Marizyme (MRZM) 10-K/A 2012 FY Annual report (amended)

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: December 31, 2012

¨ 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) 891-1711

Issuer’s telephone number

With a copy to:

Philip Magri, Esq.

The Magri Law Firm, PLLC

2642 NE 9^th Avenue

T: (646) 502-5900

F: (646) 826-9200

pmagri@magrilaw.com

www.magrilaw.com

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¨ Nox 

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¨ Nox

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¨ Nox

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¨ Nox 

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 companyx

(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¨ Nox

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. At June 30, 2012, the aggregate market value of the voting and non-voting common equity held by non-affiliates was approximately $10,284,666 based on $0.40 (the closing sales price of the Company’s common stock on June 29, 2012).

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of May 8, 2014, there were 31,904,291 shares of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

EXPLANATORY NOTE

GBS Enterprises Incorporated, a Nevada corporation (the “Company”), is filing this Amendment No. 3 (this “Amendment No. 3”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “Form 10-K”), originally filed with the Securities and Exchange Commission on May 17, 2013 (the “Original Filing”) and subsequently amended on June 14, 2014 (“Amendment No. 1”) and March 4, 2014 (“Amendment No. 2”), to make only the following changes to Item 8 of Form 10-K in Amendment No. 2:

1. To amend the Annual Consolidated Statements of Equity for the years ended December 31, 2012 and 2011 for an inadvertent printing error;

2. To add a purchase price allocations to Note 1; and

3. To amend Note 3 to include 12/31/2011 Balance Sheets, Income Statements and Cash Flow Statements for the Company’s original Form 10-K filing as compared to subsequent amendments, and to include the explanation for such changes.

Other than the foregoing, no changes have been made to Item 8 or the other Form 10-K Items included Amendment No. 2.

This Amendment No. 3 speaks as of the fiscal year ended December 31, 2012 and does not modify or update in any way disclosures made in Amendment No. 2. The Form 10-K Items contained in Amendment No. 2 which have not been duplicated in this Amendment No. 3 are incorporated by reference herein.

The certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, filed as Exhibits 31 and 32, respectively, have been re-executed and re-filed as of the date of this Amendment No. 3.

Item 8. Financial Statements and Supplementary Data  

Our consolidated financial statements and related financial statement schedule, together with the report of independent registered public accounting firm after the Signature Page of this report.

Item 15. Exhibits, Financial Statement Schedules

Exhibit No.:	Description:	Filed an Exhibit to the following Company SEC Filing and Incorporated by Reference herein:
3.1	Articles of Incorporation	Form SB-2 (File No: 333-146748) filed January 14, 2008
3.1.1	Certificate of Amendment to Articles of Incorporation, effective September 6, 2010	Form 10-K filed July 16, 2012
3.1.2	Certificate of Amendment to Articles of Incorporation, effective November 22, 2010	Form 10-K/A filed November 7, 2011
3.1.3	Certificate of Incorporation, dated June 5, 2012, of GBS India Private Limited	Form 10-Q filed September 13, 2012
3.2	Bylaws	Form SB-2 (File No: 333-146748) filed January 14, 2008
4.1	Form of Private Placement Warrant	Form S-1(File No.: 333-180626) filed April 9, 2012
4.2	Form of Investor Warrant	Form 8-K filed March 30, 2012
4.3	Warrant, dated April 16, 2012, issued to Joerg Ott	Form 10-K filed April 16, 2012
7.1	Letter from Grant Thornton GmbH, addressed to the Securities and Exchange Commission, dated August 27, 2012.	Form 8-K/A filed August 28, 2012
10.1	Subsidiary Stock Purchase Agreement, dated September 21, 2009, between SWAV Enterprises Ltd. and Pui Shan Lam	Form 8-K filed September 21, 2009
10.2	Asset Purchase Agreement, dated April 26, 2010, between SWAV Enterprises Ltd. and Lotus Holdings Limited	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	Form 8-K filed April 26, 2010
10.4	Affiliate Stock Purchase Agreement, dated April 26, 2010, between the Selling Stockholders and Joerg Ott	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	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	Form 10-Q/A filed May 20, 2011
10.7	Stock Purchase Agreement, dated November 3, 2010, between GBS Enterprises Incorporated and MPire Capital City	Form 10-Q/A filed May 20, 2011
10.8	Stock Purchase Agreement, dated November 5, 2010, between GBS Enterprises Incorporated and Stone Mountain Ltd.	Form 10-Q/A filed May 20, 2011

10.9	Stock Purchase Agreement, dated November 3, 2010, between GBS Enterprises Incorporated and Tuomo Tilman	Form 10-Q/A filed May 20, 2011
10.10	Stock Purchase Agreement, dated November 5, 2010, between GBS Enterprises Incorporated and vbv Vitamin B Venture	Form 10-Q/A filed May 20, 2011
10.11	Stock Purchase Agreement, dated November 5, 2010, between GBS Enterprises Incorporated and Jyrki Salminen	Form 10-Q/A filed May 20, 2011
10.12	Stock Purchase Agreement, dated January 5, 2011, between GBS Enterprises Incorporated and Delta Consult LP	Form 10-Q/A filed May 20, 2011
10.13	Stock Purchase Agreement, dated January 5, 2011, between GBS Enterprises Incorporated and GAVF LLC	Form 10-Q/A filed May 20, 2011
10.14	Stock Purchase Agreement, dated January 5, 2011, between GBS Enterprises Incorporated and K Group	Form 10-Q/A filed May 20, 2011
10.15	Acquisition Agreement, dated September 27, 2011, by and between GBS Enterprises Incorporated, SD Holdings, Ltd. and the Shareholders of SD Holdings Ltd.	Form 8-K filed October 4, 2011
10.16	Amendment, dated October 31, 2011, to that certain Acquisition Agreement, dated September 27, 2011, by and between GBS Enterprises Incorporated, SD Holdings, Ltd. and the Shareholders of SD Holdings Ltd.	Form S-1(File No.: 333-180626) filed April 9, 2012
10.17	Amendment, dated November 30, 2011, to that certain Acquisition Agreement, dated September 27, 2011, by and between GBS Enterprises Incorporated, SD Holdings, Ltd. and the Shareholders of SD Holdings Ltd.	Form S-1(File No.: 333-180626) filed April 9, 2012
10.18	Amendment, dated December 16, 2011, to that certain Acquisition Agreement, dated September 27, 2011, by and between GBS Enterprises Incorporated, SD Holdings, Ltd. and the Shareholders of SD Holdings Ltd.	Form S-1(File No.: 333-180626) filed April 9, 2012
10.19	Acquisition Agreement, dated June 1, 2011, by and among GBS Enterprises Incorporated, GroupWare AG and the Selling Stockholder of GroupWare AG	Form 8-K filed June 27, 2011
10.20	Acquisition Agreement, dated July 15, 2011, by and among GBS Enterprises Incorporated, IDC Global, Inc., the IDC Shareholders’ Representative and Management Shareholders’ Representative	Form 8-K filed July 28, 2011
10.21*	Consultant Services Agreement, dated February 24, 2012, between GBS Enterprises Incorporated and Green Minds Venture GmbH	Form 8-K filed February 28, 2012
10.22*	Offer Letter, dated January 26, 2012, between the Company and David M. Darsch, as amended	Form 8-K filed March 6, 2012
10.23*	Offer Letter, dated January 26, 2012, between the Company and John A. Moore, Jr., as amended	Form 8-K filed March 6, 2012

10.24*	Offer Letter, dated January 26, 2012, between the Company and Mohammad Shihadah, as amended	Form 8-K filed March 6, 2012
10.25*	Offer Letter, dated February 24, 2012, between the Company and Stephen D. Baksa, as amended	Form 8-K filed March 6, 2012
10.26*	Offer Letter, dated January 23, 2012, between the Company and Woody A. Allen, as amended	Form 8-K filed March 6, 2012
10.27	Securities Purchase Agreement, dated April 16, 2012, between GBS Enterprises Incorporated and Joerg Ott	Form 10-K filed April 16, 2012
10.28	Note Purchase and Security Agreement, dated August 13, 2012, by and between GBS Enterprises Incorporated and John A. Moore, Jr. and Annedenise M. Moore	Form 8-K filed August 16, 2012
10.29	Purchase Agreement, dated June 6, 2012, between GBS Enterprises Incorporated (as Purchaser) and SD Holdings, Ltd. (as Seller)	Form 10-Q filed September 13, 2012
10.30	Purchase Agreement, dated April 2, 2012, between GBS Enterprises Incorporated (as Seller) and Lotus Holdings, Ltd. (as Purchaser)	Form 10-Q filed September 13, 2012
10.31	Transfer Agreement, dated May 21, 2012 (effective as of July 1, 2012), between Synaptris Decisions Private Limited and GBS India Private Limited	Form 10-Q filed September 13, 2012
10.32	Note Purchase and Security Agreement, dated October 26, 2012, by and between GBS Enterprises Incorporated and Stephen D. Baksa	Form 8-K filed November 2, 2012
10.33	Secured Promissory Note, dated October 26,2012, by and between GBS Enterprises Incorporated and Stephen D. Baksa	Form 8-K filed November 2, 2012
10.34	Common Stock Purchase Warrant, issued October 26, 2012, by GBS Enterprises Incorporated to Stephen D. Baksa	Form 8-K filed November 2, 2012
10.35	Note Purchase Agreement, dated October 29, 2012, by and between Group Business Software AG and GBS Enterprises Incorporated	Form 8-K filed November 2, 2012
10.36	Promissory Note, dated October 29, 2012, by and between GROUP Business Software AG and GBS Enterprises Incorporated	Form 8-K filed November 2, 2012
10.37	Note Purchase Agreement, dated November 14, 2012, by and between Group Business Software AG and GBS Enterprises Incorporated	Form 8-K filed November 20, 2012
10.38	Promissory Note, dated November 14, 2012, by and between GROUP Business Software AG and GBS Enterprises Incorporated	Form 8-K filed November 20, 2012
10.39	Note Purchase and Security Agreement, dated November 30, 2012, by and between GBS Enterprises Incorporated and Pike H. Sullivan	Form 8-K filed December 12, 2012
10.40	Secured Promissory Note, dated November 30, 2012, by and between GBS Enterprises Incorporated and Pike H. Sullivan	Form 8-K filed December 12, 2012

10.41	Common Stock Purchase Warrant, issued November 30, 2012, by GBS Enterprises Incorporated to Pike H. Sullivan	Form 8-K filed December 12, 2012
10.42	Secured Promissory Note, dated April 29, 2013, by and between GBS Enterprises Incorporated and Stephen D. Baksa	Form 8-K filed May 2, 2012
10.43	Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Stephen D. Baksa	Form 8-K filed May 2, 2012
10.44	Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Stephen D. Baksa	Form 8-K filed May 2, 2012
10.45	Secured Promissory Note, dated April 29, 2013, by and between GBS Enterprises Incorporated and Vitamin B Venture GmbH	Form 8-K filed May 2, 2012
10.46	Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Vitamin B Venture GmbH	Form 8-K filed May 2, 2012
10.47	Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Vitamin B Venture GmbH	Form 8-K filed May 2, 2012
21.1(1)	List of Subsidiaries	Form 10-K/A filed March 4, 2014
31.1(1)	Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive Officer	—
31.2(1)	Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Financial and Accounting Officer	—
32.1(1)	Section 1350 Certification of Principal Executive Officer	—
32.2(1)	Section 1350 Certification of Principal Financial and Accounting Officer	—
101.INS(2)	XBRL Instance Document	—
101.SCH(2)	XBRL Schema Document	—
101.CAL(2)	XBRL Calculation Linkbase Document	—
101.DEF(2)	XBRL Definition Linkbase Document	—
101.LAB(2)	XBRL Label Linkbase Document	—
101.PRE(2)	XBRL Presentation Linkbase Document	—

*	Management Contracts and Compensatory Plans, Contracts or Arrangements.
(1)	Filed herewith.
(2)	Furnished herewith. Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.

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/ Markus R. Ernst

Markus R. Ernst

Chief Financial Officer

(Principal Financing and Accounting Officer)

Date: May 8, 2014

K. R. MARGETSON LTD.	Chartered Accountants
210, 905 West Pender Street
Vancouver BC V6C 1L6
Tel:  604.641.4450
Fax: 1.855.603.3228

REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

To the Stockholders of

GBS Enterprises Incorporated:

We have audited the consolidated balance sheets of GBS Enterprises Incorporated as of December 31, 2012 and 2011 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 and 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluation 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 GBS Enterprises Incorporated as of December 31, 2012 and 2011 and the results of its consolidated operations, changes in equity and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As disclosed in Note 3, the Company changed its fiscal year end from March 31 to December 31. Prior to this change, certain entities included in these consolidated statements reported with December 31 year ends without any adjustments for timing differences in the year end. These consolidated financial statements retroactively apply this change so all entities included in these consolidated statements have December 31, 2012 and 2011 year ends. In doing so, these consolidated statements each include a twelve month period of consolidated operations, changes in equity and cash flows, starting at January 1 and ending December 31.

Without qualifying our report, and because of the relative significance of the assets, we note that the reported values of goodwill and other intangibles is contingent upon the Company attaining projected revenues from new product lines. Accordingly, failure to attain those projections would negatively affect those reported values.

