13TH ANNUAL REPORT 2009-10 - Bombay Stock …...INDIA Hyderabad Hyderabad Goa Goa Bangalore...

COMP-U-LEARN TECH INDIA LTD.

13TH

ANNUAL REPORT

2009-10

CONTENTS

Page No.

1. From the Chairman’s Desk 01

2. Company on Growth Track 04

3. Year Under Review 05

4. Company Details 06

5. Notice 07

6. Director’s Report 12

7. Corporate Governance 17

8. Management Discussion and Analysis 25

9. Financial Section 30

10. Standalone Statements 30

11. Consolidated Statements 41

12. Statements of Subsidiaries 47

13. Spry Resources India Pvt. Ltd. 47

14. ACE Bpo Services Pvt. Ltd. 62

15. CTIL Infrastructure Pvt. Ltd. 76

16. Compulearn Middle East FZC 88

17. Proxy Form 96

Comp-U-Learn Tech India Limited


FROM THE CHAIRMAN’S DESK:

Dear Members,

At the very outset, I wish to thank all of you for the formidable confidence reposed in Board of directors allalong for the past several years.

Today really a commemorable and landmark day in the history of your Company. It may not be SilverJubilee day, Golden Jubilee day but for us it is indeed greater than that. Till the end of Financial Year2008-09, the Company had just been sprawling with meager turnovers of Rs.2–6 crores for all theseyears. The Company remained for almost 12 years with low turnovers marked by poor growth.

The year under review, your Company has grown manifold. Company posted Consolidated turnover ofRs.28.46 crores and net profit of Rs.3.68 crores registering growth of 423% in turnover and 281.37% inNet Profit over the previous year. Hence, it is justified to declare this year as landmark year in the historyof the Company.

It is undoubtedly a moment of immense pleasure and pride for all of us for being part of this inspiringjourney, I wish to pronounce it. I hope you all will endorse my saying / pronouncement as inspiringjourney when you hear more about the financial performance and structural initiatives for the growth ofthe Company that took place during the year.

Before I dwelve on Financial performance and structural initiatives, I just take you round the briefbackground from where we really started this journey. In February 2008, just two complete Financialyears back, the present management took over control of the Company from the erstwhile Promoters.When we took over in February 2008, there were accumulated losses of Rs.6.70 cores as at 31st March,2008. Started from this deep down, it took us two full years to come out of red.

FINANCIAL PERFORMANCE:

Right from 1997, the year of incorporation till 2007-08 under the reins of erstwhile Management, theCompany witnessed hardly any growth. Turnovers during all these years were just single digit and lessthan Rs. 6 Crores.

The Financial year 2008-09 was really transitional year where we could not do much.

It is the year 2009-10 which has really paid us for our honest hard work and dedication for the past twoyears. During this year, we were able to build some group companies enabling company to have aconsolidated turnover and growth. During the year company posted Revenues at Rs.28.46 Crores andNet Profit at Rs.3.68 Crores. Further on standalone basis also our growth is Spectacular. Standalonebasis Revenues and Net profit for the year stands at Rs.14.31 Crores and Rs.2.18 Crores respectivelywhich represents growth of 163.54% in Revenues and 126% in Net Profit.

STRUCTURAL INITIATIVES:

Your Company was originally into business of software development and education training. During thepast two years, our focus was shifted to e-governance solutions to Government departments of State andCentral Governments. During the year, we were able make a dent in e-governance business market andmade headway in the process with good order book position from Goa Government and other StateGovernments.

To broaden base of our operations and increase geographical presence so as to become global player,the following growth initiatives were undertaken:

a) The Company has acquired 55% stake in M/s Spry Resources India Pvt Ltd – a Hyderabad basedSoftware Company in Similar line to have increased strengths and leverages.

b) Acquired 60% stake in M/s ACE BPO Services Pvt Ltd - a Healthcare & Insurance BPO Company toforay into BPO space.

c) Acquired 51% stake in Comp-u-learn Middle East FZC in Dubai for Spearheading growth drive fordevelopment of business in Middle East and African Countries.

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d) Acquired 100 % stake in Astus Technologies Inc USA to have presence in USA and increase thebusiness scope through further acquisitions in USA and Europe.

e) Floated 100% subsidiary in Hong Kong as a multipurpose vehicle for increasing our footprints inGlobe, business development and leverages and mobilizing resources requisite to aid growthmomentum.

