sql 24th a r 10-11 (5-9-11) part 1 (colour)

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24th Annual Report 2010-11

Notice is hereby given that the Twenty Fourth Annual General Meeting of the members of SQL STAR INTERNATIONAL

LIMITED will be held on Friday, the 30th day of September, 2011 at 10.25A.M. at Hotel NKM’s Grand, 6-3-563/31/1,

Erramanzil, Somajiguda, Hyderabad - 500082 to transact the following business:

ORDINARY BUSINESS:

1. Adoption of Annual Accounts and Directors’ Report for the financial year 2010-11

To consider and adopt the Balance Sheet as at 31st March 2011, the Profit & Loss Account for the year ended on

31st March 2011 along with the annexure and the reports of the Board of Directors and Auditors thereon.

2. Appointment of Director retiring by rotation

To appoint a director in place of Mr. Jai Narain Khandelwal who retires by rotation and being eligible, offers himself for

re-appointment.

3. Re-appointment of Auditors

To consider and if thought fit, to pass with or without modifications, the following resolution as an Ordinary Resolution:

“RESOLVED THAT M/s. Maharaj N. R. Suresh & Co., Chartered Accountants, Chennai, FRN No. 001931S, be and are

hereby appointed as auditors of the Company for holding the office from the conclusion of this meeting until the

conclusion of the next Annual General Meeting and remuneration payable for the audit and other serivice for the

period 2011-12 be as under plus out of pocket expenses on actual basis:

1. Statutory audit fee Rs. 2,50,000/-

2. Limited review Rs. 12,500/- per quarter.

3. Tax audit Rs. 30,000/-

4. Tax representation Rs. 32,500/-

5. Out of Pocket Expenses Rs. Actual

Certification of consolidated Financial Statements Rs 25,000/-.

TP Report & Certification are to be billed on mutually acceptable basis.”

SPECIAL BUSINESS:

4. Appointment of Mr. Mahesh Solanki as Director of the Company

To consider and if thought fit, to pass with or without modification(s)the following resolution as an Ordinary Resolution:

“Resolved that Mr. Mahesh Solanki who was appointed as Additional Director of the Company by the Board with

effect from 27th January 2011 and who hold office up to this Annual General Meeting as per Section 260 of the

Companies Act 1956, and being eligible for appointment and in respect of whom the Company had received a notice

from a member pursuant to Section 257 of the said Act in writing proposing his candidature for the office of Director

of the Company, be and is hereby appointed as Director of the Company liable to retire by rotation”

5. Appointment of Mr. Mohinesh Jagwani as Director of the Company

To consider and if thought fit, to pass with or without modification(s)the following resolution as an Ordinary Resolution:

“Resolved that Mr. Mohinesh Jagwani who was appointed as Additional Director of the Company by the Board with

effect from 27th January 2011 and who hold office up to this Annual General Meeting as per Section 260 of the

NOTICE


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Companies Act 1956, and being eligible for appointment and in respect of whom the Company had received a

notice from a member pursuant to Section 257 of the said Act in writing proposing his candidature for the office of

Director of the Company, be and is hereby appointed as Director of the Company liable to retire by rotation”

By Order of the Board

For SQL Star International Limited

Date :2nd September, 2011 Sunil Gupta

Place: Mumbai Co-Chairman & Managing Director

NOTES:

1) The relevant Explanatory Statement pursuant to section 173(2) of the Companies Act, 1956, in respect of the Special

Business is annexured hereto.

2) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND

AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. THE INSTRUMENT APPOINTING

PROXY, IN ORDER TO BE EFFECTIVE, SHOULD REACH THE REGISTERED OFFICE OF THE COMPANY AT LEAST

48 HOURS BEFORE THE TIME OF THE MEETING.

3) The Register of Members and Transfer Books of the Company will remain closed from 23.09.2011 to 29.09.2011

(both days inclusive) in connection with the Annual General Meeting.

4) All documents referred to in the accompanying Notice and Explanatory Statement are open for inspection at the

registered office of the company on all working days except Saturdays between 10.00 am to 1.00 pm up to the date of

the Annual General Meeting.

5) Members/Proxy-holders are requested to produce at the entrance, the attached Attendance Slip duly completed and

signed, for admission to the meeting hall.

6) Members seeking any information with regard to accounts of the company are requested to send their queries to reach

at least 10 days before the meeting, to enable the management to keep the information ready.

7) Members holding shares in physical form are requested to advise any change of address and all communication

relating to shares immediately to the Company’s Registrar and Share Transfer Agents, Karvy Computershare Private

Limited (Unit: SQL Star International Limited). 17-24, Vital Rao Nagar, Madhapur, Hyderabad – 500081, Andhra

Pradesh, India. Members holding shares in electronic form must send the advice about change in address to their

respective Depository Participants and not to the Company.

8) Members / Proxies are requested to bring their copies of Annual Report to the meeting and the attendance slip duly

filled in for attending the meeting. Copies of Annual Reports will not be provided at the Meeting.

9) As per Section 109A of the Companies Act, 1956, nomination facility is available to individual shareholders.

Shareholders, in particular those holding shares in single name are requested to avail the facility of nomination by

furnishing to the Registrars and Transfer Agents (RTA) of the company, the particulars of their nomination in the form

enclosed at the end of this report.

By Order of the Board

For SQL Star International Limited

Date : 2nd September, 2011 Sunil Gupta

Place : Mumbai Co-Chairman & Managing Director

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Annexure to Notice

Brief particulars of Director proposed to be appointed/re-appointed, as required to be furnished under the Listing

Agreement, Corporate Governance Code:

Name of Director

Date of Birth

Date of Appointment

Qualification

Expertise in specific

functional areas

Directorships held in

Other Companies

Committee position

held in other

Companies

No. of shares held in

the Company

Mr. Jai Narain Khandelwal

31.01.1965

12.05.2005

B.Com., FCA

More than 15 years of

experience in dealing with

various auditing, Taxation,

financial matters, tax

planning, having good

contacts in industry and

with strong understanding

of financial markets in India.

1. Ni-Tech Corporate

Services Limited

2. Systematix Corporate

Services Limited

Nil

Nil

Mr. Mahesh Solanki

06.08.1968

27.01.2011

B.Com., M.Com., FCA,

Dip.

More than 18 years of

experience in dealing

with various Financial

matters, Audit,

Consultancy, Financial /

Corporate Restructuring,

Mergers & Acquisitions

and Merchant Banking,

Information Systems

Audit and Company

Law.

1. Gold Fin Capital

Private Limited

2. Systematix

Corporate Services

Limited

Nil

Nil

Mr. Mohinesh Jagwani

01.09.1962

27.01.2011

BE (Mechanical), Post Graduate

Dip in Marketing Mgmt

More that 27 years of

experience, worked in dealing

with M/s. Indian Oil Corp Ltd in

various capacities. For the last 17

Years, Mr. Mohinesh is involved

in his own business which deals

in speciality products related to

packaging of products, catering

the requirements of customers

in Pharma; Health Care; Food &

Beverages; Edible Oil; Agro

Chemicals and Engineering

Industries. Mr. Mohinesh had

long association with various

German & American companies,

who are Leaders in their

respective fields. Mr. Mohinesh

had extensively travelled within

India & Europe.

Nil

Nil

Nil


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EXPLANATORY STATEMENT

[ Pursuant to Section 173(2) of the Companies Act, 1956 ]

Item # 4:

Mr. Mahesh Solanki was appointed as Additional Director at the Board Meeting held on 27th January, 2011. As per the

provisions of section 260 of the Companies Act, 1956, Mr. Mahesh Solanki holds office till the conclusion of ensuring

Annual General Meeting.

The Company has received a notice in writing from a member proposing the candidature of Mr. Mahesh Solanki for the

office of the Director under the provisions of section 257 of the Companies Act, 1956.

Mr. Mahesh is a qualified Chartered Accountant with more that 18 years of experience in dealing with various Financial

matters, Audit, Consultancy, Financial / Corporate Restructuring, Mergers & Acquisitions and Merchant Banking, Information

Systems Audit and Company Law. The Board is of the opinion that his association would benefit the Company.

The Board of Directors recommend the resolution for approval of the Shareholders.

None of the Directors of the Company other that Mr. Mahesh Solanki, is in any way concerned or interested in this

resolution.

Item # 5:

Mr. Mohinesh Jagwani was appointed as Additional Director at the Board Meeting held on 27th January, 2011. As per the

provisions of section 260 of the Companies Act, 1956, Mr. Mohinesh Jagwani holds office till the conclusion of ensuring

Annual General Meeting.

The Company has received a notice in writing from a member proposing the candidature of Mr. Mohinesh Jagwani for the

office of the Director under the provisions of section 257 of the Companies Act, 1956.

Mr. Mohinesh is a qualified Mechanical Engineer with more that 27 years of experience, worked in dealing with M/s. Indian

Oil Corp Ltd in various capacities. For the last 17 Years, Mr. Mohinesh is involved in his own business which deals in

speciality products related to Packaging of products, catering the requirements of customers in Pharma; Health Care; Food

& Beverages; Edible Oil; Agro Chemicals and Engineering Industries. Mr. Mohinesh had long association with various

German & American companies, who are Leaders in their respective fields. Mr. Mohinesh had extensively travelled within

India & Europe. The Board is of the opinion that his association would benefit the Company.

The Directors recommend the resolution for approval of the Shareholders.

None of the Directors of the Company other that Mr. Mohinesh Jagwani is in any way concerned or interested in this

resolution.

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Our Vision

To be respected as a Leader in Information Technology and Knowledge Services by

Unlocking Human Potential and Delivering value to Enterprises, Departments,

undertakings and Communities.

Quality Policy

We, at SQL Star, shall continually strive to achieve total customer satisfaction by

providing service on time, and consistently meeting customer expectations.

Quality Objectives

To provide products and services consistently meeting or exceeding internal and

external customer expectations.

To implement Quality Management System based on ISO 9001: 2008 and to ensure

continual improvement in the effectiveness of the system.

To strive for increasing the productivity of the resources.

To be guided by the spirit of continual improvement, team work and commitment

and achieve a high level of motivation of all personnel.

Offices in India and Overseas


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Company Information

KOLKATA

2nd Floor, Kankaria Estate, 6, Little

Russel Street, Kolkatta – 700071

MUMBAI

II Floor, Citi Point, Rajashri Sahu

Maharaj Road (Telli Gully), Andheri

(East), Mumbai – 400069

PUNE

2nd Floor, Mittal Court, A wing, Rasta Peth,

Off: Ambedkar Road, Pune – 411001

NEW DELHI

Aggarwal Cyber Plaza I, 201, 2nd floor,

Tower-A, Plot No. C 4,5,6,

Netaji Subhash Place,

Pitampura, Delhi - 110034.

BHOPAL

B-15, Amrapali, Enclave, Charimali Extn,

Chuna Bhatti Road,

Bhopal-462016

CHANDIGARH

3198, 2nd Floor, Sector 40-D,

Chandigarh - 160036.

WHOLLY OWNED SUBSIADARIES

USA

SQL Star International Inc.

8820 Kenamar Drive,

Suite 506, San Diego, CA 92121

SINGAPORE

International SQL Star Pte. Ltd

100 Beach Road, # 12-02, Shaw Tower

Singapore 189702

AUSTRALIA

SQL Star International Pty Ltd

Level 7, Suite 7, Strathfield Plaza,

11, The Boulevarde, Strathfield,

NSW 2135

BOARD OF DIRECTORS

Mr. C.P. Khandelwal,

Non-Executive Chairman

Mr. Sunil Gupta,

Co-Chairman & Managing Director

Mr. Jai Narain Khandelwal,

Director

Mr. Mahesh Solanki,

Additional Director

Mr. Mohinesh Jagwani

Additional Director

GM - FINANCE

Mr. K.V. Sai Prasad

REGISTERED OFFICE

601 & 602, No. 1-8-271, 272, 6th Floor,

Ashoka Bhoopal Chambers, Sardar Patel Road,Secunderabad - 500003

BANKERS

Yes Bank Limited

Ground Floor, Mayank Towers, 6-3-1090/B/1 & 2,

Raj Bhavan Road, Somajiguda,

Hyderabad – 500 004

STATUTORY AUDITORS

Maharaj N.R. Suresh & Co.,

Chartered Accountants

9 (Old No.5), II Lane, II Main Road,

Trustpuram, Chennai – 600024.

LOCATIONS

BANGALORE

40/4, 3rd Floor, Above Mandovi

Motors, Lavelle Road,

Bangalore – 560001

BHUBANESWAR

B-41, Sahid Nagar,

Opp: R.D. Women’s College,

Bhubaneswar – 751007

CHENNAI

3rd Floor, Dwaraka, 36,

Nungambakkam High Road,

Chennai – 600034

HYDERABAD

4, Motilal Nehru Nagar, 1st Floor,

Begumpet, Hyderabad – 500016

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Chairman’s Message

Dear Shareholders,

It gives me great pleasure to welcome you to the 24th Annual General Meeting of your Company and share with you the

progress your Company has made, despite the global economy has posed several challenges.

While the economic climate throughout the industry has remained challenging during the year gone by, however, the Fiscal

Year 2011 was a year of steady revival and consolidation for us. During the year we saw strong revival of business demand

across the markets, however, in the backdrop of economic recovery, investments were closely evaluated and business

models were realigned by most of our clients.

While, some of the Verticals/Lines of Business and Subsidiary Companies have fared well and high achievers this fiscal,

however, the major setback was on the e-Governance business segment front. As informed in our last Annual Report, due

to the Mandi Board resorting to unilateral and un-lawful termination of the Service Contract and withholding dues to the

Company from April’ 08 onwards aggregating to Rs. 28.77 Crores (out of which Rs. 20.22 Crores pertains to billing raised

on behalf of outsourcing partner), the Company had suffered severely from financially and otherwise. The dispute was

referred to Arbitration and pending for disposal. Further, the other e-governance project viz., Sampark Project in the Union

Territory of Chandigarh has come to a logical conclusion as of Dec 31, 2010.

The Company’s Singapore subsidiary is growing steadily, where revenues grew annually at 39%. The Company had

forayed into Training & Education Services in Singapore, by launching Android Training in partnership with Singapore IT

Federation (SiTF). The Training Program is being endorsed and funded from Infocomm Development Authority (IDA),

Singapore as enhanced Critical Infocomm Technology Resource Program (e-Citrep). So far, the Company had billed

training revenues in excess of SGD $ 450000. Now, the Company is poised to launch Trainings on other Technologies/

Platforms. Using the Android training experience and leveraging the past credentials in Embedded Wireless and Software,

the Company has also bagged few prestigious projects on the Embedded & Android platform.

Looking Ahead

As we step into new fiscal, the crisis of confidence, which we thought was over, has been rekindled with the economic crisis

that the USA and Europe are now facing, which will cast shadow on the strong business demand. While “caution” is on

everyone’s mind, with Companies carrying over the lessons of the past years into the fiscal 2011-12, the expectation is that

it will be more mature Indian IT Industry that will emerge from the existing scenario. Therefore, we see that IT spending on

a rebound and the outlook for the future is robust. We believe that with our diverse portfolio of services, domain expertise

and the increasing value-add to customers, we are best suited to be a strategic partner to our customers. Our offerings are

highly differentiated and leverage deeply, as these capabilities are built over decades.


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With the powerful differentiation indicated above and a diverse customer base across geographies, coupled with the

learning’s during the last couple of years, I am sure that your Company will continue to consolidate and grow in the years

to come. This is very evident from orders bagged from various high value customers and new accounts being opened with

various Industry majors during the current fiscal 2011-12. The Company is re-starting several initiatives to embrace growth

by aggressive business strategies and new business models.

Growth Strategy and Way Forward

1. To leverage on the Company’s over 23 years of enviable reputation as a high-end quality IT Educator

2. To increase product offerings across all business segments

3. To pursue various e-Government opportunities, as Central and State Governments putting more emphasis on e-

Governance initiatives.

4. To effectively integrate on-site and off-shore capabilities to deliver seamless, scalable, and cost-effective solutions to

our Customers

5. Pursue alliances with various Companies and Technology Providers, that complement our core competencies

Concluding Note

I am confident that SQL Star, with its excellent customers, committed associates and strong and stable management team

will continue to deliver significant value to all its stakeholders in the years to come and will achieve every milestone in the

journey to success.

I would like to thank all our shareholders, investors, employees, customers, principals and all other stakeholders, who have

always stood by us. With our focussed business strategy, dynamic management team and a pool of professional talent, we

are poised for growth.

I look forward to your continued support in the coming years to take this Company to the next level of growth.

Yours Sincerely,

Sunil Gupta


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DIRECTORS’ REPORT

Dear Shareholders,

Your Directors take pleasure to present the 24th Annual Report on the business and operations of the Company together with

the Audited Financial Accounts for the year ended 31st March, 2011.

The financial highlights of the Company :- (Rupees in Lakhs)

Business Performance

On a Consolidated basis, the Company reported total income of Rs. 3,938.68 lacs in the FY 2010-11, as compared to

Rs. 5,381.01 lacs reported in the previous financial year, registering a decline of 27%. The loss after tax was Rs. 856.50 lacs

in the FY 2010-11, as against Rs. 1,874.82 lacs reported in the previous year.

SQL Star

Group Consolidated

Financial Year

2010-11 2009-10

SQL Star, India

(Stand alone)

Financial Year

2010-11 2009-10

Particulars

INCOME:

- Sales/Income from Operations 3,938.68 5,381.01 1,778.16 2,545.59

Total 3,938.68 5,381.01 1,778.16 2,545.59

EXPENDITURE :

- Staff Cost 2,927.38 3,462.61 1,035.16 1,077.96

- Other Expenditure 1,281.21 1,188.75 784.49 861.69

- Direct & Outsourcing 282.81 540.51 204.57 348.22

- Provisions 160.54 1,441.71 160.54 1,441.71

- Depreciation 215.75 830.68 190.75 820.59

Total 4,867.69 7,464.26 2,375.51 4,550.17

Profit / (Loss) from Operations before Other Income,

interest & exceptional items (929.01) (2,083.25) (597.35) (2,004.58)

- Other Income 86.91 132.10 71.16 90.47

Profit/(Loss) before interest & exceptional items (842.10) (1,951.15) (526.19) (1,914.11)

- Interest 53.91 108.94 47.13 103.23

Profit/(Loss) After Interest but before exceptional items (896.01) (2,060.09) (573.32) (2,017.34)

- Exceptional Items - 49.35 - 49.35

Profit/(Loss) from Ordinary Activities before tax (896.01) (2,109.44) (573.32) (2,066.69)

Tax Expenses (39.51) (234.62) (45.05) (238.47)

Profit/(Loss) from Ordinary Activities after tax (856.50) (1,874.82) (528.27) (1,828.22)

Extraordinary Items (net of tax expenses) - - - -

Net Profit/(Loss) for the period (856.50) (1,874.82) (528.27) (1,828.22)


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On a Standalone basis, the Company reported total income of Rs 1,778.16 lacs in the FY 2010-11, as compared to

Rs. 2545.59 lacs reported in the previous financial year, registering a decline of 30%. The loss after tax was Rs. 528.27 lacs

in the FY 2010-11, as against Rs. 1828.22 lacs reported in the previous year.

Segment wise Revenues:-

Consolidated Basis Stand-alone Company

2.1. Performance of SQL Star, India – Standalone Company

The main reason for the fall in the revenue of the stand-alone company was due to decline in revenues from the e-

Governance vertical. As informed in our previous Annual Report, during the last fiscal, the Mandi Board had resorted

to unilateral and un-lawful termination of the Service Contract for executing the Mandi Project and further, withheld

dues to the Company from April’ 08 onwards aggregating to Rs. 28.77 Cr (out of which Rs. 20.22 Cr pertains to billing

raised on behalf of outsourcing partner). The Mandi Project was one of the major contributors to the revenues of the

Company and the unilateral and un-lawful termination has severely impacted the Company financially and otherwise.

The matter was referred for Arbitration proceedings. When the arbitration proceedings were in progress, the Mandi

Board withdrew the arbitrator and the new arbitrator is yet to be appointed by the Mandi Board. In the meanwhile, the

company has filed a petition before the Honourable High Court of Madhya Pradesh, Jabalpur Bench seeking to

appoint an arbitrator to complete the proceedings.

Further, the other e-Governance project viz., Sampark Project in the Union Territory of Chandigarh came to a logical

conclusion as of Dec 31, 2010. When the Department of Information Technology, Chandigarh initiated the re-

tendering process, the Company has submitted its bids and stood as sole bidder in the technical review, however,

owing to the CVC guidelines, the Department of Information Technology (“DIT”), Chandigarh has entrusted the

responsibility of running the operations to another Department Agency viz., Society of Promotion of Information

Technology in Chandigarh (“SPIC”) which is part of DIT, Chandigarh, w.e.f Jan 01, 2011. As a result of this change, the

Company had lost the project revenues from 4th quarter of financial year 2010- 11 onwards.

2.2. Performance of Wholly Owned Subsidiaries

During the year under review, the Singapore Company reported an increase of around 39% in its revenues, whereas

the revenues of the USA subsidiary was down by around 65%, mainly due to macroeconomic conditions prevailing

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in the USA and also on account of no revenues from the Embedded Wireless and Software business unit, as it has

been shelved by the Company. Due to certain business challenges, there were no major revenues from the Australian

Company.

