeds the appraised fair value, an impairment test based on use value is necessary in order to measure the amount of impairment loss, if any.

Use value is generally used in order to determine the recoverability of goodwill and intangible assets with an indefinite useful life. The current plan prepared by the management serves as the basis for this policy. The planning assumptions are each adjusted for the current state of knowledge. Reasonable assumptions regarding macroeconomic trends and historical developments are taken into account in making these adjustments. Future estimated cash flows are essentially determined based on the expected growth rates of the markets in question.

Property, Plant and Equipment

Property, plant and equipment are valued at acquisition or manufacturing costs, reduced by scheduled and, if necessary, unscheduled depreciation. Fixed assets are depreciated on a straight-line basis, prorated over their expected useful life. Scheduled depreciation is mainly based on useful lives of 3 to 10 years.

If fixed assets are sold, retired or scrapped, the profit or loss arising from the difference between the net sales proceeds and the residual book value are included under other operating earnings and expenses.

Impairment or Disposal of Long-Lived Assets

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

License Revenues

Our license revenues consist of revenues earned from the licensing of our software products. These products are generally licensed on a perpetual basis. Pricing models have generally been based either upon the physical infrastructure, such as the number of physical desktop computers or servers, on which our software runs or on a per user basis. License revenues are recognized when the elements of revenue recognition for the licensed software are complete, generally upon electronic shipment of the software and the software key to provide full access to all functionalities for our customers. In general our invoices reflect license, service and maintenance components. In the case of multi element contracts, the revenues allocated to the software license represent the residual amount of the contract after the fair value of the other elements has been determined. Certain products of our software offering are licensed on a subscription basis.

Software Maintenance Revenues

Software maintenance revenues are recognized ratably on a pro-rata basis over the range of the contract period. Our contract periods typically range from one to five years. Vendor-specific objective evidence (“VSOE”) of fair value for software maintenance services is established by the rates charged in stand-alone sales of software maintenance contracts or the stated renewal rate for software maintenance. Customers who are party to software maintenance agreements with us are entitled to receive support, product updates and upgrades on a when-and-if-available basis.

Professional Services Revenues

Professional services include pre-project consulting, software design, customization, project management, implementation and training. Professional services are not considered essential to the functionality of our products, as these services do not alter the product capabilities and may be performed by our customers or by other vendors. Professional services engagements performed for a fixed fee, for which we are able to make reasonably dependable estimates of progress toward completion, are recognized on a proportional performance basis based on hours incurred and estimated hours of completion. Professional services engagements that are on a time and materials basis are recognized based on hours incurred. Revenues on all other professional services engagements are recognized upon completion. Our professional services may be sold with software products or on a stand-alone basis. Vendor Specific Objective Evidence (VSOE) of fair value for professional services is based upon the standard rates we charge for such services when sold separately.

Foreign Currency Translation

The functional currency of the Company is US dollars. For financial reporting purposes, the financial statements of GROUP 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.

Other Provisions

According to FASB ASC 450 Contingencies, provisions are made whenever there is a current obligation to third parties resulting from a past event which is likely in the future to lead to an outflow of resources and of which the amount can be reliably estimated. Provisions not already resulting in a outflow of resources in the following year are recognized at their discounted settlement amount on the financial statement date. The discount taken is based on market interest rates. The settlement amount also includes the expected cost increases. Provisions are not set off against contribution claims. If the amended estimate leads to a reduction of the obligatory amount, the provision is proportionally reversed and the earnings are recognized in other operating earnings.

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.

Recent Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures which amends ASC Topic 820, adding new requirements for disclosures for Levels 1 and 2, separate disclosures of purchases, sales, issuances, and settlements relating to Level 3 measurements and clarification of existing fair value disclosures. ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the requirement to provide Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010 (the Company’s fiscal year 2012); early adoption is permitted. The Company does not expect the adoption of ASU 2010-06 to have a material impact on its results of operations or financial position.

In February 2010, FASB issued ASU 2010-9 Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements ("ASU 2010-9"). ASU 2010-9 amends disclosure requirements within Subtopic 855-10. An entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC's requirements. ASU 2010-9 is effective for interim and annual periods ending after June 15, 2010. The Company does not expect the adoption of ASU 2010-09 to have a material impact on its results of operations or financial position.

Effective July 1, 2010, we adopted the update to the accounting standard regarding derivatives and hedging (Topic 815). This update clarifies how to determine whether embedded credit derivatives, including those interests held in collateralized debt obligations and synthetic collateralized debt obligations, should be bifurcated and accounted for separately. The adoption of this standard did not have a significant impact on our results of operations.

In December 2010, the FASB issued Accounting Standards Update ASU 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations (Topic 805). The update requires public companies to disclose pro forma information for business combinations that occur in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. This guidance is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. The Company’s adoption of FASB ASU No. 2010-29 effective December 1, 2010 did not have an impact on the Company’s consolidated results of operations or financial position but did result in additional disclosures.

A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, management has not determined whether implementation of such proposed standards would be material to the Company’s consolidated financial statements

Principles of Consolidation and Reverse Acquisition

As previously disclosed, the Company has exchanged a total of 5,405,411 shares of common stock in exchange for 50.1% of the outstanding common shares of GROUP. Although the Company was the legal acquirer, the transaction was accounted for as a recapitalization of GROUP in the form of a reverse merger, whereby GROUP becomes the accounting acquirer and is deemed to have retroactively adopted the capital structure of the Corporation. Accordingly, the accompanying consolidated financial statements reflect the historical consolidated financial statements of GROUP for all periods presented, and do not include the historical financial statements of the Company. All costs associated with the reverse merger transaction were expensed as incurred. Those expenses totaled approximately $300,000 and were included in professional fees in administrative expenses.

The Company has based its financial reporting for the consolidation with GROUP in accordance with FASB Accounting Standard Codification (ASC) 805-40 as it relates to reverse acquisitions. Goodwill has been measured as the excess of the fair value of the consideration effectively transferred by the Company, the acquiree, for financial reporting purposes, over the net amount of the Company’s recognized identifiable assets and liabilities.

We have recorded the acquired assets and liabilities of GBSX on the acquisition date of January 6, 2011, at their fair value and the operations of GBSX have been included in the consolidated financial statements since the acquisition date.

The assets and liabilities of GROUP, the acquirer for financial reporting purposes, are measured and recognized in the consolidated financial statements at their precombination carrying amounts in accordance with ASC 805-40-45-2(a). Therefore, in a reverse acquisition, the non-controlling interest reflects the non-controlling shareholders’ proportionate interest in the pre-combination carrying amounts of GROUP’s net assets even though the non-controlling interests in other acquisitions are measured at their fair values at the acquisition date.

It should also be noted that the Company and GROUP have different year-end reporting dates. The Company’s fiscal year-end reporting date is March 31 and GROUP”s calendar year-end reporting date is December 31. The consolidation of these entities for financial reporting purposes has been performed without any adjustments for timing differences between these two reporting dates in accordance Regulation S-X Rule 3A-02.

The purpose of the acquisition was to allow GROUP easier access to American financial markets. Goodwill recognized of $8,705 KUSD was recorded upon consolidation and was calculated as the value of the consideration given less the value of the asset received. The resulting goodwill represents the benefit to be gained by gaining entry into American financial markets.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

N/A

Item 8. Financial Statements and Supplementary Data

GBS ENTERPRISES INCORPORATED

Financial Statements

March 31, 2011

K. R. MARGETSON LTD.

Chartered Accountant

331 East 5^th Street	Tel 604.929.0819
North Vancouver BC	Fax: 1.877.874.9583
V7L 1M1	keith@krmargetson.com
Canada

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders of

GSB Enterprises Incorporated:

We have audited the consolidated balance sheet of GSB Enterprises Incorporated and its subsidiaries as of March 31, 2011 and 2010 and the related consolidated statements of operations, equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of 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 audits provide a reasonable basis for our opinion.

In our opinion, based on our audits, these consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of GSB Enterprises Incorporated. as of March 31, 2011 and 2010 and the results of its consolidated operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 33 to the financial statements, the 2011 and 2010 financial statements have been restated to correct misstatements.

	/s/ K. R. MARGETSON LTD.
North Vancouver BC	Chartered Accountant

November 3, 2011, except for Note 32 as to which the date is March 12, 2012

GBS Enterprises Incorporated

Consolidated Balance Sheets

March 31, 2011 and 2010

	2011		2010
	$		$
	Restated		Restated
Assets
Current Assets
Cash and cash equivalents (Note 5)		8,530,864		1,744,965
Accounts receivable (Note 6)		5,698,321		2,821,958
Inventories (Note 2)		-		114,172
Deferred tax assets (Note 29)		-		12,284
Prepaid expenses (Note 7)		1,423,281		1,550,634
Assets held for sale (Note 8)		-		12,372,600
Other receivables (Note 9)		2,222,887		332,812
Total current assets		17,875,353		18,949,425

Property, plant and equipment (Note 10)		298,497		275,856
Financial assets (Note 11)		837,481		99,273
Investment in related company, at equity (Notes 4 & 12)		290,973		376,572
Deferred tax assets (Note 29)		1,136,135		4,968,740
Goodwill (Note 13)		39,688,966		35,767,273
Software (Note 14)		16,514,894		13,028,818
Other assets (Note 15)		223,630		175,900
Total non-current assets		58,990,576		54,692,432