Vancouver, Canada	/s/ K. R. Margetson Ltd.
February 28, 2014	Chartered Accountants

GBS Enterprises Incorporated

Annual Consolidated Balance Sheets

December 31, 2012 and December 31, 2011

Audited and Restated

	Restated			Restated
	December 31, 2012			December 31, 2011
	$			$
Assets
Current Assets
Cash and cash equivalents - Note 5		1,154,602			3,142,308
Accounts Receivable - Note 6		4,143,448			4,850,507
Inventories - Note 2		-			236,712
Prepaid expenses - Note 7		84,304			389,772
Other receivables - Note 8		676,976			680,693
Assets held for sale - Note 9		384,862			682,999
Total current assets		6,444,192			9,982,991
Assets held for sale - Note 9		1,846,645			1,388,723
Property, plant and equipment - Note 10		332,839			521,976
Non - Operating receivables - Note 11		428,422			548,909
Investment in related company, at equity		-			244,219
Deferred tax assets - Note 26		1,132,103			2,451,800
Goodwill - Note 12		34,254,881			39,221,603
Software - Note 13		12,207,031			14,249,905
Other assets - Note 14		156,379			93,268
Total non-current assets		50,358,300			58,720,403
Total assets		56,802,492			68,703,394
Liabilities and stockholders' equity
Current liabilities
Notes payable - Note 15		1,277,407			1,381,821
Liabilities to banks - Note 16		6,774			19,595
Accounts payables and accrued liabilities - Note 17		6,241,733			6,078,711
Deferred income - Note 18		6,099,570			6,341,575
Other liabilities - Note 19		860,032			4,252,240
Due to related parties - Note 22		3,152,034			432,421
Liability held for sale - Note 9		589,634			552,031
Total current liabilities		18,227,184			19,058,394
Liabilities to banks - Note 20		3,716,102			3,463,483
Retirement benefit obligation - Note 27		165,876			150,632
Other liabilities - Note 21		-			2,266,075
Liability held for sale - Note 9		159,898			7,662
Total non-current liabilities		4,041,876			5,887,852
Total liabilities		22,269,060			24,946,246
Stockholders' equity
Capital stock - Note 23
Authorized:
75,000,000 common shares of $.001 par value each
25,000,000 preferred shares of $.001 par value each
Issued and outstanding:
29,461,664 shares of common stock
(27,306,664 shares at December 31, 2011)		29,462			27,307
Additional paid in capital		49,691,195			47,446,318
Accumulated deficit		(18,974,582	)		(12,147,666	)
Other comprehensive income		442,841			494,206
		31,188,916			35,820,165
Noncontrolling interest in subsidiaries		3,344,516			7,936,983
Total stockholders' equity		34,533,432			43,757,148
Total stockholders' equity and liabilities		56,802,492			68,703,394

Subsequent events - Note 30

GBS Enterprises Incorporated

Annual Consolidated Statements of Operations and Comprehensive Loss

For the year ended December 31, 2012 and December 31, 2011  

Audited and Restated 

	For the Three Months Ended						For the Twelve Months Ended
	Restated December 31, 2012 $			Restated December 31, 2011 $			Restated December 31, 2012 $			Restated December 31, 2011 $
Revenues - Note 24
Products		6,160,732			6,291,196			21,195,435			21,787,910
Services		1,023,604			661,545			4,540,349			6,485,182
		7,184,337			6,952,741			25,735,784			28,273,092
Cost of goods sold
Products		1,804,678			1,598,997			5,638,228			5,575,747
Services		2,359,871			3,272,805			8,976,846			10,322,435
		4,164,549			4,871,802			14,615,074			15,898,182
Gross profit		3,019,788			2,080,939			11,120,710			12,374,910
Operating expenses
Selling expenses		2,112,364			3,149,098			12,102,534			15,426,600
Administrative expenses		2,022,783			1,321,724			5,962,875			6,160,961
General expenses		788,859			83,212			1,500,086			926,129
		4,924,005			4,554,034			19,565,495			22,513,690
Operating loss		(1,904,217	)		(2,473,095	)		(8,444,785	)		(10,138,779	)
Other Income (expense) - Note 25
Other Expense		(1,107,277	)		(15,959,654	)		(1,054,734	)		(15,894,738	)
Interest income		161			14,694			3,027			33,948
Interest expense		(238,681	)		(144,654	)		(480,086	)		(406,407	)
		(1,345,798	)		(16,089,614	)		(1,531,793	)		(16,267,197	)
Loss before income taxes and discontinued operations		(3,250,015	)		(18,562,709	)		(9,976,578	)		(26,405,976	)
Income tax (income) expense		2,842,011			(45,472	)		1,432,252			(2,151,211	)
Loss before discontinued operations		(6,092,026	)		(18,517,237	)		(11,408,830	)		(24,254,766	)
Discontinued operations (net of tax) - Note 9		(235,820	)		521,979			40,607			521,979
Net Loss		(6,327,846	)		(17,995,258	)		(11,368,223	)		(23,732,787	)
Net Loss Attributable to noncontrolling Interest		(2,841,757	)		(9,075,158	)		(4,541,307	)		(11,567,489	)
Net loss attributable to stockholders		(3,486,089	)		(8,920,100	)		(6,826,916	)		(12,165,298	)
Net loss per share, basic and diluted	$	(0.119	)	$	(0.349	)	$	(0.233	)	$	(0.449	)
Weighted average number of common stock outstanding, basic and diluted		29,119,710			25,139,198			29,461,664			27,247,958
Statement of Comprehensive Loss
Net Loss		(6,327,846	)		(17,995,258	)		(11,368,223	)		(23,732,787	)
Foreign currency Translation Adjustment		13,610			295,718			(102,525	)		(125,751	)
Comprehensive loss		(6,314,236	)		(17,699,540	)		(11,470,748	)		(23,858,538	)
Less: Net loss attributable to noncontrolling interest		(2,841,757	)		(9,075,158	)		(4,541,307	)		(11,567,489	)
Less: Other Comprehensive loss attributable to noncontrolling interest		(18,518	)		147,563			(51,160	)		(62,750	)
Total Comprehensive loss attributed to stockholders		(3,453,961	)		(8,771,945	)		(6,878,281	)		(12,228,299	)

GBS Enterprises Incorporated

Annual Consolidated Statements of Cash Flows

For the year ended December 31, 2012 and 2011

Audited and Restated

	Restated			Restated
	December 31, 2012			December 31, 2011
	$			$
Cash flow from operating activities:
Net loss		(11,368,223	)		(23,732,787	)
Income from discontinued operations		(40,607	)		(521,979	)
Adjustments :
Interest Expense		26,700			-
Consulting Expense		272,832			34,000
Deferred income taxes		1,319,697			(2,193,941	)
Depreciation and amortization		4,148,915			5,840,688
Loss on Equity Investment		227,781			-
Write-down of Intangibles		1,517,139			-
Changes in operating assets and liabilities:
Accounts receivable and other assets		1,073,620			4,147,043
Retirement benefit obligation		15,244			(3,433	)
Inventories		236,712			(236,712	)
Accounts payable and other liabilities		(5,737,266	)		(1,031,853	)
Net cash used in operating activities for continuing operations		(8,307,456	)		(17,698,974	)
Cash flow from investing activities
Purchase or Sale of Intangible assets		(3,378,072	)		(3,941,396	)
Purchase or Sale of Property, plant and equipment		(56,262	)		-
Purchase or Sale of Equity Investment		-			(244,219	)
Purchase or Sale of Subsidiaries		1,020,500			(1,910,529	)
Increase (Decrease) in Financial assets		3,946,222			13,465,619
Net cash provided by investing activities from continuing operations		1,532,388			7,369,475
Cash flow from financing activities
Net borrowings - banks		239,798			2,651,919
Other borrowings		(104,414	)		(59,442	)
Net Borrowings from related party		2,719,613			432,421
Capital paid-in		1,947,500			9,703,920
Net cash provided by financing activities from continuing operations		4,802,497			12,728,818
Cash flows from discontinued operations
Net cash proved by (used in) operating activities		70,661			(990,050	)
		70,661			(990,050	)
Effect of exchange rate changes on cash		(85,796	)		(139,029	)
Net increase (decrease) in cash		(1,987,706	)		1,270,240
Cash and cash equivalents - Beginning of the year		3,142,308			1,872,068
Cash and cash equivalents - End of year		1,154,602			3,142,308

Note 29 - Supplemental Cash Flow Disclosures

GBS Enterprises Incorporated

Annual Consolidated Statements of Equity

For the year ended December 31, 2012 and December 31, 2011

Audited and Restated

							Accumulated						Equity
	Common Stock				Additional		Other						Attributable
					Paid in		Comprehensive			Accumulated			to Noncontrolling
	Shares		Amount		Capital		Income (Loss)			Deficit			Interest			Equity
	#		$		$		$			$			$			$
Balance, December 31, 2010		16,500,000		16,500		27,221,755		557,207			17,632			19,567,222			47,380,316
March 28, 2011, issued with sale of units at $1.25 /unit		6,044,000		6,044		6,672,906											6,678,950
April 1, 2011, issued on purchase of Pavone AG		999,790		1,000		4,899,000											4,900,000
April 1, 2011, Warrants issued for services		-		-		34,000											34,000
June 1, 2011, issued on purchase of GroupWare, Inc.		250,000		250		1,084,750											1,085,000
July 1, 2011, issued on purchase of IDC Global, Inc.		880,000		880		3,255,120											3,256,000
December 13, 2011, warrants exercised at $1.50 /sh		2,020,000		2,020		3,022,950											3,024,970
December 23, 2011, issued on purchase of SD Holdings Ltd.		612,874		613		1,255,837											1,256,450
Net comprehensive loss for the year								(63,001	)		(12,165,298	)		(11,630,239	)		(23,858,538	)
Balance, December 31, 2011		27,306,664		27,307		47,446,318		494,206			(12,147,666	)		7,936,983			43,757,148
March 27, 2012, warrants exercised at $1.50 /sh		5,000		5		7,495											7,500
March 27, 2012, warrants exercised at $.50 /sh		400,000		400		199,600											200,000
March 30, 2012, warrants exercised at $.50 /sh		500,000		500		249,500											250,000
March 31, 2012, warrants issued for services		-		-		270,208											270,208
				#
April 16, 2012, issued on sale of units at $1.50 /unit		120,000		120		179,880											180,000
April 28, 2012, issued on conversion of note into shares at $1.15 /sh		550,000		550		631,950											632,500
April 30, 2012, issued on conversion of note into shares at $1.15 /sh		400,000		400		459,600											460,000
April 30, 2012, issued on conversion of note and debt into shares at $1.15 /sh		150,000		150		172,350											172,500
May 15, 2012, issued on sale of units at $1.50 /unit		30,000		30		44,970											45,000
July 5, 2012, fair value of conversion on issuance of convertible debt		-		-		26,700											26,700
December 21, 2012, warrants issued for services		-		-		2,624											2,624
Net comprehensive loss for the year								(51,365	)		(6,826,916	)		(4,592,467	)		(11,470,748	)
Balance, December 31, 2012		29,461,664		29,462		49,691,195		442,841			(18,974,582	)		3,344,516			34,533,432

Note 1 COMPANY AND BACKGROUND

Overview

GBS Enterprises Incorporated, a Nevada corporation (the “Company,” “GBS,” “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 software and consulting business is focused on serving IBM’s Lotus Notes and Domino market.   Headquartered in Eisenach, Germany, the Company has offices throughout Europe and North America. The Company maintains a website at www.gbsx.us. GROUP maintains a website at www.gbs.com. The information contained in the Company’s and GROUP’s websites is not incorporated by reference herein.

The Company’s Common Stock is quoted at the OTCQX under the ticker symbol “GBSX.”

In 2012, in order to reduce overhead and administrative costs, we restructured the Company’s multilevel subsidiary-structure.

Products & Services

GBS has grown by consolidating the fragmented Lotus Software market through the acquisition of companies with complementary product, technology or services offerings. GBS has developed its software and service business to service and support its Lotus customer base.

Messaging and Business Applications Software & Solutions

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.

GBS develops, sells and installs 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 and centrally administered use of e-mail and IM while maintaining control over their compliance with current legal requirements and corporate guidelines.

Consulting Services

GBS develops, sells and orchestrates customer-specific Lotus Domino strategy and consulting services.

GBS Consulting Services’ global teams of consultants use modern project management techniques, proprietary methodologies and GBS accelerator technologies to complete client projects on time and with reduced risk.

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.

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 modernized, web enabled (also named “cloud” or “cloud computing”) and migrated Lotus applications; and thus ultimately take the Lotus applications from legacy to the future. The foundation of the Modernizing/Migrating Suite Software offering is GBS’s significant R&D investment in a set of methodologies and key technology accelerators to support 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.

Revenue Model

GBS generates its revenue from the sale of internally created software, third-party developed software and the delivery of related services, including IT systems planning, administration, support, hosting, implementation and integration.

General Corporate History

GBS Enterprises Incorporated was incorporated in Nevada on March 20, 2007 as SWAV Enterprises Ltd. (“SWAV”). SWAV had a different management team and was in a different industry.

On April 26, 2010, SWAV purchased certain technology assets of Lotus Holdings Ltd. (“Lotus”) in consideration for an aggregate of 2,265,240 shares of SWAV common stock. Also on April 26, 2010, Lotus (on behalf of the SPPEF Members as discussed below) purchased an aggregate of 11,984,770 shares of SWAV common stock from certain SWAV stockholders for $370,000. As a result of these transactions, Lotus acquired a total of 14,250,010 shares of SWAV common stock which represented approximately 95.0% of the 15,000,000 outstanding shares of SWAV common stock on April 26, 2010.

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.