(a) SQL Star International Inc., USA

During the year under review, SQL Star International Inc., USA, has generated Rs. 607.55 Lakhs in revenue and

reported Loss before Interest, Depreciation and Tax of Rs (127.36) Lakhs, with loss after Tax of Rs. 126.33

Lakhs.

(b) International SQL Star Pte. Ltd., Singapore

During the year under review, International SQL Star Pte Ltd., Singapore, has generated Rs. 1518.63 Lakhs in

revenue and reported Profit before Interest, Depreciation and Tax of Rs. 29.85 Lakhs, with Profit after Tax of

Rs. 6.49 Lakhs.

(c) SQL Star International Pty Ltd., Australia

During the year under review, SQL Star International Pty Ltd., Australia, has generated Rs. 41.27 Lakhs in

revenue and reported Loss before Interest, Depreciation and Tax of Rs. (3.55) Lakhs, with loss after Tax of Rs.

5.49 Lakhs.

3. DIVIDEND

Due to the loss incurred during the year, the Board of Directors of your Company does not recommend any dividend

for the financial year 2010-11.

4. AUDITOR’S

The Statutory Auditors of the Company, M/s. Maharaj N R Suresh & Co, Chartered Accountants, Chennai retire at the

conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment.

The Company has received letter from them to the effect that their appointment if made would be within the

prescribed limits under Section 224(1-B) of the Companies Act, 1956.

5. EXPLANATIONS TO QUALIFICATIONS IN AUDITOR’S REPORT

Qualification in

Clause No. of the

Auditors’ ReportDirectors Reply

The Company has borrowed unsecured loans from Promoter Group Companies. Due to cash

liquidity issues, the Company has not paid the interest from March 2008 onwards. The outstanding

interest will be cleared once the cash flow pressure is eased out.

Due to overall fall in revenues and margins, and with the Mandi Board withholding our payments

from April’ 08 onwards, there has been tremendous pressure on the cash flows of the Company. As

a result, there have been delays in the payment of the statutory dues. In order to clear certain amount

of the Statutory dues, the Company borrowed Rs. 1Cr from Mr. Sunil Gupta, the Co-Chairman &

Managing Director of the Company. The Company had cleared the said loan in multiple trenches

and the final trench of the Loan along with interest has been cleared before May’ 11.

As informed earlier, due to the Mandi Board resorting to unilateral and un-lawful termination of the

Service Contract and withholding dues to the Company from April’ 08 onwards aggregating to Rs.

28.77 Crores (out of which Rs. 20.22 Crores pertains to billing raised on behalf of outsourcing

partner), there was tremendous pressure on the working capital of the Company. Further, due to

external market conditions, the revenues from all business units have suffered, which has further

put the pressures on the working capital.Due to these reasons, there were incessant delays in

making the payments of undisputed statutory dues including Provident Fund, Income Tax deducted

from various Services/Payments and Service Tax However, the Company is taking necessary steps

to regularize the remittances of various statutory dues with appropriate authorities.

3 (iii)(d)

3 (vi)

3 (ix)(a) & (b)


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6. DIRECTORS

As per Article 51 of the Articles of Association, Mr.

Jai Narain Khandelwal retires by rotation at the

ensuing Annual General Meeting and being eligible

offers himself for re-appointment.

Sri. Mahesh Solanki was appointed as an additional

director of the Company at the Board Meeting held

on 27/01/2011. The Company has received notices

under section 257 of the Companies Act, 1956

together with a deposit of Rs. 500/- signifying their

intention to propose Sri. Mahesh Solanki as director,

subject to retirement by rotation. He holds office up

to the date of ensuing Annual General Meeting.

Sri. Mohinesh Jagwani was appointed as an additional

director of the Company at the Board Meeting held

on 27/01/2011. The Company has received notices

under section 257 of the Companies Act, 1956

together with a deposit of Rs. 500/- signifying their

intention to propose Sri. Mohinesh Jagwani as

director, subject to retirement by rotation. He holds

office up to the date of ensuing Annual General

Meeting.

7. PUBLIC DEPOSITS

In terms of the Provision of section 58A of the

Companies Act, 1956 read with the Companies

(Acceptance of Deposits Rules) 1975, Your Company

has accepted loans which are in the nature of

deposits.

8. CORPORATE GOVERNANCE

Pursuant to the provisions of Clause 49 of the Listing

Agreement and Section 292A of the Companies Act,

1956, a Report on the Corporate Governance, which,

inter alia, includes the composition and constitution

of Audit Committee, is featuring as a part of Annual

Report. Certificate of the Statutory Auditors regarding

compliance with the conditions of Corporate

Governance as stipulated in Clause 49 of the Listing

Agreement is also given in this Annual Report. Your

Company will continue to adhere in letter and spirit

to the good corporate governance policies.

9. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as

required under Clause 49 (IV) (F) is disclosed

separately in this Annual Report.

10. INTERNAL CONTROL

Your Company has established reasonably sound

system of Internal controls in the operational areas.

Internal controls evolved are commensurate with the

size of the operations and organizational

requirements and are adequate to protect the

enterprise resources. The Audit Committee reviews

the adequacy of internal control system from time to

time.

11. HUMAN RESOURCES

Your Company administers a comprehensive human

resources management system which includes

attracting, developing and retaining a highly qualified

and continuously learning workforce. Your

Company is continuously striving towards the

implementation of certain HR best practices, with a

greater focus on fulfilling and supporting our

business needs and simultaneously catering to the

enhancement of people, process and procedures in

the organization.

12. QUALITY

Continuous Quality improvement and adherence

to quality standards and processes are important to

remain competitive in the global market. During the

year, your Company has focused on improving

quality in every process, including project designs,

product development and delivery, Testing and

Implementation and maintenance.. As a part of

continuous improvement program, during the year,

your Company obtained ISO 9001:2008

recertification.

13. MATERIAL CHANGES AFFECTING THE FINANCIAL

POSITION

Pursuant to provisions of Section 217 (1) (d) of the

Companies Act, 1956, there has been no material

change and commitment affecting the financial

position of the Company that has occurred between

the end of the financial year of the company, related

to the balance sheet and the date of the report.

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Name Designation Qualification Age Date of Joining Experience

Gross

Remuneration

(in INR)

Last

emplopyment

and designation

Sunil Gupta Co-Chairman B.E, PGM 48 26.02.2010 27 77.61 Collabera

& Managing Enterprise

Director Solutions Pvt

Ltd as Director

17. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement of provisions of Section 217 (2AA) of the Companies Act, 1956 with respect to Directors’

Responsibility Statement, it is hereby confirmed that:-

(i) In the preparation of the annual accounts for the year ended March 31st, 2011, the applicable accounting

standards read with requirements set out under Schedule VI of the Companies Act, 1956, have been followed

and there are no material departures from the same;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and

estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company

as at March 31st, 2011 and the Loss of the Company for the year ended as on date.

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in

accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for

preventing and detecting fraud and other irregularities; and

(iv) The Directors have prepared the annual accounts of the Company on a “going concern” basis.

18. RELATED PARTY TRANSACTIONS

As a matter of policy, your Company carries out transactions with related parties on an arm’s length basis. Statement

of these transactions is given in the Notes to Accounts in compliance of Accounting Standard AS – 18.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION etc.

Information in accordance with the provisions of section 217 (1)(e) of the Companies Act, 1956 read with the

Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure-A forming

part of this report.

15. FINANCIAL INFORMAITON OF SUBSIDIARY COMPANIES

In terms of the specific approval granted by the Central Government under Section 212(8) of the Companies Act,

1956, and in terms of the general permission granted by the Central Government to all companies vide General

Circular No. 3/2011 dated February 21, 2011, the Audited/Un-Audited Financial Statements along with the reports of

the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The

Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your

Company. Investors who want to have a copy of the above may write to the Compliance Officer at the registered office.

16. PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars

of Employees) Rules, 1975 and forming part of Directors’ Report for the year ended March 31st, 2011.


14

19. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the valuable support and cooperation extended by Yes

Bank and other State and Central Government Agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of

the Company and are thankful to the Shareholders for their continued patronage and support.

For and on behalf of the Board

SQL Star International Limited

Place: Mumbai Sunil Gupta

Date: 2nd Septemeber, 2011 Co-Chairman and Managing Director

ANNEXURE TO DIRECTORS’ REPORT

Annexure - A

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, FOREIGH EXCHANGE EARNINGS AND OUTGO

A. Conservation of Energy

Your Company’s operations are software oriented and not energy intensive. Adequate measures are taken to conserve

energy wherever possible. No additional investments are made for reduction of consumption of energy.

The energy consumption is very meager and energy cost forms a small part of total costs, the impact of costs is not

material.

B. Technology absorption

A technology vision has been formulated that anticipates changes to evolve technology based on the same. The core

management team identifies itself with the vision process and is constantly absorbing, adapting and deploying the

technological changes into its services to its customers, so as to improve their business efficiencies.

C. Foreign exchange earnings and outgo

Details Year ended

31.03.2011

Year ended

31.03.2010

Earnings from service 3.73 0.54

Expenditure 4.20 1.24

(Rupees in Lakhs)

15


1. INDUSTRY STRUCTURE, DEVELOPMENT AND OUTLOOK

1.1 Economy & IT Industry

The Global IT Services industry is operating in a rapidly changing economic and business environment. 2010

saw a shift from ‘anxiety’ to ‘cautious optimism’ across the world. The demand outlook for IT has also improved.

After negative growth in last year, the World-wide spending on technology and related products and services is

estimated to have crossed US$ 1.6 trillion in 2010, a growth of 4.0% over 2009, with growth driven by emerging

verticals and emerging geographies in addition to USA.

Trends in global sourcing remained positive and showed a growth rate of 10.4% in 2010 over 2009 and the

global sourcing market size was in the range of US$ 102 to 106 billion in 2010. IT sourcing grew at 10.3% to a

market size of US$ 62 to 64 billion and BPO sourcing grew at 10.6% to a market size of US$ 40 to 42 billion.

1.2 Indian IT Industry

India is widely recognized as the premier destination for offshore Technology Services. According to NASSCOM

strategic review 2011, IT exports from India are estimated to grow by 22.7% in fiscal 2011. There are several key

factors which are contributing to the growth of IT and IT services in India and by Indian companies. Some of

these factors are high quality of delivery, significant cost benefits and abundant skilled resources.

IT services spend is expected to increase from US$ 566 billion in 2009 to US$ 684 billion by 2014 at a CAGR2

of 3.9%. IT outsourcing component is expected to grow from US$ 225 billion in 2009 to US$ 239 billion in

2014 at a CAGR of 1.1%. IT services off-shored is expected to grow from US$ 31.1 billion in 2009 to US$ 42.8

billion in 2014 at a CAGR of 6.6%.

IT spend forecasts by global technology analyst firms like Gartner, Forrester, IDC and others indicate a growing

market for IT and ITES for industry verticals, service offerings and geographies of interest to the Company and

excellent prospects for growth in the future.

2. BUSINESS STRUCTURE OF THE COMPANY

SQL Star is a leading global Information Technology Company, primarily into IT Services & Consulting, headquartered

in Hyderabad, India. The Company is involved in integrated operations of Knowledge Services, E-Governance, Software

Development and Services. In each of the lines of businesses, the Company has built key strategic partnerships with

industry leaders in these segments. The company enjoys elite partnerships with Fortune 1000 companies such as

ORACLE, Sun Microsystems, and Red Hat etc. Our service delivery process puts a tremendous emphasis on quality.

Over the past two decades, SQL Star has established itself as a leading player in the Education & Learning space in the

areas of Information Technology. Today, we boast of a set of comprehensive services delivering value to our customers.

The Company operates in the following primary business segments:-

� Knowledge Services

� E-Governance

� Software Development & Services

MANAGEMENT DISCUSSION AND ANALYSIS


16

3. SEGMENT WISE OVERVIEW

3.1 KNOWLEDGE SERVICES

The Company offers IT Training / Education services to:-

� Students from IT or non-IT background, aspiring to make a career in IT

� Working professionals in IT and non-IT domains, aspiring to upgrade their skills;

� Training programs for Corporate Sector.

Offerings from the Knowledge Services Division can be broken down into the following basic segments i.e.

Individual Training Groups (ITG), Corporate Training Group (CTG).

Learning Services from Individual Training Group

The ITG business segment includes fresh graduates, graduates seeking employment, professionals seeking industry-

recognized certification and even students who are in still at university (who want to have an accelerated start to

their career). Knowledge Services provides the Retail learner a range of learning options to choose from:

� In class training for those who want to learn the basics of IT

� Certification Tracks for those learners who want to equip themselves with industry-recognized IT certification

� Self-paced Learning titles for those learners who would like to be in control of the pace, time and intensity

of their learning schedules. For example, full-time students and busy professionals.

Learning Services from Corporate Training Group:

SQL Star helps corporate justify their investments in Human Capital by means of training their resources. SQL Star

has been in the business of conducting highly customized, High End technology training for companies to meet

specific business requirements; whether to induct new hires in Fresher Induction Programs or to more experienced

project level technology up-skilling and also some advanced level training.

Future Outlook

While, the financial year 2010-11 saw a progression in economic trends from cautious optimism at the beginning

of the year leading into moderate recoveries and expected to achieve rapid growth in many emerging economies

by the year end, some of the positive trends of next fiscal are:-

� Year 2010-11 ended with strong hiring by employers across industries.

Consolidated Basis Standalone Basis

17


� Strongest hiring intentions since 2005 with Net Employment Outlook at 51% (Source: Manpower

Employment Outlook Survey)

� Fresher IT recruitments expected to cross 200,000 next fiscal year

� Education and skill development remained a top agenda with the Government, with greater private sector

participation

� Corporate sector business confidence improved.

� US markets showed recovery in terms of training spends; Outsourcing activity grew faster in Europe

Spending on supplementary IT education has seen a moderate growth with increased hiring by the IT Companies

but the main driver for IT education will be to meet the skill shortage that the industry faces. While the industry

grows, the no. of employable graduates in technology has not kept pace with the development.

However, based on various industry reports, we strongly believe that the student’s sentiment is likely to improve

as major IT Companies are planning to step-up their hiring in FY’12. The Company is also seeing a growing

pipeline of deals for Training, particularly in the Government sector and would continue its thrust to provide

end-to-end solution set.

Education represents one of the most powerful factors in providing individuals with the ability to improve their

quality of life, increase earning power, and provide the basic foundation for future economic growth.

Our training programs are constantly engineered with inputs from the industry to keep them in sync with the

skills demand, characterized by both ‘relevance’ and ‘completeness’.

Opportunity

The Company sees the tremendous growth opportunity in the IT Education & Training services, based on the

following trends:-

� Indications of large hiring plans across sectors

� Increased government spending

� Slowdown in the number of fresh graduates hired each year has urged large IT companies to look for role/

technology specific training. Focus is on productivity of existing manpower rather than to hire large

numbers and then train them to be deployed.

� Increased Govt. spending on skill up-gradation in PSU’s and in conventional education systems provides

increased opportunities for creating online, e-learning content and providing requisite infrastructure

platforms to support online education

� India’s large pool of educated entry-level job-seekers and the low levels of employability have been

principal factors in driving the growth in the Indian career training market.

� The need for existing skills to improve exponentially will mean the opportunity to increase offerings in

each vertical.

3.2 E-GOVERNANCE SERVICES

E-Governance is a relatively new area in India and India has been home to pioneering innovations in this area.

The innovations have come from applying technology to rising customer expectations in terms of citizen services,

a growing awareness and acceptance, among citizens, bureaucrats and their political masters, of the potential of

technology to allow ‘any time, any where’ access to information, use of local languages, the extending reach of


18

public networks and new business models of public-private partnerships. Unlike, commercial IT applications,

which are often evaluated in terms of Returns on Investments and Total Cost of Ownership, e-Governance

applications have benefits which are difficult to quantify, at least in short term. These benefits are in terms of

customer service, greater convenience, saving of hours of time in millions of customer transactions, empowerment

of ordinary citizens, enabling Right to Information, reducing corruption, improving profitability of public services,

improving transparency in decision-making, intra-government communication, and so on.

This Business Unit at SQL Star creates customized solutions that address the entire spectrum of the information

technology needs of state governments, central government, and local government bodies facilitating effective

Government-to-Government (G2G), Government to Employee (G2E), and Government to Citizen (G2C)

interaction.

The Mandi Project which was one of the major contributors to the Revenues and Margins of the Company was

unilaterally and un-lawfully terminated by the Mandi Board. This has severely impacted the Company financially

and otherwise. The Company had invoked the Arbitration, which is pending for disposal. The other e-Governance

project viz., Sampark Project in the Union Territory of Chandigarh has come to a logical conclusion as of

December 31, 2010.

Opportunity

SQL Star specializes in operationalization of automation of market yards and management of G2C & B2C utility

bill payment services. The huge thrust and spending on nationwide (Common Services Centers) CSC’s under

National e-Governance Plan (NeGP) that integrates back to back with State Service Delivery Gateway (SSDG),

National Service Delivery Gateway (NSDG) and State Portal requires a lot of innovation & in depth domain

understanding for making it a viable business model under Public Private Partnership (PPP). A lot if thrust is also

going on in automation of various state agricultural marketing boards. SQL Star being an early entrant holds a lot

of edge in terms of domain understanding and successfully executing some award winning projects.

3.3 SOFTWARE DEVELOPMENT & SERVICES

3.3.1 Strategic Resourcing Group (“SRG”)

The strategic resourcing group of SQL Star provides consulting services to large scale system integrators,

various government departments and IT/ITeS companies. The group is extremely agile and responds to the

ongoing business requirements by suitably up-scaling and down-scaling the consultant base. This is a time

tested strategy and has been delivering the results for the organisation. In an endeavor towards utilizing

the strength of the organization, the group has discussed and formalized the following Train-Hire-Deploy

approach and methodology for strategically scaling up the business;

The Train-Hire-Deploy methodology has three distinct phases.

� Planning

� Implementation

� Transition

During the planning stage the major activities are training identification & scheduling and marketing of the

program to the right audience. The implementation stage consists of the screening, background verification

and conduction of the training. SQL Star will hire the successful candidates from training batches across

the country and deploy them with various client projects.

19


The critical success factors identified for the methodology are as follows:

� Marketing the product to right set of available talent

� Quality screening mechanism during talent hunt

� Mature competency building framework

� Mature staff augmentation framework

� Proper alert and monitoring mechanism for updating stakeholders on various monitoring parameters

� Association with the client at suitable intervals during selection, training, hiring and deployment of

consultant

� Continuous review and appraisal of the program

� Retention of consultants through

� Loyalty bonus at the end of a defined employment period

� Employment agreement

� Refresher training

Opportunity

A lot of product development and services MNCs are hunting for ready made talents, who can perform in

their projects. These MNCs doesn’t have the necessary mandate for building training facilities like the local

SI’s. Hence, SQL Star with its Knowledge Services Framework integrated with its Staff Augmentation

Framework can play a major role in partnering with these organizations to scale their competencies.

3.3.2 Technology & Managed Services

In implementing business and application software, enterprises are faced with new challenges - attracting

and retaining skilled work force to maintain and enhance systems in line with business requirements.

SQL Star’s Technology & Managed Services provide end-to-end solutions to address business requirements,

be it application, software infrastructure, or hardware infrastructure. SQL provides outsourced management

of IT services proactively through a combination of offshore and onsite delivery model.

SQL Star has established itself as one of the credible player in Business Intelligence, Microsoft, Share point,

.Net Technologies. SQL Star, Singapore has been recognized as Microsoft’s most preferred Vendor on

“Business Intelligence & Share Point platforms etc. we have gained good traction on the project side and

bagged a few orders; some of them are in the Government space.

Opportunity

As enterprises begin to focus on their core competencies and functions such as product development,

marketing, brand management and customer relationships and seek more cost effective solution to manage

their IT back bone and IT development the trend for out sourcing is fast catching up. This development

means a growing opportunity for technology and managed solutions. SQL Star with its multi dimensional

capabilities in IT sector is well poised to offer end-to-end solutions in this market segment.


20

4. RISKS AND CONCERNS

As a global enterprise, SQL Star is exposed to wide variety of risks across our entire range of business line/operations.

A comprehensive and integrated risk management framework forms the basis of all the de-risking efforts of the Company.

Formal reporting and control mechanisms ensure timely information availability and facilitate proactive risk management.

These mechanisms are designed to cascade down to the level of the line managers so that risks at the transactional

level are identified and steps are taken towards mitigation in a decentralized manner.

In broadest sense, the Company perceives risks as the danger of not achieving financial, operative and strategies goals

set to be achieved during the year. It has a comprehensive risk management structure in place, which is intended to

enable the Company to recognize and analyze risks early and put an appropriate mitigation plan in place. This system

is implemented as an integral part of SQL Star’s business processes across the Company. It constitutes of multiple

control mechanisms with major and important constituents of the decision making process. This mechanism includes

recording, monitoring and controlling internal enterprise processes and business risks with comprehensive risks

reporting system. Through the said mechanics, SQL Star is intended to maximize the stakeholder’s value by maintaining

a steady balance between risks and concerns.