Total assets		76,865,929		73,641,857

Liabilities and shareholders' equity
Current liabilities
Notes payable (Note 16)		1,440,295		-
Liabilities to banks (Note 17)		50,073		83,793
Accounts payables and accrued liabilities (Note 18)		4,996,748		3,532,004
Other liabilities (Note 19)		2,820,002		1,982,916
Deferred income (Note 20)		6,208,458		5,919,527
Liabilities held for sale (Note 21)		-		2,013,729
Due to related parties (Note 27)		830,156		-
Total current liabilities		16,345,732		13,531,969

Notes payable (Note 16)		-		1,549,490
Liabilities to banks (Note 22)		780,277		3,231,405
Deferred tax liabilities (Note 29)		878,450		926,357
Retirement benefit obligation (Note 28)		153,962		150,276
Other liabilities (Note 23)		6,127,373		4,426,327
Total non-current liabilities		7,940,062		10,283,855

Total liabilities		24,285,794		23,815,824

See Accompanying Notes

GBS Enterprises Incorporated

Consolidated Balance Sheets

March 31, 2011 and 2010

	2011			2010
	$			$
	Restated			Restated

Stockholders' equity
Common stock (Note 24)
Authorized:
75,000,000 common shares, par value $.001
25,000,000 preferred shares, par value $.001
Issued and outstanding
22,544,000 shares of common stock (16,500,000 in 2010)		22,544			16,500
Additional paid in capital		33,894,661			27,221,755
Retained earnings		(322,519	)		1,642,728
Other comprehensive income		(13,639	)		130,419
		33,581,047			29,011,402
Noncontrolling interest in subsidiaries		18,999,088			20,814,631
Total equity		52,580,135			49,826,033

Total equity and liabilities		76,865,929			73,641,857

Commitment (Note 31)
Subsequent events (Note 32)

See Accompanying Notes

GBS Enterprises Incorporated

Consolidated Statements of Operations

For the years ended March 31, 2011 and 2010

	2011			2010
	$			$
	Restated
Revenues
Products		12,848,954			12,479,629
Services		14,858,272			19,105,103
		27,707,226			31,584,732
Cost of goods sold
Products		7,016,189			5,631,372
Services		7,066,305			5,662,619
		14,082,494			11,293,991

Gross profit		13,624,732			20,290,741
Operating expenses
Selling expenses		10,610,545			13,847,697
Administrative expenses		3,853,532			4,481,893
General expenses		1,454,213			703,129
		15,918,290			19,032,719

Operating income (loss)		(2,293,558	)		1,228,022
Other Income (expense)
Other income		2,393,821			454,486
Interest income		16,804			44,626
Interest expense		(471,282	)		(263,590	)
		1,939,343			235,522

Income (loss) before income taxes		(354,215	)		1,463,544
Income tax expense		3,283,091			44,106

Net income (loss)		(3,637,306	)		1,419,438
Net income (loss) attributable to noncontrolling interest		(1,672,059	)		710,605
Net income (loss) attributable to stockholders		(1,965,247	)		708,833

Other comprehensive income (loss)		(287,542	)		38,626
Other comprehensive income (loss) attributable to noncontrolling interest		(143,484	)		-
Other comprehensive income (loss) attributable to stockholders		(144,058	)		38,626
Comprehensive income (loss) attributed to stockholders		(2,109,306	)		747,458

Net earnings (loss) per share
Basic		(0.119	)		0.043
Diluted		(0.119	)		0.038

Weighted average number of common stock outstanding
Basic		16,566,236			16,500,000
Diluted		18,601,444			18,500,000

See Accompanying Notes

GBS Enterprises Incorporated

Consolidated Statements of Equity

For the period from April 1,2009 to March 31, 2011

(Audited)

	Common Stock						Accumulated						Equity
					Additional		Other						attributable to
					Paid in		Comprehensive			Accumulated			noncontrolling
	Shares		Amount		Capital		Income (Loss)			Deficit			interests			Equity
			$		$		$			$			$			$

Balance April 1, 2009		16,500,000		16,500		27,221,755		91,794			933,895			20,104,026			48,367,970

Net income for the year ended March 31, 2010		-		-		-		38,626			708,833			710,605			1,458,063

Balance, March 31, 2010		16,500,000		16,500		27,221,755		130,419			1,642,728			20,814,631			49,826,034

Shares issued for cash		6,044,000		6,044		6,672,906		-			-			-			6,678,950

Net loss for the year ended March 31, 2011		-		-		-		(144,058	)		(1,965,247	)		(1,815,543	)		(3,924,848	)

		22,544,000		22,544		33,894,661		(13,639	)		(322,519	)		18,999,088			52,580,135

See Accompanying Notes

GBS Enterprises Incorporated

Consolidated statements of Cash Flows

For the Years Ended March 31, 2011 and 2010

	2011			2010
	$			$
	Restated			Restated
Cash flow from operating activties
Net income (loss) for the year		(3,637,306	)		1,419,438
Adjustments
Deferred income taxes		3,796,982			(167,191	)
Depreciation and amortization		4,035,732			2,894,795
Interest expense		(109,195	)		80,448
Loss on sale of assets		266,269			-
Loss from equity investment		85,599			31,078
Minority interest losses		(143,736	)		-
Changes in operating assets and liabilities
Accounts receivable and other assets		(4,529,889	)		2,812,836
Retirement benefit obligation		3,686			10,243
Inventories		114,172			(12,265	)
Accounts payable and other liabilities		2,755,795			(2,738,594	)
Net cash provided by operating activities		2,638,109			4,330,788

Cash flow from investing activties
Purchase of intangible assets		(5,941,612	)		(4,560,821	)
Purchase of property, plant and equipment		(161,037	)		(479,398	)
Purchase of subsidiaries		-			(1,513,176	)
Proceeds from sale of subsidaries		2,588,035			-
Increase in financial assets		321,515			-
Net cash used in investing activities		(3,193,099	)		(6,553,395	)

Cash flow from financing activties
Net borrowings - banks		(2,484,597	)		830,001
Other borrowings		2,460,438			(692,093	)
Loans from related party		830,156			-
Capital paid-in		6,678,950			-
Net cash used in financing activities		7,484,947			137,908

Net increase in cash		6,929,957			(2,084,699	)
Effect of translation on cash and cash equivalents		(144,058	)		77,097
Cash and cash equivalents - Beginning of the year		1,744,965			3,752,567

Cash and cash equivalents - End of year		8,530,864			1,744,965

See supplemental disclosures (See Note 30)

Notes on the Annual Financial Statement for the Business Year

ending March 31, 2011

GBS Enterprises Incorporated

Note 1 COMPANY AND BACKGROUND

GBS Enterprises Incorporated, a Nevada corporation (sometimes referred to in this annual report as the “Company,” “GBSX,” “we,” “us,” “our” or similar terms), conducts its primary business through its 50.1% owned subsidiary, GROUP Business Software AG (“GROUP”), a German-based public-company whose stock trades on the Frankfurt Exchange under the stock symbol INW. GROUP’s core business is focused on serving IBM’s Lotus Notes and Domino market where it has become IBM’s largest provider of software and services for business solutions worldwide. 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 IBM Lotus Notes/Domino Application and Transformation technology, and related Cloud Computing technology. Headquartered in Eisenach, Germany, GROUP has offices throughout Europe and North America.

General Corporate History

We were incorporated in Nevada on March 20, 2007 as SWAV Enterprises Ltd. (“SWAV”). SWAV was an importer and wholesaler of Chinese manufactured goods.

Simultaneously with SWAV’s acquisition of Lotus, the SWAV stockholders sold an aggregate of 11,984,770 shares of SWAV common stock for an aggregate purchase price of $370,000.

On September 6, 2010, SWAV’s name was changed to GBS Enterprises Incorporated. On October 14, 2010, the Company’s trading symbol on the OTC Bulletin Board was changed from SWAV to GBSX.

On November 5, 2010, the Company entered in to an agreement to acquire 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 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 $0.5479 per share as determined by an independent valuation firm, making the total value of the acquisition $3,898,000, The agreement was effective December 30, 2010. The acquisition was a two-step transaction, culminating in a share exchange.

Note 2 ACCOUNTING POLICIES

The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, the more significant of which are as follows:

Critical Accounting Policies and Estimates

Comprehensive Income (Loss)

Net Income per Common Share

ASC 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. Accordingly, although the diluted weighted average number of common stock outstanding is disclosed on the statements of operation, the calculated net loss per share is the same for bother basic and diluted as both are based on the basic weighted average of common stock outstanding. There were no adjustments required to net income for the period presented in the computation of diluted earnings per share.

Financial Instruments

Currency Risk

Fair Value Measurements

The Company follows ASC 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 ASC 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.

Cash and cash equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

Inventories

Intangible Assets

The useful life of acquired software is between three and five years and three years for Company-designed software.

Property, Plant and Equipment

Impairment or Disposal of Long-Lived Assets

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

Sources of Revenues

License revenues

Software maintenance revenues

Professional services revenues

Foreign Currency Translation

Other Provisions

Deferred Taxes

Recent Accounting Pronouncements

Off - Balance Sheet Arrangements

Principles of Consolidation and Reverse Acquisition

Note 3 SUBSIDIARY COMPANIES

In the consolidated financial statements of GROUP Business Software AG, the subsidiaries listed below were included in the basis of consolidation; in the previous year, there were eight of these subsidiaries (KUSD = 1,000’s of US Dollars).