ORGANISATION STRUCTURE, HUMAN RESOURCES AND INFRASTRUCTURE

Our strategic thrust is founded on our ability to continuously invest in existing and new capabilities - OurPeople, Infrastructure and Technology. As an offshoot of this, our main assets today is pool of diversecore competencies in different segments and diversified areas of business. As such, our Organisationstructure has been so designed and built over a period of time enabling the company to pursue newavenues of growth without diluting focus on existing line of business.

SHAPING COMP-U-LEARN OF TOMORROW:

MAJOR GROWTH DRIVERS:

1. E-GOVERNANCE SPACE:

In order to broad-base Project execution Skills, Strengths, maximize business leverages, yourCompany has during the year, added great feather in its net e-governance space, by acquisition of55% stake in M/s Spry Resources India Pvt Ltd, a player in this space.

Like a thunder bolt as the aid of our growth, e-district, a major e-governance initiative taken by theMinistry of Communication and Information Technology (MCIT) as part of National e-governanceplan (NeGP) of Government of India. NeGP vision aims at creating a citizen centric environment forgovernance. To implement the vision of NeGP, twenty seven Central, State and integrated MissionMode projects (MMPS) along with eight support components have been identified and approved toenable and facilitate rapid introduction of e-governance in the country, with focus on service deliv-ery.

Highlights of this e-governance initiative of the Government is funds allocated towards this mission.e-Goverance spend by Indian Government on NeGP plan is Rs. 46,000 Crores. Out of this, even ifsmall pie we get, would be sufficient enough to take our Company to greater heights. We areconfident of definite market share in the segment and your company will have promising future.

2. DIVERSIFICATION PLANS:

a) SOLAR POWER PROJECT

Your company is aggressively making strides with a mission to become a player in the Infrastructuresegment with power generation as its main focus in this segment. The Company envisages to setup on standalone basis and its name 5 MWS Solar Power Project under the Scheme of New gridconnected Solar Photo voltaic projects – phase 1 of Jawaharlal Nehru National Solar Mission(JNNSM). NTPC Vidyut Vyapar Nigam Ltd (NVVN) is a Nodel agency for inviting proposals fromprivate players for setting up of grid connected Solar PV Projects for purchase of power for a periodof 25 years. The tentative outlay for the Solar Power project is estimated at Rs.100 Crores whichproposed to be met by the company partly by equity, partly by loans from Banks or FinancialInstitutions and partly by Government subsidy. The financial details are being worked out and willbe announced shortly.

b) THERMAL POWER PROJECT:

As a major growth initiative under infrastructure Segment Company plans to set-up 135 x 3 – 405MWS coal based Thermal Power Plant in two phases at a project outlay tentatively of Rs.2008.80Crores. The project is proposed to be set-up by M/s CTIL Infrastructure Pvt Ltd, a 100% subsidiaryof the Company and project location is proposed at JIRAL Village, Bhuban Block, KamakshanagarTahsil, Dhenkanal District, Orissa. Combined application submitted to high powered committee ofGovernment of Orissa for single window clearance of the project is already in advance stage of

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clearance. Single window clearance for the project is awaited.

3. CHANGE OF NAME A support initiative.

As part of growth strategy and in the wake of several growth initiatives, Board of Directors feel it isimperative to change the name of the company from M/s Comp-u-Learn Tech India Ltd to M/s CTILLtd so as to give true picture of what the company is today and what would it be tomorrow. Necessarysteps in this regard have already been initiated.

4. GLOBAL PRESENCE:

The Company has already made its strong presence in the Industry in India & US. It is an initiativeto shape the Company as global player. As part of this, the company acquired 100% stake in M/sASTUS Technologies INC, USA, 51% stake in Dubai based Company and registered 100%subsidiary M/s CTIL Hong Kong Ltd in Hong Kong for the purpose of increasing its foot prints in theGlobe. Company further envisages to do so more in UK and Europe in future.

Journey so far we made is very small and what we need to travel is a lot in our mission. Hence I seekfrom all of you more support, co-ordination in the years to come to attain our goals. It is indeedhonour and pride for all of us to be with the company at this defining moment and personally for me,it is honour and privilege to be at the helm of affairs.