Your Company too faces several business risks, of which some prominent ones are discussed hereunder alongside the

risk mitigation approach followed by the Company:

4.1 Concentration risks:

Excessive dependence on any single business segment increases risk. The Company continuously makes efforts

to broad base and diversify its revenue streams to prevent undesirable concentration in any one vertical technology

client or geographic area. However, considerable efforts are being made to generate business from new geographies

and clients.

4.2 Financial risks

SQL Star’s activities expose the Company to a variety of financial risks such as market risks, credit risks, change

in regulations of economy in which Company operates etc. All these risks arise in the normal course of business.

The Company is exposed to longer recovery cycles due to its involvement in long duration projects and

Government entities in its customer profile resulting in need to finance higher level of working capital. The

Company is confident to have adequate funding to finance its working capital requirements as well as future

growth needs. The volatility in foreign currency rates may impact the profitability of the Company to the extent

of its exposure to the International business and specific currencies.

4. 3 Legal risks

Litigation regarding intellectual property rights, patents and copyrights is significantly high in the software industry.

In addition, there are other general corporate legal risks. The management has clearly charted out a review and

documentation process for all contracts.

4.4 Exchange rate risks

The functional currencies for SQL Star and our subsidiaries’ operations are the respective currencies of the

countries in which they operate. A portion of our revenues is derived from foreign exchange; any fluctuation in

this could have an impact on the Company’s performance. We actively book foreign exchange forward covers/

derivative options to hedge against foreign currency fluctuations related to bills receivables and anticipated

realizations from projected revenues.

21


4.5 Availability of skilled personnel & attrition:

Retaining the existing talent pool and attracting new talent is a major risk. SQL Star has taken initiatives such as

Faculty Development Programs, participating in seminars etc. Rising attrition is a major risk in the industry. The

Company is addressing this through higher investments in building the competencies of its employees. The

Company also addresses employee aspirations through well planned career management and job rotation and

by giving the employees exposure to multiple technologies, domains and geographies. The Company also

strives to create a conducive environment for work life balance. The Company has created employee friendly

policies which enhance retention of employees. Wage Inflation is the other factor which has an impact on the

industry. The Company has a very strong performance management system and a systematic process for annual

increments which rewards performance.

4.6 Regulatory & Compliance risk:

The Company has a global footprint and as it increases its global reach and operations, the risk of ensuring

compliance with the regulations and laws in the various jurisdictions, of any global organization also increases.

To mitigate this risk, the Company has put in place an institutionalized structure to ensure regulatory and legal

compliance across the globe. The use of local managers as well as consultants, auditors, lawyers, specialists and

experts in these countries where we have a presence is encouraged to ensure compliance.

4.7 Information Security related risks:

Information security and business continuity is an area of concern of most customers, particularly when key

business processes are outsourced. The Company has adopted information security management system complying

with ISO 9001:2008.

4.8 Competition-related risk:

Indian IT services market remains a very competitive space. The Company is facing competition from large

Indian IT vendors and global vendors who are increasing their India presence by setting up offshore delivery

centers.

4.9 New technologies and business models continue to emerge:

The Company operates in the Information Technology Services Industry where fast and dramatic changes in

technology, business models and intense competition are a fact of life. The Company continues to engage in

newer business models in order to address changing requirements. This results in alliances, strategic investments

and joint ventures. SQL Star focus on achieving improvements based on innovation has been influenced by the

need to harness the implicit knowledge of the people within the organization.

4.10 Industry Dissonance Risk:

The Company operates in the fast changing Information Technology space where changes in technology can

make today’s market leaders into market laggards and changes in customer and market needs can result in a

mismatch between customer/market requirements and the Company’s offerings.

The Company adopts the following approaches to address these risks:-

Growth engines: The Company systematically focuses on addressing emerging buyer trends and needs by

developing solutions such as in infrastructure services or engineering services. We constantly scan the environment

for emerging technology areas and develop offerings of value in the selected areas.


22

Deep customer relationships: The Company has a deep understanding of its customers’ needs and enhances

this by engaging systematically with customers on periodic review of customer needs and fulfillment of the

same for prospective periods.

Geo-political risks: The ability of Indian IT/BPO services companies to secure offshore projects from client

organizations abroad is often subject to threat perceptions as regards the Indian subcontinent. Current civil

situations in neighbouring countries of India may have negative implications for the operations of the Company.

To mitigate these risks and to ensure continued delivery of services to clients irrespective of any geo-political

disturbances, the Company has been taking appropriate measures in respect of disaster recovery and business

continuity in different locations.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate system of internal controls implemented by the management towards achieving

efficiency in operations, optimum utilization of resources and effective monitoring thereof and compliance with

applicable laws. These have been designed to provide reasonable assurance with regard to recording and providing

reliable information complying with applicable statues, safeguarding assets from unauthorized use or losses, executing

transactions with proper authorization and ensuring compliances with corporate policies. The system is continuously

reinforced with analysis of data to strengthen it to meet the changing requirements. The Company has well defined

delegation of power with authority limits for approving revenue as well as expenditure. Process of evaluating long

term and short term business plans have been laid down. It has continued its efforts to maintain all its processes in line

with the global best practices. The Internal Audit process is designed to check the adequacy of internal controls and

checks in the system and cover all significant areas of company’s operations including subsidiaries.

A qualified and independent Audit Committee of the Board of Directors reviews the internal audit reports and the

adequacy of internal controls and also reviews all quarterly and yearly financial results of the Company and conveys

to the Board its recommendation for consideration of such results and their approval.

6. HUMAN RESOURCE MANAGEMENT (HRM):

The main objective of the HR System is to attain the support of various Business Units of the Company and to

streamline the different functions related to HRM. SQL Star has always believed in creating an environment where

our employees feel safe, secure and inspired to achieve excellence in their respective area of functioning.

SQL Star continues to focus and invest in human resource development to provide an open work culture and rewarding

career opportunities to all its employees.SQL Star provides an environment that can help the employees maintain

work-life balance. Your Company has maintained a competitive, healthy and harmonious work environment at all

levels. We have taken new initiatives to strengthen the Company’s recruitment process, values and vision programmes,

leadership and Performance management. The Company’s HR policies and processes are aligned to effectively drive

its expanding business and emerging Opportunities. This has been achieved by continuously investing in learning

and development programs, creating a compelling work environment, empowering employees at all levels and

maintaining well-structured reward and recognition mechanisms. Employee engagement remains a key focus of HR

initiatives undertaken by the Company. SQL enables its employees to meet their career objectives through rotation

across projects, functions and locations. The Company helps employees build new skills and competencies and

promotes knowledge sharing and team building.

23


CEO AND CFO CERTIFICATE AS PER CLAUSE 49 OF THE

LISTING AGREEMENT

TO WHOMSOEVER IT MAY CONCERN

1. We have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2011 and that

to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements

that might be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with

existing accounting standards, applicable laws and regulations.

2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year 31st

March 2011 which are fraudulent, illegal or violative of the Company’s Code of Conduct.

3. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have

evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and have

disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls,

if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

4. There are no:

(i) Significant changes in internal control over financial reporting during the year ended 31st March 2011;

(ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to

the financial statements; and

(iii) Instances of significant fraud of which they have become aware and the involvement therein, if any, of the

management or an employee having a significant role in the Company’s internal control system over financial

reporting.

Sunil Gupta K.V. Sai Prasad

Chief Executive Officer Chief Financial Officer

Place : Mumbai

Date : 2nd September, 2011


24

1. Company’s Philosophy

Corporate governance is about maximizing shareholder’s value legally, ethically and on sustainable basis, while

ensuring fairness to every stakeholder, customers, employees, investors, vendors-partners and governmental authorities.

Therefore, corporate governance is a reflection of a company’s culture, policies, and its relationship with the shareholders,

and its commitment to values.

SQL in its initiative and drive towards good governance and accountability has upheld the corporate governance

through ethical business practices, integrity and the transparent business operations. SQL believes the sound corporate

governance practices provide an important framework to assist the Board in fulfilling its responsibilities. Board of

Directors is elected by shareholders with responsibility to set strategic objectives to the management and to ensure that

the long term interest of all the stakeholders are served by adhering to and enforcing the principles of sound Corporate

Governance. Thus, the management is responsible to establish and implement policies, procedures and systems to

enhance long-term values of the Company.

The Share owners remain the nucleus of our growth strategy and consistently your Board endeavors and practices a

great degree of integrity, transparency, accountability in a truthful and ethical manner that enhances long term shareholder

value. The Company is in compliance with the requirements of the revised Corporate Governance under Clause 49 of

Listing Agreement and with the adoption of the Code of Conduct and a robust Clause 49 compliance monitoring

system, the Company has advanced further in its pursuits of excellence in Corporate Governance.

2. Board of Directors

The Company is managed and controlled through a professional Board of Directors comprising of an optimum

combination of Executive and Non-Executive Independent Directors. The composition of the Board of Directors of the

Company is in conformity with the provisions of Clause 49 of the Listing Agreement with the Stock Exchange(s). The

present strength of the Board of Directors is Five (5), out of which four (4) members do Non-Executive Directors

constitute more than 50 percent of the total strength. The Company’s Board consists of eminent persons with considerable

professional expertise and experience. The Independent Directors do not have any other material pecuniary relationship

(other than receiving remuneration and stock options) or transactions with the Company, its promoters, its management

or its subsidiaries, which may affect the independence or judgment of the Directors.

CORPORATE GOVERNANCE REPORT

Mr. C.P. Khandelwal Non-Independent Non-Executive 23.01.2007 21 1 -

Non-Executive Director Chairman & Director

Mr. Sunil Gupta Promoter Group Co-Chairman and 26.02.2010 1 - -

Managing Director

Mr. Jai Narain Khandelwal Non-Independent Director 12.05.2005 2 - 2

Non-Executive Director

Mr. Mahesh Solanki Independent Additional Director 27.01.2011 2 2 -


Mr. Mohinesh Jagwani Independent Additional Director 27.01.2011 - - -


The Composition and category of Directors:

Name of the

DirectorCategory Designation Date of

Appointment

Directorship

in other

Companies

Chairmanship

in Committees

of Boards of

other

companies

Membership

in Committees

of Boards

of other

companies

25


Particulars of Directors appointed/re-appointed/resigned

As per the provisions of the Articles of Association of

the Company, Mr. Jai Narain Khandelwal retires by

rotation and being eligible offers himself for re-

appointment at this Annual General Meeting. The

Board of Directors of the Company has also

recommended his re-appointment for consideration

of the Shareholders.

Mr. Mahesh Solanki was appointed as Additional

Director of the Company by the Board with effect

from 27th January 2011 and who holds office up to

this Annual General Meeting as per Section 260 of

the Companies Act 1956, and being eligible for

appointment and in respect of whom the Company

had received a notice from a member pursuant to

Section 257 of the said Act in writing proposing his

candidature for the office of Director of the Company

be and is hereby appointed as Director of the

Company liable to retire by rotation.

Mr. Mohinesh Jagwani was appointed as Additional

Director of the Company by the Board with effect

from 27th January 2011 and who holds office up to

this Annual General Meeting as per Section 260 of

the Companies Act 1956, and being eligible for

appointment and in respect of whom the Company

had received a notice from a member pursuant to

Section 257 of the said Act in writing proposing his

candidature for the office of Director of the Company

be and is hereby appointed as Director of the

Company liable to retire by rotation.

In terms of the Listing Agreement, brief resume of the

Directors proposed to be re-appointed at the ensuing

Annual General Meeting is provided as an Annexure

to the Notice convening the Annual General Meeting.

The notice for the Annual General Meeting scheduled

to be held on 2011 complies with this requirement.

Board Meeting Procedures

The draft agenda papers along with all information

relevant to be discussed at the upcoming Board

meeting is sent to the Directors at least one week

prior to the Board meeting to invite the suggestions

from each Board member for their views and for the

inclusion of items on the agenda if any. Relevant

materials to be considered at the meeting are

circulated to the Board before the Board meeting.

Information supplied to the Board

The Board of Directors of SQL Star International

Limited is presented with various issues affecting the

business and environment whenever applicable and

materially significant. The Board is also given

presentations covering Finance, Sales, and Marketing

covering all the major business operations and

segments of the Company at each of the scheduled

quarterly Board meetings.

Mr. C.P. Khandelwal 4/4 4 No

Mr. Sunil Gupta 4/4 4 Yes

Mr. Jai Narain Khandelwal 4/4 4 No

Mr. Mahesh Solanki(Appointed on 27.01.2011) 1/1 1 N.A.

Mr. Mohinesh Jagwani(Appointed on 27.01.2011) 1/1 1 N.A.

Name of the Director

Number of

meetings held /

Suppose to attend

Number of meetings

attended

Attendance at the last AGM

held on 25th September

2010 (Yes/No/N.A.)

Directors’ membership in Board/Committees of other companies

As per the Listing Agreement, no Director can be a member in more than 10 committees or act as chairman of more than

five committees across all companies in which he is a Director. In terms of the Listing Agreement, none of the Directors

of our Company were members in more than 10 committees nor acted as chairman of more than five committees

across all companies in which they were Directors. Details of other Directorships/Committee membership/Chairmanship

held by them are given in table above.

Meetings of Board of Directors

During the Financial Year 2010-11, the Board of Directors met four times on the following dates: 26th July, 2010,

14th August, 2010, 15th November, 2010, 12th February, 2011.

Attendance of Directors at Board Meetings during the year and at last AGM:


26

The Processes for Board and Committee meetings

facilitate an effective post meeting follow-up, review

and reporting process for the decisions taken by the

Board of Directors.

3. Audit Committee

The Composition, procedures, powers and role of

the audit committee constituted by the Board comply

with the requirements of Clause 49 of the Listing

Agreement and Section 292A of the Companies Act,

1956.

Terms of reference

The Audit Committee has been constituted as per

Section 292A of the Companies Act, 1956 and the

guidelines set out in the Listing Agreement with the

Stock Exchanges. The terms of reference include: -

� Overview of the Company’s financial reporting

process and the disclosure of its financial

information to ensure that the financial

statements reflect a true and fair position and

that sufficient and credible information

disclosed.

� Recommending the appointment and removal

of external auditors, fixation of audit fee and

also approval for payment for any other

services.

� Discussion with external auditors before the

audit commences, of the nature and scope of

audit as well as post-audit discussion to

ascertain any area of concern.

� Reviewing the financial statements and draft

audit report, including quarterly / half yearly

financial information.

� Reviewing with management the annual

financial statements before submission to the

Board, focusing primarily on:

� any changes in accounting policies and

practices;

� major accounting entries based on

exercise of judgment by management;

� qualifications in draft audit report;

� significant adjustments arising out of

audit;

� the going concern assumption;

� compliance with accounting standards;

� Reviewing with the management, external and

internal auditors, and the adequacy of internal

control systems.

� Reviewing the adequacy of internal audit

function, including the audit charter, the

structure of the internal audit department,

approval of the audit plan and its execution,

staffing and seniority of the official heading the

department, reporting structure, coverage and

frequency of internal audit.

� Discussion with internal auditors of any

significant findings and follow-up thereon.

� Reviewing the findings of any internal

investigations by the internal auditors into

matters where there is suspected fraud or

irregularity or a failure of internal control

systems of a material nature and reporting the

matter to the Board.

� Looking into the reasons for substantial

defaults in payments to the shareholders (in

case of non-payment of declared dividends)

and creditors.

� Reviewing compliances as regards the

Company’s Whistle Blower Policy.

Composition of Audit Committee:

The Audit Committee comprises of all the following.

Mr. C P Khandelwal Member

Mr. Jai Narain Khandelwal Member

Mr. Mahesh Solanki Chairman

(Appointed on 27.01.2011)

Mr. Mohinesh Jagwani Member


The head of the finance & accounts and the Statutory

Auditors are permanent invitees to the Audit Committee.

Due to resignations of Independent Directors, Company

has taken steps to oppoint independent directors to

comply with the provisions of Listing Agreement, however

due to the Current Financial position and continued losses,

Company had faced challenges in attracting qualified an

independent directors, however Company made best

efforts to appoint Mr. Shri Mahesh Solanki an Mr. Shri

Mohinesh Jagwani. Shri Mahesh Solanki, took the

Chairmanship wef 27.01.2011, Chairman of the

Committee has expertise in accounting and financial

management

During the year Audit Committee met four times on:

26th July, 2010,

14th August, 2010,

15th November, 2010,

12th February, 2011.

Attendance of Directors at Audit Committee Meetings

during the year

DirectorNumber of

meetings

held

Number of

meetings

attended

Mr. C.P. Khandelwal 4/4 4

Mr. Jai Narain Khandelwal 4/4 4

Mr. Mahesh Solanki(Appointed on 27.01.2011) 1/1 1

Mr. Mohinesh Jagwani(Appointed on 27.01.2011) 1/1 1

27

24th Annual Report 2010-114. Remuneration Committee

The Remuneration Committee has been empowered with the role and function as per the provisions as specified

under Annexure ID(2) of the Corporate Governance Code under Clause 49 of the Listing Agreement with the Stock

Exchange(s) including the appointment and finalizing the remuneration of senior level employees of the Company

and its subsidiaries.

The Remuneration Committee comprises of the following:

Mr. Mohinesh Jagwani Chairman



Mr. C.P. Khandelwal Member

Mr. Mahesh Solanki Member


During the year, no meeting was held.

a) Executive Director(s)

Mr. Sunil Gupta, CCMD 69.61 8.00 77.61

Name of Director Salary Perquisites Total

b) Non - Executive Director(s) (Amount in Rupees)

(Amount in Lacs)

Details of Remuneration paid to the directors during 2010 -11:

5. Shareholders / Investor Grievance Committee

The Committee comprises of the following:

Mr. Sunil Gupta Chairman



Mr. Mahesh Solanki Member (Appointed on 27.01.2011)

Mr. Mohinesh Jagwani Member (Appointed on 27.01.2011)

The main object of the Committee is to strengthen the Investors’ relations.

The main functions of the Committee are to look into the matters of investors’ grievances pertaining to:

� Dematerialization of shares.

� Non-receipt of dividends and other corporate benefits.

� Replacement of lost/mutilated/stolen share certificates.

� Non-receipt of and change of addresses etc.

There has been no meeting of the Investor Grievance Committee in this year. As per provisions of Clause 49 of VI(D),

to process the share transfer requests expeditiously, the Board of the Company had already delegated the power of

share transfer to the Registrar and Share Transfer Agents – Karvy Computershare Private Limited and they attend to

share transfer formalities atleast once in a fortnight.

During the year, 33 nos. of requests/complaints were received from the shareholders that related to change/correction

of address, non-receipt of dividend warrants for re-validation, change/correction in bank mandate, request for ECS

facility (Electronic Clearing Services), loss of securities and request for issue of duplicate, request for stop transfer of

securities, deletion of joint name due to death, non-receipt of dividend warrants, non-receipt of securities/complaint

relating to transfer of shares and postal return documents. The complaints were duly attended and resolved to the

satisfaction of the shareholders. Out of the complaints received during the year, none of the complaints were pending

as on 31st March 2011.

Mr. K V Sai Prasad, General Manager Finance & Accounts, is the Compliance Officer of the Company.

Mr. C P Khandelwal 70,000

Mr. Jai Narain Khandelwal 70,000

Mr. Mahesh Solanki 17,500

Mr. Mohinesh Jagwani 17,500

Name of Director Sitting Fees


28

6. Compensation Committee

The Compensation Committee was constituted during the year 2010 to administer the Company’s Employee Stock

Option Scheme (ESOPs) comprising of the following members

Mr. C P Khandelwal Chairman

Mr. Sunil Gupta Member




Mr. K V Sai Prasad General Manager Finance

The Compensation Committee has been given the authority to do the following:

� Determine the number of Options to be awarded, to each Employee and in the aggregate, and the times at which

such Awards shall be made.

� Determine a vesting schedule other than that specified in the said scheme for any Employee or class of Employees.

� Lay down the conditions under which Options Vested in Optionee’s may lapse in case of termination of

employment for misconduct etc.

� Determine the Exercise Period within which the Optional should Exercise the Options and that Options would

lapse on failure to Exercise the same within the Exercise Period.

� Specify the time period within which the Employee shall exercise the Vested Options in the event of termination

or resignation of an Employee.

� Lay down the procedure for making a fair and reasonable adjustment to the number of Options and to the

Exercise Price in case of rights issues, bonus issues and other Corporate Action.

� Provide for the right of an Optionee to exercise all the options vested in him at one time or at various points of time

within the Exercise Period.

� Lay down the method for satisfaction of any tax obligation arising in connection with the Options or such Shares.

� Lay down the procedure for cashless exercise of Options, if any.

� Provide for the award, Vesting and Exercise of Options in case of Employees who are on long leave or whose

services have been seconded to any other company or who have joined any other company at the instance of the

Employer Company.

During the year, no meeting was held.

7. Committee of Directors – Routine Matters

The Board has reconstituted a Committee of Directors - Routine Matters on 12th February, 2010 to advice the Board on

the financial matters and day to day management of the Company .This Committee of Directors have been given the

power(s), to perform the functions that are vested with the Board except that are prohibited under Section 291, 292,

293 and other applicable provisions, if any, of the Companies Act, 1956.