Affiliated Company	Headquarters		Sockholders' Equity		Percentage of					Profit		Date
			as of		Subscribed Capital					of the		of the
			03.31.11							Fiscal Year		First Consolidation
			KUSD		KUSD		in %			KUSD
ebVOKUS Software GmbH		Dresden		391		54		100,0	%		201		11.01.2005
GROUP Business Software (UK) Ltd.		Manchester		-1.030		29		100,0	%		-312		12.31.2005
GROUP Business Software Corp.		Milford		-1.651		1		100,0	%		-1.130		12.31.2005
GROUP LIVE N.V.		Den Haag		-2.013		134		100,0	%		8		12.31.2005
GROUP Technologies GmbH		Karlsruhe		72		33		100,0	%		0		10.01.2005
Permessa Corporation		Waltham		-372		0		100,0	%		50		09.22.2010
Relavis Corporation		New York		-486		1		99,5	%		387		08.01.2007
GBS Enterprises Incorportated		Canton		12.489		22		reverse 50,1%			-524		01.06.2011

GROUP Business Software (UK) Ltd. is an indirect 100% shareholding.

A domination and profit transfer agreement is in place between GROUP Business Software AG as the dominating company and Group Technologies GmbH.

Effective March 1, 2010, the Company disposed of its interest in GROUP Business Software Holding OY and the latter's subsidiary Gedys IntraWare GmbH.

On September 22, 2010, GROUP Business Software AG acquired the initial 51% of the Permessa Corporation and the remaining shares on November 23, 2010.

Note 4 RELATED COMPANY

Due to the absence of domination/control, B.E.R.S. AD, Varna, Bulgaria was treated an associated company in the consolidated financial statements. GROUP Business Software AG's interest in B.E.R.S AD, with acquisition costs of 265,000.00 Euros, is 50%.

Associated Companies

Headquarters

Total Value

Debts

Sales Revenues

Annual Profit/Loss

Assets

3.31.11

KUSD

B.E.R.S. AD

Varna

186

379

-118

Note 5 CASH AND CASH EQUIVALENTS

As of the financial statement date, the Company’s cash and cash equivalents totaled 8,531 KUSD (previous year: 1,745 KUSD). Included in that amount are cash equivalents of 20 KUSD (previous year: 42 KUSD). 250 KUSD are in accounts that are subject to federal deposit insurance as of the financial statement date. (No insurance in previous year.)

Note 6 ACCOUNTS RECEIVABLE

Receivables are generally measured at their nominal value and taking into account all foreseeable risks. Probable default risks are handled with specific allowances for bad debts. With regard to the trade receivables which are neither impaired nor delinquent, there are no indications as of the financial statement date that the debtors will not meet their payment obligations.

There were no expenses incurred through derecognition of receivables in the 2011 and 2010 fiscal years.

The residual term of the receivables is less than one year with the exception of deposits provided as security presented under other financial assets.

Note 7 PREPAID EXPENSES

Prepaid expenses in the amount of 1,423 KUSD (previous year: 1,551 KUSD) represent a down payment toward a share of sales in a basic technology in the amount of 1,201 KUSD (previous year: 1,213 KUSD). Due to technical delays, the term of this license has been extended until June 30, 2014.

Note 8 ASSETS HELD FOR RESALE

In fiscal 2010, the outgoing assets associated with the sale of the two subsidiaries, Gedys IntraWare GmbH and GROUP Business Software Holding OY, were recognized under this category in the amount of 12,373 KUSD. A breakdown of the assets included is disclosed below. The ultimate disposal in fiscal 2011 was not shown as a discontinued operation as there continues to be operations in the segment to which it was grouped.

	KUSD
	2010
Asset
Cash		1,185.6
Trade receivables		2,847.6
Other receivables		281.3
Equipment		66.2
Goodwill		7,292.6
Other intangible assets		699.3
		12,372.6

Note 9 OTHER RECEIVABLES - CURRENT

The largest individual item under other receivables represents reinstatement of a receivable from previous management of a subsidiary company in the amount of 1,902 KUSD (previous year: 0 KUSD). Also included herein are tax refund claims (44 KUSD; previous year: 229 KUSD), other loans issued (0 KUSD; previous year: 59 KUSD) as well as security deposits (224 KUSD; previous year: 163 KUSD).

Note 10 PROPERTY PLANT AND EQUIPMENT

Fixed assets are measured at cost less scheduled straight-line depreciation. The specific useful life was based on those used uniformly at the parent company.

Depreciation of the computer hardware listed as office equipment is distributed over a period of three to five years. The depreciation period for other office equipment is three to ten years. Office furnishings are depreciated over a period of eight to ten years.

KUSD 3.31.11

KUSD 3.31.10

Accumulated

Net Book

Accumulated

Net Book

Cost

Depreciation

Value

Cost

Depreciation

Value

Equipment

4,494

4,196

298

4,538

4,262

276

Note 11 LONG TERM FINANCIAL ASSETS

The major components of the Financial Assets include the following:

	KUSDS		KUSDS
	2011		2010
Receivable from sale of GEDYS IntraWare GmbH
Balance outstanding, repayable in monthly instalments of $20,086, bearing interest at prime plus .25%, not be be greater than 2% per annum		984		-
Current portion, included in other current receivables		241		-
		743		-
Other long term receivables		95		99
Balance, March 31		838		99

Note 12 INVESTMENT IN RELATED COMPANY

The investment, representing 50% of B.E.R.S. AD has been accounted for on the equity basis, with the Company’s proportionate share of income being recorded in the consolidated statement of operations with a corresponding adjustment to the asset carrying value. In fiscal 2011, the proportion share of the loss was 59 KUSD and in 2010 it was 46 KUSD.

Note 13 GOODWILL

Goodwill results from business combinations and is tested annually for recoverability as part of an impairment test. Goodwill arises from the following business acquisitions:

Affiliated Company	Date of the First Consolidation		Goodwill as of 3.31.11 in KUSD		Goodwill as of 3/.31.10 in KUSD
global words AG		01.10.02		5.095,3		4.821,9
GROUP Technologies AG		01.09.05		4.479,7		4.239,4
GROUP Business Software Inc.		31.12.05		2.177,5		2.060,7
GROUP LIVE N.V.		31.12.05		1.324,2		1.253,2
Retained Goodwillof CRM		31.12.05		3.108,4		2.941,7
GROUP Business Software Ltd		31.12.05		2.765,1		2.616,7
ebVOKUS Software GmbH		01.10.05		443,6		419,8
GAP AG für GSM Applikationen und Produkte		31.12.05		1.913,9		1.811,2
Relavis Corporation		01.08.07		7.288,3		6.897,2
Permessa		22.09.10		2.387,4		0,0
GROUP Business Software AG		06.01.11		8.705,5		8.705,5
				39.689,0		35.767,3

Note 14 SOFTWARE

Development costs

The costs of developing new software products and updating products already marketed by GROUP Business Software AG are generally recognized as expenses in the period in which they arise. Provided they meet the conditions for capitalization as per FASB ASC 985-20-25, they are capitalized. Capitalized development costs can be attributed to the defined products. These products are technically realizable and there is a target market for them.

The development costs arising in the reporting period result from the personnel costs to be attributed to the development work as well as overhead costs, provided that these are related to the development work and do not represent general administrative costs. The ascribable overhead costs are directly recognized.

Capitalized development costs are generally amortized over a period of three years starting with the date of marketability of the new products or major releases.

Concessions, Industrial Property Rights, Licenses

The intangible financial assets carried in this item are licenses acquired in exchange for payment.

These financial assets are measured at acquisition cost less scheduled straight-line amortization. The assets added in the scope of the cost price allocation of the business divisions acquired this year.

The useful life spans were based uniformly throughout the Corporation on those used by the parent company. Scheduled amortization is performed over a period from three to ten years.

The useful life of the domain “gbs.com”, acquired during the previous year, was estimated as unlimited. This is because no other legal, contractual or other factors exist which would limit its useful life. It is not systematically amortized, but rather annually and also, whenever there are signs pointing to impairment, it is tested for its recoverability and if necessary written down to the amount which could be obtained for it if sold.

Amortization of concessions, industrial property rights and similar rights and assets as well as licenses to such rights and assets is presented in the profit and loss statement under "Depreciation and Amortization."

Note 15 OTHER ASSETS

Re-insurance claims from life insurance (reinsurance of pension obligations) were recognized as actuarial reserves. Corresponding communications by the insurance companies form the basis for the valuation. Earnings from interest on the financial assets were - according to the cost of liabilities from pension obligations - presented in the pension plan costs.

Note 16 NOTES PAYABLE

This item concerns the outside capital components of the convertible bond issue in the amount of 1,440 KUSD (previous year: 0 KUSD; long term 1,550 KUSD). The outside capital component of the convertible bond is carried at amortized cost according the effective interest method in compliance with the categorization pursuant to FASB ASC 815-15. The effective interest rate used as a basis as of the financial statement date is 6.16% (previous year: 6,61%). The debt is convertible at the rate of $1.44 debt to one share. The calculated value of the conversion feature was not material.

The term of the convertible bonds ends on December 31, 2011. In January, 2012, only $1,286 USD was converted into shares. The balance was repaid in cash.

Note 17 LIABILITIES TO BANKS - CURRENT

Short term liabilities to bank represent an operating line of credit, bearing interest at 3.8%, with a credit limit of 80 KUSD. Security is disclosed with the long term portion of bank debt. See Note 22.

Note 18 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Trade payables

As of the financial statement date, trade accounts payable amounted to 2,043 KUSD (previous year: 1,403 KUSD). Trade payables are carried at their repayment amount and all have a residual term of up to one year.

Tax accruals

As of the financial statement date, provisions for taxation were created in the amount of 112 KUSD (previous year: 45 KUSD).

Other accrual

Other provisions are created in the amount necessary as of the financial statement date which is necessary, according to a reasonable commercial appraisal, in order to cover future payment obligations, perceivable risks as well as uncertain liabilities of the Company. The amounts deemed to be most likely in a careful assessment of the situation are accrued.