About Lotus Holdings, Ltd.

Lotus is a holding company which was formed under the laws of Gibraltar for the purpose of financing merger and acquisition projects, specifically in the niche market of small or microcap companies listed on the Frankfurt Stock Exchange with complex shareholder structures and whose stock is trading below one Euro (€1.00) per share. 

SPPEFs

Lotus typically finances its merger and acquisition projects through the use of Special Purpose Private Equity Funds (“SPPEFs”). Typically, SPPEFs are funded by a company’s major shareholders (the “Major Shareholders”) seeking to raise capital for projects and who fund at least 50% of the SPPEF, with the remaining portion being provided through the investment community and network of investors in Lotus. Each SPPEF is co-managed by a representative of the Major Shareholders (the “Representative Secretary”) and an attorney appointed by Lotus (the “Lotus Representative”).

On February 25, 2010, a group of shareholders (the “GROUP Major Shareholders”) of GROUP Software AG, a German public company trading on the Frankfurt Stock Exchange under the symbol “INW” (“GROUP”), engaged Lotus to provide financial consulting and advisory services, on a non-exclusive basis, for the primary task of establishing a SPPEF. On March 12, 2010, the GROUP Major Shareholders and Lotus established and funded a SPPEF with $1,400,000, consisting of $1,000,000 from the GROUP Major Shareholders and $400,000 from a Lotus investor (collectively, the “SPPEF Members”).

In early April 2010, the SPPEF Members decided to acquire SWAV. As disclosed above, on April 26, 2010, Lotus, on behalf of the SPPEF Members, acquired an aggregate of 11,984,770 shares of SWAV common stock from the selling shareholders of SWAV for an aggregate purchase price of $370,000. The 11,984,770 shares of SWAV common stock shares represented approximately 79.9% of the 15,000,000 outstanding shares of SWAV common stock on April 26, 2010.

Transactions following the April 26, 2010 Transaction

On November 1, 2010, the Company repurchased an aggregate of 3,043,985 of the 11,984,770 shares of the Company’s common stock originally purchased by Lotus on April 26, 2010. In consideration for these 3,043,985 shares, the Company issued to Lotus a Secured Demand Note, dated November 1, 2010 (the “First Demand Note”), for the principal amount of $300,000, bearing interest at the rate of 5% per annum. The First Demand Note was repaid in September 2011.

Effective December 30, 2010, pursuant to securities purchase agreements between the Company and six GROUP Major Shareholders, the Company purchased an aggregate of 7,115,500 shares of GROUP common stock from the six GROUP Major Shareholders in consideration for the 3,043,985 shares of GBS common stock (the “December 2010 Transaction”). As a result, the Company owned approximately 28.2% of the outstanding common stock of GROUP.

Reverse Merger

After the December 2010 Transaction was completed, the additional GROUP Major Shareholders decided to accept the share swap offer from the Company and to effectuate a reverse merger of GROUP and the Company. To effectuate the reverse merger, on January 5, 2011, the Company repurchased from Lotus an aggregate of 2,361,426 of the 11,984,770 shares of the Company’s common stock originally purchased by Lotus on April 26, 2010. In consideration for these 2,361,426 shares, the Company issued to Lotus a Secured Demand Note, dated January 5, 2011 (the “Second Demand Note”), for the principal amount of $200,000, bearing interest at the rate of 5% per annum. The Second Demand Note was repaid in November 2011.

Effective January 6, 2011, pursuant to securities purchase agreements between the Company and the remaining GROUP Major Shareholders, the Company purchased an aggregate of 5,525,735 shares of GROUP common stock from the remaining GROUP Major Shareholders in consideration for the 2,361,426 shares of GBS common stock (the “January 2011 Transaction”). These 5,525,735 GROUP shares represented approximately 21.9% of the outstanding shares of common stock of GROUP. As a result of the December 2010 Transaction and January 2011 Transaction, the Company had acquired an aggregate of 12,641,235 shares of GROUP common stock from the GROUP Major Shareholders in consideration for an aggregate of 5,405,411 shares of GBS common stock, resulting in GBS owning approximately 50.1% of the outstanding GROUP common stock and effectuating a reverse merger of the Company and GROUP whereby GROUP became the accounting acquirer.

Additional GROUP Acquisition

On February 27, 2012, the Company acquired an additional 883,765 shares of common stock of GROUP from GAVF LLC for an average purchase price of $0.70 per share, or approximately $619,000, after 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. By acquiring the new shares, the Company kept its ownership of GROUP common stock at 50.1%. 

Acquisition/Dissolution of Subsidiary Companies

Pavone AG

Effective April 1, 2011, the Company acquired 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 acquisition. The total value of the investment, including the assumption of $583,991 in debt was $5,843,991. Pavone’s workflow software for Lotus Notes and Domino along with their customer base is well suited to GBS Enterprises portfolio strategy.

GroupWare, Inc.

Effective June 1, 2011, the Company acquired 100% of the outstanding common shares of GroupWare, Inc., a Florida corporation (“GroupWare”). 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 acquisition. The total value of the investment, including the assumption of $694,617 in debt was $2,029,617. 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's ePDF server delivers centralized, network-wide PDF solutions for messaging, workflow, document, content and data management.

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. Pursuant to the acquisition agreement, dated July 15, 2011, the Company agreed to issue the shareholders an aggregate of 800,000 shares of common stock and made 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 $3.70 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 $4,066,000. IDC was a privately held company that provides nationwide network and data center services.

SD Holdings, Ltd.

On September 27, 2011, the Company entered into an acquisition agreement with SD Holdings, Ltd. (“SYN”), a Mauritius corporation, and the shareholders of SYN owning 100% of issued and outstanding shares of SYN. SYN owns 100% of all issued and outstanding shares of Synaptris, Inc., a California corporation (“Synaptris”), and 100% of all issued and outstanding shares of Synaptris Decisions Private Limited, a company formed in India (“Synaptris India”). Pursuant to the acquisition agreement, the Company purchased one hundred percent (100%) of the issued and outstanding shares of SYN (effective November 1, 2011 in consideration for $525,529 and agreed to issue 700,000 shares of common stock, subject to adjustment. Actual shares issued were 612,874. 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.

On April 1, 2012, the Company sold SYN, Synaptris and Synaptris India for $1,877,232 to Lotus. in an effort to restructure the Company’s multilevel subsidiary - structure derived from the historical mergers and acquisitions, and to reduce overhead and administrative costs.

GBS India Private Limited

Pursuant to an existing transfer agreement, effective July 1, 2012, the Company entered into a purchase agreement with SYN for $1,877,232, which transferred all assets, including intellectual property rights, and liabilities of the IntelliPRINT and FewClix product lines, customer contracts and certain employees for operations in a new subsidiary, GBS India Private Limited, an incorporated entity formed under the Indian Companies Act 1956 (“GBS India”). A royalty fee in the amount of approximately $350,000 has been agreed upon for the benefit the Company. Additionally a profit based fee of up to $700,000 may be earned based on license and revenue recognized from the sold IntelliVIEW and IntelliVIEW NXT products.

On August 1, 2012, the Company acquired 100% of the outstanding shares of capital stock of GBS India. We anticipate GBS India’s presence in India to accelerate our plan to expand our product development team particularly for our strategic offerings in India.

In accordance with ASC Topic 805, presented below are unaudited pro forma results for year ended restated December 31, 2012 and 2011. To show the effect on our consolidated results of operations as if our acquisitions completed in 2012 had occurred on January 1, 2011:

Supplemental Unaudited Pro Forma

Fiscal Year Ended December 31, 2012

Pre-Combination

Post Combination

Subsidiary

Date

Revenue

Earnings

Date

Revenue

Earnings

2011

($)

($)

2012

($)

($)

GBS India

1/1/2011 - 12/31/2011

(a)

(a)

7/1/2012 - 12/31/2012

9,484

(438,731

)

(a) No metric, as this subsidiary was newly formed as of 7/1/2012

Supplemental Pro Forma

Combined Entity Figures

Year End 2012 & 2011

	Consolidated Figures
	Date	Revenue		Comprehensive Income/(Loss)
		($)		($)
GBS Enterprises	1/1/2011 - 12/31/2011		28,273,092		(23,858,538	))
GBS Enterprises	1/1/2012 - 12/31/2012		25,735,784		(11,470,748	)

Pavone AG/Groupware AG

On July 6, 2012 and August 9, 2012, wholly-owned subsidiaries Pavone AG and Groupware AG, respectively, were merged into Pavone GmbH. The mergers were consummated solely for administrative purposes. Pavone GmbH is a wholly-owned subsidiary of the Company.

Pavone, Ltd.

Pavone, Ltd, a shell company, was dissolved on July 8, 2012.

EbVokus, GmbH.

On October 1, 2012, GROUP sold all of the software and operational assets (constituting substantially all of the assets) of its wholly-owned subsidiary, ebVokus GmbH, along with the associated maintenance and project agreements to a non-affiliated third party for a purchase price of approximately $459,000, approximately $258,000 (200,000 Euros: 1 EUR = $1.29 USD on October 1, 2012) was paid at closing and the remaining $201,000 was paid on February 15, 2013 (150,000 Euro: 1EUR = $1.35 USD on February 15, 2013).

B.E.R.S. AD.

On November 23, 2012 GBS AG sold its entire participation (50%) in B.E.R.S AD for a total of 25,000 BGN (approximately $ 16,438 USD).

In accordance with ASC 805-30-50-2 the table below represents the purchase price allocations of the above acquistions:

Purchase Price Allocations

	IDC			Pavone			GroupWare			SD Holdings
Purchase price paid
Value GBS shares	$	3,256,000		$	4,900,000		$	1,085,000		$	1,256,392
Cash	$	775,000		$	350,000		$	250,000		$	525,529
Assumed debt / Other liabilities	($	35,000	)	($	583,991	)	($	694,617	)	($	853,116	)
Total purchase consideration	$	4,066,000		$	5,833,991		$	2,029,617		$	2,635,037
Assets Acquired
Working capital	$	883,005					$	721,506		$	326,405
Trademarks / Tradenames				$	319,700		$	95,900
Customer relationships	$	188,595		$	557,900		$	218,100
Goodwill	$	2,994,400		$	4,956,391		$	994,111		$	2,308,632
TOTAL Enterprise Value	$	4,066,000		$	5,833,991		$	2,029,617		$	2,635,037

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

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.

Segment Reporting

The Financial Accounting Standards Board (“FASB”) authoritative guidance regarding segment reporting establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. It also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company has determined that it operates in only one segment – the development and maintenance of computer software programs and support products.

Comprehensive Income (Loss)

The Company adopted the 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 and small net actuarial losses on pension plans.

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 both the 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 and other receivable, financial assets, notes payable, liabilities to banks, accounts payable, accrued liabilities and other liabilities, due to related parties and retirement benefit obligations. 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, the British pound and the Bulgarian Lev. Accordingly, some assets and liabilities are incurred in those currencies and we are subject to foreign currency risks.

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

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.

Goodwill and other Intangible Assets

Intangible assets predominately comprise goodwill, acquired software and capitalized software development services. Intangible assets acquired in exchange for payment are reflected at 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.

The Company 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 created software.

Intangible assets obtained as part of an acquisition which do not meet the criteria for a separate entry are identified as goodwill. Goodwill is reviewed once a year during an impairment test, whereby the appraised fair value of the invested capital of the reporting unit, is compared with the carrying (book) value of its invested capital amount (including goodwill.) Use value is generally applied in order to determine the recoverability of goodwill and intangible assets with an indefinite useful life. The projected financial plan prepared by the management serves as the basis for this determination of use value and 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 determined based on the expected growth rates of the markets in question.

If the carrying amount of the reporting unit exceeds the appraised fair value, the impairment based on use value measures the amount of loss, if any, and an unscheduled amortization expense is recorded. If the appraised value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to be impaired.

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 for property, plant and equipment is based on useful lives of 3 to 10 years. Leasehold Improvements are depreciated up to 40 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 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 or appraised value In this instance, the asset is considered to be impaired and is written down to fair value.

Revenue Recognition

Sources of Revenues:

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 in most cases 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 the subsidiary companies whose functional currency is other than US dollars were translated into US dollars using the current rate method. Assets and liabilities were translated at the exchange rates at the balance sheet dates, 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 an 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, 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 July 2012, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. With the objective of reducing the cost and complexity of performing an impairment test for indefinite-lived intangible assets by simplifying how an entity tests those assets for impairment and to improve consistency in impairment testing guidance among long-loved asset categories. The amendments permit an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles – Goodwill and Other – General Intangibles Other than Goodwill. The more-likely-than-not threshold is defined as having the likelihood of more than 50 percent. The amendments are effective for annual and interim impairment tests performed beginning April 1, 2013. Adoption of this new standard is not expected to have significant impact to the Company’s financial statement.

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.

Principles of Consolidation and Reverse Merger

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 became the accounting acquirer and is deemed to have retroactively adopted the capital structure of the Company. Accordingly, the accompanying consolidated financial statements reflect the historical consolidated financial statements of GROUP for periods presented prior to January 6, 2011. 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 the FASB 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 Group Business Software Enterprises, Inc. on the acquisition date of January 6, 2011, at their fair value and the operations of Group Business Software Enterprises, Inc. 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, 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.