The Composition of this meeting is:

Mr. Sunil Gupta Chairman





During the year, no meeting was held

8. Compliance with other Mandatory Requirements

Management Discussion and Analysis

A management Discussion and Analysis Report forms part of the Annual Report and includes discussions on various

matters specified under clause 49(IV)(F) of the Listing Agreement.

29


25.09.2009 AGM The Central Court Hotel, Lakdikapul, Hyderabad. 10.30 A.M None

25.09.2010 AGM The Central Court Hotel, Lakdikapul, Hyderabad. 11.00 A.M 3

No. of Special

Resolutions passedDate of AGM/EGM Venue Time

22-09-2008 AGM The Central Court Hotel, Lakdikapul, Hyderabad. 3:30 P.M 1

Subsidiary Companies

Under the clause 49 of the Listing Agreement, the Audit Committee of the Company reviews the financial statements,

in particulars, the investments made by its unlisted subsidiaries.

The Minutes of the meetings of the Board of Directors of the Unlisted Subsidiary Companies are regularly placed

before the Board of Directors of the Company. A statement containing the significant transactions and arrangements

entered into by the unlisted subsidiaries are periodically placed before the Board of Directors of the Company.

Disclosure on Risk Management

The Company has laid down procedures to inform Board members about the risk assessment and minimization

procedures. The Board periodically reviews the same.

CEO and CFO Certification

In terms of the requirements of Clause 49 (V) of the Listing Agreement , the the Co-Chairman and Managing Director

Mr. Sunil Gupta and CFO, Mr. K V Sai Prasad, have submitted necessary certificate to the Board of Directors stating

the particulars specified under the said clause.

This certificate has been reviewed and taken on record by the Board of Directors at its meeting held on

September 02, 2011.

9. General Body Meetings

The Annual General Meetings and Extraordinary General Meetings held during the past three years are as under:

10. Disclosures

a) Related Party Transactions

There are no materially significant related party transactions of the Company which have a potential conflict

with the interests of the Company at large. The related party transactions (as per Accounting Standard18) of the

Company in the ordinary course of business during the year April 1, 2010 to March 31, 2011 are reported

under Note 17 of Schedule Q of the Financial Statements. The same, as per the provisions of Clause 49, were

placed before the Audit Committee of the Company. For further details, please refer to Notes, forming part of the

Balance Sheet of the Company.

b) Accounting treatment in preparation of financial statements

The Company has followed the guidelines of accounting standards laid down by the Institute of Chartered

Accountants of India (ICAI) in preparation of financial statements of the Company and there has been no

deviation from the prescribed Accounting Standards.

c) Statutory Compliance, Penalties and Strictures

The Company has complied with the requirements of the Stock Exchange(s)/SEBI and Statutory Authority (ies)

on all matters relating to the capital market during the last three years. There are no penalties or strictures

imposed on the Company by Stock Exchange(s) or SEBI or any Statutory Authority (ies) relating to the above.

d) Code of conduct

The Company has a well defined policy framework, which lays down procedures to be followed by the

employees for ethical professional conduct. The code of conduct has been laid down for all the Board Members

and Senior Management of the Company. The Board members and Senior Management personnel have

affirmed compliance with the Company’s code of conduct for the year 2010-11. This code has been displayed

on the Company’s website.


30

e) Whistle Blower policy

The Company has adopted a whistle blower policy under the code of ethics, whereby employees are given free

access to Audit Committee to report violation of code of conduct or ethics policy, actual or suspected fraud to

the Chairman of Audit Committee. During the financial year, no personnel of the Company have been denied

access to the Audit Committee.

f) Compliance with mandatory requirements and adoption of the non-mandatory requirements of this Clause.

Your Company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement.

The details of these compliances have been given in the relevant sections of this Report.

11. Means of Communication

� Quarterly, half-yearly and annual financial results of the Company are communicated to the Stock Exchanges

immediately after the same are considered by the Board and are published in the prominent newspapers namely

Business Standard and Andhra Prabha. They are also hoisted on the Company’s website viz. www.sqlstar.com.

� Further all material information that has some bearing on the operations of the Company is sent to the stock

exchanges and also published through press releases and placed on the Company’s website.

� The Management Discussion and Analysis report forms part of this report and is provided elsewhere in this

report.

12. General Shareholder Information

Twenty Fourth Annual General Meeting

Date : 30th September, 2011

Time : 10.25 A.M.

Venue : Hotel NKM’s Grand, 6-3-563/31/1, Erramanzil, Somajiguda, HYDERABAD- 500 082.

Financial Calendar

1st April of current year to 31st March of forthcoming year.

Quarter ending 30.06.2011 : 2nd week of August, 2011

Quarter ending 30.09.2011 : 2nd week of November, 2011

Quarter ending 31.12.2011 : 2nd week of February, 2012

Year ending 31.03.2012 : Last week of May, 2012

Date of Book Closure (Both days inclusive)

23rd September, 2011 to 29th September, 2011. (Both days inclusive)

Dividend Payment Date

The Board of Directors recommends no dividend.

Listing on Stock Exchanges

The Equity Shares of the Company are listed on:

Bombay Stock Exchange Limited.

The Listing fee for the financial year 2010-11 has been paid to the Stock Exchanges.

Stock Code

The Bombay Stock Exchange Limited 532249

Depository ISIN No. INE399A01018

31


Market Price Data:

Monthly high and low quotations along with the volume of shares traded at BSE for 2010-2011 are:

April-10 17.30 11.27 440,778

May-10 15.90 12.05 114,847

June-10 14.10 12.50 396,505

July-10 14.50 12.15 120,103

August-10 13.18 10.80 165,134

September-10 21.78 10.80 2,071,732

October-10 20.35 14.50 1,801,256

November-10 24.00 13.75 1,961,310

December-10 19.40 13.00 521,966

January-11 15.70 12.30 168,506

February-11 12.95 10.10 186,809

March-11 12.48 10.00 202,231

MonthBombay Stock Exchnage (BSE)

High Low Volume

Distribution of Shareholding as on 31st March, 2011.

Upto 1 - 5000 11,691 88.05 14,219,600 4.40

5001 - 10000 759 5.72 6,416,940 1.99

10001 - 20000 387 2.91 6,090,240 1.88

20001 - 30000 121 0.91 3,113,310 0.96

30001 - 40000 58 0.44 2,116,230 0.65

40001 - 50000 71 0.53 3,369,140 1.04

50001 - 100000 77 0.58 5,850,590 1.81

100001 & ABOVE 113 0.85 282,073,950 87.26

Total: 13,277 100.00 323,250,000 100.00

Shareholding of Nominal Value No of case % of Cases Amount % of the Amount


32

Shareholding Pattern as on 31st March 2011.

Statement Showing Shareholding Pattern in Clause - 35

Name of the Company : SQL STAR INTERNATIONAL LIMITED

Scrip Code : 532249 Name of the Scrip : SQL Star - Equity

Partly paid-up shares No. of partly paid-up As a % of total no. of As a % of total no. of

shares partly paid-up shares shares of the Company.

Held by promoter/promoter group 0 0 0

Held by Public 0 0 0

Total: 0 0 0

Outstanding convertible securities: No. of outstanding As a % of total no. of As a % of total no. of shares

securities outstanding convertible of the Company assuming

securities. full conversion of the

convertible securities

Held by promoter/promoter group 0 0 0

Held by Public 0 0 0

Total: 0 0 0

Warrants: No. of warrants As a % of total no. of As a % of total no. of shares

warrants of the Company, assuming

full conversion of warrants

Held by promoter/promoter group 3,325,000 68.91 8.95

Held by Public 1,500,000 31.09 4.04

Total: 4,825,000 100.00 12.99

Total paid-up capital of the Company,

assuming full conversion of warrants

and convertible securities 32,325,000 100.00 100.00

Class of Security : S Quarter Ended : 31/3/2011

33


Cat.Code

(I)

Category of Shareholder

(II)

Numberof ShareHolders

(III)

Totalnumberof shares

(IV)

(A) Promoter and Promoter Group

(1) INDIAN (a) Individual /HUF 1 3,325,000 - 10.29 10.29 - -(b) Central Government/State Government(s) - - - - - - -(c) Bodies Corporate 4 9,125,186 5,625,186 28.23 28.23 3,350,000 36.71(d) Financial Institutions / Banks - - - - - - -(e) Others - - - - - - -

Sub-Total A(1) : 5 12,450,186 5,625,186 38.52 38.52 3,350,000 26.91

(2) FOREIGN (a) Individuals (NRIs/Foreign Individuals) - - - - - - -(b) Bodies Corporate - - - - - - -(c) Institutions - - - - - - -(d) Others - - - - - - -

Sub-Total A(2) : - - - - - - -

Total A=A(1)+A(2) 5 12,450,186 5,625,186 38.52 38.52 3,350,000 26.91

(B) PUBLIC SHAREHOLDING (1) INSTITUTIONS

(a) Mutual Funds /UTI 2 4500 - 0.01 0.01 (b) Financial Institutions /Banks 2 1000 - - - (c) Central Government / State Government(s) - - - - - (d) Venture Capital Funds - - - - - (e) Insurance Companies - - - - - (f) Foreign Institutional Investors - - - - - (g) Foreign Venture Capital Investors - - - - - (h) Others - - - - -

Sub-Total B(1) : 4 5500 - 0.02 0.02

(2) NON-INSTITUTIONS (a) Bodies Corporate 301 11,627,218 7,910,418 35.97 35.97 (b) Individuals

(i) Individuals holding nominal share capital upto Rs.1 lakh 12,845 3,737,687 3,454,768 11.56 11.56

(ii) Individuals holding nominal share capital in excess of Rs.1 lakh 70 4,178,693 4,165,393 12.93 12.93

(c) Others TRUSTS 3 161,980 71,630 0.50 0.50 OVERSEAS CORPORATE BODIES 2 55,340 1,000 0.17 0.17 NON RESIDENT INDIANS 40 103,412 103,412 0.32 0.32 CLEARING MEMBERS 7 4,984 4,984 0.02 0.02

Sub-Total B(2) : 13,268 19,869,314 15,711,605 61.47 61.47

Total B=B(1)+B(2) : 13,272 19,874,814 15,711,605 61.48 61.48

Total (A+B) : 13,277 32,325,000 21,336,791 100.00 100.00

(C) Shares held by custodians, against which

Depository Receipts have been issued

(1) Promoter and Promoter Group

(2) Public - - - - -

GRAND TOTAL (A+B+C) : 13,277 32,325,000 21,336,791 100.00 100.00 3,350,000 10.36

No. ofShares Held

in dematForm

(V)

%(A+B)

(VI)

%(A+B+C)

(VII)

PledgeShares

(VIII)

Pledge%

(IX)=(VIII)/(IV)*100

Shares Pledge or

otherwise

encumbered

Total

Shareholding As

a % of Total No.

of Shares


34

STATEMENT SHOWING SHAREHOLDING OF PERSONS BELONGING TO “PROMOTER GROUP

Sl.No.

(I)

Name of the Share Holder

(II)

1 Superstar Exports Pvt. Ltd. 3,752,275 11.61 3,350,000 89.28 10.36

2 Sunil Gupta 3,325,000 10.29 - - -

3 Kanishkdeep Stock Consultants Pvt Ltd 3,200,000 9.90 - - -

4 Pacific Corporate Services Limited 1,872,911 5.79 - - -

5 Superstar Exports Pvt Ltd 300,000 0.93 - - -

TOTAL 12,450,186 38.52 3,350,000 26.91 10.36

TotalShares

(III)

As a % ofGrand Total(A)+(B)+(C)

(IV)

PledgeShares

(V)

As a %

(VI)=(V)/(III)*100

As a % ofGrand Total

(VII)

Shares Dematerialized up to 31st March 2011

Sl.No.

Description No. of Shares Percentage

1 PHYSICAL 4,412 10,988,209 33.99

2 NSDL 6,229 11,195,038 34.63

3 CDSL 2,636 10,141,753 31.38

TOTAL 13,277 32,325,000 100.00

No. of Holders

STATEMENT SHOWING DETAILS OF LOCKED-IN SHARES

Sl.No.

Name of the Share Holder No. of Shares Percentage

1 Superstar Exports Pvt. Ltd. PBC 300,000 0.93

TOTAL 300,000 0.93

CategoryCode

STATEMENT SHOWING SHAREHOLDING OF PERSONS BELONGING TO “PUBLIC GROUP” HOLDING > 1% OF THE

TOTAL NUMBER OF SHARES

Sl.No.

Name of the Share Holder No. of Shares Percentage

1 Sarvapratham Investments Ltd 3,700,000 11.45

2 Investsmart Financial Services Ltd 1,454,625 4.50

3 Bennett, Coleman And Company Limited 1,300,000 4.02

4 Satyamitra Stock Consultants Private Ltd. 1,015,173 3.14

5 Naishadh Jawahar Paleja 1,000,000 3.09

6 Findeal Investments Pvt Limited 618,198 1.92

7 Ivory Consultants Private Limited 555,650 1.72

8 Industrial Investment Trust Ltd. 547,677 1.69

9 Madhukar Sheth 508,484 1.57

10 Rajni Jain 500,000 1.55

11 Chiraayush Stock Consultants Private Limited 497,617 1.54

12 Dhananjaya Money Management Services Pvt. Ltd. 481,283 1.49

TOTAL 12,178,707 37.68

35


a) Top Ten Shareholders of the Company as on 31st March 2011.

Sl.No.

Name Total Shares % of Holding

1 Superstar Exports Pvt. Ltd. 3,752,275 11.61

2 Sarvapratham Investments Ltd. 3,700,000 11.45

3 Sunil Gupta 3,325,000 10.29

4 Kanishkdeep Stock Consultants Pvt. Ltd. 3,200,000 9.90

5 Pacific Corproatate Services Ltd. 1,872,911 5.79

6 Investsmart Financial Services Ltd. 1,454,625 4.50

7 Bennett, Coleman and Company Ltd. 1,300,000 4.02

8 Satyamitra Stock Consultants Pvt. Ltd. 1,015,173 3.14

9 Naishadh Jawahar Paleja 1,000,000 3.09

10 Findeal Investments Pvt. Ltd. 618,198 1.91

TOTAL 21,238,182 65.70

Registrar and Share Transfer Agent

M/s. Karvy Computershare Private Limited

17-24, Vittal Rao Nagar, Madhapur,

Hyderabad – 500 081, Andhra Pradesh, INDIA

Tel: 040-2320815 –28

Fax: 040-23420814 / 23420857

Email: [email protected]

www.karvycomputershare.com

Share Transfer System

The Board of Directors of the Company has delegated the

power of share transfers to the Committee of Directors. The

shares for transfer which are received in Physical form (either

at Registered Office of the Company or at RTA) are processed

and verified by the RTA and the share certificates returned

within a period of 1 month from the date of receipt, subject

to the documents being valid and complete in all respects.

Investor’s Correspondence.

For Investor Matters:

Mr. K V Saiprasad.

General Manager – Finance & Accounts


601 & 602, No.1-8-271 , 272, 6th Floor,

Ashoka Bhoopal Chambers,

S P Road, Secunderabad - 500003

Phone No.: 040-49101600; Fax No.: 040-49101608.


Web: www.sqlstar.com

For queries on Financial Statements

Mr. K V Saiprasad.

General Manager – Finance & Accounts


601 & 602, No.1-8-271 , 272, 6th Floor,

Ashoka Bhoopal Chambers,

S P Road, Secunderabad - 500003

Phone No.: 040-49101600; Fax No.: 040-49101608


Web: www.sqlstar.com

Dematerialization of shares

The Company’s shares came under ‘’Compulsory Demat

Trading’’ category with effect from August 28, 2000. They

are available for trading in both the National Securities

Depository Ltd. and Central Depository Services Ltd. The

processing activities with respect to the requests received

for dematerialization are generally completed within 21days

from the date of receipt of request.

13. Other Information

a) Electronic Clearing Service / Mandates / Bank

details

The Members may please note that Electronic

Clearing service details contained in the Benpos

downloaded from NSDL and CDSL would be

reckoned for dividend. Shareholders desirous

of modifying those instructions would write to

their respective Depository Participants.


36

b) Nomination in case of shares held in physical

form

The Companies Act, 1956 facilitates for making

nomination by shareholders in respect of their

holding of shares. Such nomination greatly

facilitates transmission of shares from the

deceased shareholder to his/her nominee

without having to go through the succession

certificate/Probate of will process.

d) Secretarial Audit

M/s. Savita Jyothi & Associates, a qualified

Practicing Company Secretary has carried out

quarterly secretarial audit to reconcile the total

admitted capital with National Securities

Depository Limited (NSDL) and Central

Depository Services (India) Limited (CDSL) and

the total issued and listed capital. The audit

confirms that the total/paid up capital is in

agreement with the aggregate total number of

shares in physical form and the total number

of dematerialized shares held in NSDL and

CDSL.

e) Compliance

The Certificate on Corporate Governance

obtained from M/s. Maharaj N. R. Suresh & Co.,

Chartered Accountants; Chennai is given at

relevant page in this report.

f) Code of Conduct

In pursuit of outlining the Company’s business

policies and values and setting the standards

for professional and ethical behavior of all the

employees in the Company, the Board of

Directors of the Company has laid down the

Code of Business Conduct and Ethics. The same

is available on Company’s website at

www.sqlstar.com.

DECLARATION REGARDING COMPLIANCE BY BOARD

MEMBERS AND SENIOR MANAGEMENT PERSONNEL

WITH THE COMPANY’S CODE OF CONDUCT

As Co-Chairman & Managing Director of the Company,

required under Clause 49 of the listing agreement with the

Stock Exchange in India, I hereby declare and confirm that

the Board Members and Senior Management team of the

Company have affirmed the Compliance with the Business

Code of Conduct and Ethics as on 31st March 2011.

For the purpose of this declaration, Senior Management

Team means the Company Secretary and employees in the

General Manager and above as on 31st March 2011.

Sunil Gupta


Place: Mumbai

Date : 2nd September, 2011

37


To

The Members of


We have examined the compliance of conditions of Corporate Governance by SQL Star International Limited for the period

ended 31st March 2011 as stipulated in the Clause 49 of the Listing Agreement of the said company with the Stock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was

limited to procedures and implementation thereof adopted by the company for ensuring the compliance of the conditions

of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.

In our opinion and to the best of our information and according to the explanations given to us, and the representations

made by the Directors and the Management, We certify that the Company has complied with the conditions of Corporate

Governance as stipulated in the above mentioned Listing Agreement except that

a) there was no Audit Committee till 12th February 2011, as the Company did not have requisit number of Independent

Director till that date.

b) the Shareholders / Investors Grievance Committee is headed by an Executive Director.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that as per the

records maintained and certified by the Company / Registrar and Transfer Agent of the Company, there were no investor

grievances remaining unattended / pending for more than 30 days as at 31st March 2011.

We further state that such compliance is neither an assurance as to the future viability of company nor the efficiency or

effectiveness with which the management has conducted the affairs of the company.

For Maharaj N. R. Suresh & Co.,

FRN No. 001931S


N R Suresh

Place : Chennai Partner

Date : 2nd September, 2011 M. No. 21661

Auditors’ Certificate on Corporate Governance



9 (Old No.5), II Lane, II Main

Road,



38

Auditors’ Report

To

The Members of


1. We have audited the attached Balance Sheet of SQL STAR INTERNATIONAL LIMITED as at 31st March 2011, the

Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These

financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion

on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards

require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are

free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and

disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant

estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our

audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of

sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters

specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that :

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were

necessary for the purposes of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears

from our examination of those books.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement

with the books of account.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report

comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(v) On the basis of written representations received from the directors, as on 31st March 2011 and taken on record

by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2011 from being

appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts

give the information required by the Companies Act, 1956, in the manner so required and give a true and fair

view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

(b) in the case of the Profit and Loss Account, of the LOSS for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.


FRN No. 001931S


N R Suresh


Date : 2nd Septemeber, 2011 M. No. 21661



9 (Old No.5), II Lane,

II Main Road,


39


Annexure to the Auditors Report

i) a) The company has maintained proper records showing full particulars including quantitative details and situation

of fixed assets.

b) These fixed assets other than those installed at M P Mandi Board have been physically verified by the management

at reasonable intervals which, in our opinion, is reasonable having regard to the size of the company and the

nature of its business and assets. No material discrepancies were noticed on verification.

c) No substantial part of fixed assets has been disposed off during the year.

ii) a) Inventories have been physically verified during the year by the management. In our opinion, the frequency of

verification is reasonable.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate

in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the

physical stocks and book records have been properly dealt with in the books of accounts and were not material.

iii) a) The company has not granted secured/unsecured loan to a company covered in the register maintained under

section 301 of the Companies Act, 1956.

b) The company has taken unsecured loans from three companies and a party covered in the register maintained

under section 301 of the Companies Act; 1956.The amount outstanding at the end of the year is Rs. 310.27 lakhs

including interest of Rs. 8.26 lacs.

c) In our opinion, the rate of interest and other terms and conditions on which loans have been taken are not, prima

facie, prejudicial to the interest of the company.

d) The company is regular in repaying the principal amounts as stipulated however interest has not been paid from

March, 2008 onwards.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control

procedures commensurate with the size of the company and the nature of its business for the purchases of

inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not

observed any continuing failure to correct major weaknesses in internal controls.

v) The Company has not entered in to any contracts or arrangements with any parties referred to under Section 301

of the Companies Act 1956.

vi) The Company has accepted loans which are in the nature of deposits without complying with provisions of

Section 58A and the rules made there under.

vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

viii) The Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the

Companies Act, 1956

ix) a) Undisputed statutory dues including provident fund, Income Tax,, Service Tax, Employees State Insurance and

Cess have not been regularly deposited with the appropriate authorities and there have been delays in a

number of cases except in respect of Investor Education and Protection Fund, Sales tax and Wealth Tax.