KUSD	Status								Currency		Status
	04.01.10		Utilization		Dissolution		Increase		Differences		03.31.11

Salary		1.004		895		118		1.241		10		1.241
Vacation		245		247		0		224		2		224
Workers Compensation Insurance Association		20		20		0		15		0		15
Compensation Levy for Non-Employment of Severely Handicapped Persons		16		16		0		17		0		17
Outstanding Invoices		463		282		86		794		0		889
Annual Financial Statement Costs		232		199		11		182		1		205
Other Provisions		254		221		26		49		9		66
Warranties		133		90		0		82		0		125
Provision for Legal Costs		70		6		40		13		0		36
Reclassification Held for Sale		-352		-237		0		116		0		0
Total		2.083		1.739		282		2.734		21		2.817

Provisions for salaries include the provisions created for the variable salaries of the sales staff for the sales objectives reached in this business year as well as the contractually stipulated guaranteed bonuses for the members of the Board of Directors for the business year.

Vacation provisions include the obligations of GROUP’s companies to their employees from remaining vacation claims for the reporting period. The amount of the provision is based on the gross salary of the individual employee plus the employer contribution to social security and the unused vacation days as of the financial statement date.

For liabilities not yet settled, a provision totaling 889 KUSD (previous year: 463 KUSD) was created.

Expenses for preparing the annual financial statements and the consolidated financial statements, for the auditing of the Company and consolidated financial statements were recognized at 205 KUSD (previous year: 232 KUSD.

For warranty claims, a provision was created depending on income from services.

Note 19 OTHER SHORT TERM LIABILITIES

Other short-term liabilities are comprised of the following:

Other Short-Term Liabilities	3.31.11	3.31.10
	KUSD	KUSD
Purchase Assets L911	745.9	505.1
Purchase Assets - Fastworks	119.2	-
Purchase Assets - Permessa	757.9	-
Purchase Assets - Salesplace	504.8	-
Tax Liabilities	603.9	635.4
Loans	-	72.4
Other Liabilities	88,3	770.0
	2,820.0	1,982.9

Note 20 DEFERRED INCOME

Accruals for future periods leading to realization of sales after the financial statement date are reported under deferred income. The deferred income items listed as of the financial statement date in the amount of 6,208 KUSD (previous year: 5,920 KUSD) mainly include maintenance income collected in advance for the period after the end of the fiscal year which primarily accumulated in the parent company. They are amortized on a straight-line basis over the respective contract terms.

Note 21 LIABILITIES HELD FOR SALE

In fiscal 2010, the outgoing liabilities associated with the sale of the two subsidiaries, Gedys IntraWare GmbH and GROUP Business Software Holding OY, were recognized under this category in the amount of 2,013.7 KUSD. A breakdown of the liabilities included is disclosed below. The ultimate disposal in fiscal 2011 was not shown as a discontinued operation as there continues to be operations in the segment to which it was grouped.

	KUSD
	2010
Libility
Trade payables		1,178.6
Other liabilities		790.4
Deferred income		44.7
		2,013.7

Note 22 LIABILITIES TO BANKS – LONG TERM

Liabilities to banks represent bank facilities of GROUP AG with Baden-Württembergische Bank with a credit line totaling 4,017 KUSD and are collateralized by a silent blanket agreement for GROUP AG’s trade receivables. The term of the loan runs until June 30, 2014. The Company has curtailed the risk of changing interest rates existing with regard to liabilities to banks due to variable interest rate agreements by obtaining a fixed interest rate for half of its credit line. Accordingly, 2,008.5 KUSD is bearing interest at prime plus 1.5% and 2,008.5 KUSD is fixed at 3.5%

Note 23 OTHER LIABILITIES – LONG TERM

Other long-term liabilities are made up of unsecured liabilities connected to the purchase of assets as follows:

Other Long-Term Liabilities	3.31.11	3.31.10
	KUSD	KUSD
Purchase Assets L911	3.448,2	4.426,3
Purchase Assets Fastworks	506,2
Purchase Assets Permessa	1.162,3
Purchase Assets Salesplace	1.011,0
	6.127,7	4.426,3

Expected payments over the next 5 fiscal years stated in KUSD.

				Purchase			Purchase			Purchase
	Purchase			Assets			Assets			Assets
	Asset L911			Fastworks			Permessa			Salesplace

Interset		4.50	%		5.50	%		0.00	%		0.00	%

Expiration date		Sep 30, 2013			April 15, 2013			June 30, 2013			Jan 15, 2013
2012		745.9			119.2			7 57.9			5 04.8
2013		33.5			133.9			1,004.3			669.6
2014		3,414.7			372.3			1 58.0			3 41.5
2015		-			-			-			-
2016		-			-			-			-
Thereafter		-			-			-			-
Total		4,194.1			625.4			1,920.2			1,515.8

Note 24 COMMON STOCK

Common stock belongs to the legally purchasing company according to the principles of a Reverse Acquisition and therefore, the common stock as that of GBS Enterprises Incorporated. The Company has authorized capital of 75,000,000 common shares and 25,000,000 preferred shares each with a par value of $001. No preferred shares have been issued. As at March 31, 2011, there were 22,544,000 shares of common stock issued. At the time of the Reverse Acquisition, there were 16,500,000 shares of common stock outstanding and, as the Reverse Acquisition was accounted for as a recapitalization applied retroactively, this balance is recorded as the balance outstanding since inception.

During the reporting period from the date of the Reverse Acquisition to March 31, 2011, the Company completed a private placement offering whereby it raised $7,555,000 gross proceeds through the sale of 6,044,000 units at $1.25 per unit. Each unit represented one share of common stock and one warrant. The warrant allows the holder to purchase one share of common stock of the Company from the date of the grant until the third anniversary of the date of the grant for a purchase price of $1.50 per share.

Warrants and Options

The Company has issued warrants to outside consultants in payments for services provided as detailed in the following schedule. The warrants are issued as “cashless” warrants and all have a three-year term with the exception of the Ventana Capital Partners’ warrant which has a 30 month term. Each warrant is exercisable into one share of common stock. The warrants have been valued using a Black-Scholes option pricing model with appropriate volatility, equity value and interest rate inputs. The valuation of the warrants is for disclosure purposes only as the charge is related to the cost of issuing the shares and there is no impact to the financial statements. There are no stock options issued by the Company to employees or other parties.

Valuation of Common Stock Purchase Warrants

Summary of Warrants Issued

							Stock Value at		Warrant
Outside Consultants	Grant Size		Strike Price		Val. Date		Warrant Date		Value

Ventana Capital Partners		2,000,000	$	4.00		10/1/2010	$	0.03	$	0.00

Frank J. Pena		117,880	$	1.50		3/14/2011	$	0.91	$	0.34

GarWood Securities, LLC		117,880	$	1.50		3/14/2011	$	0.91	$	0.34

Jackson E. Spears		421,520	$	1.50		3/14/2011	$	0.91	$	0.34

William Gregozeski		50,000	$	1.50		3/14/2011	$	0.91	$	0.34

Frank J. Pena		3,000	$	1.50		3/24/2011	$	0.91	$	0.34

GarWood Securities, LLC		2,400	$	1.50		3/24/2011	$	0.91	$	0.34

Jackson E. Spears		9,600	$	1.50		3/24/2011	$	0.91	$	0.34

	Common		Valuation		Fair Value per		Warrants'
Common Stock Warrants Issued to Outside Consultants	Shares		Date		Warrant Share		Fair Value

Common Stock Warrants Issued on October 1, 2010		2,000,000		10/1/2010	$	0.00	$	0

Common Stock Warrants Issued on March 14, 2011		707,280		3/14/2011	$	0.34	$	240,475

Common Stock Warrants Granted on March 24, 2011		15,000		3/24/2011	$	0.34	$	5,100

				Total Warrants' Fair Value			$	245,575

Note 25 SEGMENT REPORTING

The Company reports segment information based on the “management’ approach. Segment management is performed at the level of chief operating decision maker. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the CODM in deciding how to allocate resources and assess performance. Because of this management structure, the Company has only one reporting unit which is the same as an operating or reportable segment, which is no different in this case, as the entity as a whole (entity or consolidated level). In summary, the Company presents its financial statements as a single reporting unit because it directly reflects the way the entity manages its operations by the chief operating decision maker.

Gross revenue may be broken down by the following products.

Sales Revenues	3.31.11	3.31.10
	KUSD	KUSD

Licenses	4,981	6,272
Maintenance	9,616	12,114
Partner Contribution	21	138
Service	5,243	6,992
Third-Party Products	3,062	3,344
LND Third-Party Products	4,610	2,502
Others	173	223

	27,707	31,585

Revenues by geographic area for the year ended March 31, 2011 and 2010 are as follows:

	3.31.11	3.31.10
	KUSD	KUSD

US	7,768	2,426
Germany	19,213	28,251
United Kingdom	726	793
Other	-	115
	27,707	31,585

Long-lived assets by geographic area, which primarily include property plant and equipment as at March 31, 2011 and 2010 are as follows:

	2011		2010
	KUSD		KUSD
US		71		15
Germany		224		261
United Kingdom		3		-
		298		391

Note 26 OTHER INCOME

Other income of 2,394 KUSD (previous year: 454 KUSD) relate within 1,902 KUSD (previous year: 0 KUSD) from the reinstatement of a receivable from the former managers of a subsidiary as disclosed in Note 9 – other current receivables.

Note 27 RELATED PARTY TRANSACTIONS AND BALANCES

Related parties basically refer to the Board of Directors, Supervisory Board, stockholders and associated companies.

Business transactions between the companies and its subsidiaries which are also considered to be related companies were eliminated through the consolidation and are not reflected within these footnotes to the consolidated statements.