Truly yours,

Sd/-PVV SATYANARAYANACHAIRMAN

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COMPANY ON GROWTH TRACK:

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YEAR UNDER REVIEW:

Growth at a Glance: Rs. In LakhsPARTICULARS STANDALONE

FY 2010 FY 2009 GROWTH IN %A. Financial Performance

i. Income 1431.03 543.63 163.23ii. Operating Profit (PBDITA) 312.07 146.56 112.91iii. PAT 218.04 96.49 125.96iv. Return on Capital in % 11.86 7.42 59.84

B. Financial Position:v. Fixed Assets (Gross Block) 374.13 373.56 ——vi. Net Current Assets 1078.52 647.10 66.67vii. Share Cpital 1850.00 1300.00 42.30viii. Reserves & Surplus 527.50 225.00 134.44ix. Secured Loans 67.76 —— 100.00x. Networth 2377.50 1525.00 55.90xi. Investments in subsidiaries 875.04 —— 100.00

OPERATIONAL FRONT:HUMAN RESOURCES:Employees Strength has been substantially increased.GEOGRAPHICAL PRESENCE IS INCREASED AS FOLLOWS:

YEAR 2009 YEAR 2010

INDIA Hyderabad HyderabadGoa Goa

Bangalore BangaloreChennai Chennai

MumbaiU.S.A. One Office Two OfficesU.K. — One Representative OfficeMIDDLE EAST DUBAI — Dubai – One CentreHONG KONG — One Representative Office

Details of the Companies acquired and made as subsidiaries:

During the Financial Year 2008-09 —— NILDuring the Financial Year 2009-10:

INDIAN COMPANIES:

1. Spry India Resources Pvt Ltd —— 55% Stake & Holding2. Compulearn Middle East FZC —— 51% Stake & Holding

OVERSEAS COMPANIES3. CTIL Hongkong Limited —— Registered as wholly

owned subsidiary4. Compulearn Middle East FZC —— 51% Stake & Holding5. Astus Technologies INC —— 100% Stake & Holding

INDIA – SPECIAL OBJECTIVE VEHICLES:6. CTIL Infrastructure Limited is formed as wholly owned subsidiary of the Company with diversification

plans to set up 405 MWS Coal fired Thermal Power plant.7. CTIL Media Pvt Ltd. Is formed as wholly owned subsidiary with diversification plan to foray into media

and Entertainment. Initially it was envisaged to go in for Film Production on Joint Venture basis inpartnership with well-known, and established players in the Industry. The Plans are put on hold forthe time being till the successful execution and implementation of the power Project.

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BOARD OF DIRECTORSMr.P.V.V.Satyanarayana - ChairmanMr.K.S.Rao - Managing DirectorMr. P. Obul Reddy - Executive DirectorMr.Gottipati S.S.prasad - DirectorMr.P.Jagadeesh Babu - DirectorMr.V.Suresh Babu - DirectorMr.Baljinder Sharma - DirectorMr.Raj Kosaraju - DirectorMr. Bhavani Prasad Kale - DirectorMr. P. Gruru Krishna - Director

AUDITORSM/s.Balaji Viswanath & Co.Chartered Accountants202, Krishnaveni ArcadeBhagyanagar Colony,Kukutpally,Hyderabad-500072Ph: 040-23161679BANKERS : AXIS Bank

Srinagar Colony, Hyderabad

UCO Bank,62, M.G.Road, Secunderabad

HDFC Bank,Banjara Hills, Hyderabad.

Standard Chartered Bank,Secunderabad.

REGISTRAR AND SHARE TRANSFER AGENTSM/s. Big Share Services Private Limited,G-10, Left Wing, Amrutha Ville,Opp.Yashodha Hospital,Somajiguda, Raj Bhavan Road,Hyderabad-500082Ph: 040-23374967Fax: 040-23370295

REGISTERED OFFICE

4th Floor, My Home Tycoon,Life Style Building, Greenlands,Begumpet, Hyderabad-500016

LISTED ATTHE BOMBAY STOCK EXCHANGE LIMITED

Date, time and Venue of the13th Annual General Meeting

Thursday, the 30th September, 2010at 9.00 a.m.

Royal Pavilion, Ameerpet, Ground FloorConference Hall, Hyderabad - 500 016.

Book Closure :26.09.2010 to 30.09.2010

(Both days inclusive)

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NOTICE OF THE THIRTEENTH ANNUAL GENERAL MEETING

Notice is hereby given to all the members of the Company that the Thirteenth Annual GeneralMeeting of the Company will be held on Thursday, the 30th September, 2010 at 9.00 A.M. at RoyalPavilion, Ground Floor, Conference Hall, Ameerpet, Hyderabad – 500 016.