(Referred to in paragraph 3 of our report of even date)


40

Name of the

StatuteNature of

Dues

Amount

(Rs.)Period to which the amount relates

Income Tax Interest on TDS payments 10,95,962/- 01.04.2008 to 31.03.2010

x) The accumulated losses, as at 31st March 2011 is more than 50% of the Companies Net worth. The company has

incurred cash losses in the financial year under report and in the immediately preceding financial year.

xi) The company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures

and other securities .

xiii) The company is not a chit fund or a nidhi / mutual benefit fund / society.

xiv) The company is not dealing or trading in shares, securities, debentures and other investments.

xv) The Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi) According to the information and explanations given to us, the company has not raised any term loans during the

year.

xvii) According to the information and explanations given to us and on overall examination of the financial statements

of the Company as at 31st March, 2011, we report that funds raised on short-term basis have not been used for

long-term investment.

xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in the register

maintained under section 301 of the Companies Act, 1956 during the year.

xix) The Company has not issued any debentures during the year.

xx) The Company has not raised money by public issues during the year.

xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or

reported during the course of our audit.

c) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs

Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute

other than the following:

The Andhra Pradesh General Sales Tax 21.65 CTO, Madhapur Circle,

Sales Tax Act, 1957 Hyderabad.

Service Tax Service Tax 1867.52 Custom Excise & Service

Tax Appellate Tribunal

Total 1889.17

Name of the Statute Nature of Dues Amount Rs. Lacs Forum where dispute is pending


FRN No. 001931S


N. R. Suresh


Date : 2nd Septemeber, 2011 M. No. 21661

b) The arrears of statutory dues as at the last day of the Financial year outstanding for a period of more than six

months from the day it is payable is detailed below:


41

BALANCE SHEET AS AT MARCH 31, 2011

SOURCES OF FUNDS

Shareholders’ Funds

Share Capital A 323,297,685 323,297,685

Share Warrants (Refer Note II(1)) 14,475,000 14,475,000

Reserves & Surplus B 402,724,323 402,724,323

740,497,008 740,497,008

Loan Funds

Secured Loans C 10,912,581 10,352,851

Unsecured Loans D 71,596,290 38,844,627

Deferred Tax 12,700,000 17,205,000

Total 835,705,879 806,899,486

APPLICATION OF FUNDS

Fixed Assets E

Gross Block 135,697,072 154,692,610

Less: Depreciation 97,476,286 123,788,774

Net Block 38,220,786 30,903,836

Capital Work in Progress - 25,000,000

Total 38,220,786 55,903,836

Investments F 16,128,188 25,474,276

Current Assets, Loans & Advances G

Inventories 1,144,566 1,583,287

Sundry Debtors 252,905,639 251,178,928

Cash & Bank Balances 19,389,221 14,276,019

Loans & Advances 105,551,778 117,451,438

378,991,204 384,489,673

Less: Current Liabilities & Provisions H

Current Liabilities 258,816,710 268,499,508

Provisions 3,252,048 2,076,208

Total 262,068,758 270,575,716

Net Current assets 116,922,446 113,913,957

Profit&Loss Account

Debit balance in Profit & Loss Account I 664,434,459 611,607,416

Total 835,705,879 806,899,486

ScheduleAs at

March 31, 2011As at

March 31, 2010

(In Rs.)

Particulars

Schedule A to I and notes in Schedule Q form part of this Balance Sheet.

vide our report of even date

For Maharaj N R Suresh & Co.,

FRN No.: 001931S


For and on behalf of the Board of Directors.,

N.R. Suresh

Partner

M.No. 21661

Place : Mumbai

Dated : 2nd September, 2011

K.V. Sai Prasad

General Manager Finance & Accounts

Mahesh Solanki

Additional Director

Sunil Gupta



42

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011

(In Rs.)

Year endedMarch 31, 2011


INCOME

Software Development & Services 65,880,661 149,140,441

Education & Training 135,780,437 126,984,430

201,661,098 276,124,871

Less:Service Tax 23,845,322 21,565,957

177,815,776 254,558,914

Others J 7,115,982 9,046,736

Total 184,931,758 263,605,651

EXPENDITURE

Direct K 20,456,562 34,821,574

Personnel L 103,517,415 107,796,385

Others M 78,448,714 86,169,109

Finance N 4,712,910 10,323,009

Provisions O 16,053,645 144,171,269

Depreciation/Amortisation/Impairment Loss 19,074,555 82,058,892

(Refer Schedule E)

Total 242,263,801 465,340,239

Profit before Prior Period items (57,332,043) (201,734,588)

Prior Period P - 4,935,264

Profit before Tax (57,332,043) (206,669,852)

Provision for

Deferred tax (4,505,000) (20,795,000)

Income Tax Relating to earlier Year - (3,052,030)

Profit after tax (52,827,043) (182,822,822)

Balance brought forward (620,266,968) (437,444,146)

Balance carried to balance sheet (673,094,011) (620,266,968)

Earnings per share before extraordinary items

Basic (1.63) (7.00)

Diluted*

Earnings per share after extraordinary items

Basic (1.63) (7.20)

Diluted*

ScheduleParticulars

* Diluted EPS is ignored as it is anti-dilutive

Schedule J to P and notes in Schedule Q form part of this Profit and Loss account.



FRN No.: 001931S



N.R. Suresh

Partner

M.No. 21661

Place : Mumbai


K.V. Sai Prasad


Mahesh Solanki

Additional Director

Sunil Gupta



43

SCHEDULES TO BALANCE SHEET AS AT MARCH 31, 2011

Authorised

40,000,000 Equity Shares of Rs. 10/- each

(40,000,000 Equity Shares of Rs. 10/- each) 400,000,000 400,000,000

Issued Capital

32,325,000 Equity Shares of Rs. 10/- each 323,250,000 323,250,000

Subscribed and Paid up Capital

32,325,000 Equity Shares of Rs. 10/- each, fully paid up 323,250,000 323,250,000

(Out of the above 1,545,147 Equity Shares of Rs. 10/- each fully

paid up is by way of Bonus Shares by way of capitalisation of profits) 323,250,000 323,250,000

Less : Calls in Arrears

Other than Directors 28,365 28,365

323,221,635 323,221,635

Add : Call in Arrears refundable 1,050 1,050

Forfeited Shares 75,000 75,000

Total 323,297,685 323,297,685

A ] SHARE CAPITAL (In Rs.)

As at March 31, 2011

As atMarch 31, 2010

Particulars

C ] SECURED LOANS

Capital Reserve

Share Premium Account

Total

22,080,000

380,644,323

402,724,323

-

-

-

22,080,000

380,644,323

402,724,323

-

-

-

B ] RESERVES & SURPLUS

Particulars Deductions As at

March 31, 2011AdditionsAs at

March 31, 2010

From Banks

a) Working Capital Loan (Refer Note II (4) in Schedule Q) 9,945,580 7,763,832

b) Hire Purchase # 778,315 2,100,807

From Others

c) Hire Purchase # 188,686 488,212

Total 10,912,581 10,352,851

As atMarch 31, 2011

As atMarch 31, 2010

Particulars

# Secured by Assets created out of respective loans, in the possesion of the Company and ex-employees to be transferred

on completion of Loan.

D ] UNSECURED LOANS

From Banks - 842,170

From Others

Co-Chairman & Managing Director 1,262,746 -

Companies 60,333,544 38,002,457

Others 10,000,000 -

Total 71,596,290 38,844,627


44

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45


F ] INVESTMENTS (In Rs.)


As atMarch 31, 2010Particulars

G ] CURRENT ASSETS, LOANS AND ADVANCES

INVENTORIES

Courseware

Total

1,144,566

1,144,566

1,583,287

1,583,287

Cash on hand

Balance with Scheduled Bank

Current Account

Deposit Account (refer note no II (10) in schedule Q)

Total

CASH & BANK BALANCES

631,510

3,939,499

14,818,212

19,389,221

SUNDRY DEBTORS

Unsecured

a) Exceeding six months

i) Considered good 243,887,278 245,069,263

ii) Considered doubtful 78,864,586 64,507,947

b) Others


ii) Considered doubtful - 10,739,100

331,770,223 326,425,976

Less: Provision for doubtful debts 78,864,586 75,247,047

Total 252,905,639 251,178,929

INVESTMENTS - LONG TERM

Non Trade Unquoted at cost

Subsidiary Companies

International SQL Star Pte Limited, Singapore

Cost as on 01.04.2010 21,957,038

Add : Investment made during the year 656,150

22,613,188

Less:

Provision for Diminution in value of Investments 6,485,000 16,128,188 15,472,038

825,000 Equity Shares of S$ 1.00 each,

(805,000 Equity Shares of S$ 1.00 each)

SQL Star International Inc., U.S.A.

Cost as on 01.04.2010 463,014,538

Add: Investments made during the year 2,096,745

465,111,283

Less:

Provision for Diminution in value of Investments 465,111,283 - 10,002,238

1,06,91,00,000 Equity Shares of US $ 0.01each.

(1,06,45,00,000 Equity Shares of US$ 0.01 each.)

Total 16,128,188 25,474,276

945,494

6,534,671

6,795,853

14,276,018


46


SCHEDULES TO PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011

(In Rs.)


As atMarch 31, 2010

Particulars

K ] DIRECT EXPENSES

Computer Hire Charges & Consumables 173,872 355,309

Courseware 16,411,723 22,541,278

Obsolete Courseware written off - 3,989,619

Royalty 668,685 2,565,272

Outsourcing and Consultants 3,202,282 5,370,097

Total 20,456,562 34,821,574

J ] OTHER INCOME (In Rs.)

Year endedMarch 31,2011


Interest on Deposit 493,014 778,578

(Tax Deducted at source Rs.39,685 /- (Previous year Rs. 75,670/-)

Exchange (loss)/gain (net) 733,483 614,992

Other receipts 5,889,485 7,653,167

Total 7,115,982 9,046,736

Particulars

LOANS & ADVANCES

UnsecuredConsidered goodAdvance recoverable in cash or in kind for which value to be received

Due from Subsidiary 334,173 -Prepaid Expenses 28,201,320 31,977,913Others 25,232,570 17,141,786

Security deposits 19,087,878 16,154,510Advance Tax (net) 27,568,521 47,116,783Balance with Central Excise 267,356 200,486 SQL ESOP Trust 4,859,960 4,859,960Considered doubtfulAdvance recoverable in cash or in kind for which value to be receivedOthers 1,094,534Less: Provision for doubtful debts 1,094,534 - -

Total 105,551,778 117,451,438

H ] CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIES

Sundry Creditors

a) Micro and Small Enterprises (Refer note no II(11) in schedule Q) - 3,871

b) Others 188,108,651 183,311,890

Other Liabilities 70,708,059 83,762,334

Due to Subsidiary - 1,421,413

Total 258,816,710 268,499,508

PROVISIONS

Employee Benefits 3,252,048 2,076,208

Total 3,252,048 2,076,208

I ] PROFIT & LOSS ACCOUNT

Debit Balance in Profits & Loss Account 673,094,011 620,266,968

Less : General Reserve 8,659,552 8,659,552

Total 664,434,459 611,607,416


47

SCHEDULES TO PROFIT & LOSS ACCOUNTFor the year ended March 31, 2011

M ] OTHER EXPENSES

(In Rs.)



Rents 27,896,438 30,817,601

Power and fuel 6,509,333 6,862,814

Rates and Taxes 209,229 165,044

Insurance 182,641 106,269

Repairs & Maintenance

Office 5,495,001 6,727,720

Vehicles 795,292 824,040

Others 1,463,121 2,059,633

Lease & Hire Charges - 2,045

Travel and Conveyance 5,720,767 3,990,266

Communication Expenses 3,763,802 5,042,352

Advertising and Business Promotion 11,194,943 10,320,595

Printing and Stationery 1,330,839 1,806,571

Consultancy Charges 1,597,882 7,237,229

Directors Remuneration 7,761,469 2,719,982

Directors Sitting Fees 175,000 300,000

Commission 529,200 275,750

General Expenses 2,107,032 3,275,522

Loss on Sale of assets 719,919 1,486,615

Claim from Customers 417,454 1,396,326

Auditors Remuneration 579,352 752,737

Total 78,448,714 86,169,109

Particulars

N ] FINANCIAL EXPENSES

Interest

Fixed Loans 295,170 784,961

Others 3,740,283 4,035,453 8,616,691

Finance Charges 677,457 921,357

Total 4,712,910 10,323,009

P] PRIOR PERIOD

Rent&Maintenance - 957,353

Service Tax - 3,977,911

Total - 4,935,264

L ] PERSONNEL EXPENSES

Salaries, Wages & Bonus 94,355,206 98,705,003

Contribution to Provident and other funds 5,987,287 6,395,417

Staff Welfare 2,844,558 2,487,594

Staff Recruitment and Training 330,364 208,372

Total 103,517,415 107,796,385

O] PROVISIONS

Provision for Doubtful Debts 3,617,538 70,086,269

Provision for Doubtful Advances 337,124 -

Provision for Diminution in value of Investments 12,098,983 74,085,000

Total 16,053,645 144,171,269


48

Q ] NOTES TO THE ACCOUNTS

I) Significant Accounting Policies

1. Basis of Preparation

The financial statements are prepared under the historical cost convention in accordance with generally accepted

accounting principles and applicable accounting standards.

Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions

that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the

date of financial statements and reported amounts of income and expenses during the year. Example of such estimates

include provision for doubtful debts, employee benefits, provision for income taxes, accounting for contract costs

expected to be incurred to complete software development and the useful lives of fixed assets.

2. Fixed Assets

Fixed Assets are stated at cost less depreciation/amortization. Cost of acquisition includes freight, duties and installation

expenses net of taxes and duties eligible for credit.

Capital Work-in-Progress

Advances paid for acquisition of fixed assets and cost of assets (net of taxes and duties eligible for credit) not put to use

before the year-end are disclosed under Capital Work-in-Progress.

Assets are capitalised when they are ready for use / put to use.

3. Intangible Assets

Intellectual Property Rights (IPR) is stated at cost less amortization. All costs incurred for development are carried

forward till development is complete.

The Intangible assets are tested for impairment for both value and availability for use at the end of year and impairment

loss is provided and deducted from the carrying amounts.

4. Investments

Long-term investments are stated at cost. Diminution is provided for decline in the carrying cost of long-term investments,

if the decline is other than temporary.

5. Inventories

Stock of Courseware is valued on FIFO basis at lower of cost and net realizable value.

6. Revenue and Expenditure recognition

Revenue is recognized and expenditure is accounted for on their accrual, where there is no uncertainty as to measurement

or collectibles other than the following

SCHEDULE FORMING PART OF THE ACCOUNTSFor the year ended March 31, 2011


49


7. Employee Benefits

Short term employee benefits are charged at the undiscounted amount to Profit and Loss Account in the year in which

the related service is rendered.

Defined contributions towards retirement benefits in the form of Provident Fund and Employees State Insurance

Scheme for the year are charged to Profit and Loss Account.

Defined benefit plan – Gratuity and Long term compensated absence

Liability in respect of defined benefit plan in the form of gratuity is determined based on actuarial valuation made by

an independent actuary using Projected Unit Credit Method as at the balance sheet date and are unfunded. Liabilities

for long term compensated absences are recognised in the same manner.

8. Foreign Currency Transactions

Transactions in foreign exchange are accounted at the rates prevailing on the dates of Transactions.

Foreign Currency liabilities/Assets at the close of the year are restated, adopting the year end rates. The resultant

difference, if any, is recognized as income or expense in Profit and Loss Account.

Exchange difference, arising on forward contracts, is recognized in the statement of Profit and Loss in the reporting

period in which the exchange rates change.

Premium / discounts arising on forward contract are amortized as expense or income over the life of the contract.

Any Profit or Loss arising on cancellation or renewal of a forward exchange contract is recognized as income or as

expense for the period.

Nature of Revenue

a) Software and Services

Fixed Price, Fixed time frame contracts

Time and materials contracts

Annual Support Services

Trading of Software Licenses

b) Training and Education Services

i) Corporate

ii) Others

c) e-Governance

i. e-Sampark and Jan Sampark Projects

d) Others

i) Interest, Rental

ii) Commission

iii) Notice Pay

Basis of Recognition

Percentage of completion

As per terms of contract, when related services are

rendered and passing of title

Proportionately over the period in which services are

rendered.

Upon Delivery and passing of title

As per the contract terms with the customers

On services rendered and payment received

On services rendered

On accrual basis

On accrual subject to confirmation

On realisation


50


a) Assets acquired for e-Governance Projects

i) Chandigarh

ii) Madhya Pradesh

b) Software

i) Acquired prior to 01.01.2005

ii) Acquired after 01.01.2005

c) Assets at Leased Premises

d) Intellectual Property Rights (IPR)

Depreciation on additions / deductions in respect of fixed assets are charged pro-rata from / up to the date in which the

asset is available for use / disposal

Plant & Machinery costing less than Rs.5,000/- are capitalised and 100% depreciation is provided in the year of

addition.

10. Segment Reporting

The company has identified business segments as primary reporting segments and geographical segments as its

secondary segment.

The company has identified three business segments;-

a) Software Development & Services

b) Education & Training

c) E-Governance.

Revenue and expenses have been identified to respective segments on the basis of operating activities of the Enterprise.

Revenue and expenses which relate to the enterprise as a whole and are not allocable to a segment on a reasonable

basis has been disclosed as un-allocable revenue and expenses.

There are no inter-segmental transfers.

Segment assets and liabilities represent assets and liabilities in respective segments. Other assets and liabilities that

cannot be allocated to a segment on a reasonable basis have been disclosed as un-allocable assets and liabilities.

Geographical segments have been identified by treating sales in India and Rest of the world as reportable geographical

segments

11. Lease

Finance Leases are accounted in accordance with AS 19

12. Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the

provisions of Income Tax Act 1961. Deferred tax is recognised, on timing differences, being the difference between

taxable income and accounting income that originate in one period and are capable of reversal in one or more

subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised

if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

Agreement Period of 5 years

Schedule XIV rates

Schedule XIV rates

5 years

Schedule XIV rates, since Leases are generally

renewed.WDV of the asset is written off in the year in

which lease is not renewed / cancelled.

The estimated useful life is 3 years and is amortized in

3 years in equal installments from the year of use.

9. Depreciation/ Amortization

Depreciation is provided on Straight Line method at the rates specified in Schedule XIV to the Companies Act, 1956

other than the following for which depreciation/ amortization is on straight-line basis as under


51

13. Impairment of Assets

Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount.

Impairment loss is aggregated with depreciation

14. Provisions

A provision is recognised when there is a present obligation as a result of a past event, it is probable that an outflow of

resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is

not discounted to its present value and is determined based on the best estimate required to settle the obligation at the

year-end date. These are reviewed at each year-end date and adjusted to reflect the best current estimate.

Contingent Liabilities are disclosed by way of notes in the Financial Statements.

Contingent Assets are neither recognised nor disclosed.

II) Notes on Accounts

1. Share capital and Share Warrants

During the Financial year 2009-10 the Company issued 1,05,25,000 equity shares of Rs. 10/- each on Preferential

basis at a premium of Rs. 0.50 per share as per SEBI guidelines. The Company has also allotted 48,25,000 share

warrants at a price of Rs 10.50 per warrants on Preferential basis as per SEBI Guidelines. These warrants are convertible

at the option of the holders at any time before the expiry of 18 months from its allotment in to fully paid up equity shares

of Rs 10/-each at a premium of Rs 0.50 per share any time between November 2009 to May 2011 against which Rs 3

per warrant of the value has been received as at 31st March 2011.

2. Capital reserve

Represents balance brought forward relating to amounts forfeited on non subscription of 5,20,000 Share Warrants on

due dates.

3. ESOP Scheme

The shareholders have approved in November 2005, scheme titled “SQL ESOP 2005”, which provides for an option

to issue equity shares not exceeding 8,01,000 shares constituting 5% of the paid up capital of the Company to

permanent employees of the company subject to such conditions the Board may determine. Under this plan, Company

granted 7,50,000 Employee Stock Options to 37 Employees pursuant to the resolution passed at the extra-ordinary

general meeting of the Company held on 30th November 2005. Out of the options granted, 725,000 (700,000)

options were lapsed due to resignation of the employees and 25,000 (50,000) options are in force as on 31.03.2011.

SQL ESOP Trust holds 159980 (159980) equity shares as on 31.03.2011 that were allotted under the ESOP Plan in

December 1998 for and on behalf of the eligible employees and will be offered to the Employees as per the terms and

conditions of the ESOP Scheme-2005. The total options available for grant is 776,000 (751,000) as on 31.03.2011.