Remuneration of the management occupying key positions in the Corporation subject to disclosure include the remuneration of the Board of Directors and that of the Supervisory Board. With regard to their remuneration, please see Section VIII.

In addition, the following transactions took place in the fiscal year:

Company	Related	Transaction	Amount in	Comment
	Party		KUSD

GROUP Business Software AG	Joerg Ott	Rental Agreement as Landlord and Owner of Hospitalstraße 6, 99817 Eisenach	58	Rental Expenses 2011
			60	Rental Expenses 2010
			18	Remaining term
GROUP Business Softwar AG	Board of Directors	Remuneration	891	Expense in 2011
			971	Expense in 2010
GBS Enterprises Incorporated	Joerg Ott	Interest on demand note	2	Expense in 2011
GBS Enterprises Incorporated	Lotus Holdings Ltd.	Interest on demand note	8	Expense in 2011

The following related party balances existed as at March 31, 2011 (None in 2010)

	KUSD
	2011

Due to a director and shareholder, unsecured demand note payable, bearing interest at 5%		152
Due to to related company, bearing interest at 5% due October 31, 2011
- secured by 3,049,489 shares of GROUP AG		300
- secured by 2,000,000 shares of GROUP AG		200
- secured by 500,000 shares of GROUP AG		100
- secured by software		78
		830

NOTE 28 PENSION PLAN OBLIGATIONS

The Company has a non-contributory defined benefit pension plan (“Qualified Plans”). The Qualified Plans provide retirement benefits for certain employees meeting certain age and service requirements. Benefits for the Qualified Plans are funded from assets held in the plans’ trusts.

Benefit Obligations and Funded Status

The following table presents the status of GROUP AG’s pension plan. The benefit obligation for pension plans represents the projected benefit obligation. GROUP AG’s benefit obligations and plan assets are measured each year as of March 31.

	Pension benefits in USD
	2011			2010

Change in benefit obligation:
Benefit obligation at beginning of year		139,572			143,191
Service cost		-			-
Interest cost		7,676			7,874
Actuarial loss (gain)		6,714			(789	)
Curtailment (gain) loss		-			-
Plan amendments		-			-
Foreign exchange rate changes		-			-
Participant contributions		-			-
Benefits paid		-			-
Benefit obligation at end of year		153,962			150,276
Change in plan assets:
Fair value of plan assets at beginning of year		90,095			94,767
Actual return on plan assets		2,041			3,207
Employer contributions		-			-
Participant contributions		-			-
Benefits paid		-			-
Foreign exchange rate changes		-			-
Fair value of plan assets at end of year		93,035			97,973
Funded status at end of the year		(60,927	)		(52,303	)

	Pension benefits in USD
	2011			2010

Amounts recognized in the Balance Sheets
Non current asset		223,630			175900
Current liabilities		(153,962	)		(150,276	)
Net		69,668			25,624
Amounts recognized in other accumulated comprehensive earnings
Net actuarial loss (gain)		16,431			10,292
Prior service cost (credit		-			-
Net		16,431			10,292

The following table presents the components of net periodic benefit cost and other comprehensive earnings for Group AG’s pension plan.

	Pension benefits in USD
	2011		2010
Net periodic benefit cost:
Service cost		-		-
Interest cost		7,676		7,874
Recognition of net actuarial loss (gain)		6,714		-789
Recognition of prior service cost		-		-
		14,390		7,085
Total net periodic benefit cost
Other comprehensive earnings:
Actuarial (gain) loss arising in current year		2,041		3,207
Prior service cost (credit) arising in current year		-		-
Recognition of net actuarial (loss) gain in net periodic benefit cost		-		-
Recognition of prior service cost, including curtailment,
in net periodic benefit cost		-		-
Total other comprehensive earnings (loss)		2,041		3,207
Total recognized		16,431		10,292

Assumptions

The following table presents the weighted average actuarial assumptions that were used to determine benefit obligations and net periodic benefit costs.

	Pension Benefits
	2011			2010

Assumption to determine benefit obligations:
Discount rate		5.7	%		6.0	%
Rate of compensation increase		N/A			N/A
Assumptions to determine net periodic benefit cost:
Discount rate		6.0	%		6.0	%
Expected return on plan assets		N/A			N/A
Rate of compensation increase		N/A			N/A

Discount rate — Future pension obligations are discounted at the end of each year based on the rate at which obligations could be effectively settled, considering the timing of estimated future cash flows related to the plans. This rate is based on high-quality bond yields, after allowing for call and default risk. High quality corporate bond yield indices are considered when selecting the discount rate.

Rate of compensation increase — The expected DBO for end of 2011/ 2012 is estimated to increase from $ 153,962 in 2010/ 2011 to $ 169,857. The expected increase of the assets is estimated end of 2011/ 2012 by $ 4,143.

Expected return on plan assets — The expected rate of return on plan assets was determined by evaluating input from external consultants and economists as well as long-term inflation assumptions. The Company expects the long-term asset allocation to approximate the targeted allocation. Therefore, the expected long-term rate of return on plan assets is based on the target allocation of investment types in such assets. See plan assets discussion below for more information on GROUP AG’s target allocations.

Pension Plan Assets

GROUP AG’s overall investment objective for its pension plans’ is to eliminate further risks. Therefore, all permitted benefits are reinsuranced. In total, the benefits from the permitted pension correspond to the benefits of the reinsurances which have been signed for these pension promises.

Note 29 DEFERRED INCOME TAXES

As a result of the change in the majority ownership of GROUP Business Software in 2011 and based on the current legal situation, management has determined it is more likely than not that the tax losses carried forward will be available as a deduction to determine taxable income. Therefore, the deferred tax assets from the losses carried forward for GROUP Business Software AG in an amount of 3,691 KUSD was written off this year and included in income tax expense.

The following schedule details the reconciliation of the Consolidated Earnings Before Taxes to the Income Tax Expense per the Consolidated Profit and Loss Statement:

	USD			USD
March 31	2011			2010
Statutory rate		23.0% - 34.0%			23.0% - 34.0%

Expected income taxes recovery at the statutory rate		(118,198	)		440,023

Effect of change in tax rate		(71,536	)		(47,458	)
Permanent differences		(347,871	)		(259,483	)
Temporary differences		208,005			(14,259	)
Price allocation from consolidation		172,795			(146,787	)
Change in deferred income tax asset		3,349,211			67,626
Valuation allowance		90,685			4,445
Income tax expense (recovery) recognized		3,283,091			44,106

Income tax expense (recovery) is comprised of:
Current		40,552			116,248
Future		3,242,539			(72,143	)

The following schedule reflects a summary of the basic components of the Deferred Tax Liability as presented in the Company’s Consolidated Balance Sheet.

	USD			USD
March 31	2011			2010

Intangible assets		64,277			121,121
Non-capital losses availiable for future periods		587,943			4,088,599
Price allocation from consolidation		(251,173	)		(102,376	)
		401,047			4,107,344
Valuation allowance		(143,362	)		(52,677	)
		257,685			4,054,667

The balances have been dislcosed as follows:

	USD			USD
March 31	2011			2010

Short term asset		-			12,284
Long term assets		1,136,135			4,968,740
Long term liability		(878,450	)		(926,357	)
		257,685			4,054,667

The Company also has incurred losses for income tax purposes of approximately 1,996 KUSD which may be applied in future years to reduce taxable income. The ability to apply this loss expires starting in 2015.

Note 30 SUPPLEMENTAL CASH FLOW DISCLOSURES

	2011		2010
	USD		USD
Cash paid for
Interest paid		471,282		263,590
Taxes paid (recovered)		40,552		116,248

The significant non-cash transactions for the year ended March 31, 2011 and 2010 were as follows:

On October 9, 2009, the Company purchased L911 Assets for 4,753 KUSD. The Company paid 234 KUSD upon signing and financed the remainder. The financed balance is disclosed in Notes 19 & 23, Other Liabilities.

On May 10, 2010, the Company purchased Fastworks Assets for 1,305KUSD. The Company paid 502 KUSD upon signing and financed the balance. The balance is disclosed in Notes 19 & 23, Other Liabilities.

On September 17, 2010, the Company purchased Permessa Assets for 3,079 KUSD. The Company paid 535 KUSD upon signing and financed the balance. The balance is disclosed in Notes 19 & 23, Other Liabilities

On September 22, 2010, the Company purchased Salesplace Assets for 3,341 KUSD. The Company paid 1,332 KUSD upon signing and financed the balance. The balance is disclosed in Note 19 & 23, Other Liabilities.

Note 31 COMMITMENTS

The Company has the following commitments as at March 31, 2011:

Other Financial Obligations	1 Year		Over 1 year		Total
	KUSD		KUSD		KUSD

Liabilities from Rental Agreements		350		350		700
Previous Year		636		673		1,309

Liabilities from Vehicle Lease Agreements		175		350		525
Previous Year		133		222		355

Liabilities from other Lease Agreements		54		44		98
Previous Year		49		72		121

Lease agreement - subsequent to year end		100		250		0

Current Year - 2011		678		993		1,672
Previous Year - 2010		818		967		1,785

Note 32 SUBSEQUENT EVENTS

Pavone AG

Group Ware AG

IDC Global, Inc.

On July 25, 2011, the Company acquired 100% of the issued and outstanding shares of common stock of IDC Global, Inc. (“IDC”), a Delaware corporation with offices in Chicago, New York, London and other key cities. Pursuant to the acquisition agreement of July 15, 2011, the Company agreed to issue the shareholders an aggregate of 800,000 shares of common stock and make a cash payment of $750,000. The agreement required an additional payment to the management shareholders of 80,000 shares of common stock and pay signing bonuses to personnel of $35,000. The Company also agreed to reimburse IDC up to $25,000 for incurred accounting and legal fees related to the transaction. The total value of the investment, including $883,005 of debt assumption was $4,713.005.