Note 3 CHANGE IN ACCOUNTING POLICIES

Fiscal reporting

Effective September 19, 2012, the Company changed its fiscal year end from March 31 to December 31. Prior to this change, the company’s subsidiaries, with the exception of SD Holdings, had fiscal year ends of December 31 and in reporting its financial statements, the Company, through the use of Regulation S-X Rule 3A-02 (“the 93 day rule”), consolidated those subsidiaries without any adjustments for timing differences in the period ends. This application was in error. With the change in year end, the Company retroactively adjusted previously released financial statements to reflect this change beginning December 31, 2010. Accordingly, the financial statements for the year ended December 31, 2012 and 2011, include the accounts of all consolidated companies for the same twelve month period beginning January 1, 2012 and 2011 respectively. The Balance Sheets as at December 31, 2012 and December 31, 2011 have also been adjusted to include the accounts of all consolidated companies as of those dates.

This is Amendment No. 3 to the financial statements and notes for December 31, 2012.

In accordance with ASC 250, effects of this restatement to the previously reported statements for years ending December 31, 2012 and comparative December 31, 2011 are shown below. Where there were no changes between Amendment No. 3 and Amendment No. 2, these have been grouped together.

	For the twelve months ended
	10K/A – 3 10 K/A - 2			10K/A - 1			10K			10K/A – 3 and 10 K/A – 2 as compared to			10K/A - 1 as compared to 10K
	Restated			Restated			Original			10K/A - 1			Original
	December 31, 2012			December 31, 2012			December 31, 2012			Difference			Difference
	$			$			$			$			$
Assets
Current Assets
Cash and cash equivalents		1,154,602			1,154,602			(4,159,318	)		0			5,313,920
Accounts receivable		4,143,448			4,143,448			4,914,640			0			(771,192	)
Inventories		0									0
Prepaid expenses		84,304			84,304			160,095			0			(75,791	)
Other receivables		676,976			676,976			676,976			0			0
Assets held for sale		384,862			384,862			2,231,507			0			(1,846,645	)
Total current assets		6,444,192			6,444,192			9,137,820			0			(2,693,628	)
Assets held for sale		1,846,645			1,846,645			0			0			1,846,645
Property, plant and equipment		332,839			332,839			332,839			0			0
Other non-current receivables		428,422			428,422			428,421			0			1
Deferred tax assets		1,132,103			1,132,103			4,823,871			0			(3,691,768	)
Goodwill		34,254,881			34,254,881			36,206,460			0			(1,951,579	)
Software		12,207,031			12,207,031			13,724,170			0			(1,517,139	)
Other assets		156,379			156,379			156,379			0			0
Total non-current assets		50,358,300			50,358,300			55,672,140			0			(5,313,840	)
Total assets		56,802,492			56,802,492			64,809,961			0			(8,007,469	)
Liabilities and shareholders' equity
Current liabilities
Notes payable		1,277,407			2,313,572			0			(1,036,165	)		2,313,572
Liabilities to banks		6,774			6,774			6,774			0			0
Accounts payable and accrued liabilities		6,241,733			6,241,733			10,846,650			0			(4,604,917	)
Other liabilities		860,032			860,032			860,032			0			0
Deferred income		6,099,570			6,099,570			6,099,570			0			0
Due to related parties		3,152,034			2,115,869			48,068			1,036,165			2,067,801
Liability held for sale		589,634			589,634			749,532			0			(159,898	)
Total current liabilities		18,227,184			18,227,184			18,610,626			0			(383,442	)
Liabilities to banks		3,716,102			3,716,102			3,716,101			0			1
Deferred tax liabilities		0			0			874,551			0			(874,551	)
Retirement benefit obligation		165,876			165,876			165,876			0			0
Liability held for sale		159,898			159,898			0			0			159,898
Total non-current liabilities		4,041,876			4,041,876			4,756,528			0			(714,652	)
Total liabilities		22,269,060			22,269,060			23,367,154			0			(1,098,094	)
Shareholders' equity
Capital Stock
Authorized:
75,000,000 common shares and 25,000,000 preferred shares each with a par value of $.001
Issued and outstanding
		29,462			29,462			29,462			0			0
Additional paid in capital		49,691,195			49,691,195			49,391,663			0			299,532
Accumulated deficit		(18,974,582	)		(18,974,582	)		(15,706,308	)		0			(3,268,274	)
Other comprehensive income		442,841			442,841			313,139			0			129,702
Total shareholders' equity		31,188,916			31,188,916			34,027,957			0			(2,839,041	)
Noncontrolling interest in subsidiaries		3,344,516			3,344,516			7,414,850			0			(4,070,334	)
Total equity and liabilities		56,802,492			56,802,492			64,809,961			0			(8,007,469	)

Balance Sheet

Explanations to above changes: 10K-A No. 1 as compared to 10K as Originally Filed 

Line Item	Explanation of Difference
Cash and cash equivalents	Inadvertent printing error
Accounts receivable	Reclassification to Goodwill ($700k) and bad debt expense($71k)
Prepaid expenses	Reclassification to Accounts payable ($76k)
Assets held for sale	Reclassification to Non-current assets held for sale ($1847k)
Other non-current receivables	Rounding
Deferred tax assets	Reclassification to Tax expense (Income)
Goodwill	Reclassification of $700K from Accounts receivable; ($90k) to Other income; ($2,561k) to write down of goodwill
Software	Reclassification to Intangible write down ($1,517k)
Notes payable	Reclassification from Accounts payable ($2,314k)
Accounts payable and accrued liabilities	Reclassification to Notes payable ($2,314k); prepaid expenses ($76k); legal ($76k); Due to related parties ($2,067k); audit expense ($72k)
Due to related parties	Reclassification from Accounts payable ($2,067k)
Liability held for sale	Reclassification to long term liabilities held for sale
Liabilities to banks	Rounding
Deferred tax liabilities	Reclassification of tax assets
Liability held for sale	Reclassification from short term liabilities held for sale
Additional paid in capital	Reclassification of interest expense ($27K); administrative expenses through warrants ($ 272k)
Accumulated Deficit	Reclassification from Other Income/Expense ($3,268k)

Explanations to above changes: 10K-A No. 3 and 10K-A No. 2 as compared to 10K-A No. 1

Balance Sheet
Line Item	Explanation of Difference
Notes payable	Reclassification to Due to related parties($1,036k)
Due to related parties	Reclassification from Notes payable ($1,036k)

	For the twelve months ended
	10K/A – 3 10K/A – 2			10K/A - 1			10K			10K/A – 3 and 10 K/A – 2 as compared		10K/A - 1 as compared to 10K
	Restated			Restated			Original			to 10K/A - 1		Original
	December 31, 2012			December 31, 2012			December 31, 2012			Difference		Difference
	$			$			$			$		$
Revenues
Products		21,195,435			21,195,435			21,266,627			0		(71,192	)
Services		4,540,349			4,540,349			4,540,349			0		0
		25,735,784			25,735,784			25,806,976			0		(71,192	)
Cost of goods sold
Products		5,638,228			5,638,228			5,638,228			0		0
Services		8,976,846			8,976,846			8,711,016			0		265,830
		14,615,074			14,615,074			14,349,245			0		265,829
Gross profit		11,120,710			11,120,710			11,457,731			0		(337,021	)
Operating expenses
Selling expenses		12,102,534			12,102,534			12,102,534			0		0
Administrative expenses		5,962,875			5,962,875			5,837,796			0		125,079
General expenses		1,500,086			1,500,086			4,458,185			0		(2,958,099	)
		19,565,495			19,565,495			22,398,515			0		(2,833,020	)
Operating Loss		(8,444,785	)		(8,444,785	)		(10,940,783	)		0		2,495,998
Other Income (Expense)
Other income (expense)		(1,054,734	)		(1,054,734	)		5,806,253			0		(6,860,987	)
Interest income		3,027			3,027			3,027			0		0
Interest expense		(480,086	)		(480,086	)		(453,386	)		0		(26,700	)
		(1,531,793	)		(1,531,793	)		5,355,894			0		(6,887,687	)
Loss before income taxes		(9,976,578	)		(9,976,578	)		(5,584,889	)		0		(4,391,689	)
Income tax (income) expense		1,432,252			1,432,252			(1,384,965	)		0		2,817,217
Net Loss		(11,408,830	)		(11,408,830	)		(4,199,924	)		0		(7,208,906	)
Discontinued operations (net of tax)		40,607			40,607			40,607			0		0
Net Loss attributable to non controlling interest		(4,541,307	)		(4,541,307	)		(600,676	)		0		(3,940,631	)
Net Loss attributable to shareholders		(6,826,916	)		(6,826,916	)		(3,612,971	)		0		(3,213,945	)
Other Comprehensive Loss		(102,525	)		(102,525	)		(108,443	)		0		5,918
Total Comprehensive Loss attributable to stockholders		(6,878,281	)		(6,878,281	)		(3,612,971	)		0		(3,265,310	)
Basic and diluted loss per share		(0.233	)		(0.233	)		(0.123	)		0		(0	)
Weighted average number of shares outstanding		29,461,664			29,461,664			29,461,664			0		0

Statement of Operations and Comprehensive Loss

Explanations to above changes: 10K-A No. 1 as compared to 10K as Originally Filed

Line Item	Explanation of Difference
Revenues - Product	Reclassification from Accounts receivable – bad debt expense ($71k)
Cost of goods sold - Service	Correction to capitalized labor costs ($265k)
Administrative expenses	Reclassification from Additional Paid-In ($272k); Reclassification to Accounts payable ($147k)
Other Income (expense)	Reclassification to Accumulated Deficit ($3,268k);
Interest expense	Reclassification from Additional Paid-In Capital ($27k)
Income tax (income) expense	Reclassification from Deferred tax assets ($3,692k) and Deferred tax liabilities ($875k)

	For the twelve months ended
	10K/A – 3 10 K/A - 2			10K/A - 1			10K			10K/A – 3 and 10 K/A – 2 as compared to			10K/A - 1 as compared to 10K
	Restated			Restated			Original			10K/A - 1			Original
	December 31, 2012			December 31, 2012			December 31, 2012			Difference			Difference
	$			$			$			$			$
Cash flow from operating activities
Net loss / net income		(11,368,223	)		(11,368,223	)		(4,159,318	)		0			(7,208,905	)
Income from discontinued operations		(40,607	)		0			0			(40,607	)		0
Adjustments
Deferred income taxes		1,319,697			1,319,697			(556,679	)		0			1,876,376
Depreciation and amortization		4,148,915			4,816,098			4,816,098			(667,183	)		0
Loss from equity investment		227,781			244,219			46,754			0			197,465
Consulting Expense		272,832			0			0			272,832			0
Write-down of Intangibles		1,517,139			0			0			1,517,139			0
Minority interest losses		0			(4,541,307	)		(600,676	)		4,541,307			(3,940,631	)
Interest Expense		26,700			0			0			26,700			0
Foreign exchange
Changes in operating assets and liabilities
Accounts receivable and other assets		1,073,620			953,133			536,124			120,487			417,009
Retirement benefit obligation		15,244			15,244			(15,244	)		0			30,488
Inventories		236,712			236,712			263,712			0			(27,000	)
Accounts payable and other liabilities		(5,737,266	)		2,539,440			1,181,226			(8,276,706	)		1,358,214
Net cash provided by operating activities		(8,307,406	)		(5,784,987	)		1,484,997			(2,522,469	)		(7,269,984	)
Net cash provided (used) by discontinued		70,661			0			0			70,661			0
Cash flow from investing activities
(Increase) Decrease of intangible assets		(3,378,072	)		(3,516,593	)		(3,516,593	)		138,521			0
(Increase) Decrease of property, plant and equipment		(56,262	)		(189,137	)		(56,262	)		132,875			(132,875	)
(Purchase) Sale of subsidiaries		1,020,500			2,498,257			2,498,257			(1,477,757	)		0
(Increase) Decrease in Financial assets		3,946,222			(416,357	)		278,676			4,362,579			(695,033	)
Purchase of financial assets											0			0
Net cash used in investing activities		1,532,388			(1,623,830	)		(795,922	)		3,156,218			(827,908	)
Cash flow from financing activities
Net borrowings - banks		239,798			(239,798	)		(237,797	)		479,596			(2,001	)
Other borrowings		(104,414	)		3,392,208			2,273,737			(3,496,622	)		1,118,471
Net Borrowings from related party		2,719,613			0			0			2,719,613			0
Capital paid in		1,947,500			2,244,877			(2,065,692	)		(297,377	)		4,310,569
Net cash used in financing activities		4,802,497			5,397,287			215,720			(594,790	)		5,181,567
Effect of exchange rate changes on cash		(85,796	)		(84,689	)		(84,689	)		(1,107	)		0
Net increase in cash		(1,987,706	)		(2,096,219	)		(2,096,220	)		108,513			1
Cash and cash equivalents - Beginning of the period		3,142,308			3,250,821			3,250,821			(108,513	)		0
Cash and cash equivalents - End of period		1,154,602			1,154,602			1,154,602			0			0

Statement of Cash Flows

Explanations to above changes: 10K-A No. 1 as compared to 10K as Originally Filed

Changes to the Statement of Cash Flows upon restatement are directly attributable to changes noted in the Balance Sheet and Statement of Operations. 

Explanations to above changes: 10K-A No. 3 and 10K-A No. 2 as compared to 10K-A No. 1

Restatement discloses separately the cash flows from discontinued operations.  