4. Working Capital Loans are secured by a first charge on current assets and movable fixed assets of the borrower (except

assets on Hire Purchase, both present and future), and further secured by

a) Fixed Deposit with Bank

b) 33,50,000 Equity Shares in the company held by Super Star Exports Pvt Ltd (Promoter)

c) 10,00,000 Equity Shares held by Satyamitra Stock Consultants Pvt Ltd.

d) Guaranteed by Super Star Exports Pvt Ltd , Satyamitra Stock Consultants Pvt Ltd. and by a Director of the

Company

5. The Company has sent letters of Confirmation during the year to Debtors, Creditors and Loans and Advances; however

the Company received the confirmation only in a few cases.

6. The Madhya Pradesh State Agricultural Board (MANDI BOARD) has resorted to unlawful and unilateral termination of

the Service contract by their letter dated 17th February 2010 on the purported reason of Deficiency/Under performance,

besides



52


Amount receivable fromYear ended

31.03.2011

A) Wholly Owned Subsidiaries

i) International SQL Star Pte Ltd., Singapore 91.95 137.71

Total due maximum balance outstanding during the year 139.75 145.68

ii) SQL Star International Inc., USA - -

Total due maximum balance outstanding during the year - 60.20

B) Unbilled Revenue (out of which Rs. 24.00 lacs

(Rs.573.80) lacs have since been billed 24.00 580.83

Sl.NoYear ended

31.03.2010

(In Rs. Lacs)

a) refusing to settle the dues for services from April 2008 to termination date amounting to Rs 28.77 Crores (out of

which Rs 20 22 Crores pertains to billing raised on behalf of Outsourcing partner)

b) refusing to give required documents for billing from April 2009 to January 2010

c) invoking performance bank guarantee of Rs 5 Lakhs and

d) Confiscating the assets of the company located in the Mandis.


Board withdrew the arbitrator and the new arbitrator is yet to be appointed by the Mandi Board. In the meanwhile, the

company has filed a petition before the Honourable High Court of Madhya Pradesh, Jabalpur Bench seeking to


7. Sundry Debtors include

8. Investment in Subsidiaries

During the year the Company has invested the following sums in the Equity shares of the wholly owned subsidiaries

(In Rs. Lacs)9. Movement for Provision for Doubtful debtors, advances and diminution in Investments

Loans and Advances Investments

Balance as on 01.04.2010 752.47 7.57 4,594.97

Add: Provision for the year 36.17 3.37 120.99

Less: Realization against Doubtful debts/ Restatement

of Carrying amount - - -

Balance as on 31.03.2011 788.64 10.94 4715.96

Sundry Debtors

Year ended

31.03.2011

Year ended

31.03.2010

a) SQL Star International Inc., USA

No of Equity Shares applied and allotted

i) Equity shares of 1 cent each 46,00,000 2,20,00,000

ii) Amount in US $ 46,000 2,20,000

iii) Amount Rs. in lacs 20.97 100.33

b) International SQL Star Pte Ltd., Singapore


i) Equity shares of S$ 1 each 20,000 -

ii) Amount in S $ 20,000 -

iii) Amount Rs. in lacs 6.56 -

ParticularsSl.No

Particulars


53


10. Fixed Deposits with Banks includes

Year ended

31.03.2011

Year ended

31.03.2010

Deposits held in the Joint names of the Company and

Central Excise department 1.69 1.57

Pledged for Bank Guarantees issued 65.05 59.95

Margin Deposit towerds Overdraft Facility 6.44 6.43

Particulars

11. The Company has sent letters to the creditors to identify under MSMED Act, enterprises which have provided goods

and services to the Company. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at

March 31, 2011 has been made in the financials statements based on the information received and available with the

Company.

Year ended

31.03.2011

Year ended

31.03.2010

a) Amount due and outstanding to suppliers as at the end of accounting year - 0.04

b) Interest paid during the year - -

c) Interest payable at the end of the accounting year, and 0.00174 0.00064

d) Interest accrued and unpaid at the end of the accounting year, 0.00174 0.00064

Particulars

(In Rs. Lacs)

(In Rs. Lacs)

13. Taxation

Deferred Tax comprises of

12. Auditors Remuneration includes

Year ended

31.03.2011

Year ended

31.03.2010

Statutory Audit 2.50 2.50

Tax Audit 0.30 0.64

Tax Representation 0.87 1.29

Certification 0.59 0.95

Reimbursement of expenses to Statutory Auditors 1.53 2.15

Total 5.79 7.53

Particulars

Year ended

31.03.2011

Year ended

31.03.2010

Deferred Tax Assets on account of

a) Carry forward Losses - -

b) Disallowances under section 43 B - -

Deferred Tax Liabilities on account of

a) Difference between WDV of Assets as per Books and Income Tax 127.00 172.05

Net Deferred Tax Liability 127.00 172.05

Particulars

(In Rs. Lacs)

(In Rs. Lacs)


54


14. Employee Benefits (In Rs. Lacs)

Estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion

and other relevant factors, such as supply and demand in the employment market.

UNFUNDED

Long TermCompensated Absence

CHANGES IN THE PRESENT VALUE OF THE

OBLIGATION (PVO) - RECONCILIATION OF

OPENING AND CLOSING BALANCES:

PVO as at the beginning of the period 12.79 12.34 10.65 7.98 7.96 19.47

Interest Cost 1.02 0.99 0.85 0.63 0.64 1.56

Current service cost 4.39 0.95 0.50 0.22 0.24 0.92

Benefits paid (3.77) (1.59) (8.19) - - -

Actuarial loss/(gain) on obligation (balancing figure) 9.38 0.10 8.53 (0.12) (0.86) (14.00)

PVO as at the end of the period 23.81 12.79 12.34 8.71 7.98 7.95

EXPENSES RECOGNISED IN THE STATEMENT

OF PROFIT AND LOSS ACCOUNT


Interest Cost 1.02 0.99 0.50 0.64 0.64 1.56

Net actuarial (gain)/loss recognised in the year 9.38 0.11 8.53 (012) (0.86) (14.00)

Expenses recognized in the statement of profit and

loss account 14.79 2.05 9.88 0.74 0.02 (11.52)

MOVEMENTS IN THE LIABILITY RECOGNIZED

IN THE BALANCE SHEET

Opening net liability 12.79 12.34 10.65 7.98 7.96 19.47

Expense as above 14.79 2.04 9.88 0.74 0.02 (11.52)

Transitional gain reversed to General Reserve - - - - - -

Contribution paid (3.77) (1.59) (8.19) - - -

Closing net liability recognized in Balance Sheet 23.81 12.79 12.34 8.72 7.98 7.95

Type of Plan

GRATUITY

Period of Disclosure 2010-11 2009-10 2009-10 2008-092008-09 2010-11

Long TermCompensated AbsenceGRATUITY

PRINCIPAL ACTUARIAL ASSUMPTIONS

2010-11 2009-10 2009-10 2008-092008-09 2010-11[Expressed as weighted avarages]

Mortality Table LIC (1994 -96)

Discount Rate 8% 8% 8% 8% 8% 8%

Salary escalation rate 10% 10% 10% 10% 10% 10%

Attrition rate 15% 15% 15% 15% 15% 15%

Expected rate of return on Plan Assets 0% 0% 0% 0% 0% 0%

ENTERPRISE’S BEST ESTIMATE OF

CONTRIBUTION DURING NEXT YEAR (Rs. Lacs) 20.00 20.00 20.00 20.00 10.00 10.00


55

16. Foreign Currency Exposures

The Company has foreign currency exposures arising out of services rendered/ received. The receivables and payables

are not hedged. Foreign currency exposure is given below:

Currency 31.03.11 31.03.10 Under Lying Risk Coverage

USD 0.07 0 USD / INR

SGD 2.69 4.29 SGD/ INR

17. Related Party Disclosures

(a) List of Related Parties where control exists:

Name of the Related Parties a) Wholly owned Subsidiaries

SQL Star International Inc., USA

International SQL Star Pte Ltd., Singapore

b) Wholly owned subsidiary of US Subsidiary

SQL Star International Pty Ltd., Australia

c) Others

Super Star Exports Private Limited

Systematix Capital Services Private Limited

Systematix Fincorp (India) Limited

Systematix Shares & Stock (I) Limited

Systematix Commodities Services Private Limited

Systematix Corporate Services Limited

Ceepeek Real Estate Limited

Rangsharda Properties Private Limited

Shubhamangalam Real Estate Limited

Snehavardhini Real Estate Limited

Tek Point Properties Private Limited

Funsign Real Estate Limited

Shivshakthi Real Estate Limited

Riteplaza Trading Company Private Limited

Magicline Trading Company Private Limited

Topcity Trading Company Private Limited

Goldflag Exports Private Limited

Goldlife Trading Company Private Limited

Thirdwave Mercantile Company Private Limited

Nikunj Mercantile Private Limited

Systematix Finvest Limited

Technosoft Consulting Resources Pvt Ltd


(In Rs. Lacs)

15. Computation of net profit in accordance with section 198 and 309 of the Companies Act, 1956 (In Rs. Lacs)

Profit before tax from ordinary activities (573.32) (2017.34)

Add :

Directors Remuneration 77.61 27.19

Directors Sitting Fees 1.75 3.00

Provisions 160.53 1441.71

Net Profit (333.43) (545.44)

No Commission Payable as per terms of appointment

Year ended

31.03.2011

Year ended

31.03.2010Particulars


56


b) Transaction with Related parties


Receivable 3.34 (14.21)

Reimbursement of Expenses (net) 3.34 2.08

Services Rendered by SQL India - 62.07

Service Rendered by SQL US - 16.83

b) International SQL Star Pte Ltd, Singapore

Receivable 91.95 137.71

Service Rendered by SQL India 4.23 5.77

Reimbursement of Expenses 1.03 0.98

Service Rendered by SQL Singapore 3.52 -

c) Super Star Exports Private Limited

Inter corporate Loans - -

Outstanding as at the end of the year 5.43 5.43

Shares Allotted (300,000 Equity shares) - 31.50

Guarantee given to Banks for borrowing 99.45 77.64

No. of Equity Shares held 37,52,275 37,52,275

% of Shares Held 11.61% 11.61%

d) Kanishkdeep Stock Consultants Pvt Ltd

Shares Allotted (3,200,000 Equity Shares) - 336.00



e) Thirdwave Mercantile Co. Private Limited

Inter corporate Loans 217.00 217.00


No. of Equity Shares held - -

% of Shares Held - -

f) Sunil Gupta

Shares Allotted (33,25,000 Equity shares) - 349.13

Warrant Allotted (33,25,000 Warrants) - 99.75

Loan given to SQL Star 100.00 -

Outstanding as at the end of the year 12.62 -

Interest Paid 2.62 -



g) Techno soft Consulting Resources Pvt Ltd



Interest 0.21 -

h) C P Khandelwal

Guarantee given for bank borrowings 99.45 77.64



(In Rs. Lacs)

Year ended

31.03.2011

Year ended

31.03.2010Description of Transactions

i) No amount has been written off or written back during the year in respect of debts due from or to related

parties

ii) Key Management Personnel : Mr. Sunil Gupta, Co-Chairman and Managing Director

Remuneration vide Note 19 (5)

i) Transaction with related parties other than stated above


57


18. Contingent Liabilities (In Rs. Lacs)

Year ended

31.03.2011Year ended

31.03.2010

S.No. Dscription of Contingent Liability

Estimated AmountIndication of

UncertaintyPossible Recovery

if Liability Arises

a)

b)

c)

d)

Guarantees issued by the banks on

behalf of the Company

Tax Demands Contested in Appeals :

i) Service Tax*

ii) Income Tax

iii) Central Sales Tax

Other Claims against the Company

not acknowledged as Debts.

Export obligation on account of

Imports.

65.05

1917.52

157.49

21.65

228.38

8.14

59.95

1383.94

82.39

21.65

220.40

62.05

Performance or

Non-performance of

various parties

All are disputed

before concerned

authorities. The

company is advised

that the cases are

likely to be disposed

off in favour of the

Company.

-do-

-

Nil

Nil

Nil

Nil

-

-

* includes penalty of Rs. 1142.95 Lacs.


58

19. Other Notes (In Rs. Lacs)

1 Estimated amount of contracts remaining to be executed on capital

and not provided - -

2 CIF Value of Imports

Capital Goods - -

3 Expenditure in foreign currency (on cash basis)

Expenditure on foreign staff 3.52 16.83

Foreign Travel 4.20 1.24

4 Earnings in foreign exchange

Sale of software and services 0.34 0.54

Education & Training 3.39 -

5 Directors Remuneration

a) Mr. N R Ganti

Salaries - 20.00

Benefits - 0.28

b) Mr. Sunil Gupta (*)

Salaries 69.61 6.37

Benefits 8.00 0.55

Total expensed to Profit & Loss Account 77.61 27.20

Total Director’s Remuneration 77.61 27.20

6 Number of Equity shares used in computing Earnings per share

Basic 32,325,000 25,399,452

Diluted 37,951,000 27,852,849


Year ended

31.03.2011

Year ended


Chairman and Managing Director (Resigned on 30.11.2009)

Co-Chairman and Managing Director (Appointed on 26.02.2010)

(*) includes Rs. 38.82 Lacs being remuneration paid to Mr. Sunil Gupta, Co-Chairman & Managing Director, for the

period 28th September 2010 to 31st March 2011 which is subject to the approval of the Central Government.


59


(In Rs. Lacs)20 Segment Results

Year ended

31.03.11

Year ended

31.03.10

A. Primary Segment (By Business Segment)

1 Segment Revenue

a. Software Devl. & Services 421.23 592.86

b. Education & Training 1,232.93 1,151.50

c. E-Governance 124.00 801.23

Total 1,778.16 2,545.59

Less Inter segment sales - -

Net Sales 1,778.16 2,545.59

2 Segment Results

Profit / (Loss) before Tax and

Interest from each segment

a. Software Devl. & Services (47.35) 46.10

b. Education & Training 100.78 (0.51)

c. E-Governance 4.29 (120.20)

Total 57.72 (74.61)

Less :

i) Interest 47.13 103.23

ii) Other un-allocable expenses 655.07 1,929.97

iii) Un-allocable income (71.16) (90.47)

iv) Prior Period Items - 49.35

Total Profit Before Tax (573.32) (2,066.69)

3 Capital Employed


b. Education & Training 377.21 541.09

c. E-Governance 1,242.00 1,182.30

d. Un-allocated 18.73 31.45

Total Capital Employed 1,712.72 1,952.92

B) Secondary Segment (By Geographical Segment)

Segment Revenue

Geographical Location

- India 1,773.93 2,477.76

- Rest of the World 4.23 67.83

Particulars


60

CASH FLOW STATEMENT For the year ended March 31, 2011(In Rs. Lacs)

Year ended31-03-2011


Particulars

A Cash flow from Operating Activities

Profit before tax and exceptional items (573.32) (2,017.35)

Adjustments for :

Depreciation 190.75 820.59

Interest Paid 47.13 103.23

Interest Received (4.93) (7.79)

Exchange Fluctuations difference (7.33) (6.15)

(Profit)/ Loss on sale of Assets / Assets Discarded 7.20 14.87

232.82 924.75

Operating Profit before working capital changes (340.50) (1,092.60)

Adjustments for :

Trade and Other Receivables / Increase in

other Current Assets (132.63) (688.27)

Inventories 4.39 116.08

Trade and Other Payables including Employee Benefit (85.07) (266.93)

(213.31) (839.12)

Cash Generated from Operations (553.81) (1,931.73)

Interest Received - -

Finance Charges (6.77) (9.21)

Exchange Fluctuations 7.33 6.15

Direct Taxes Paid net of refund 194.81 29.38

195.37 26.32

Cash Generated from Operations before

exceptional items (358.44) (1,905.41)

Provision for Doubtful debts 36.18 700.86

Provision for Diminution in value of Investments 120.99 740.85

Provision for Doubtful Advances 3.37 -

160.54 1,441.71

Net Cash from Operating Activities (A) (197.90) (463.70)

B Cash from Investing Activities

Purchase/ Acquisition of Fixed Assets (24.60) (37.74)

Investments in Subsidiaries (27.53) (100.33)

Sale of Fixed Assets 3.49 9.81

Net cash used in investing activities (B) (48.64) (128.26)


61

Note:

1. Figures in brackets represents outflows

2. Previous year figures have been regrouped/restated wherever necessary

CASHFLOW STATEMENT For the year ended March 31, 2011(In Rs. Lacs)



Particulars

C Cash from financing activities

Proceeds from Issue of Share Capital / Share warrants - 1,249.88

Proceeds from Borrowings (net) 311.30 (597.97)

Working Capital Loan 21.82 45.18

Interest received 4.93 7.79

Interest Paid on Borrowings (40.35) (94.02)

Net cash used in financing activities (C) 297.70 610.85

Net increase in cash and cash equivalents 51.13 18.89

(A+B+C)

Cash and Cash equivalents at the beginning 142.76 123.87

Cash and Cash equivalents at the end 193.89 142.76



FRN No. : 001931S



N.R. Suresh

Partner

M.No. 21661

Place : Mumbai


K.V. Sai Prasad


Mahesh Solanki

Additional Director

Sunil Gupta



62

Registration Details

Registration No.

Balance Sheet Date

Capital raised during the year (Amount in Rupees Thousands)

Public Issue

Bonus Shares

Position of Mobilisation and Deployment of Funds (Amount in Rupees Thousands)

Total Liabilities

Sources of Funds

Paid-up Capital

Secured Loans

Share Warrants

Application of Funds

Net Fixed Assets

Net Current Assets

Accumulated Losses

Performance of Company (Amount in Rupees Thousands)

Turnover

Profit/(Loss) before Tax

Earning per share (Rs.)

Generic names of Three principal Products/Services of Company (As per monetary terms)

Product Description Item Code No. (ITC Code)

Computer Education

Software Exports

I.

II.

III.

IV.

V

State Code

Right Issue

Private Placement

Total Assets

Reserves & Surplus

Unsecured Loans

Defered Tax

Investments

Capital Work in Progress

Misc.Expenditure

Total Expenditure

Profit/(Loss) after Tax

Dividend rate (%)

31.03.2011

-

-

835,705.88

323,297.69

10,912.58

14,475.00

38,220.79

116,922.44

664,434.46

184,931.76

(57,332.04)

(1.63)

Nil

Nil

01

-

105,250

835,705.88

402,724.32

71,596.29

12,700.00

16,128.19

-

-

242,263.80

(52,827.04)

-

BALANCE SHEET ABSTRACT AND COMPANY’S

GENERAL BUSINESS PROFILE

Information required as per Part IV of Schedule VI of the Companies Act, 1956.

01-48874


63

STATEMENT OF INFORMATION ON SUBSIDIARY COMPANIES

PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Sl

NoName of Subsidiary

International

SQL Star Pte. Ltd.,

SQL Star

International Pty Ltd.,

1 Country of Operations USA Singapore Australia

2 Financial Year of the Subsidiary 31-Mar-11 31-Dec-10 31-Mar-11

3 Equity Share Capital

~ Number of Shares and face value 1,069,100,000 Equity 825,000 Equity Shares 10,000 Equity Shares

shares of US $0.01 of S$ 1 each, fully of AUD $1 each, fully

each, fully paid-up paid-up paid-up

~Holding Company’s interest 100% 100% 100%

4 Net aggregate amounts of the profits/

(losses) of the subsidiary so far as it

concerns the members of the holding

company and is not dealt with in

accounts of the holding Company

~ Dealt within the accounts of SQL

Star International Ltd for the year ended. Nil Nil Nil

~ Not dealt within the accounts of SQL

Star International Ltd for the year ended. 3573.61 67.18 60.56

5 Net aggregate amount of Profit/(Loss)

for previous financial year of the

Subsidiary since it became Subsidiary

so for as they concern members of

SQL Star International Ltd.

~ Dealt within the accounts of SQL Star

International Ltd for the year ended. Nil Nil Nil

~ Not dealt within the accounts of SQL

Star International Ltd for the year ended. 4,664.32 62.72 66.05

6 Share Capital 4,667.82 291.92 4.61

7 Reserves & Surplus - - -

8 Total Assets 124.73 543.24 13.40

9 Total Liabilities 121.74 316.14 79.60

10 Details of investment (except in case of

investment in the subsidiaries) - - -

11 Revenues 620.60 1,518.64 41.27

12 Profit before taxation (120.79) 6.49 (5.49)

13 Provision for Taxation 5.54 - -

14 Profit after Txation (126.33) 6.49 (5.49)

15 Proposed Dividend - - -

SECTION 212

SQL Star

International Inc.,

Note : The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office

of your Company. Investors who want to have a copy of the above may write to the Compliance Officer at the registered

office.

~ Local currency US $ SGD $ AUD $

~ Exchange rate as at March 31, 2011 to INR 44.59 35.38 46.12

The information for all the subsidiaries have been provided in Indian rupees(INR). The local currency, in the country of

operation, and the exchange rate in comparison to INR as at March 31, 2011 is provided below:


64

To

The Board of Directors of


1. We have audited the attached Consolidated Balance

Sheet. of SQL Star International Limited “ the

Company” and its subsidiaries (collectively referred

as the “SQL Group”) as at 31st March 2011, the

Consolidated Profit and Loss Account and the

Consolidated Cash Flow Statement for the year ended

on that date annexed thereto. These financial

statements are the responsibility of the Company’s

management and have been prepared on the basis

of separate financial statements and other financial

information regarding components. Our

responsibility is to express an opinion on these

financial statements based on our audit.