SD Holdings Ltd. and Synaptris, Inc.

GROUP Business Software AG

On February 27, 2012, GROUP increased its share capital with an investment in kind of 1,750,000 shares. The investment in kind related to a conversion of the long-term loan given from Lotus Holdings Ltd. to GROUP in conclusion with the Lotus 911 purchase. As such, the shares issued by GROUP increased to 26,982,000.

Simultaneously and effective February 27, 2012, the Company increased its participation in GROUP by 883,765 shares to a total amount of 13,525,000 shares or 50.1%

Notes Payable

In January, 2012, $1,286 of the convertible notes payable were converted into shares. The balance was repaid in cash.

Note 33 CORRECTION OF ERRORS ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Restatement of Balance Sheet – March 31, 2010

	As Previously					As
	Issued		Restatement			Restated
	$		$			$
Assets
Current Assets
Cash and cash equivalents		1,744,965					1,744,965
Accounts receivable		2,821,958					2,821,958
Inventories		114,172					114,172
Deferred tax assets		12,284					12,284
Prepaid expenses		1,550,634					1,550,634
Assets held for sale		332,812		12,039,788			12,372,600
Other receivables		12,372,600		(12,039,788	)		332,812
Total current assets		18,949,425					18,949,425

Non-current assets		54,692,431					54,692,431

Total assets		73,641,856					73,641,856

There were no other adjustments to the liabilities and stockholders’ equity as at March 31, 2010.

Restatement of Balance Sheet – March 31, 2011

	As Previously
	Issued			Corrections			As restated
	$			$			$
Assets
Current Assets
Cash and cash equivalents		8,530,864						8,530,864
Accounts receivable		5,698,321						5,698,321
Prepaid expenses		1,423,281						1,423,281
Assets held for sale								-
Other receivables		1,981,887	(1)		241,000			2,222,887
Total current assets		17,634,353						17,875,353

Property, plant and equipment		298,497			-			298,497
Financial assets		1,369,454	(1)		(531,973	)		837,481
Investment in related company, at equity			(1)		290,973			290,973
Deferred tax assets		1,136,135						1,136,135
Goodwill		39,688,966						39,688,966
Software		16,514,894						16,514,894
Other assets		223,630						223,630
Total non-current assets		59,231,576						58,990,576

Total assets		76,865,929						76,865,929

Liabilities and shareholders' equity
Current liabilities
Notes payable		1,440,295						1,440,295
Liabilities to banks		50,324	(2)		(251	)		50,073
Accounts payables and accrued liabilities		4,972,833	(1)		23,915			4,996,748
Other liabilities		3,674,073	(1)		(854,071	)		2,820,002
Deferred income		6,208,458						6,208,458
Due to related parties			(1)		830,156			830,156
Total current liabilities		16,345,983						16,345,732

Long term liabilities		7,940,062						7,940,062

Total liabilities		24,286,045						24,285,794

Stockholders' equity
Common stock		22,544						22,544
Additional paid in capital		33,894,661						33,894,661
Retained earnings		(174,959	)(2)		(147,560	)		(322,519	)
Other comprehensive income		(13,639	)					(13,639	)
		33,728,607						33,581,047
Noncontrolling interest in subsidiaries		18,851,277	(2)		147,811			18,999,088
Total equity		52,579,884						52,580,135

Total equity and liabilities		76,865,929						76,865,929

(1)

Re-allocation arising from previously unidentified related party balances.

(2)

Restatement required to correct over allocation of amounts allocated to noncontrolling interest in subsidiaries. This re-allocation also required restatement of the Consolidated Statement of Operations, as noted below.

Restatement of Consolidated Statement of Operations – for the year ended March 31, 2011

	As
	Previously filed			Corrections			As Restated
	$						$
Net income (loss)		(3,637,306	)					(3,637,306	)
Net income (loss) attributable to noncontrolling interest		(1,963,354	)		291,295			(1,672,059	)

Net income (loss) attibutable to stockolders		(1,817,687	)		(147,560	)		(1,965,247	)

Other comprehensive income (loss)		(144,159	)		(143,383	)		(287,542	)
Other comprehensive income (loss) attributable to noncontrolling interest		-			(143,484	)		(143,484	)
Other comprehensive income (loss attributable to stockholders		(144,159	)					(144,058	)

Comprehesive income (loss) attributed to stockholders		(1,961,746	)		(147,560	)		(2,109,306	)

Restatement of Cash Flow Statements for the years ended March 31, 2011 and 2010

GBS Enterprises Incorporated

Consolidated statements of cash flows

For the Years Ended March 31, 2011

	March 31, 2011						March 31, 2010
	As			As			As			As
	Previously filed			Restated			Previously filed			Restated
	$			$			$			$

Cash flow from operating activties
Net income (loss) for the year		(3,637,306	)		(3,637,306	)		1,419,438			1,419,438
Adjustments
Deferred income taxes		3,239,283			3,796,982			(167,191	)		(167,191	)
Depreciation and amortization		4,036,047			4,035,732			2,894,795			2,894,795
Interest expense		-			(109,195	)		-			80,448
Loss on sale of assets		-			266,269			-			-
Loss from equity investment		-			85,599			31,078			31,078
Minority interest losses		(9,188	)		(143,736	)		-			-
Changes in operating assets and liabilities
Accounts receivable and other assets		(5,310,427	)		(4,529,889	)		1,893,241			2,812,836
Retirement benefit obligation		14,730			3,686			10,243			10,243
Inventories		-			114,172			(12,265	)		(12,265	)
Accounts payable and other liabilities		3,440,602			2,755,795			(2,084,566	)		(2,738,594	)
Net cash provided by operating activities		1,773,741			2,638,109			3,984,773			4,330,788

Cash flow from investing activties
Purchase of intangible assets		(3,865,982	)		(5,941,612	)		(4,560,821	)		(4,560,821	)
Purchase of property, plant and eq.		(161,037	)		(161,037	)		(479,398	)		(479,398	)
Purchase of subsidiaries		(251,751	)		-			(1,513,176	)		(1,513,176	)
Proceeds from sale of subsidaries		5,052,424			2,588,035			-			-
Increase in financial assets		-			321,515			-			-
Net cash used in investing activities		773,654			(3,193,099	)		(6,553,395	)		(6,553,395	)

Cash flow from financing activties
Net borrowings - banks		(2,221,567	)		(2,484,597	)		830,001			830,001
Other borrowings		80,234			2,460,438			(489,629	)		(692,093	)
Loans from related party		-			830,156			-			-
Capital paid-in		6,678,950			6,678,950			-			-
Net cash used in financing activities		4,537,617			7,484,947			340,372			137,908

Net increase in cash		7,085,012			6,929,957			(2,228,250	)		(2,084,699	)
Effect of translation on cash and cash equivalents		(299,113	)		(144,058	)		220,648			77,097
Cash and cash equivalents beginning of the year		1,744,965			1,744,965			3,752,567			3,752,567
Cash and cash equivalents end of the year		8,530,864			8,530,864			1,744,965			1,744,965

Restatements in both years arise out of changes in cash flow analysis of subsidiaries.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective in ensuring that the information we were required to disclose in reports that we file or submit under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission (“SEC”) rules and forms.

The Certifying Officers based their conclusion on the fact that the Company has identified material weaknesses in controls over financial reporting, detailed below. In order to reduce the impact of these weaknesses to an acceptable level, the Company has contracted with consultants with expertise in U.S. GAAP and SEC financial reporting standards to review and compile all financial information prior to filing that information with the SEC. However, even with the added expertise of these consultants, we still expect to be deficient in our internal controls over disclosure and procedures until sufficient capital is available to hire the appropriate internal accounting staff and individuals with requisite U.S. GAAP and SEC financial reporting knowledge.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Under the supervision and with the participation of our principal executive officer and principal financial officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of March 31, 2011, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below.

Management assessed the effectiveness of the Company's internal control over financial reporting as of evaluation date and identified the following material weaknesses at March 31, 2011:

LACK OF SEGREGATION OF DUTUES OF INTERNAL ACCOUNTING AND SEC REPORTING DEPARTMENTS.

LACK OF AUDIT COMMITTEE AND OUTSIDE DIRECTORS ON THE COMPANY'S BOARD OF DIRECTORS. We do not have a functioning audit committee or outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

LIMITED KNOWLEDGE OF U.S. GAAP BY THE COMPANY’S BOARD OF DIRECTORS AND ACCOUNTING AND REPORTING DEPARTMENTS. Our current Board of Directors, as of March 31, 2011, had one director, Joerg Ott, who also serves as the Chief Executive Officer of the Company. Mr. Ott has limited knowledge of U.S. GAAP, and the Certifying Officers believe that this limited knowledge constitutes a material weakness of the Company’s internal controls over financial reporting. The Company’s internal accounting and reporting departments also have limited knowledge of U.S. GAAP which the Certifying Officers also believe constitutes a material weakness of the Company’s internal control over financial reporting.

Management believes that the material weaknesses set forth above did not have an effect on the Company’s financial results. Notwithstanding the foregoing, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on Company’s board of directors caused and continues to cause an ineffective oversight in the establishment and monitoring of the required internal controls over financial reporting.