Statement of Equity
10 - K/A - 3
Net comprehensive loss for the year				(51,365	)	(6,826,916	)	(4,592,467	)	(11,470,748	)
Balance, December 31, 2012	29,461,664	29,462	49,691,195	442,841		(18,974,582	)	3,344,516		34,533,432
10 - K/A – 2
Net comprehensive loss for the year				(51,365	)	0		(51,160	)	102,525
Balance, December 31, 2012	29,461,664	29,462	49,691,195	442,841		(12,147,666	)	7,885,283		45,901,655

Explanations to above changes: 10K-A No. 3 as compared to 10K-A No. 2

Inadvertent printing error to Net comprehensive loss for the year

	For the twelve months ended
	10K/A – 3 10 K/A - 2			10K/A - 1			10K			10K/A – 3 and 10 K/A – 2 as compared			10K/A - 1 as compared
	Restated			Restated			Original			to 10K/A - 1			to 10K
	December 31, 2011			December 31, 2011			December 31, 2011			Difference			Difference
	$			$			$			$			$
Assets
Current Assets
Cash and cash equivalents		3,142,308			3,250,821			(23,732,781	)		(108,513	)		26,983,602
Accounts receivable		4,850,507			5,007,194			4,886,788			(156,687	)		120,406
Inventories		236,712			236,712			236,712			0
Prepaid expenses		389,772			444,147			444,147			(54,375	)		0
Other receivables		680,693			1,020,010			1,020,010			(339,317	)		0
Assets held for sale		682,999			24,107			24,107			658,892			0
Total current assets		9,982,991			9,982,991			9,862,585			0			120,406
Assets held for sale		1,388,723			0			0			1,388,723			0
Property, plant and equipment		521,976			1,604,994			1,604,994			(1,083,018	)		0
Other non-current receivables		548,909			548,909			548,909			0			0
Investment in related companies		244,219			244,219			244,219			0			0
Deferred tax assets		2,451,800			2,748,800			3,945,272			(297,000	)		(1,196,472	)
Goodwill		39,221,603			39,221,603			39,221,603			0			0
Software		14,249,905			14,258,610			14,258,610			(8,705	)		0
Other assets		93,268			93,268			93,268			0			0
Total non-current assets		58,720,403			58,720,403			59,916,875			0			(1,196,472	)
Total assets		68,703,394			68,703,394			69,779,460			0			(1,076,066	)
Liabilities and shareholders' equity
Current liabilities
Notes payable		1,381,821			1,381,821			1,381,821			0			0
Liabilities to banks		19,595			19,595			19,595			0			0
Accounts payable and accrued liabilities		6,078,711			6,491,565			6,872,665			(412,854	)		(381,100	)
Other liabilities		4,252,240			4,256,410			4,256,410			(4,170	)		0
Deferred income		6,341,575			6,476,582			6,476,582			(135,007	)		0
Due to related parties		432,421			432,421			51,321			0			381,100
Liability held for sale		552,031			0			0			552,031			0
Total current liabilities		19,058,394			19,058,394			19,058,394			0			0
Liabilities to banks		3,463,483			3,463,483			3,463,483			0			0
Deferred tax liabilities		0			0			1,196,472			0			(1,196,472	)
Retirement benefit obligation		150,632			150,632			150,632			0			0
Other liabilities		2,266,075			2,273,737			2,273,737			(7,662	)		0
Liability held for sale		7,662			0			0			7,662			0
Total non-current liabilities		5,887,852			5,887,852			7,084,324			0			(1,196,472	)
Total liabilities		24,946,246			24,946,246			26,142,718			0			(1,196,472	)
Shareholders' equity
Capital Stock
Authorized:
75,000,000 common shares and 25,000,000 preferred shares each with a par value of $.001
Issued and outstanding
		27,307			27,307			27,248			0			59
Additional paid in capital		47,446,318			47,446,318			47,325,971			0			120,347
Accumulated deficit		(12,147,666	)		(12,147,666	)		(12,147,666	)		0			0
Other comprehensive income		494,206			494,206			494,206			0			0
Total shareholders' equity		35,820,165			35,820,165			35,699,759			0			120,406
Noncontrolling interest in subsidiaries		7,936,983			7,936,983			7,936,983			0			0
Total equity and liabilities		68,703,394			68,703,394			69,779,460			0			(1,076,066	)

Balance Sheet

Explanations to above changes: 10K-A No.1 as compared to 10K as Originally Filed

Line Item	Explanation of Difference
Cash and cash equivalents	Inadvertent Printing Error
Accounts receivable	Reclassification against Equity
Deferred tax assets	Reclassification against Deferred Tax Liabilities
Accounts payable and accrued liabilities	Reclassification from Notes Payable to Due to related parties
Due to related parties	Reclassification from Notes Payable to Due to related parties
Deferred tax liabilities	Reclassification against Deferred Tax Assets
Capital Stock and Additional paid in capital	Reclassification against Accounts Receivable

Explanations to above changes: 10K-A No. 3 and 10K-A No. 2 Compared to 10K-A No. 1

Line Item	Explanation of Difference
Cash and cash equivalents	Reclassification to Assets held for sale - current ($109k)
Accounts receivable	Reclassification to Assets held for sale - current ($157k)
Prepaid expenses	Reclassification to Assets held for sale - current ($54k)
Other receivables	Reclassification to Assets held for sale - current ($339k)
Assets held for sale - current	Reclassification to Assets held for sale - current ($659k)
Assets held for sale - non-current	Reclassification to Assets held for sale - non-current ($1,389k)
Property, plant and equipment	Reclassification to Assets held for sale - non-current ($1,083k)
Deferred tax assets	Reclassification to Assets held for sale - non-current ($297k)
Software	Reclassification to Assets held for sale - non-current ($9k)
Accounts payable and accrued liabilities	Reclassification to liabilities held for sale - current ($413k)
Other liabilities	Reclassification to liabilities held for sale - current ($4k)
Deferred income	Reclassification to liabilities held for sale - current ($135k)
Liabilities held for sale - current	Reclassification to liabilities held for sale - current ($552k)
Other liabilities	Reclassification to liabilities held for sale - non-current ($8k)
Liability held for sale - non-current	Reclassification to liabilities held for sale - non-current ($8k)

	For the twelve months ended
	10K/A – 3 10 K/A - 2			10K/A - 1			10K			10K/A – 3 and 10K/A – 2 as compared to		10K/A - 1 as compared
	Restated			Restated			Original			10K/A -1		10K
	December 31, 2011			December 31, 2011			December 31, 2011			Difference		Difference
	$			$			$			$		$
Revenues
Products		21,787,910			21,787,910			21,787,910			0		0
Services		6,485,182			6,485,182			6,485,182			0		0
		28,273,092			28,273,092			28,273,092			0		0
Cost of goods sold
Products		5,575,747			5,575,747			5,575,747			0		0
Services		10,322,435			10,322,435			10,322,435			0		0
		15,898,182			15,898,182			15,898,182			0		0
Gross profit		12,374,910			12,374,910			12,374,910			0		0
Operating expenses
Selling expenses		15,426,600			15,426,600			15,426,600			0		0
Administrative expenses		6,160,961			6,160,961			2,858,679			0		3,302,282
General expenses		926,129			926,129			926,129			0		0
		22,513,690			22,513,690			22,513,690			0		0
Operating income		(10,138,779	)		(10,138,779	)		(10,138,779	)		0		0
Other Income (expense)
Other Income (expense)		(15,894,738	)		(15,894,738	)		(15,894,738	)		0		0
Interest income		33,948			33,948			33,948			0		0
Interest expense		(406,407	)		(406,407	)		(406,407	)		0		0
		(16,267,197	)		(16,267,197	)		(16,267,197	)		0		0
Income (loss) before income taxes and discontinued operations		(26,405,976	)		(26,405,976	)		(26,405,976	)		0		0
Income tax (income) expense		(2,151,211	)		(2,151,211	)		(2,151,211	)		0		0
Net income (loss)		(24,254,765	)		(24,254,765	)		(24,254,765	)		0		0
Discontinued operations (net of tax)		521,979			521,979			521,979			0		0
Net income (loss) attributable to non controlling interest		(23,732,786	)		(23,732,786	)		(23,732,786	)		0		0
Net income (loss) attributable to stockholders		(12,165,298	)		(12,165,298	)		(12,750,279	)		0		584,981
Other comprehensive income (loss)		(63,001	)		(63,001	)		(63,001	)		0		0
Net income (loss) and comprehensive income (loss) attributed to shareholders		(12,228,299	)		(12,228,299	)		(12,750,279	)		0		521,980
Basic and diluted income (loss) per share		(0.449	)		(0.449	)		(0.468	)		0.000		0.019
Weighted average number of shares outstanding		27,247,958			27,247,958			27,247,958			0		0

Statement of Operations and net comprehensive loss

Explanations to above changes: 10K-A No. 1 as compared to 10K as Originally Filed
Line Item	Explanation of Difference
Administrative expenses	Inadvertent Printing Error
Net income (loss) attributable to stockholders	Inadvertent Printing Error
Net income (loss) and comprehensive income (loss) attributed to shareholders	Inadvertent Printing Error

	For the twelve months ended
	10K/A – 3 10 K/A - 2			10K/A - 1			10K			10K/A – 3 and 10K/A – 2 as compared to			10K/A - 1 as compared
	Restated			Restated			Original			10K/A -1			to 10K
	December 31, 2011			December 31, 2011			December 31, 2011			Difference			Difference
	$			$			$			$			$
Cash flow from operating activities
Net loss / net income		(23,732,787	)		(23,732,787	)		(23,732,787	)		0			0
Income from discontinued operations		(521,979	)		0			0			(521,979	)		0
Adjustments
Deferred income taxes		(2,193,941	)		6,796,982			6,796,982			(8,990,923	)		0
Depreciation and amortization		5,840,688			5,035,732			5,035,732			804,956			0
Loss from equity investment					85,599			85,599			(85,599	)		0
Loss on sale of assets					266,269			0			(266,269	)		266,269
Consulting expense		34,000			0			0			34,000			0
Minority interest losses					(143,736	)		(143,736	)		143,736			0
Interest Expense					0			0			0			0
Changes in operating assets and liabilities
Accounts receivable and other assets		4,147,043			(2,139,084	)		(2,139,084	)		6,286,127			0
Retirement benefit obligation		(3,433	)		3,686			3,686			(7,119	)		0
Inventories		(236,712	)		114,172			114,172			(350,884	)		0
Accounts payable and other liabilities		(1,031,853	)		5,755,795			5,755,795			(6,787,648	)		0
Net cash provided by operating activities		(17,698,974	)		(7,957,372	)		(7,957,372	)		(9,741,602	)		0
Net Cash provided (used) by discontinued		(990,050	)		388,396			0			(1,378,446	)		388,396
Cash flow from investing activities
Purchase  or Sale of intangible assets		(3,941,396	)		(2,141,612	)		(2,141,612	)		(1,799,784	)		0
Purchase or Sale of Property, plant and equipment		0			(161,037	)		(161,037	)		161,037			0
Purchase or Sale of equity invest		(244,219	)		0			0			(244,219	)		0
Purchase or Sale of subsidiaries		(1,910,529	)		3,715,077			3,715,077			(5,625,606	)		0
(Increase) Decrease in Financial assets		13,465,619			321,515			321,515			13,144,104			0
Net cash used in investing activities		7,369,475			1,733,943			1,733,943			5,635,532			0
Cash flow from financing activities
Net borrowings – banks		2,651,919			(2,484,597	)		(2,484,597	)		5,136,516			0
other borrowings		(59,442	)		2,460,438			2,460,438			(2,519,880	)		0
Net Borrowings from related party		432,421			830,156			0			(397,735	)		830,156
Capital paid in		9,703,920			6,678,950			6,678,950			3,024,970			0
Net cash used in financing activities		12,728,818			7,484,947			7,484,947			5,243,871			0
Effect of exchange rate changes on cash		(139,029	)		(144,058	)		(144,058	)		5,029			0
Net increase in cash		1,270,240			1,505,856			1,505,856			(235,616	)		0
Cash and cash equivalents - Beginning of the period		1,872,068			1,744,965			1,744,965			127,103			0
Cash and cash equivalents - End of period		3,142,308			3,250,821			3,250,821			(108,513	)		0

Cash Flow Statement

Explanations to above changes: 10K-A No.1 as compared to 10K as Originally filed

Changes to the Statement of Cash Flows upon restatement are directly attributable to changes noted in the Balance Sheet and Statement of Operations. The exception is that the restatement discloses separately the cash flows from discontinued operations

Explanations to above changes: 10K-A No. 3 and 10 K-A No. 2 as compared to 10K-A No. 1

The restatement discloses separately the cash flows from discontinued operations.

Note 4 SUBSIDIARY COMPANIES

The subsidiaries listed below were included in the basis of consolidation (KUSD = 1,000’s of US Dollars):

		Stockholders' Equity								Profit
		as of			Percentage of					of the			Date
		12.31.12			Subscribed Capital					consolidated year			of the
Subsidiary	Headquarters	KUSD			KUSD		in %		Ownership	KUSD			First Consolidation
GROUP Business Software (UK) Ltd.	Manchester		(1,334	)		24		1	I		(66	)	12/31/05
GROUP Business Software Corp.	Woodstock		(12,328	)		1		1	I		(4,367	)	12/31/05
Permessa Corporation	Waltham		10			0		1	I		682		09/22/10
Relavis Corporation	Woodstock		(819	)		2		1	I		(10	)	01/08/07
GROUP Business  Software AG	Eisenach		23,897			35,658		1	I		(655	)	06/01/11
Pavone GmbH	Boeblingen		(1,223	)		44		1	D		(503	)	01/04/11
Groupware Inc.	Woodstock		(482	)		1		1	D		0		01/06/11
IDC Global, Inc.	Chicago		2,442			0		1	D		128		07/25/11
GBS India	Chennai		101			14		1	D		89		09/30/12

D - Direct Subsidiary

I -   Indirect Subsidiary

The above table reflects the individual companies owned at period end.