2. We conducted our audit in accordance with the

auditing standards generally accepted in India. Those

Standards require that we plan and perform the audit

to obtain reasonable assurance about whether the

financial statements are free of material misstatement.

An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the

financial statements. An audit also includes assessing

the accounting principles used and significant

estimated made by management, as well as evaluating

the overall financial statement presentation. We

believe that our audit provides a reasonable basis for

our opinion.

3. We did not audit the financial statements of the

subsidiaries. The financial statements and other

financial information of the subsidiaries have been

subject to audit by other auditors as under:

Australian subsidiary has not been audited by other

auditors and are accepted based on the management

certification of transactions.

Further, the consolidated financial statements include

transactions of the wholly owned Singapore

subsidiary for the three months period ended 31st

March 2011 which has not been audited by other

auditors and are accepted based on the management

certification of transactions

4. We report that the consolidated financial statements

have been prepared by the Company’s management

in accordance with the requirement of Accounting

Standard (AS 21) issued by the Institute of Chartered

Accountants of India.

5. Subject to the matter referred in paragraphs 3 & 4

above, based on our audit and consideration of

reports of other auditors on separate financial

statements and on the other financial information of

the components, and to the best of our information

and according to the explanations given to us, we

are of the opinion that the attached consolidated

financial statements give a true and fair view in

conformity with the accounting principles generally

accepted in India

(a) in the case of Consolidated Balance Sheet of

the state of affairs of SQL group as at 31st

March 2011

(b) in the case of the Profit and Loss Account, of

the LOSS for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the

cash flows for the year ended on that date.

For Maharaj N. R. Suresh & Co.

FRN No.: 001931S


Place : Chennai N.R. Suresh

Date : 2nd Septemeber, 2011 Partner

M. No. 21661

AUDITORS’ REPORT

ON CONSOLIDATED FINANCIAL STATEMENTSMaharaj N.R. Suresh & Co.,


9 (Old No.5), II Lane, II Main

Road,


SlNo

Name of thesubsidiary

Audited/UnAuditedReview

Un-Audited/Review upto

1) Wholly OwnedSubsidiary

Status

SQL Star International Inc.,USA

Un Audited 31/03/2011

2) Wholly OwnedSubsidiary

SQL Star International PteLtd., Singapore

Audited 31/03/2010

3) Step DownSubsidiary

SQL Star International PtyLtd., Australia

Review 31/03/2011

We have relied on the audit reports of Singapore and

that have been furnished to us and our opinion is

based solely on the report of other auditors. Further

the Financial Statements of USA subsidiary and


65

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011

SOURCES OF FUNDS

Shareholders’ Funds

Share Capital A 323,297,685 323,297,685

Share Warrants (Refer Note II(1)) 14,475,000 14,475,000

Reserves & Surplus B 412,376,705 421,920,665

750,149,390 759,693,350

Loan Funds

Secured Loans C 12,828,372 16,874,254

Unsecured Loans D 71,596,290 38,844,627

Deferred Tax 12,700,000 17,205,000

Restatement on Consolidation 227,792,543 198,610,588

Total 1,075,066,595 1,031,227,819

APPLICATION OF FUNDS

Fixed Assets E

Gross Block 157,565,750 464,882,744

Less: Depreciation & Amortization 109,503,274 427,667,681

Net Block 48,063,476 37,215,064

Capital Work in Progress - 25,000,000

Total 48,063,476 62,215,064

Current Assets, Loans & Advances F

Inventories 1,144,566 1,583,287

Sundry Debtors 288,106,476 290,454,589

Cash & Bank Balances 25,222,270 22,396,965

Loans & Advances 109,064,248 149,018,953

423,537,560 463,453,794

Less: Current Liabilities & Provisions G

Current Liabilities 289,804,015 300,284,662

Provisions 3,252,048 5,027,763

293,056,063 305,312,425

Net Current assets 130,481,498 158,141,369

Profit & Loss Account H

Debit balance in Profit & Loss Account 896,521,622 810,871,387

Total 1,075,066,595 1,031,227,819

ScheduleAs at

March 31, 2011As at

March 31, 2010

(In Rs.)

Particulars

Schedule A to H and notes in Schedule P form part of this Balance Sheet.



FRN No. : 001931S

Chartered AccountantsFor and on behalf of the Board of Directors.,

N.R. Suresh

Partner

M.No. 21661

Place : Mumbai


K.V. Sai Prasad


Mahesh Solanki

Additional Director

Sunil Gupta



66

CONSOLIDATED PROFIT AND LOSS ACOUNTFOR THE YEAR ENDED MARCH 31, 2011 (In Rs.)



INCOME

Software Development & Services 281,932,590 432,682,036

Education & Training 135,780,437 126,984,430

417,713,027 559,666,466

Less:Service Tax 23,845,322 21,565,957

393,867,705 538,100,509

Others I 8,691,157 13,209,965

Total 402,558,862 551,310,473

EXPENDITURE

Direct J 28,281,452 54,050,222

Personnel K 292,737,972 346,261,011

Others L 128,120,531 118,875,365

Finance M 5,391,313 10,894,028

Provisions N 16,053,645 144,171,269

Depreciation/Amortisation/Impairment Loss 21,575,012 83,067,947

Total 492,159,925 757,319,841

Profit before Exceptional items (89,601,063) (206,009,368)

Prior Period O - 4,935,264

Profit before Taxation (89,601,063) (210,944,632)

Provision for

Current tax 554,172 384,658

MAT Credit (entitlement) / Write off - -

Deferred tax (4,505,000) (20,795,000)

Fringe Benefit tax - -

Income Tax Relating to earlier Year - (3,052,030)

Profit for the year after taxation (85,650,235) (187,482,260)

Balance brought forward (819,530,938) (523,113,608)

Priod period adjustment (USA) - (108,935,070)

Amount available for appropriation (905,181,173) (819,530,938)

Balance carried to balance sheet (905,181,173) (819,530,938)

Earning per share before Prior Period /Exceptional items

Basic EPS (2.65) (8.11)

Diluted EPS *

Earning per share after Prior Period /Exceptional items

Basic EPS (2.65) (8.31)

Diluted EPS *

ScheduleParticulars

* Diluted EPS is ignored as it is anti-dilutive

Schedule I to O and notes in Schedule P form part of this Profit and Loss account.



FRN No.: 001931S



N.R. Suresh

Partner

M.No. 21661

Place : Mumbai

Dated : 2nd September, 2011K.V. Sai Prasad


Mahesh Solanki

Additional Director

Sunil Gupta



67

SCHEDULES TO CONSOLIDATED BALANCE SHEET AS AT 31-03-2011

Authorised

40,000,000 Equity Shares of Rs. 10/- each

(40,000,000 Equity Shares of Rs. 10/- each) 400,000,000 400,000,000

Issued Capital

3,23,25,000 Equity shares of Rs. 10/- each 323,250,000 323,250,000

Subscribed and paid up Capital

3,23,25,000 Equity shares of Rs. 10/- each, fully paid up 323,250,000 323,250,000

(Out of the above 15,45,147 Equity Share of Rs. 10/- each fully

paid up is by way of bonus shares by way of capitalisation of profit) 323,250,000 323,250,000

Less : Calls in arrears

Other than Directors 28,365 28,365

323,221,635 323,221,635

Add : Call in arrears refundable 1,050 1,050

Forfeited Shares 75,000 75,000

Total 323,297,685 323,297,685

A ] SHARE CAPITAL (In Rs.)


As atMarch 31, 2010

Particulars

C ] SECURED LOANS

Capital Reserve 22,080,000 - - 22,080,000

Share Premium Account 380,644,323 - - 380,644,323

Foreign Currency Translation Reserve 19,196,342 (9,543,960) - 9,652,382

Total 421,920,665 (9,543,960) - 412,376,705

B ] RESERVES & SURPLUS

Particulars Deductions As at

March 31, 2011AdditionsAs at

March 31, 2010

As at March 31, 2011 As at March 31, 2010Particulars

# Secured by Assets created out of respective loans, in the possesion of the Company and ex-employees to be

transferred on completion of Loan.

From Banks

a) Working Capital Loan (Refer Note. II(4) in Schedule P) 11,861,372 14,285,235

b) Hire Purchase # 778,315 2,100,807

From Others

c) Hire Purchase # 188,686 488,212

Total 12,828,373 16,874,254

D ] UNSECURED LOANS

From Banks - 842,170

From Others

Co-Chairman & Managing Director 1,262,746 15,758,970

Companies 60,333,544 22,243,487

Others 10,000,000 -

Total 71,596,290 38,844,627


68

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69

SCHEDULES TO CONSOLIDATED BALANCE SHEETAS AT MARCH 31, 2011

F ] CURRENT ASSETS, LOANS AND ADVANCES

INVENTORIES

Courseware 1,144,566 1,583,287

Total 1,144,566 1,583,287

As atMarch 31, 2011

As atMarch 31, 2010

(Amount in Rs.)

Particulars

Unsecured

a) Exceeding six months


ii) Considered doubtful 78,864,586 64,507,947

b) Others


ii) Considered doubtful - 10,739,100

Total 366,971,062 365,701,636

Less : Provision for doubtful debts 78,864,586 75,247,047

Total 288,106,476 290,454,589

SUNDRY DEBTORS

Cash on hand 648,985 961,038

Balance with Scheduled Bank

Current Account 3,939,498 6,534,671

Deposit Account (refer note no II (11) in schedule P) 14,818,213 6,795,853

Balance with foreign Banks & Current Accounts 5,815,574 8,105,403

Total 25,222,270 22,396,965

CASH & BANK BALANCES

Unsecured and considered good

Advance recoverable in cash or in kind for which value to be received

Due from Subsidiary 334,173 -

Prepaid Expenses 29,740,549 34,031,425

Others 26,563,655 46,073,555

Security deposits 19,730,034 16,736,744

Advance Tax (net) 27,568,521 47,116,783

Balance with Central Excise 267,356 200,486

SQL ESOP Trust 4,859,960 4,859,960

Considered doubtful

Advance recoverable in cash or in kind for which value to be received

Others 1,094,534

Less: Provision for doubtful debts 1,094,534 - -

Total 109,064,248 149,018,953

LOANS & ADVANCES


70

(In Rs.)

As atMarch 31, 2011

As atMarch 31, 2010

Particulars

G ] CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIES

Sundry Creditors

a) Micro and Small Enterprises (refer note no II (12) in schedule P) - 3,871

b) Others 219,095,956 216,518,457

Other Liabilities 70,708,059 83,762,334

Total 289,804,015 300,284,662

PROVISIONS

Current Tax - 2,951,555

Employee Benefits 3,252,048 2,076,208

Total 3,252,048 5,027,763

SCHEDULES TO CONSOLIDATED BALANCE SHEETAS AT MARCH 31, 2011

I ] OTHER INCOME

SCHEDULES TO CONSOLIDATED PROFIT & LOSS ACOUNTFOR THE YEAR ENDED MARCH 31, 2011



Particulars

Interest on Deposit 493,014 778,578

(Tax Deducted at source Rs. 39,685/- (Previous year Rs. 75,670/-)

Exchange Fluctuation - Gain 733,483 614,992

Other receipts 7,464,660 11,816,395

Total 8,691,157 13,209,965

(In Rs.)

Computer Hire Charges & Consumables 173,872 355,309

Books, Course material & Others 16,411,723 22,541,277

Obsolete Courseware written off - 3,989,619

Royalty 668,685 2,565,272

Outsourcing and Consultants 11,027,172 24,598,745

Total 28,281,452 54,050,222

J ] DIRECT EXPENSES

Debit Balance in Profit & Loss Account 905,181,174 819,530,939

Less: General Reserve 8,659,552 8,659,552

Total 896,521,622 810,871,387

H ] PROFIT & LOSS ACCOUNT

Salaries, Wages & Bonus 277,994,727 332,236,581

Contribution to Provident and other funds 11,451,985 11,211,762

Staff Welfare 2,960,896 2,604,296

Staff Recruitment and Training 330,364 208,372

Total 292,737,972 346,261,011

K ] PERSONNEL EXPENSES


71

SCHEDULES TO CONSOLIDATED PROFIT & LOSS ACOUNTFOR THE YEAR ENDED MARCH 31, 2011

L ] OTHER EXPENSES (In Rs.)

Rents 33,947,676 43,752,754

Power and fuel 6,677,348 6,964,167

Rates and Taxes 209,229 165,044

Insurance 3,371,741 1,986,482

Repairs & Maintenance

Office 6,212,419 7,026,737

Vehicles 795,292 824,040

Others 1,463,121 2,059,633

Lease & Hire Charges - 2,045

Travel and Conveyance 7,897,111 6,518,175

Communication Expenses 5,549,609 7,334,150

Advertising and Business Promotion 12,815,863 12,222,880

Printing and Stationery 1,576,211 1,896,579

Consultancy Charges 7,952,295 12,884,137

Directors Remuneration 7,761,469 2,719,982

Directors Sitting Fees 175,000 300,000

Commission 529,200 275,750

General Expenses 9,181,456 8,307,132

Loss on Sale of assets 719,919 1,486,615

Prior Period Expenses 20,288,766 -

Claim from Customers 417,454 1,396,326

Auditors Remuneration 579,352 752,737

Total 128,120,531 118,875,365

O ] PRIOR PERIOD / EXCEPTIONAL ITEMS

Rent&Maintenance - 957,353

Service Tax - 3,977,911

Total - 4,935,264



Particulars

M] FINANCIAL EXPENSES

Interest

Fixed Loans 295,170 784,961

Others 4,333,957 9,150,532

Finance Charges 762,186 958,535

Total 5,391,313 10,894,028

N] PROVISIONS

Provision for Doubtful Debts 3,617,538 70,086,269

Provision for Doubtful Advances 337,124 -

Provision for Diminution in value of Investments 12,098,983 74,085,000

Total 16,053,645 144,171,269


72

P] SCHEDULE FORMING PART OF THE CONSOLIDATED ACCOUNTSFOR THE YEAR ENDED MARCH 31, 2011

I) Significant Accounting Policies

1. Basis of Preparation

The financial statements are prepared under the historical cost convention in accordance with generally accepted

accounting principles applicable accounting standards.

Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions

that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the

date of financial statements and reported amounts of income and expenses during the year. Example of such estimates

include provision for doubtful debts, employee benefits, provision for income taxes, accounting for contract costs

expected to be incurred to complete software development and the useful lives of fixed assets.

2. Basis of Consolidation

The financial statements of the subsidiary companies used in the consolidation are drawn up to the same reporting

date as of the company.

The financial statements of the company and its subsidiary companies have been combined on a line-by-line basis by

adding together like items of assets, liabilities, income and expenses. Inter-company balances and transactions and

unrealized profits or losses have been fully eliminated.

3. Fixed Assets

Fixed Assets are stated at cost less depreciation. Cost of acquisition includes freight, duties and installation expenses

net of taxes and duties eligible for credit.

Capital Work-in-Progress

Advances paid for acquisition of fixed assets and cost of assets (net of taxes and duties eligible for credit) not put to use

before the year-end are disclosed under Capital Work-in-Progress.

Assets are capitalised when they are ready for use / put to use.

4. Intangible Assets

Intellectual Property Rights (IPR) is stated at cost less amortization. All costs incurred for development are carried

forward till development is complete.

The Intangible assets are tested for impairment for both value and availability for use at the end of year and impairment

loss is provided and deducted from the carrying amounts.

5. Investments

Long-term investments are stated at cost. Diminution is provided for decline in the carrying cost of long-term investments,

if the decline is other than temporary.

6. Inventories

Stock of Courseware is valued on FIFO basis at lower of cost and net realizable value.

7. Revenue and Expenditure recognition

Revenue is recognized and expenditure is accounted for on their accrual, where there is no uncertainty as to

measurement or collectibles other than the following

P] NOTES TO ACCOUNTS


73

Nature of Revenue

a) Software and Services

Fixed Price, Fixed time frame contracts

Time and materials contracts

Annual Support Services

Trading of Software Licenses

b) Training and Education Services

i) Corporate

ii) Others

c) e-Governance

i. e-Sampark and Jan Sampark Projects

d) Others

i) Interest, Rental

ii) Commission

iii) Notice Pay

Basis of Recognition

Percentage of completion

As per terms of contract, when related services are

rendered and passing of title

Proportionately over the period in which services are

rendered.

Upon Delivery and passing of title

As per the contract terms with the customers

On services rendered and payment received

On services rendered

On accrual basis

On accrual subject to confirmation

On realisation


Indian Operations

Short term employee benefits are charged at the undiscounted amount to Profit and Loss Account in the year in which

the related service is rendered.

Defined contributions towards retirement benefits in the form of Provident Fund and Employees State Insurance

Scheme for the year are charged to Profit and Loss Account.

Defined benefit plan – Gratuity and Long term compensated absence

Liability in respect of defined benefit plan in the form of gratuity is determined based on actuarial valuation made by

an independent actuary using Projected Unit Credit Method as at the balance sheet date and are unfunded. Liabilities

for long term compensated absences are recognised in the same manner.

Singapore Operations

Contributions to Defined contributions retirement benefit plans are recorded as expense as they fall due.

9. Foreign Currency Transactions

Transactions in foreign exchange are accounted at the rates prevailing on the dates of Transactions.

Foreign Currency liabilities/Assets at the close of the year are restated, adopting the year end rates. The resultant

difference, if any, is recognized as income or expense in Profit and Loss Account.

Exchange difference, arising on forward contracts, is recognized in the statement of Profit and Loss in the reporting

period in which the exchange rates change.

Premium or discounts arising on forward contract are amortized as expense or income over the life of the contract.

Any Profit or Loss arising on cancellation or renewal of a forward exchange contract is recognized as income or as

expense for the period.

SCHEDULE FORMING PART OF THE CONSOLIDATED ACCOUNTSFOR THE YEAR ENDED MARCH 31, 2011


74

Depreciation on additions / deductions in respect of fixed assets are charged pro-rata from / up to the date in which the

asset is available for use / disposal

Plant & Machinery costing less than Rs.5,000/- are capitalised and 100% depreciation is provided in the year of

addition.

11. Segment Reporting

The Company has identified business segments as primary reporting segments and geographical segments as its

secondary segment.

The Company has identified three business segments:-

a) Software Development & Services

b) Education & Training

c) e-Governance.

Revenue and expenses have been identified to respective segments on the basis of operating activities of the enterprise.

Revenue and expenses which relate to the enterprise as a whole and are not allocable to a segment on a reasonable

basis has been disclosed as un-allocable revenue and expenses.

The are no inter-segmental transfers.

Segment assets and liabilities represent assets and liabilities in respective segments. Other assets and liabilities that

cannot be allocated to a segment on a reasonable basis have been disclosed as un-allocable assets and liabilities.


a) Assets acquired for e-Governance Projects

i) Chandigarh

ii) Madhya Pradesh

b) Software

i) Acquired prior to 01.01.2005

ii) Acquired after 01.01.2005

c) Assets at Leased Premises

d) Intellectual Property Rights (IPR)

e) Assets held by Subsidiaries

i) Singapore

ii) United States of America

iii) Australia

Agreement Period of 5 years

Schedule XIV rates

Schedule XIV rates

5 years

Schedule XIV rates, since Leases are generally

renewed.WDV of the asset is written off in the year in

which lease is not renewed / cancelled.

The estimated useful life is 3 years and is amortized in

3 years in equal installments from the year of use.

Straight-line Method over estimated useful lives.

Furniture & Fittings : 5 years

Office Equipment : 3 to 5 years

Renovation : 3 years

Straight-line Method over estimated useful lives

Diminishing value method over estimated useful lives.

10. Depreciation/ Amortization

Depreciation is provided on Straight Line method at the rates specified in Schedule XIV to the Companies Act, 1956

other than the following for which depreciation/ amortization is on straight line basis as under


75

Geographical segments have been identified by treating sales in India and Rest of the world as reportable geographical

segments

12. Lease

Finance Leases are accounted in accordance with AS 19

13. Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the

provisions of Income Tax Act 1961. Deferred tax is recognised, on timing differences, being the difference between

taxable income and accounting income that originate in one period and are capable of reversal in one or more

subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are

recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses.

14. Impairment of Assets

Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount.

Impairment loss is aggregated with depreciation

15. Provisions

A provision is recognised when there is a present obligation as a result of a past event, it is probable that an outflow of

resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is

not discounted to its present value and is determined based on the best estimate required to settle the obligation at the

year-end date. These are reviewed at each year-end date and adjusted to reflect the best current estimate.

Contingent Liabilities are disclosed by way of notes in the Financial Statements.

Contingent Assets are neither recognised nor disclosed.