ORDINARY BUSINESS:

01. To receive, consider and adopt the Annual Accounts consisting of Balance Sheet and Profit andLoss Account as on 31st March 2010, together with the notes and schedules thereto and the reportsof Directors and Auditors thereon.

02. To appoint a Director in place of Mr. K. S. Rao who retires by rotation and being eligible offershimself for reappointment.

03. To appoint a Director in place of Mr. K. Bhavani Prasad who retires by rotation and has not offeredhimself for reappointment.

04. To appoint a director in place of Mr. V. Suresh Babu who retires by rotation and being eligible offershimself for reappointment.

05. To appoint a director in place of Mr. P Jagadeesh Babu who retires by rotation and being eligibleoffers himself for reappointment.

06. To appoint Auditors and to fix their remuneration. The retiring auditors M/s Balaji Viswanath & Co,.Chartered Accountants, Hyderabad being eligible offer themselves for re appointment.

SPECIAL BUSINESS:

07. To consider and, if though fit, to pass with or without modification(s) the following Resolution anOrdinary Resolution.

“RESOLVED that Mr. P Guru Krishna, who was appointed w.e.f.28.10.2009 as Additional Director ofthe Company and holds office up to date of this Annual General Meeting under Section 260 of theCompanies Act, 1956 and in respect of whom the Company has received a notice in writing from aMember proposing his candidature for the office of the Director, be and is hereby appointed as aDirector of the Company whose office shall be liable to determination through retirement by rotation.

08. To consider and, if though fit, to pass with or without modification(s) the following Resolution asSpecial Resolution.

“RESOLVED that pursuant to Section 21 and other applicable provisions, if any, of the CompaniesAct 1956, and subject to approval of Central Government i.e. Registrar of Companies, AndhraPradesh, name of the company as has been made available to the Company by the Registrarof Companies, Andhra Pradesh vide its letter dated 03.03.2010 be and is hereby changed from“COMP-U-LEARN TECH INDIA LTD TO CTIL LTD” and further Mr. K.S. Rao, Managing Director,Mr. P.V.V. Satyanarayana Director of the Company are severally authorized to sign and executeall such documents, deeds, letters, affidavits, etc., and to do such things or perform such acts as arerequired in this regard and to file such returns / forms with concerned authorities in this regard”.

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

(a) RESOLVED that pursuant to the provisions of Section 81(1A) and other applicable provisions,if any of the Companies Act, 1956 (including any amendments thereto or re-enactment thereof)and the provisions of the Foreign Exchange Management Act, 2000 (FEMA) Foreign ExchangeManagement (Transfer or issued of Security by a Person Resident Outside India) Regulations,2000, Issue of Foreign Currency convertible Bonds and Ordinary Shares (Through DepositoryReceipt Mechanism) Scheme, 1993 as amended, the Securities and Exchange Board of India(SEBI) Regulations and in accordance with the rules, regulations, guidelines, notifications,circulars and clarifications issued thereon from time to time by Government of India (GOI), the