Note 5 CASH AND CASH EQUIVALENTS

As of the financial statement date, the Company’s cash and cash equivalents totaled 1,155 KUSD (December 31, 2011 restated year end: 3,142 KUSD). Included in that amount are cash equivalents of 3 KUSD (December 31, 2011 restated year end: 12 KUSD).

Note 6 ACCOUNTS RECEIVABLE

As of the financial statement date, Accounts Receivable was 4,143 KUSD (December 31, 2011 restated year end: 4,851 KUSD). 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.

Note 7 PREPAID EXPENSES

Prepaid expenses in the amount of 84 KUSD were primarily recorded for prepaid rent and advance on technological collaboration events (December 31, 2011 restated year end: 390 KUSD).

Note 8 OTHER RECEIVABLES - CURRENT

Other Receivables as of the financial statement date were 677 KUSD (December 31, 2011 year end: 681 KUSD). The largest individual item under other receivables represents a receivable from a previous insolvency (469 KUSD). Also included are tax assets (177 KUSD) and other prepaid costs (31 KUSD).

Note 9 ASSETS AND LIABILITIES HELD FOR SALE

In September, 2012, the Board of Directors approved the concept of selling of IDC Global Inc. Accordingly, the assets and liabilities of the Company have been classified as available for sale as the requirements for doing so under FASB ASC 205-20-45-1 are met.

On February 1, 2013 IDC Global Inc. ("IDC“), entered into a Stock Purchase Agreement, with Global Telecom & Technology Americas, Inc., a Virginia corporation (“GTT”). GTT is a publicly traded (GTLT:OTC US) cloud network provider. Pursuant to the Agreement, the Company sold 100% of the issued and outstanding shares of capital stock of IDC (the “IDC Shares”) to GTT for an aggregate purchase price of $4,600,000 in cash.

Summarized financial information for balance sheet disclosure is shown below.

Balance Sheet	2012		2011
	$		$
Current assets
Cash and cash equivalents		86,438		132,620
Accounts Receivable		214,953		156,687
Prepaid expenses		5,438		54,375
Other receivables		78,033		339,317
Assets held for sale		384,862		682,999
Non - current assets
Property, plant and equipment		1,315,572		1,083,018
Deferred tax assets		297,000		297,000
Software		5,261		8,705
Other assets		228,812		-
Assets held for sale		1,846,645		1,388,723
Current liabilities
Accounts payables and accrued liabilities		322,527		415,854
Deferred income		79,886		4,170
Other liabilities		187,221		135,007
Liability held for sale		589,635		555,031
Non - current liabilities
Other liabilities		159,898		7,662
Liability held for sale		159,898		7,662

On April 1, 2012, the Company sold SD Holdings, Ltd. (“SYN”), Synaptris and Synaptris India to Lotus Holding, Ltd. for a purchase price of $1,877,232 in an effort to restructure the Company’s multilevel subsidiary-structure derived from historical mergers and acquisitions, and to reduce overhead and administrative costs.

The results of operations have been classified as income from discontinued operations on the statement of operations and the statement of cash flows for SD Holdings, Ltd. and IDC Global, Inc. as follows:

	For the twelve months ended
	12/31/2012
SD Holdings, Ltd.		(25,001	)
IDC Global, Inc.		65,608
Income from discontinued operations		40,607

Note 10 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are measured at cost less scheduled straight-line depreciation.

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. Leasehold Improvements are depreciated up to 40 years.

Property, Plant and Equipment kUSD	Development of the cost			Development of accumulated depreciation			Balance
Restated 12/31/2011		8,460			7,938			522
Additions		280			339
Disposals		(1,411	)		(208	)
Currency differences		118			110
Reclassifications		(240	)		(1,305	)
Restated 12/31/2012		7,207			6,874			333

Note 11 NON-OPERATING RECEIVABLES

The major components of the Non-Operating Receivables include the following:

	KUSD Restated		KUSD Restated
	12/31/2012		12/31/2011
Receivable from sale of GEDYS IntraWare GmbH
Balance outstanding, payable in monthly installments of $20,006, bearing interest at prime plus .25%, not be greater than 2% per annum		0		777
Current portion, included in other current receivables		0		233
		0		544
Cooperative shares		1		0
Other long term receivables		427		5
Balance		428		549

Note 12 GOODWILL

Goodwill derives from the following business acquisitions:

December 31, 2012	1/1/2012		Additions		Adjustments			Written Off		12/31/2012
GROUP Business Software AG		20,194.4		0.0		(1,768.8	)		0.0		18,425.6
GROUP Business Software Corp		2,177.5		0.0		0.0			2,177.5		0.0
GROUP Live N.V.		0.0		0.0		0.0			0.0		0.0
GROUP Business Software Ltd.		2,765.1		0.0		0.0			0.0		2,765.1
EbVokus Software GmbH		443.6		0.0		0.0			443.6		0.0
Relavis Corporation		0.0		0.0		0.0			0.0		0.0
Permessa Corporation		2,387.4		0.0		0.0			0.0		2,387.4
Pavone GmbH		5,950.5		0.0		0.0			0.0		5,950.5
IDC Global Inc.		2,994.4		0.0		0.0			0.0		2,994.4
SD Holdings		2,308.7		0.0		0.0			2,308.7		0.0
GBS India		0.0		1,731.8		0.0			0.0		1,731.8
Totals		39,221.6		1,731.8		(1,768.8	)		4,929.8		34,254.9

December 31, 2011	1/1/2011		Additions		Adjustments		Written Off		12/31/2011
GROUP Business Software AG		14,597.3		8,705.5		0.0		3,108.4		20,194.4
GROUP Business Software Corp		2,177.5		0.0		0.0		0.0		2,177.5
GROUP Live N.V.		1,324.2		0.0		0.0		1,324.2		0.0
GROUP Business Software Ltd.		2,765.1		0.0		0.0		0.0		2,765.1
EbVokus Software GmbH		443.6		0.0		0.0		0.0		443.6
Relavis Corporation		7,288.3		0.0		0.0		7,288.3		0.0
Permessa Corporation		2,387.4		0.0		0.0		0.0		2,387.4
Pavone GmbH		0.0		5,950.5		0.0		0.0		5,950.5
IDC Global Inc.		0.0		2,994.4		0.0		0.0		2,994.4
SD Holdings		0.0		2,308.7		0.0		0.0		2,308.7
Totals		30,983.4		19,959.1		0.0		11,720.9		39,221.6

During the year ended December 31, 2012, the Company sold SD Holdings, Ltd., and the operating assets of ebVokus GmbH, the effect of which was to reduce the goodwill associated with these subsidiaries.

The adjustment in GROUP Business Software AG arose as a result of the swap of liabilities into equity.

An impairment charge in 2012 arose as a result of repositioning GROUP Business Software Corp. and a recognition that previous capitalizations were no longer applicable.

Also in early 2012, the Company focused on the then emerging modernization and migration market in general but with a specific concentration towards the IBM Lotus Notes/Domino portion of the market. There was a particular geographic orientation on addressing the needs of the North America segment of that market. Strategically, the Company utilized the Transformer technology and a variety of associated analytic tools to position itself in the market. This technology represents the major portion of the Company’s total development expenses of $10.2 million in 2012. In order to align the intangible assets of the company with the fast changing market, management decided to write off the Goodwill in GBS Corp., which is associated to the classical core business entirely in the amount of $2.8 million, and to write off the capitalized development through 1/1/12 on the former Transformer technology in the amount of 1,569 KUSD.

Note 13 INTANGIBLE ASSETS

Software Development costs

The costs of developing new software products and updating products already marketed by the Company 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 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 Company according to 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”, 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. Should there exist signs indicating towards impairment it is tested for recoverability and, if necessary, written down to the amount which could be obtained for it if sold.

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

Concessions and licenses kUSD	Development of the cost			Development of accumulated depreciation			Balance
Restated 12/31/2011		33,085.1			18,835.2			14,249.9
Additions		1,269.3			1,266.2
Disposals		(244.5	)		(5.8	)
Currency differences		895.2			736.1
Reclassifications		(715.9	)		-
Impairment charge		(1,250.5	)		-
Restated 12/31/2012		33,038.7			20,831.7			12,207.0

Note 14 OTHER ASSETS

This includes of 156 KUSD primarily from rent and other security deposits (December 31, 2011 restated year end: 93 KUSD).

Note 15 NOTES PAYABLE

A breakdown of the Notes Payable of $ 1,277,407 as of December 31, 2012 (December 31, 2011 restated year end: $1,381,821) is as follows:

	Date of			Interest				Related Party		Unrelated Party
Lender	Loan	Principal		Accrued		Total		Loan		Loan		Due Date
		$		$		$
Director	7/5/2012		50,000		2,084		52,084		52,084			1/5/2013
Unrelated Investor	7/5/2012		250,000		10,421		260,421				260,421	1/5/2013
Director	7/5/2012		252,500		10,526		263,026		263,026			1/5/2013
Director	8/13/2012		1,000,000		76,712		1,076,712		1,076,712			8/13/2013
Director	10/26/2012		1,000,000		36,165		1,036,165		1,036,165			10/26/2013
Unrelated Investor	11/30/2012		500,000		8,493		508,493				508,493	11/30/2013
Unrelated Investor	11/30/2012		500,000		8,493		508,493				508,493	11/30/2013
	Total		3,552,500		152,894		3,705,394		2,427,987		1,277,407

· On July 5, 2012, the Company entered into three separate unsecured convertible promissory notes, for a total of $552,500 bearing interest at 8.5% and due January 5, 2013. The conversion options were not exercised. Two of the investors were directors. The Company also issued common stock purchase warrants, entitling the holders to purchase 550,000 shares of common stock at $1.00 for a period of 3 years from issuance. The discounted value of the loans, using a rate of 20% was determined to be $528,800 and the discount of $26,700 was charge to debt discount and credited to additional paid in capital. The discount was amortized and charged to operations in 2012

· On August 13, 2012, the Company entered into a note purchase and security agreement with John A. Moore, a member of the Board. Pursuant to the agreement, the Company issued a secured promissory note, dated October 26, 2012, to Mr. Moore for the principal amount of $1,000,000, bearing interest at a rate of 20% per year and maturing on the earlier of the first anniversary date of the date of issuance or such other time as described in more detail in the Note, without any penalty for prepayment. To secure the obligations of the Company under the Note, the Company granted Mr. Moore a secured priority security interest in the Company’s Accounts Receivable and its subsidiaries located in the United States of America. Pursuant to the loan agreement the Company issued a common stock purchase warrant, which entitled the holder to purchase 100,000 shares of common stock at an exercise price of $0.35 until the third anniversary date of the date of issuance. In connection with the loan agreement, on February 22, 2013, the Company and Mr. Moore amended the note whereby Mr. Moore agreed to convert the interest due under the Note into shares of common stock of the Company at a rate of $0.30 per share. Pursuant to the amendment, the Company issued 450,960 shares of Common Stock to Mr. Moore.

· On October 26, 2012, the Company entered into a note purchase and security agreement with Stephen D. Baksa, a member of the Board. Pursuant to the loan agreement, the Company issued a secured promissory note, dated October 26, 2012, to Mr. Baksa for the principal amount of $1,000,000, bearing interest at a rate of 20% per year and maturing on the earlier of the first anniversary date of the date of issuance or such other time as described in more detail in the Note, without any penalty for prepayment. To secure the obligations of the Company under the Note, the Company granted the Baksa a first priority security interest in all of the Company’s right, title and interest in and to the shares of IDC Global, Inc. then owned by the Company. The Note contains customary provisions upon an Event of Default, as more fully described in the full text of the document.

In connection with the execution of the Loan Agreement, on October 26, 2012, the Company issued the Lender a common stock purchase warrant which entitled the holder to purchase 500,000 shares of common stock at an exercise price of $0.20 until the third anniversary date of the date of issuance.

On February 12, 2013, the Lender exercised the right to purchase 500,000 share of common stock at the exercise price of $0.20 per share.

In connection with the Loan Agreement, on February 22, 2013, the Company and Mr. Baksa amended the Note pursuant to which Mr. Baksa agreed to convert the interest due under the Note into shares of GBSX common stock at a rate of $0.30 per share. Pursuant to the amendment, the Company issued 200,000 shares of Common Stock to Mr. Baksa.

· On November 30, 2012, the Company entered into two Note Purchase and Security Agreements pursuant to which the Company sold two secured promissory notes to two separate lenders in the aggregate principal amount of $1,000,000 bearing interest at a rate of 20% per year and maturing on the first anniversary date of the issuance with no prepayment penalty. To secure the obligations of the Company under the Note, the Company granted the Lenders all the Company’s right, title and interest in and to its shares of one of its subsidiaries, IDC Global, Inc.

In connection with the execution of the Loan Agreements, on November 30, 2012, the Company issued the lenders a common stock purchase warrant, pursuant to which the lenders are entitled to purchase 250,000 shares of common stock at an exercise price of $0.20 until the third anniversary date of the date of issuance.

On February 12, 2013, one of the Lenders exercised the right to purchase 250,000 shares of common stock at the exercise price of $0.20 per share.