76

II) Notes on Accounts

1. Share Capital and Share Warrants

During the Financial year 2009-10 the Company issued 1,05,25,000 equity shares of Rs. 10/- each on Preferential

basis at a premium of Rs. 0.50 Ps per share as per SEBI guidelines. The Company has also allotted 48,25,000 share

warrants at a price of Rs 10.50 per warrants on Preferential basis as per SEBI Guidelines. These warrants are convertible

at the option of the holders at any time before the expiry of 18 months from its allotment in to fully paid up equity

shares of Rs 10/-each at a premium of Rs 0.50 per share any time between November 2009 to May 2011 against

which Rs 3 per warrant of the value has been received as at 31st March 2011.

2. Capital Reserve

Represents balance brought forward relating to amounts forfeited on non subscription of 5 20 000 Share Warrants

on due dates.

3. ESOP Scheme

Indian Operations

The shareholders have approved in November 2005, scheme titled “SQL ESOP 2005”, which provides for an option

to issue equity shares not exceeding 8,01,000 shares constituting 5% of the paid up capital of the Company to

permanent employees of the company subject to such conditions the Board may determine. Under this plan,

Company granted 7,50,000 Employee Stock Options to 37 Employees pursuant to the resolution passed at the extra-

ordinary general meeting of the Company held on 30th November 2005. Out of the options granted, 725,000

(700,000) options were lapsed due to resignation of the employees and 25,000 (50,000) options are in force as on

31.03.2011.

SQL ESOP Trust holds 159980 (159980) equity shares as on 31.03.2011 that were allotted under the ESOP Plan in

December 1998 for and on behalf of the eligible employees and will be offered to the Employees as per the terms and

conditions of the ESOP Scheme-2005. The total options available for grant is 776,000 (751,000) as on 31.03.2011.

4. Working Capital Loans are secured by a first charge on current assets and movable fixed assets of the borrower

(except assets on Hire Purchase, both present and future), and further secured by

a) Fixed Deposit with Bank

b) 33,50,000 Equity Shares in the company held by Super Star Exports Pvt Ltd (Promoter)

c) 10,00,000 Equity Shares held by Satyamitra Stock Consultants Pvt Ltd.

d) Guaranteed by Super Star Exports Pvt Ltd , Satyamitra Stock Consultants Pvt Ltd. and by a Director of the

Company.

5. The Company has sent letters of Confirmation during the year to Debtors, Creditors and Loans and Advances;

however the company received the confirmation only in a few cases.

6. Madhya Pradesh State Agricultural Marketing Board (MANDI BOARD) has resorted to unlawful and unilaterally

terminated the Service contract by their letter dated 17th February 2010 on the purported reason of Deficiency /

Under performance, besides

a) refusing to settle the dues for services from April 2008 to termination date amounting to Rs 28.77 Crores (out

of which Rs 20.22 Crores pertains to billing raised on behalf of Outsourcing partner)

b) refusing to give required documents for billing from April 2009 to January 2010

c) invoking performance bank guarantee of Rs 5 Lakhs and

d) Confiscating the assets of the company located in the Mandis.



77


7. Sundry Debtors include

(In Rs. Lacs)9. Movement for Provision for Doubtful debtors, advances and diminution in Investments

Loans and Advances

Balance as on 01.04.2010 752.47 7.57

Add: Provision for the year 36.17 3.37

Less:

Realization against Doubtful debts/ Restatement of Carrying amount - -

Balance as on 31.03.2011 788.64 10.94

Sundry Debtors

Year ended

31.03.2011

Year ended

31.03.2010

a) Unbilled Revenue

(out of which Rs.24.00 Lacs (Rs.573.80 Lacs) have since been billed 24.00 580.83

Amount Receivable fromSl.No

(In Rs. Lacs)

8. Investment in subsidiaries

During the year the company has invested the following sums in the Equity shares of the wholly owned subsidiaries

Year ended

31.03.2011

Year ended

31.03.2010



i) Equity shares of 1 cent each 46,00,000 22,000,000

ii) Amount in US $ 46,000 2,20,000

iii) Amount Rs. in lacs 20.97 100.33



i) Equity shares of S$ 1 each 20,000 -

ii) Amount in S $ 20,000 -

iii) Amount Rs. in lacs 6.56 -

ParticularsSl.No

Particulars

10. Leases

Foreign Operations

Singapore (In Rs. Lacs)

Year ended

31.03.2011

Year ended

31.03.2010

Due within one year 36.93 37.65

Due later than one year and not later than five years 2.88 27.89

Due later than five years - -

Minimum Lease Payments


Board withdrew the arbitrator and the new arbitrator is yet to be appointed by the Mandi Board. In the meanwhile,

the company has filed a petition before the Honourable High Court of Madhya Pradesh, Jabalpur Bench seeking to



78


11. Fixed Deposits with Banks includes

United States of America (In Rs. Lacs)

Year ended

31.03.2011

Year ended

31.03.2010

Due within one year 18.20 16.80

Due later than one year and not later than five years 18.20 38.23

Due later than five years - -

Minimum Lease Payments

(In Rs. Lacs)

Year ended

31.03.2011

Year ended

31.03.2010

Deposits held in the Joint names of the Company and Central

Excise department 1.69 1.57

Pledged for Bank Guarantees issued 65.05 59.95

Margin Deposit towards Overdraft Facility 6.44 6.43

Particulars

Year ended

31.03.2011

Year ended

31.03.2010

a) Amount due and outstanding to suppliers as at the end of accounting year - 0.04

b) Interest paid during the year - -

c) Interest payable at the end of the accounting year, and 0.000174 0.00064

d) Interest accrued and unpaid at the end of the accounting year, 0.000174 0.00064

Particulars

(In Rs. Lacs)

12. The management has initiated the process of identify enterprises which have provided goods and services to the

Company and which qualify under the definition of micro and small enterprises, as defined under Macro, Small and

Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such

enterprises as at March 31, 2009 has been made in the financials statements based on the information received and

available with the Company. The Company has not received any claim for interest from any supplier under the said

Act.

13. Intangibles in Progress

Particulars

During the Year

31.03.201101.04.2010 Cost

Incurred #

Impairment

loss

(In Rs. Lacs)

a. Web Based Learning Portal 250.00 0.00 85.00 165.00

Total 250.00 0.00 85.00 165.00

Previous Year 494.34 16.50 260.84 250.00


79

The realization of the future income tax benefits from both tax losses carried forward and temporary differences are

available for an unlimited future period subject to compliance with certain provisions in the Singapore Income Tax

Act and agreement by the Comptroller of Income Tax. Where provision for deferred tax arising from timing differences

has been offset against the above tax losses carried forward, such provision for deferred tax will be required to be set

up when the tax losses are utilized in the future.


15. Taxation

Indian Operations

Deferred Tax comprises of (In Rs. Lacs)

Year ended

31.03.2011

Year ended

31.03.2010

Deferred Tax Assets on account of

a) Carry forward Losses - -

b) Disallowances under section 43B - -

Deferred Tax Liabilities on account of

a) Difference between WDV of Assets as per Books and Income Tax 127.00 172.05

Net Deferred Tax Liability 127.00 172.05

Particulars

(In Rs. Lacs)14. Auditors Remuneration includes

Year ended

31.03.2011

Year ended


Singapore Operations

The Company has tax losses carried forward and temporary differences from capital allowances available for offsetting

future taxable income as follows. (In Rs. Lacs)

Year ended

31.03.2011

Year ended

31.03.2010

Tax losses carried forward

Amount at beginning of year 75.77 58.49

Amount in current year - (5.15)

Amount utilized in current year 16.80

58.97 53.34

Deferred tax benefit on above unrecorded 10.02 9.07

Temporary differences from capital allowances

Amount at beginning of year 12.08 6.08

Amount in current year 15.69 7.31

Amount utilized in current year 27.77 (13.39)

Particulars

Statutory Audit 2.50 2.50

Tax Audit 0.30 0.64

Tax Representation 0.87 1.29

Certification 0.59 0.95

Reimbursement of expenses to Statutory Auditors 1.53 2.15

Total 5.79 7.53


80


Estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other

relevant factors, such as supply and demand in the employment market.

Long TermCompensated AbsenceGRATUITY

PRINCIPAL ACTUARIAL ASSUMPTIONS

2010-11 2009-10 2009-10 2008-092008-09 2010-11[Expressed as weighted avarages]

Mortality Table LIC (1994 -96)

Discount Rate 8% 8% 8% 8% 8% 8%

Salary escalation rate 10% 10% 10% 10% 10% 10%

Attrition rate 15% 15% 15% 15% 15% 15%

Expected rate of return on Plan Assets 0% 0% 0% 0% 0% 0%

ENTERPRISE’S BEST ESTIMATE OF CONTRIBU-

TION DURING NEXT YEAR (Rs. Lacs) 20.00 20.00 20.00 20.00 10.00 10.00


Indian Operations (In Rs. Lacs)

UNFUNDED

Long TermCompensated Absence

CHANGES IN THE PRESENT VALUE OF THE

OBLIGATION (PVO) - RECONCILIATION OF

OPENING AND CLOSING BALANCES:

PVO as at the beginning of the period 12.79 12.34 10.65 7.98 7.96 19.47

Interest Cost 1.02 0.99 0.85 0.63 0.64 1.56


Benefits paid (3.77) (1.59) (8.19) - - -

Actuarial loss/(gain) on obligation (balancing figure) 9.38 0.10 8.53 (0.12) (0.86) (14.00)

PVO as at the end of the period 23.81 12.79 12.34 8.71 7.98 7.95

EXPENSES RECOGNISED IN THE STATEMENT OF

PROFIT AND LOSS ACCOUNT


Interest Cost 1.02 0.99 0.50 0.64 0.64 1.56

Net actuarial (gain)/loss recognised in the year 9.38 0.11 8.53 (0.12) (0.86) (14.00)

Expenses recognized in the statement of profit and

loss account 14.79 2.05 9.88 0.74 0.02 (11.52)

MOVEMENTS IN THE LIABILITY RECOGNIZED

IN THE BALANCE SHEET

Opening net liability 12.79 12.34 10.65 7.98 7.96 19.47

Expense as above 14.79 2.04 9.88 0.74 0.02 (11.52)

Transitional gain reversed to General Reserve - - - - - -

Contribution paid 3.77 (1.59) (8.19) - - -

Closing net liability recognized in Balance Sheet 23.81 12.79 12.34 8.72 7.98 7.95

Type of Plan

GRATUITY

Period of Disclosure 2010-11 2009-10 2009-10 2008-092008-09 2010-11


81


18. Foreign Currency Exposures

The Company has foreign currency exposures arising out of services rendered/ received. The receivables and payables

are not hedged. Foreign currency exposure is given below:

Currency 31.03.11 31.03.10 Under Lying Risk Coverage

USD 0.07 0 USD / INR

SGD 2.69 4.29 SGD/ INR

(In Rs. Lacs)

19. Related Party Disclosures

(a) List of Related Parties where control exists:

Name of the Related Parties a) Wholly owned Subsidiaries

SQL Star International Inc., USA

International SQL Star Pte Ltd., Singapore

b) Wholly owned subsidiary of US Subsidiary

SQL Star International Pty Ltd., Australia

c) Others

Super Star Exports Private Limited

Systematix Capital Services Private Limited

Systematix Fincorp (India) Limited

Systematix Shares & Stock (I) Limited

Systematix Commodities Services Private Limited

Systematix Corporate Services Limited

Ceepeek Real Estate Limited

Rangsharda Properties Private Limited

Shubhamangalam Real Estate Limited

Snehavardhini Real Estate Limited

Tek Point Properties Private Limited

Funsign Real Estate Limited

Shivshakthi Real Estate Limited

Riteplaza Trading Company Private Limited

Magicline Trading Company Private Limited

Topcity Trading Company Private Limited

Goldflag Exports Private Limited

Goldlife Trading Company Private Limited

Thirdwave Mercantile Company Private Limited

Nikunj Mercantile Private Limited

Systematix Finvest Limited

Technosoft Consulting Resources Pvt Ltd

17. Computation of net profit in accordance with section 198 and 309 of the Companies Act, 1956 (In Rs. Lacs)

Profit before tax from ordinary activities (896.01) (2,109.45)

Add :

Directors Remuneration 77.61 27.19

Directors Sitting Fees 1.75 3.00

Provisions 160.53 1,441.71

Net Profit (656.12) (637.55)

No Commission Payable as per terms of appointment

Year ended

31.03.2011

Year ended



82


b) Transaction with Related parties


Receivable 3.34 (14.21)

Reimbursement of Expenses (net) 3.34 2.08

Services Rendered by SQL India - 62.07

Service Rendered by SQL US - 16.83


Receivable 91.95 137.71

Service Rendered by SQL India 4.23 5.77

Reimbursement of Expenses 1.03 0.98

Service Rendered by SQL Singapore 3.52 -

c) Super Star Exports Private Limited

Inter corporate Loans - -


Shares Allotted (300,000 Equity shares) - 31.50

Guarantee given to Banks for borrowing 99.45 77.64



d) Kanishkdeep Stock Consultants Pvt Ltd

Shares Allotted (3,200,000 Equity Shares) - 336.00



e) Thirdwave Mercantile Co. Private Limited

Inter corporate Loans 217.00 217.00




f) Sunil Gupta

Shares Allotted (33,25,000 Equity shares) - 349.13

Warrant Allotted (33,25,000 Warrants) - 99.75



Interest Paid 2.62 -



g) Techno soft Consulting Resources Pvt Ltd



Interest 0.21 -

h) C P Khandelwal

Guarantee given for bank borrowings 99.45 77.64



(In Rs. Lacs)

Year ended

31.03.2011

Year ended

31.03.2010Description of Transactions

i) No amount has been written off or written back during the year in respect of debts due from or to related

parties

ii) Key Management Personnel : Mr. Sunil Gupta, Co-Chairman and Managing Director

Remuneration vide Note 19 (5)

i) Transaction with related parties other than stated above


83

20. Contingent Liabilities (In Rs. Lacs)

Year ended

31.03.2011Year ended

31.03.2010

S.No. Dscription of Contingent Liability

Estimated AmountIndication of

UncertaintyPossible Recovery

if Liability Arises

a)

b)

c)

d)

Guarantees issued by the banks on

behalf of the Company

Tax Demands Contested in Appeals :

i) Service Tax*

ii) Income Tax

iii) Central Sales Tax

Other Claims against the Company

not acknowledged as Debts.

Export obligation on account of

Imports.

65.05

1917.52

157.49

21.65

228.38

8.14

59.95

1383.94

82.39

21.65

220.40

62.05

Performance or

Non-performance of

various parties

All are disputed

before concerned

authorities. The

company is advised

that the cases are

likely to be disposed

off in favour of the

Company.

-do-

-

Nil

Nil

Nil

Nil

-

-

* includes penalty & Interest of Rs.1142.95 lacs.



84


21. Other Notes (In Rs. Lacs)

1 Estimated amount of contracts remaining to be executed on capital

and not provided - -

2 CIF Value of Imports

Capital Goods - -

3 Expenditure in foreign currency (on cash basis)

Expenditure on foreign staff 3.52 16.83

Foreign Travel 4.20 1.24

4 Earnings in foreign exchange

Sale of software and services 0.34 0.54

Education & Training 3.39 Nil

5 Directors Remuneration

a) Mr. N R Ganti

Salaries - 20.00

Benefits - 0.28

b) Mr. Sunil Gupta (*)

Salaries 69.61 6.37

Benefits 8.00 0.55

Total expensed to Profit & Loss Account 77.61 27.20

Total Director’s Remuneration 77.61 27.20

6 Number of Equity shares used in computing Earnings per share

Basic 32,325,000 25,399,452

Diluted 37,951,000 27,852,849

Year ended

31.03.2011

Year ended


Chairman and Managing Director (Resigned on 30.11.2009)

Co-Chairman and Managing Director (Appointed on 26.02.2010)

(*) includes Rs. 38.82 Lacs being remuneration paid to Mr. Sunil Gupta, Co-Chairman & Managing Director, for the

period 28th September 2010 to 31st March 2011 which is subject to the approval of the Central Government.


85


(In Rs. Lacs)22. Segment Results

Year ended

31.03.2011

Year ended

31.03.2010

A. Primary Segment (By Business Segment)

1 Segment Revenue

a. Software Devl. & Services 2,581.75 3,428.28

b. Education & Training 1,232.93 1,151.50

c. E-Governance 124.00 801.23

Total 3,938.68 5,381.01

Less Inter segment sales - -

Net Sales 3,938.68 5,381.01

2 Segment Results

Profit / (Loss) before Tax and Interest from each segment

a. Software Devl. & Services (379.01) (22.48)

b. Education & Training 100.78 (0.51)

c. E-Governance 4.29 (120.20)

Total (273.94) (143.19)

Less :

i) Interest 53.91 108.94

ii) Other un-allocable expenses 655.07 1,940.06

iii) Un-allocable income (86.91) (132.10)

iv) Extra Ordinary Items - 49.35

Total Profit Before Tax (896.01) 2,109.44

3 Capital Employed


b. Education & Training 377.21 541.09

c. E-Governance 1,242.00 1,182.30

d. Un-allocated (69.11) (223.29)

Total Capital Employed (1,785.45) 2,144.72

B) Secondary Segment (By Geographical Segment)

Segment Revenue

Geographical Location

- India 1,773.93 2,477.76

- Rest of the World 2,164.75 2,903.25

Particulars


86

CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED MARCH 31, 2011 (In Rs. Lacs)



Particulars

A Cash flow from Operating Activities

Profit before tax and exceptional items (896.01) (2,060.09)

Adjustments for :

Depreciation 215.75 830.68

Interest 53.91 108.94

Interest Received (4.93) (7.79)

Exchange Fluctuation Difference 7.33 6.15

(Profit)/ Loss on sale of Assets / Assets Discarded 7.20 14.87

264.60 952.85

Operating Profit before working capital changes (631.41) (1,107.24)

Adjustments for :

Working Capital Loan

Trade and Other Receivables / Increase in

other Current Assets 187.41 401.30

Inventories 4.39 116.08

Trade and Other Payables (122.56) (67.90)

69.23 449.48

Cash Generated from Operations (562.18) (657.77)

Finance Charges (7.62) (9.59)

Exchange Fluctuation Difference (7.33) (6.15)

Direct Taxes Paid net of refund 189.94 40.93

189.65 25.19

Cash Generated from Operations before

exceptional items (372.53) (632.58)

Adjustments for exceptional items

Prior Period Adjustments/Transalation Difference 75.39 (1,089.35)

Provision for Doubtful debts 36.18 700.86

Provision for Dimunition in investments 120.99 740.85

Provision for Doubtful Advances 3.37 -

235.93 352.36

Net Cash from Operating Activities (A) (136.60) (280.21)

B Cash from Investing Activities

Purchase/ Acquisition of Fixed Assets (84.62) (48.79)

Fixed Assets Transition Differnce - (146.73)

Sale of Fixed Assets 3.77 9.81

Net cash used in investing activities (B) (80.85) (185.71)


87

CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED MARCH 31, 2011

Note:

1. Figures in brackets represents outflows

2. Previous year figures have been regrouped/restated wherever necessary

(In Rs. Lacs)



FRN No.: 001931S



N. R. Suresh

Partner

M.No. 21661

Place : Mumbai




Particulars

C Cash from financing activities

Proceeds from Issue of Share Capital / Share warrants - 1,249.88

Proceeds from Borrowings (net) 311.30 (597.97)

Working Capital Loan (24.24) (35.98)

Interest received 4.93 7.79

Interest Paid on Borrowings (46.29) (99.35)

Net cash used in financing activities (C) 245.70 524.36

Net increase in cash and cash equivalents

(A+B+C) 28.25 58.43

Cash and Cash equivalents at the beginning 223.97 165.54

Cash and Cash equivalents at the end 252.22 223.97

K.V. Sai Prasad


Mahesh Solanki

Additional Director

Sunil Gupta



88

601 & 602, No. 1-8-271, 272, 6th Floor, Ashoka Bhoopal Chambers,

Sardar Patel Road, Secunderabad - 500003.

www.sqlstar.com

PROXY FORM


Foilio No. : Client ID No.:DP ID No. :

I/We

of being

a Member/Members of SQL Star International Limted, hereby appoint Mr./Ms.

of or failing him / her, Mr./Ms. of

as my/our proxy to attend and vote for me/us on my/our behalf at the 24th Annual

General Meeting of the Company to be held on Friday, the 30th September, 2011 at 10.25 A.M. at Hotel NKM’s Grand,

6-3-563/31/1, Erramanzil, Somajiguda, Hyderabad - 500082 and at any adjournment thereof.

Signed by

Address

Signature

Note : The Proxy form duly completed must be deposited at the registered office of the Company not less than 48 hours

before the time for holding the meeting. A proxy need not be a member.

601 & 602, No. 1-8-271, 272, 6th Floor, Ashoka Bhoopal Chambers,

Sardar Patel Road, Secunderabad - 500003.

www.sqlstar.com

TWENTY-FOURTH ANNUAL GENERAL MEETING

ATTENDANCE SLIP


Foilio No. : Client ID:DP ID :

I hereby record my presence at the 24th AnnualGeneral Meeting of the Company :

Date

30th September, 2011

Time

10.25 A.M.

Venue

At Hotel NKM’s Grand, 6-3-563/31/1,

Erramanzil, Somajiguda, Hyderabad - 500082.

✄

✄

Affix

Re. 1/-

Revenue

Stamp

sql 24th a r 10-11 (5-9-11) part 1 (colour)

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