The Company is committed to improving its financial organization. As part of this commitment and when funds are available, the Company will create a position within the Company’s accounting and finance team to segregate duties consistent with its control objectives and will increase its personnel resources and technical accounting expertise within the accounting function by: (i) appointing one or more outside directors to its board of directors who will also be appointed to the audit committee of the Company’s board of directors resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls over financial reporting; and (ii) preparing and implementing sufficient written policies and checklists that will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

Management believes that the appointment of one or more outside directors, who will also be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company’s board of directors. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses: (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of U.S. GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn-over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the Company may encounter in the future.

Management will continue to monitor and evaluate the effectiveness of the Company’s internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter for our fiscal year ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Subsequent Events

New Chief Financial Officer:

As previously reported by the Company on a Current Report on Form 8-K filed by the Company with the Commission on February 28, 2012, on February 24, 2012, the Board of Directors of the Company appointed Markus R. Ernst as the Company’s Chief Financial Officer (Principal Financial and Accounting Officer), effective February 24, 2012. Mr. Ernst replaced Ronald J. Everett who had been serving as the Company’s Chief Financial Officer since August 2, 2010. Mr. Everett resigned as Chief Financial Officer on February 27, 2012.

New Board Members:

As also previously reported by the Company on a Current Report on Form 8-K filed by the Company with the Commission on March 6, 2012, on March 1, 2012, the Company’s Board of Directors increased the size of the Board from two (2) to seven (7) members and appointed Messrs. David Darsch, John A. Moore, Jr., Mohammad Shihadah, Stephen D. Baksa and Woody A. Allen (collectively, the “New Directors”) to fill the five (5) vacancies created thereby until the next annual meeting of stockholders of the Company or until his respective successor is elected and qualified.

Independent Directors:

The Board has determined that each of the New Directors qualifies as an “independent director” as defined by Section 10A(m)(3)(ii) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 5065(a)(2) of the NASDAQ Marketplace Rules.

Audit Committee:

On March 1, 2012, the Board established a standing Audit Committee comprised of two of the New Directors, John A. Moore, Jr. and Woody A. Allen, and Gary MacDonald. As previously disclosed by the Company, Mr. MacDonald was elected as a member of the Board on December 2, 2011. Mr. MacDonald also serves as the Executive Vice President and Chief Development Officer of the Company and its 50.1% subsidiary, GROUP Software AG, a German publicly-traded company, and therefore, does not qualify as an “independent director” as defined by Section 10A(m)(3)(ii) of the Exchange Act or Rule 5605(a)(2) of the NASDAQ Marketplace Rules.

On March 1, 2012, Mr. Moore was appointed the Chairman of the Audit Committee and unanimously designated as the “audit committee financial expert” as that term is defined under Item 407(d)(5)(ii) of Regulation S-K due to Mr. Moore’s experience as reflected above in his biography.

The Audit Committee shall assist the Board in fulfilling its responsibility to oversee the conduct and integrity of the Company’s financial reports, internal controls and compliance with legal and regulatory requirements, with ultimate authority to: (i) select, appoint, dismiss, oversee the compensation of and oversee the Company’s independent auditors; (ii) preapprove all auditing and non-auditing services to be provided by the independent auditors (other than non-auditing services that are de minimis); (iii) oversee the independence and qualification of the Company’s independent auditors; (iv) oversee the performance of the Company’s internal audit and surveillance functions; and (v) prepare any reports of the Committee that are required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement.

The Company believes that the appointment of the New Directors, each of whom qualifies as an “independent director” (as defined by Section 10A(m)(3)(ii) of the Exchange Act and Rule 5065(a)(2) of the NASDAQ Marketplace Rules), as well as the establishment of a standing Audit Committee comprised of a majority of independent directors, one of whom who has been appointed an “audit committee financial expert” (as defined by Item 407(d)(5)(ii) of Regulation S-K) will serve to correct the material weaknesses discussed above.

Management and the Company’s Board of Directors will continue to monitor and evaluate the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Item 9B. Other Information.

None

PART III

Item 10. Directors, Executive Officers and Corporate Governance

On April 26, 2010, Mr. Joerg Ott was appointed to serve as the sole director of the Company and to serve as the Chief Executive Officer of the Company. Directors hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified. Officers of the Company are appointed by the board of directors and hold office until their death, resignation or removal from office.

On April 30, 2010, the Company retained the services of Gary MacDonald as the Company’s Executive Vice President and Chief Corporate Development Officer.

On August 2, 2010, the Company retained the services of Ronald J. Everett to serve as the Company’s Chief Financial Officer.

The following persons served as the executive officers and members of the Board of Directors of the Company as of March 31, 2011:

Name:	Position Held with the Company:	Age:
Joerg Ott	Chief Executive Officer and Sole Director	47
Gary MacDonald	Executive Vice President and Chief Development Officer	56
Ronald Everett	Chief Financial Officer	56

BIOGRAPHIES:

Joerg Ott, Chairman of the Board and Chief Executive Officer

Since April 26, 2010, Mr. Ott has been serving as the Company’s Chief Executive Officer and sole Director; and as of April 2002, Joerg has also been serving as the Chief Executive Officer of GROUP Business Software AG, (a 50.1% subsidiary of the Company). GROUP Business Software AG has been trading at Frankfurt Stock Exchange since early 2000. From December 2000 to October 2002, Joerg was the Chief Executive Officer of Senator AG, a software company specializing in machine translation software. From October 1998 to December 2000, Joerg was the founding General Manager of Global Words GmbH, a technology and services company focusing on multi-lingual telephone based conference service. In 1997, Joerg founded OUTPUT! GmbH, a German based sales training company. Mr. Ott earned his MBA from University of Passau, Germany, focusing on Operations Research and Finance. He is also a Harvard Business School alumnus, graduated in 2009.

Gary MacDonald, Executive Vice President and Chief Development Officer

Since April 30, 2010, Gary MacDonald has been serving as the Executive Vice President and Chief Development Officer of the Company. Since September 2005, Gary has also been serving as the Chief Business Development Officer of GROUP Business Software AG, a 50.1% subsidiary of the Company which is publicly traded in Germany. From November 2003 to August 2005, Gary service as the Vice President, Corporate Development and Government Relations Officer at Raydiance, Inc., a privately held research company. From August 1994 to September 2003, Mr. MacDonald serviced as the Senior Vice President of Sales and Marketing at Kingston Technology Company, a privately held company in the computer hardware industry. From October 1991 to August 1994, Gary serviced as the Vice President and Principal of Impediment Incorporated, a privately held company in the computer hardware industry.

Ronald Everett, Chief Financial Officer

Since August 2, 2010, Ronald J. Everett has been serving as the Chief Financial Officer of the Company. Since October 1999, Ron has also been the Managing Partner of Business Valuation Center, a valuation and merger & acquisition advisory firm. From October 1995 to September 1999, Ron was a Vice Present and Director of Technology Valuation for Valuation Counselors, Inc. and CBIZ Valuation, Inc. Prior to this position, Ron was New England Director of Valuation Services for Ernst and Young from 1988 until 1992. Prior to 1988, Ron has held various financial management positions including CFO of Systems Architects, Inc., a software development company, which provided enterprise applications for the operation and management of large data center facilities, primarily for military and civilian agencies of the U.S. Government. Ron is a Certified Business Appraiser and earned a BSBA in Finance & Accounting from Suffolk University in 1978.

Family Relationships

There are no family relationships between or among any of our current directors, executive officers or persons nominated or charged by the Company to become directors or executive officers. There are no family relationships among our officers and directors and the officers and directors of our direct and indirect subsidiaries.

Involvement in Certain Legal Proceedings

None of the directors or executive officers has, during the past ten years:

(a)

Had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(b)

Been convicted in a criminal proceeding or subject to a pending criminal proceeding;

(c)

Been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; or

(d)

Been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

ode of Ethics and Code of Business Conduct

We have not yet adopted a Code of Ethics or Code of Business Conduct due to our limited size but we intend to do so when we increase the size of our Company.

Corporate Governance

Nominating and Compensation Committees

As of March 31, 2011, the Company did not have standing nominating or compensation committees, or committees performing similar functions.

Audit Committee

As of March 31, 2011, the Company’s Board of Directors did not have a standing audit committee.

Other Committees

All proceedings of our Board of Directors for the year ended March 31, 2011 were conducted by resolutions consented to in writing by our directors and filed with the minutes of the proceedings of the Board of Directors. Our Company currently does not have any committees.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with, with the exception of Ronald Everett, our Chief Financial Officer, and Gary MacDonald, our Executive Senior Vice President and Chief Development Officer. As of the fiscal year ended March 31, 2011, Mr. Everett and Mr. MacDonald have not filed their Form 3’s.

Item 11. Executive Compensation

The Summary Compensation Table sets forth the particulars of compensation paid to the “named executive officers” as that term is defined by Regulation S-K.

SUMMARY COMPENSATION TABLE
Name and Principal Position	Fiscal Year Ended March 31,	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)(4)		Total ($)
Joerg Ott —Chief Executive Officer (PEO) (1)	2011	$	120,000		—		—		—		—		—		—	$	120,000
	2010		—		—		—		—		—		—		—		—

Ronald Everett -Chief Financial Officer (PFO) (2)	2011	$	20,000		—		—		—		—		—		—	$	20,000
	2010		—		—		—		—		—		—		—		—

Gary MacDonald —Executive VP and Chief Development Officer (3)	2011		—				—		—		—		—		—		—
	2010		—		—		—		—		—		—		—		—

(1) Joerg Ott commenced serving as the Company’s Chief Executive Officer on April 26, 2010.

(2) Ron Everett commenced serving as the Company’s Chief Financial Officer on August 2, 2010.

(3) Gary MacDonald commenced serving as the Company’s Executive Vice President and Chief Development Officer on April 30, 2010.