Note 16 LIABILITIES TO BANKS - CURRENT

Short term liabilities to banks of 7 KUSD (December 31, 2011 restated year end: 20 KUSD) represent an operating line of credit (6 KUSD), bearing interest at a 3.25% daily periodic rate with a credit limit of 100 KUSD and checks in transit (15 KUSD) at the financial statement date.

Note 17 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Trade payables

As of the financial statement date, trade accounts payable amounted to 3,095 KUSD (December 31, 2011 restated year end: 2,765 KUSD). Trade payables are carried at their repayment amount and all have a residual term of up to one year.

Other Accrual

Other provisions are created as of the financial statement date in an amount necessary according to a reasonable commercial appraisal, to cover future payment obligations, perceivable risks and uncertain liabilities of the Company. Amounts deemed to be most likely to occur, in careful assessment, are accrued.

KUSD	Restated									Currency		Restated
	12/31/2011		Utilization			Dissolution		Increase		Differences		12/31/2012
Tax provision		32		(32	)		0		57		0		57
Salary		859		(489	)		24		451		16		861
Vacation		439		(303	)		30		137		12		315
Workers Compensation Insurance Association		27		(21	)		0		17		1		24
Compensation Levy for Non-Employment of Severely Handicapped Persons		17		(16	)		0		18		0		19
Outstanding Invoices		882		(626	)		60		722		22		1,059
Annual Financial Statement Costs		401		(279	)		0		0		4		126
Other Provisions		367		(221	)		0		294		6		446
Warranties		60		(4	)		0				41		96
Gesture of Goodwill		160		(160	)								0
Provision for Legal Costs		71		(4	)		0				5		72
Severance		0		0			0		70		0		70
Total		3,314		(2,155	)		114		1,766		107		3,147

Provisions for salaries of 861 KUSD (December 31, 2011 restated year end: 859 KUSD) include the provisions created for the variable salaries of the sales staff for the sales objectives reached in this business period.

Vacation provisions of 315 KUSD (December 31, 2011 restated year end: 439 KUSD) include the obligations of GROUP’s companies to their employees for remaining vacation claims from the reporting period. The amount of the provision is calculated on the gross salary of the individual employee plus the employer contribution to social security/Medicare and based on the unused vacation days as of the financial statement date.

For liabilities not yet settled, a provision totaling 1,059 KUSD (December 31, 2011 restated year end: 882 KUSD) was created.

Other Provisions of 446 KUSD (December 31, 2011 restated year end: 367 KUSD) include accruals for Board of Director compensation (46 KUSD) and miscellaneous provisions.

Expenses for the audit of the Company and preparation of the annual consolidated financial statements were recognized at 126 KUSD (December 31, 2011 restated year end: 401 KUSD).

A provision for anticipated legal consulting of 72 KUSD was recorded (December 31, 2011 restated year end: 71 KUSD).

For warranty claims, a provision of 96 KUSD (December 31, 2011 restated year end: 60 KUSD) was created determined by service income.

Note 18 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 6,099 KUSD (December 31, 2011 restated year end: 6,341 KUSD) primarily include maintenance income collected in advance for the period after the end of the financial statement date. They are amortized on a straight-line basis over their respective contract terms.

Note 19 OTHER LIABILITIES-SHORT TERM

Other Short-Term Liabilities	12/31/2012		12/31/2011
	Restated		Restated
	KUSD		KUSD
Purchase Assets L911		0		1,094
Purchase Assets Permessa		750		1,900
Tax Liabilities		0		724
Purchase Archiving Software		0		324
Other Liabilities		110		210
		860		4,252

Note 20 LIABILITIES TO BANKS – LONG TERM

Liabilities to banks as of the financial statement date was 3,716 KUSD (December 31, 2011 restated year end: 3,463 KUSD) represent bank obligations of GROUP AG with Baden-Württembergische Bank.

Note 21 OTHER LIABILITIES – LONG TERM

Other long-term liabilities as of the financial statement date of Nil KUSD (December 31, 2011 restated year end: 2,266 KUSD) includes the obligation related to the purchase of Lotus911 assets.

Note 22 DUE TO RELATED PARTIES

Related parties refer to the Management, 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. 

	12/31/2012		12/31/2011
	Restated		Restated
	KUSD		KUSD
Accounts payable and Accruals:
A company owned by the CFO		72		21.1
A company owned by the CEO		493.6		360
Board of Directors fees and outstanding expenses		110.4		-
Notes payable (per Note 14)		2,428		-
Due to associated company		48.1		51.3
		3,152.10		432.4

Remuneration of the management occupying key positions within the Company and its’ subsidiaries including that of the Board of Directors include the following:

	2012				2011
	Paid		Accrued		Paid		Accrued
Management Fees (to an officer-Company)		0		120,000		0		360,000
Management Fees (to an officer-subsidiary)		399,295		0		421,956		0
Management Fees (to an officer-Company)		122,452		0		N/A		N/A
Management Fees (to an officer-subsidiary)		196,026		68,844		211,529		99,553
Management Fees (to an officer-Company; includes consulting fees from a subsidiary)		188,931		96,279		135,107		0
Management Fees (to an officer-Company)		20,000		0		114,750		10,000
Management Fees (to an officer-subsidiary)		178,873		38,247		194,758		65,448
Management Fees (to a Director-Company)		13,667		22,833		N/A		N/A
Management Fees (to a Director-Company)		11,650		18,275		N/A		N/A
Management Fees (to a Director-Company)		0		18,100		N/A		N/A
Management Fees (to a Director-Company)		14,150		16,275		N/A		N/A
Management Fees (to a Director-Company)		0		22,425		N/A		N/A

Note 23 COMMON STOCK

The Company has authorized capital of 75,000,000 shares of common stock and 25,000,000 shares of “blank check” preferred stock, each with a par value of $0.001. No class of preferred stock has been designated or issued. As of December 31, 2012, there were 29,431,664 shares of common stock outstanding. At the time of the Reverse Merger of the Company by GROUP on January 6, 2011, there were 16,500,000 shares of common stock of the Company outstanding and, as the Reverse Merger was accounted for as a recapitalization and applied retroactively, this balance is recorded as the balance outstanding since inception.

Transactions occurring in 2011

In March, 2011, the Company consummated a private placement offering (the “Private Placement”) 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 (“Private Placement Warrant”). The net proceeds of this offering were $6,878,950. As disclosed in Note 1, the Company issued 1,742,874 shares of common stock for the purchase of Pavone AG., GroupWare, Inc. and SD Holdings Ltd.

In December, 2011, certain investors exercised their private purchase warrants at $1.50 per share and bought 2,020,000 shares of common stock for net proceeds of $3,024,970 after legal fees.

Transactions occurring in 2012

· In March, 2012 an investor exercised their private purchase warrant and bought 5,000 shares of common stock for net proceeds of $7,500.

· Also in March, 2012, as a result of purchasing warrants at nominal value, wherein each warrant allowed the holder to purchase one common share at $0.50 for a period of three years, certain investors exercised those warrants and bought 900,000 shares of common stock for net proceeds of $450,000.

· On April 16, 2012, the Company sold 120,000 Units to Joerg Ott, the then CEO and Chairman of the Board of Directors of the Company, for a price of $1.50 per Unit, for a total purchase price of $180,000. Each Unit consisted of one share of Common Stock of the Company and one warrant to purchase one share of Common Stock of the Company from the date of issuance until the third anniversary date of the date of issuance for $1.50 per share. The Company sold the Units and underlying securities to Mr. Ott in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities

· On April 28, 2012, $632,500 in notes payable were converted at $1.15 per unit into 550,000 units with each unit consisting of one common share of common stock and one warrant. Each warrant allows the holder to purchase one common share at $1.75 for a period of three years. The Company issued the Note pursuant to Section 4(a)(2) (formerly Section 4(2)) under the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

· On April 30, 2012, $460,000 in notes payable to Lotus were converted at $1.15 per unit into 400,000 units, with each unit consisting of one share of common stock and one warrant. Each warrant allows the holder to purchase one common share at $1.75 for a period of three years. The Company issued the Lotus Note pursuant to Section 4(a)(2) (formerly Section 4(2)) under the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

· Also on April 30, 2012, $172,500 in debt to a company owned by Joerg Ott, the then CEO and Chairman of the Board of Directors of the Company, were converted at $1.15 per unit into 150,000 units, with each unit consisting of one share of common stock and one warrant. Each warrant allows the holder to purchase one common share at $1.75 for a period of three years. The Company issued the debt pursuant to Section 4(a)(2) (formerly Section 4(2)) under the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

· On May 10, 2012, the Company sold 30,000 Units to Markus R. Ernst, the Chief Financial Officer of the Company, for a purchase price of $1.50 per unit, for a total purchase price of $45,000. Each unit consists of one share of common stock of the Company and one warrant, allowing the holder to purchase one share of common stock of the Company from the date of issuance until the third anniversary date of the date of issuance for $1.50 per share. The Company sold the units and underlying securities to Mr. Ernst in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

· On May 15, 2012, the Company issued 150,000 unregistered shares of common stock to Kjell Jahn, the former selling stockholder of GroupWare, AG, a Florida corporation purchased by the Company in June 2011. The Company issued the shares in reliance on Section 4(a)(2) (formerly Section 4(2)) of the Securities Act due to the fact that the issuance was isolated and did not involve a public offering of securities.

Options

The Company has not issued any options, so that none are outstanding as at December 31, 2012 and 2011.

Warrants

The Company has issued warrants in four different manners. In each instance, the warrant allows the holder to purchase a common share within a three year period from issuance at a specific price per share. In the first instance, warrants have been issued as part of a private placement offering wherein the investor purchases a common share, and a warrant. The fair value of those warrants has been determined (and is shown below) by utilizing the residual method, whereby the current market value of the stock is deducted from the unit price and the remainder is allocated to the warrant. The valuation of the warrants issued is for disclosure purposes only and has no impact to the financial statements. A description of those warrants has been described above under common shares.

The second manner in which warrants are issues is in respect to financing by way of the issuance of notes payable or the conversion of debt into shares. In these instances, the fair value of the warrant has been determined using the effective interest rate method whereby the note is discounted when the interest rate is less than other similar notes and discount is allocated to the warrant and credited to additional paid in capital. The corresponding charge to discount is then amortized over the life of the note. Where there is no difference in interest terms, no value is attributable to the warrant.

The Company has also sold warrants at nominal value to certain investors. In this instance the fair value of the warrants has been determined using a Black-Scholes option pricing model with volatility, equity value and interest rate inputs noted below. The valuation of the warrants issued is for disclosure purposes only and has no impact to the financial statements.

Lastly, the Company has issued warrants to outside consultants in consideration for services rendered. The warrants are issued as “cashless” warrants and have been valued using a Black-Scholes option pricing model with volatility, equity value and interest rate inputs noted below. The fair value of warrants issued for financing are determined for disclosure purposes as there is no impact to the financial statements. The fair value for other services, namely legal, and consulting have been recorded in the financial statements with a charge to the corresponding expense account and a credit to additional paid in capital.

Black-Scholes assumptions for warrants issued were as follows:

For the period ending:	12/31/2012		12/31/2011
Volatility		120.6 - 134.3%		77.1%
Risk free interest rate		0.34 - 0.51%		1.19%
Expected Life (years)		3		3
Dividend Rate		Nil		Nil

The following share purchase warrant transactions have not been disclosed elsewhere:

On April 1, 2011, the former CFO was issued 100,000 share purchase warrants, which gave him the option of purchasing 100,000 shares of common stock for a period of 3 years at a price of $1.50 per common share. The value of this issuance, using the Black-Scholes pricing model was determined to $34,000 and this amount was recorded as a consulting expense.

In March, 2012, the Company issued an aggregate of 2,020,000 warrants to five “accredited investors” pursuant to Section 4(a)(2) (formerly Section 4(2)) of the Securities Act. Each investor warrant is exercisable for the three-year period commencing from the date of issuance for $0.50 per share of Common Stock and has the same terms as the Private Placement Warrants. As noted above, investors immediately exercised warrants and purchased 900,000 shares of common stock for $450,000.

On March 27, 2012, the Company issued an aggregate of 250,000 warrants to 3 outside consultants pursuant to Section 4(a)(2) (formerly Section 4(2)) of the Securities Act. Each warrant is exercisable for the three-year period commencing from the date of issuance for $1.10 per share of Common Stock and has the same terms as the Private Placement Warrants. The value of this issuance, using the Black-Scholes pricing model was determined to $270,208 and this amount was recorded as a professional expense.