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Reserve Bank of India (RBI), SEBI and / or any other competent authorities and the enablingprovisions of the Memorandum and Articles of Association of the Company, the ListingAgreements entered into by the Company with the Stock Exchanges on which the Company’sshares are listed and subject to necessary approvals, permissions, consents and sanctions ofconcerned statutory and other authorities and subject to such conditions and modifications asmay be prescribed by any of them while granting such approvals, permissions, consents andsanctions and which may be agreed to by the Board of Directors of the Company (hereinafterreferred to as the “Board”, which terms shall include any committee thereof) consent of theCompany be and is hereby accorded to the Board to offer, issue and allot (including withprovisions for reservation on firm and / or competitive basis, of such part of issue and for suchcategories of persons including employees of the Company as may be permitted) either inIndia or in the course of International offering(s) in one or more foreign markets, such numberof Equity Shares with or without a green shoe option. American Depository Receipts (ADRs)Global Depository Receipts (GDRs), in registered or bearer from. Qualified InstitutionalPlacement (as defined by the SEBI (DIP) Guidelines, 2000) pursuant to a Qualified InstitutionsPlacements, as provided under Chapter XIIIA of the SEBI DIP Guidelines (QIP) and / or securitieswith or without detachable warrants with right exercisable by the warrant holders to convert orsubscribe to Equity shares (all of which are hereinafter collectively referred to as “Securities”)or any combination of Securities, in one or more tranches, whether rupee denominated ordenominated in foreign currency, to any eligible person, including foreign / resident investors(whether Institutions, incorporated bodies, mutual funds, individuals or otherwise). ForeignInstitutional Investors, Indian and / or Multilateral Financial Institutions, Mutual Funds, Non-Resident Indians stabilizing agents, and / or any other categories of investors, whether they beholders of shares of the Company or not (collectively called the “Investors”) through publicIssue (s) of prospectus in India or outside India, a qualified Institutional placement, a rightsoffering, private placement(s) / preferential allotment in India or outside India, or a combinationthereof at such time or times, at such price or prices, at a discount or premium to market priceor prices in such manner and on such terms and conditions as may be deemed appropriate bythe Board at its absolute discretion including the discretion to determine the categories ofInvestors to whom the offer, issue and allotment shall be made to the exclusion of all othercategories of Investors at the time of such offer, issue and allotment considering the prevailingmarket conditions and other relevant factors and wherever necessary in consultation withLead Managers, up to an amount not exceeding Rs.500 Crores (Rupees Five hundred Croresonly) either in foreign currency or Indian Rupees inclusive of such premium as may bedetermined by the Board, in any convertible foreign currency, as the Board at its absolutediscretion may deem fit and appropriate.

b) RESOLVED FURTHER THAT the Board be and is hereby authorized to issue and allot suchnumber of equity shares as may be required to be issued and allotted upon conversion of anySecurities referred to in paragraph (a) above or as may be necessary in accordance with theterms of the offering, all such shares being pari passu with the then existing shares of theCompany in all respects, as may be provided under the terms of the issue and in the offeringdocument.

c) RESOLVED FURTHER THAT such of these Securities to be issued as are not subscribed maybe disposed of by the Board to such persons and in such manner and on such terms as theBoard in its absolute discretion thinks fit in accordance with the provisions of law.

d) RESOLVED FURTHER THAT the issue to the holders of the securities with equity sharesunderlying such securities shall be inter alia, subject to suitable adjustment in the number ofshares, the price and the time period, etc., in the event of any change in the equity capitalstructure of the Company consequent upon any merger, amalgamation, takeover or any otherre-organisation or restructuring in the Company.

e) REOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment ofSecurities or Instruments representing the same, as described in paragraph (a) above, the

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Board be and is hereby authorized on behalf of the Company to do all such acts, deeds,matters and things as it may at its absolute discretion deem necessary or desirable for suchpurpose, including without limitations the entering into of underwriting, marketing and Institution/ trustees / agents and similar agreements / and to remuneration the managers, underwritersand all other agencies / Intermediaries by way of omission, brokerage, fees and the like as maybe involved or connected in such offerings of Securities, with power on behalf of the Companyto settle any questions, difficulties or doubts that may arise in regard to any such issue orallotment as it may in its absolute discretion deem fit.

f) RESOLVED FURTHER THAT for the purpose aforesaid, the Board be and is hereby authorizedto settle all questions, difficulties or doubts that may arise in regard to the issue, offer orallotment of Securities and utilization of the issue proceeds including but without limitationto the creation of such mortgage / change under Section 293 (1) (a) of the said Act in respectof the aforesaid Securities either on pari passu basis or otherwise or in the borrowing of loansas it may in its absolute discretion deem fit without being required to seek any further consentor approval of the Member or otherwise to the end and intent that the Members shall bedeemed to have given their approval thereto expressly by the authority of this resolution.

g) RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or anyof the powers herein conferred to any committee of Directors or the Chairman or any otherOfficers / Authorised Representatives of the Company to give effect to the aforesaid resolution.

Date : 04.09.2010 For COMP-U-LEARN TECH INDIA LIMITEDPlace: Hyderabad Sd/-

K.S. RAOMANAGING DIRECTOR

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NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A

PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A

MEMBER OF THE COMPANY. THE PROXY FORM IS ENCLOSED HEREWITH. PROXY FORM IF

INTENDED TO BE USED, IT SHOULD BE RETURNED TO THE COMPANY NOT LESS THAN 48

HOURS BEFORE THE TIME FOR HOLDING THE ANNUAL GENERAL MEETING.