Significant Employees

Other than our executive officers, GBSX did not have any significant employees at March 31, 2011.

Outstanding Equity Awards at Fiscal Year-End

As of March 31, 2011, we had not adopted any equity compensation plan and no stock, options, or other equity securities were awarded to our principal executive officer or two other most highly compensated executive officers.

Employment Agreements, Termination of Employment and Change-in-Control Arrangements with our Executive Officers

We currently do not have any employment agreements with any of our executive officers, nor do we have any compensatory plans or arrangements resulting from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or from a change in any executive officer’s responsibilities following a change-in-control.

Compensation of Directors

Directors of our Company may be paid for their expenses incurred in attending each meeting of the directors. In addition to expenses, directors may be paid a sum for attending each meeting of the directors or may receive a stated salary as director. No payment precludes any director from serving our Company in any other capacity and being compensated for such service. Members of special or standing committees may be allowed similar reimbursement and compensation for attending committee meetings. During the year ended March 31, 2011, we did not pay any compensation or grant any stock options to our directors.

Director Agreements

None.

Term of Office

Our directors are elected to hold office for a one year term or until his successor is elected and qualified.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information regarding our common stock beneficially owned on July 13, 2011, for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding common stock, (ii) each executive officer and director, and (iii) all executive officers and directors as a group. In general, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days. Shares of common stock subject to options, warrants or convertible securities exercisable or convertible within 60 days of the date of determination are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person. Percentages are determined based on 23,543,790 common shares issued and outstanding as of July 14, 2011. To the best of our knowledge, subject to community and marital property laws, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted.

Name and Address of Beneficial Owner (1)	Number of Shares of Common Stock (2)			% of Class of Stock Outstanding (3)
Joerg Ott —Chairman and Chief Executive Officer		1,850,000	(4)		7.9	%
Ronald Everett —Chief Financial Officer		200,000	*
Gary MacDonald —Executive VP and Chief Development Officer		100,000	*
Edward M. Giles 17 Heights Road Plandome, New York 11030		1,600,000	(5)		6.6	%
Stephen D. Baksa 2 Woods Lane Chatham, NJ 07928		1,400,000	(6)		5.8	%
VP Bank (Switzerland), Ltd. Bahnhofstrasse 3 CH-8022 Zurich, Switzerland		1,488,000	(7)		6.1	%
All Officers and Directors as a group (3 persons)		2,150,000			9.1	%

* Less than 1%

(1)

Unless otherwise indicated, the address of the named beneficial owners is c/o GBS Enterprises Incorporated, 585 Molly Lane, Woodstock, GA 30189.

(2)

Security ownership information for beneficial owners is taken from statements filed with the Securities and Exchange Commission pursuant to information made known by the Company.

(3)

Based on 23,543,790 shares of Common Stock outstanding as of July 14, 2011.

(4)

Consists of 1,550,000 shares of Common Stock held by vbv Vitamin B Venture GmbH, an entity of which Mr. Ott has sole voting and dispositive control and 300,000 shares of Common Stock held directly by Mr. Ott.

(5)

Consists of: (i) 440,000 shares of Common Stock held by Edward M. Giles, (ii) 440,000 shares of Common Stock issuable upon the exercise of 440,000 Warrants held by Edward M. Giles, (iii) 280,000 shares of Common Stock held by Isles Capital, L.P., a limited partnership over which Mr. Giles exercises investment discretion, (iv) 280,000 shares of Common Stock issuable upon the exercise of 280,000 Warrants held by Isles Capital, L.P., (v) 80,000 shares of Common Stock held by Edward M. Giles Roth IRA #7, (ii) 80,000 shares of Common Stock issuable upon the exercise of 80,000 Warrants held by Edward M. Giles Roth IRA #7.

(6)

Consists of (i) 700,000 shares of Common Stock held by Stephen D. Baksa and (ii) 700,000 shares of Common Stock issuable upon the exercise of 700,000 Warrants held by Stephen D. Baksa.

(7)

Consists of (i) 744,000 shares of Common Stock held by VP Bank (Switzerland), Ltd. and (ii) 744,000 shares of Common Stock issuable upon the exercise of 744,000 Warrants held by VP Bank (Switzerland), Ltd.

Changes in Control

We are not aware of any arrangements, including any pledge by any person of our securities, the operation of which may result in a change in control of the Company.

Item 13. Certain Relationships and Related Transactions, and Director Independence

See Note 30 to the Financial Statements included in this Annual Report and which is incorporated by reference herein.

Our only director, Joerg Ott, is also the Company’s President and Chief Executive Officer and therefore, is not deemed to be “independent.”

Item 14. Principal Accounting Fees and Services

K. R. Margetson Ltd., Chartered Accountant (“K.R. Margetson”) is the Company’s independent public accountant. The aggregate fees billed for the two most recently completed fiscal years ended March 31, 2010 and March 31, 2011 for professional services rendered by K.R. Margetson were as follows:

	Year Ended March 31
	2011		2010
Audit Fees and Audit Related Fees	$	5,550	$	5,200
Tax Fees		—		-
All Other Fees		6,490		1,500
Total	$	12,040	$	6,700

Policy on Pre-Approval by the Board of Services Performed by Independent Auditors

We do not use K.R. Margetson Ltd. for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We do not engage K.R. Margetson Ltd. to provide compliance outsourcing services.

The board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

The board of directors has considered the nature and amount of fees billed by K.R. Margetson Ltd. and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independence.

PART IV

Item 15. Exhibits, Financial Statement Schedules

No.:		Description:

3.1		Articles of Incorporation [Incorporated by reference to the Company’s Form SB-2 filed January 14, 2008]

3.1.1		Certificate of Amendment to Articles of Incorporation, effective September 6, 2010 [Incorporated by reference to Amendment No. 2 to the Company’s Form 10-K for the fiscal year ended March 31, 2011 filed November 7, 2011]

3.1.2		Certificate of Amendment to Articles of Incorporation, effective November 22, 2010 [Incorporated by reference to Amendment No. 2 to the Company’s Form 10-K for the fiscal year ended March 31, 2011 filed November 7, 2011]

3.2		Bylaws [Incorporated by reference to the Company’s Form SB-2 filed January 14, 2008]

10.1		Subsidiary Stock Purchase Agreement, dated September 21, 2009, between SWAV Enterprises Ltd. and Pui Shan Lam [Incorporated by reference to the Company’s Form 8-K filed September 21, 2009]

10.2		Asset Purchase Agreement, dated April 26, 2010, between SWAV Enterprises Ltd. and Lotus Holdings Limited [Incorporated by reference to the Company’s Form 8-K filed April 26, 2010]

10.3		Non-Affiliate Stock Purchase Agreement, dated April 26, 2010, between the Selling Stockholders and Joerg Ott [Incorporated by reference to the Company’s Form 8-K filed April 26, 2010]

10.4		Affiliate Stock Purchase Agreement, dated April 26, 2010, between the Selling Stockholders and Joerg Ott [Incorporated by reference to the Company’s Form 8-K filed April 26, 2010]

10.5		Subsidiary Stock Purchase Agreement, dated April 26, 2010, between SWAV Enterprises Ltd. and Pui Shan Lam [Incorporated by reference to the Company’s Form 8-K filed April 26, 2010]

10.6		Stock Purchase Agreement, dated November 5, 2010, between GBS Enterprises Incorporated and LVM Landwirtschaftlicher Versicherungsverein AG [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.7		Stock Purchase Agreement, dated November 3, 2010, between GBS Enterprises Incorporated and MPire Capital City [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.8		Stock Purchase Agreement, dated November 5, 2010, between GBS Enterprises Incorporated and Stone Mountain Ltd. [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.9		Stock Purchase Agreement, dated November 3, 2010, between GBS Enterprises Incorporated and Tuomo Tilman [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.10		Stock Purchase Agreement, dated November 5, 2010, between GBS Enterprises Incorporated and vbv Vitamin B Venture GmbH [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.11		Stock Purchase Agreement, dated November 5, 2010, between GBS Enterprises Incorporated and Jyrki Salminen [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.12		Stock Purchase Agreement, dated January 5, 2011, between GBS Enterprises Incorporated and Delta Consult LP [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.13		Stock Purchase Agreement, dated January 5, 2011, between GBS Enterprises Incorporated and GAVF LLC [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

10.14		Stock Purchase Agreement, dated January 5, 2011, between GBS Enterprises Incorporated and K Group [Incorporated by reference to the Company’s Form 10-Q/A Amendment No. 2 for the quarter ended December 31, 2010]

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

*Filed herewith.

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


	By: /s/ Joerg Ott
	Joerg Ott
	President, Chief Executive Officer and Director
	(Principal Executive Officer)

	Date: March 23, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature:	Title:	Date:

/s/ Joerg Ott	President, Chief Executive Officer and Director	March 23, 2012
Joerg Ott	(Principal Executive Officer)

/s/ Markus Everett	Chief Financial Officer	March 23, 2012
Markus Everett	(Principal Financial and Accounting Officer)

/s/ Gary MacDonald	Executive Vice President and Chief Development	March 23, 2012
Gary MacDonald	Officer, and Director

/s/ David Darsch	Director	March 23, 2012
David Darsch

/s/ John A. Moore, Jr.	Director	March 23, 2012
John A. Moore, Jr.

/s/ Mohammad Shihadah	Director	March 23, 2012
Mohammad Shihadah

/s/ Stephen D. Baksa	Director	March 23, 2012
Stephen D. Baksa

/s/ Woody A. Allen	Director	March 23, 2012
Woody A. Allen

Attached files

Stock widget

Investing forum

MARIZYME INC Reports