In December, 2012, the Company issued 16,875 warrants to an outside consultant pursuant to Section 4(a)(2) (formerly Section 4(2)) of the Securities Act. Each warrant is exercisable for the three-year period commencing from the date of issuance for $0.21 per share of Common Stock and has the same terms as the Private Placement Warrants. The value of this issuance, using the Black-Scholes pricing model was determined to $2,624 and this amount was recorded as a consulting expense

	# of shares allowed to			Issue	Expiry	Strike		Fair value at							Balance End of
	purchase			Date	Date	Price		Issuance			Issued		Exercised		Period
	#					$		$			#		#		#
Opening - Jan 1, 2011		2,000,000		10/1/2010	6/1/2013		4.00		-			-		-		2,000,000
Issued for financing services				3/11/2011	3/14/2014		1.50		-			707,280		-		707,280
Issued for financing services				3/28/2011	3/24/2014		1.50		-			15,000		-		15,000
sold with share units				3/31/2011	3/31/2014		1.50		-			6,044,000		2,020,000		4,024,000
Issued for consulting services				4/1/2011	4/1/2014		1.50		34,000	(1)		100,000		-		100,000
Closing - Dec 31, 2011												6,866,280		2,020,000		6,846,280
Opening - Jan 1, 2012		6,846,280												5,000		6,841,280
Amended		(2,000,000	)	10/1/2010	6/1/2013		4.00		-			-		-		-
Reissued		2,000,000		6/1/2012	6/1/2015		1.00		556,785			-		-		-
Issued for legal services				3/31/2012	3/31/2012		1.10		270,208	(2)		250,000		-		250,000
Issued for nominal value				3/28/2012	3/28/2015		0.50		2,457,662			2,020,000		900,000		1,120,000
Sold with share units				4/16/2012	4/16/2015		1.50		90,000			120,000		-		120,000
Issued with debt conversion				4/28/2012	4/28/2015		1.75		-			550,000		-		550,000
Issued with debt conversion				4/30/2012	4/30/2015		1.75		-			500,000		-		500,000
Sold with share units				5/10/2012	5/10/2015		1.50		25,800			30,000		-		30,000
Issued with debt				7/5/2012	7/5/2012		0.50		26,500			550,000		-		550,000
Issued with debt				8/13/2012	8/13/2015		0.35		-			100,000		-		100,000
Issued with debt				10/26/2012	10/29/2015		0.20		-			500,000		500,000		-
Issued with debt				11/30/2012	11/30/2015		0.20		-			500,000		250,000		250,000
Issued for consulting services				12/21/2012	12/21/2015		0.21		2,624	(1)		16,875		-		16,875
Closing - Dec 31, 2012												5,136,875		1,655,000		10,328,155

(1) recorded as consulting expense

(2) recorded as legal expense

The weighted average exercise price at December 31, 2012 was $0.32

The weighted average exercise price at December 31, 2011 was $ 2.23

Note 24 REVENUE ALLOCATION

Gross revenue may be broken down by the following products for the twelve months ended December 31, 2012 are as follows:

Sales Revenues	12/31/2012 Restated		12/31/2011 Restated
	KUSD		KUSD
Licenses		4,244		5,004
Maintenance		10,802		11,343
Partner Contribution		0		0
Service		4540		6,485
Third-Party Products		2,905		2,302
LND Third-Party Products		3,114		2,960
Others		131		179
		25,736		28,273

Revenues by geographical area for the twelve months ended December 31, 2012 are as follows:

Sales Revenues	12/31/2012 Restated		12/31/2011 Restated
by geographic area	KUSD		KUSD
US		10,689		9,232
Germany		14,211		17,932
United Kingdom		836		1,109
		25,736		28,273

Long-lived assets by geographical area, which primarily include property plant and equipment, are as follows:

Long-lived assets	12/31/2012 Restated		12/31/2011 Restated
by geographic area	KUSD		KUSD
US		124		204
Germany		206		292
United Kingdom		3		3
Others		0		23
		333		522

Note 25 OTHER INCOME (EXPENSE)

At the financial statement date, Other expense was 1,532 KUSD (December 31, 2011 restated Other expense: 16,267 KUSD).

Other Income / Expense	12/31/2012 Restated KUSD			12/31/2011 Restated KUSD
Other Expense		(1,055	)		(15,895	)
Interest Income		3			34
Interest Expense		(480	)		(406	)
Ending Balance Other Expense		(1,532	)		(16,267	)

Note 26 DEFERRED INCOME TAXES

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

	12/31/2012			12/31/2011
	Restated			Restated
	KUSD			KUSD
Statutory rate		23.0% - 34.0%			23.0% - 34.0%
Expected income taxes recovery at the statutory rate		(2,285	)		(6,512	)
Effect of change in tax rate		(194	)		593
Permanent differences		430			1,061
Temporary differences		813			66
Price allocation from consolidation		(86	)		2,287
Change in deferred income tax asset		(735	)		354
Valuation allowance		3,490			0
Income tax expense (recovery) recognized		1,432			(2,151	)
Income tax expense (recovery) is comprised of:
Current		112			43
Future		1,320			(2,194	)

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

	USD			USD
	12/31/2012			12/31/2011
	Restated KUSD			Restated KUSD
Intangible assets		(475	)		(732	)
Non-capital losses available for future periods		5,136			3,339
Price allocation from consolidation		(68	)		(154	)
Assets held for resale		297			0
		4,890			2,452
Valuation allowance		(3,758	)		0
		1,132			2,452

	USD			USD
	12/31/2012			12/31/2011
	Restated KUSD			Restated KUSD
Short term assets		0			0
Long term assets		2,007			3,648
Long term liability		(875	)		(1,196	)
		1,132			2,452

The Company also has incurred losses for income tax purposes of approximately 16,362 KUSD which may be applied in future years to reduce taxable income. The ability to apply this loss expires starting in 2015. 

NOTE 27 PENSION PLAN OBLIGATIONS

The Company maintains three retirement plans described as follows:

1. GROUP Business Software AG - A non-contributory defined benefit pension plan (“Qualified Plans”) is maintained by GROUP Business Software AG. 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 December 31.

	Restated		Restated
Pensions Benefits in KUSD	12/31/12		12/31/2011
Change in benefit obligation:
Benefit Obligation at beginning of year		150		154
Service cost		0		0
Interest cost		9		8
Actuarial loss (gain)		102		(7	)
Curtailment (gain) loss		0		0
Plan amendments		0		0
Foreign exchange rate changes		4		(6	)
Benefits paid		0		0
Benefit Obligation at end of year		265		150
Change in plan assets:
Fair value of plan assets at beginning of year		93		93
Actual return on plan assets		4		4
Employer contributions		0		0
Participant contributions		0		0
Benefits paid		0		0
Foreign exchange rate changes		2		(4	)
Fair value of plan assets at end of year		99		93
Benefit Obligation at end of year		166		57

	Restated			Restated
Pension Benefits in KUSD	12/31/12			12/31/2011
Amounts recognized in the Balance Sheet
Current Liabilities		(166	)		(57	)
Amounts recognized in other accumulated comprehensive earnings
Net actuarial loss (gain)		107			(2	)
Prior service cost (credit)					0
Total net periodic benefit cost		107			(2	)

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

	Restated			Restated
Pension Benefits in KUSD	12/31/12			12/31/2011
Net periodic benefit cost:
Service cost		0			0
Interest cost		9			8
Recognition of net actuarial loss (gain)		102			(4	)
Recognition of prior service cost
Total net periodic benefit cost		111			4
Other comprehensive earnings:
Actuarial (gain) loss arising in current year		(4	)		(6	)
Prior service costs (credit) arising in current year		0			0
Recognition of net actuarial loss (gain)		0			0
Recognition of prior service cost		0			0
Benefit Obligation at end of year		(4	)		(6	)
Total recognized		107			(2	)

Assumptions:

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

				Pension Benefits
	12/31/12			2012			2011
Assumption to determine benefit obligations:
Discount rate		3.4	%		5.9	%		5.7	%
Rate of compensation increase		1	%		1	%		N/A
Assumptions to determine net periodic benefit cost:
Discount rate		6.0	%		6.0	%		6.0	%
Expected return on plan assets		N/A			N/A			N/A
Rate of compensation increase		N/A			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 2012/ 2013 is estimated to increase from $150 KUSD in 2011/ 2012 to $172 KUSD. The expected increase of the assets is estimated end of 2012/ 2013 by $5 KUSD

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 reinsurance. In total, the benefits from the permitted pension correspond to the benefits of the reinsurances which have been signed for these pension promises.

2. GBS Indiaincludes gratuity obligations representing a government mandated obligation to provide employees with 15 days of wages for every year worked. Obligations are paid when the employee retires or resigns from the company and payable only if employees serve at least five years of employment with the Company.

Details of the provision for gratuity which is included within Accrued Liabilities:

Description	12/31/12 Restated
Defined benefit obligation		35,974
Fair value of plan assets		-
Less: Unrecognized past service cost		-
Plan Liability (adjusted from operating revenue/retained earnings)		35,974

Changes in present value of the defined benefit obligation are as follows:

Description	2012
Defined benefit obligation as at June 5		38,474
Interest cost		1,507
Current service cost		3,143
Benefits paid		2,036
Actuarial (gain) loss on obligation		5,114
Defined benefit obligation as at December 31		35,974

No fund is created for payment of gratuity and leave wages and the Company would pay the same amount out of its own funds as and when the same becomes payable.

Employee benefits towards compensated absences recognized in the profit and loss accounts are as follows:

Description	2012
Current service cost		3,143
Interest cost		1,507

3. GBS Corporationmaintains a defined contribution 401(k) plan (“Qualified Plans”) for the benefit of the employees of GBS Corporation and Permessa Corporation. Contributions are made at the discretion of the participating employees. No obligation exists for employer contributions.

Note 28 COMMITMENTS

The Company has the following commitments as at December 31, 2012:

	Amount for Next 12 Months		Amount Exceeding 12 Months		Total
	1/1/2013 to 12/31/2013		1/1/2014 & On		Commitments
	($)		($)		($)
Total Liabilities from Rental Agreements		926,947.15		994,845.02		1,921,792.17
Obligations from Vehicle Lease Agreements		167,437.69		66,568.23		234,005.92
Obligations from Other Lease Agreements		163,694.67		154,231.11		317,925.79
Obligations started after 12/31/12		-		-		-
Total Financial Obligations		1,258,079.51		1,215,644.37		2,473,723.88

Note 29 SUPPLEMENTAL CASH FLOW DISCLOSURES

The significant non-cash transactions for the year ended December 31, 2012 and 2011 were as follows:

· On April 1, 2011, the Company acquired Pavone AG, for 350 KUSD, assumption of $583,991 debt and 1,000,000 shares of its common stock.

· On June 1, 2011, the Company acquired GroupWare, Inc., for 250 KUSD, assumption of $694,617 debt and 250,000 shares of its common stock.

· On July 25, 2011, the Company acquired IDC Global, Inc. for 750 KUSD, $883,005 assumption of debt, 25 (KUSD) reimbursement for accounting and legal fees, 35 KUSD signing bonuses and 880,000 shares of common stock.

· On September 27, 2011, the Company acquired SD Holdings Ltd for $525,529 and issued 612,874 shares of Common Stock.

· On February 27, 2012, an outstanding debt of GROUP was converted into an aggregate of 1,750,000 shares of GROUP common stock, increasing GROUP’s total outstanding common stock to 26,982,000 shares. As a result of the foregoing increase in the number of total 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, by purchasing the 883,765 shares of GROUP common stock from GAVF LLC for an average purchase price of $0.70 per share.

· On March 31, 2012, warrants were issued in lieu of consulting services and the fair value, based on the Black Scholes pricing model, was determined to be $ 270,208 and recorded as Additional Paid-In Capital.

· On April 28, 2012, $632,500 in notes payable to RealRisk Ventures, LL were converted into 550,000 shares of common stock and into 550,000 warrants with each warrant allowing the holder to purchase one common share at $1.75 for a period of 3 years.

· On April 30, 2012, $460,000 in notes payable to Lotus Holdings Ltd. were converted into 400,000 shares of common stock and 400,000 warrants, with each warrant allowing the holder to purchase one common share at $1.75 for a period of 3 years.

· On April 30, 2012 $ 172,500 of accounts payable due to Vitamin B Venture, GmbH was converted into 150,000 shares of common stock in satisfaction of a converted note to Kjell Jahn.

· On July 5, 2012, promissory notes for $552,500 were issued at 8.5% and had a conversion feature. Similar notes without the conversion were issued at 20%. Therefore, it was determined that the conversion feature had a value which was calculated by discounting the note as if the cost of capital was 20% and based on the due date set forth of 6 months. The calculated value was classified as discounted debt and amortized over the life of the promissory notes resulting in additional Interest expense and a credit to Additional Paid-In Capital for $26,700.

· On December 21, 2012, warrants were issued in lieu of consulting services and the fair value, based on the Black-Scholes pricing model, was determined to be $ 2,624 and recorded as Additional Paid-In Capital.

Additional Information:

	For the fiscal year:		For the fiscal year:
	1/1/2012 - 12/31/2012		1/1/2011 - 12/31/2011
Interest Expense:		157,719		170,222
Corporate Income Taxes Paid (Recovered):		30,599		56,939
Corporate Taxes (Refunds):		12,156		0
Total Cash Expenditure		176,161		227,161

Note 30 SUBSEQUENT EVENTS

On February 1, 2013, GBS entered into a Stock Purchase Agreement, dated February 1, 2013 (the “Agreement”), with IDC Global, Inc., a Delaware corporation and a wholly-owned subsidiary of GBS (“IDC”), and Global Telecom & Technology Americas, Inc., a Virginia corporation (“GTT). Pursuant to the Agreement, we sold 100% of the issued and outstanding capital stock of IDC to GTT for a purchase price of $4,600,000 (the “Purchase Price”), subject to certain holdback provisions. On January 20, 2014, the Company and GTT signed an agreement in which both parties declared that the terms of the provisions were met to each company’s satisfaction.

Group Live N.V. operating under the laws of the Netherlands and a 100% subsidiary of Group Business Software AG declared its end of business May 31, 2012, registered in the commercial register June 22, 2012. Following the local procedures the Company has been dissolved from the register as per April 5, 2013, registered April 16, 2013.

Each of the directors of the Company, including all five disinterested directors with respect to the transaction, has approved each of the transaction agreements discussed above and the transactions contemplated thereby.

Note 31 COMPARATIVE STATEMENTS

In certain circumstances, the classification of accounts previously presented in 2011 has been changed to conform to the presentation used in 2012.