2. The Register of Members and the Share Transfer Register will remain closed from 26th September,

2010 to 30th September, 2010 (both days inclusive) in terms of the provisions of section 154 of the

Companies Act, 1956.

3. The members are requested to intimate promptly any change in their address to the share tranfer

agent Big share Services Private Limited, G - 10, Left Wing, Amrutha Ville, Opp: Yashodha Hospital,

Somjiguda, Raj Bhavan Road, Hyderabad - 500 082, Ph No: 040 - 23374967, Fax No: 040 -

23370295.


EXPLANATORY SATEMENTS PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 ANDCLAUSE 49 OF THE LISTING AGREEMENT.

ITEM NO. 8

As Part of the overall growth Strategy company has expanded its operations in its core activitysoftware development, E-governance solutions, IT services, IT enabled services etc. During theyear under review the company has acquired 60% stake in M/s ACE BPO Services Pvt Ltd –Hyderabad based Health Care BPO Company to expand our operations into Call Centre andHealth Care BPO and other BPO segment.

Further, during the year under review Company also made few more acquisitions of the companiesin Core competent areas so as to strengthen and broad base the operational activities of theCompany and also to increase the geographical presence of the company across the Globe. Apartfrom the core areas. Company plans to set-up a Power Project as part of growth strategy anddiversification plan. In a bid to ensure that the Company is recognized as a Global player withbroad based and diversified activities, the Board of Directors proposes to change the name of theCompany from M/s Comp-u-Learn Tech India Ltd to M/s CTIL Ltd. The proposed name is alsoavailable for adoption and change.

Pursuant to Section 21 and other applicable provisions of the Companies Act 1956 Change of thename requires approval of the Members by Special Resolution passed in the General Meeting ofthe Company.

Hence the proposed Special Resolution at Item No:8 in the Notice accompanied herewith isrecommended by the Board of Directors for passing by the Members at the ensuing Annual GeneralMeeting.

None of the Directors are concerned / or interested in any way in the above said Resolution, exceptto the extent of their shareholding.

ITEM NO. 9

The Company presently carries on Business of software development, e-governance solutions, ITand IT enabled services etc. In additional to the above, the Company plans to foray intodiversification with objects of Power Generation, Transmission, Distribute, buy, sell, acquire, handle,develop, act as a agent, broker, representative, consultant, collaborator or otherwise to deal in allsorts / kinds of power. Accordingly Company plans to set-up 405 MWS Coal fired Thermal PowerPlant in the State of Orissa. Setting up a Power Plant involves huge Capital Investment which theCompany is confident to raise financial resources through partly equity capital and partly borrowingsfrom Banks / Financial Institutions. The Company, also, in order to enhance its global competitiveness,and the ability to compete with the peer group in domestic and international markets, needs tostrengthen its financial position by augmenting long term resources. The Financial resourcesrequired for all the above purposes would be met through equity share capital which can be raisedby way of issue or placement of equity shares on Preferential basis, QIP (Qualified InstitutionalPlacement programme), FPO or such other Instruments as are allowed by the Guidelines by SEBI.Hence authorization to the Board of Directors by the Members through Special Resolution is required

The proposed special resolution seeks the enabling authorization of the Members of the Companyto the Board of Directors (Board), without the need of any further approval from the Members, toissue/ place equity shares either on preferential issue basis to the promoters, persons other thanpromoters, FPO, or such other instruments as provided here in below or to undertake the QualifiedInstitutional Placement (“QIP”) with the Qualified Institutional Buyers (“QIB”), in accordance with theprovisions of Chapter XIII – A of the SEBI (Disclosure and Investor Protection) Guidelines, 2000(“SEBI DIP Guidelines”) .

Pursuant to the above, the Board may, in one or more trenches, issue and allot equity shares/fullyconvertible debentures/partly convertible debentures/non convertible debentures with warrants/

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nay other securities (other than warrants), which are convertible into or exchangeable with equityshares on such dates as may be determined by the board but not later than 60 months from the dateof allotment (collectively referred to as “QIP Securities”).

The said QIP by the Board shall be subject to provisions of the SEBI DIP Guidelines (as amendedfrom time to time) including the pricing, which will not be less than the average of the weekly highand low of the closing prices of the related shares quoted on the stock exchanges during the twoweeks preceding the Relevant Date. The Relevant Date for the determination of applicable price forthe issue of the QIP Securities shall be the date of meeting in which the Board of the Companydecide to open the proposed issue or in case of securities which are convertible into or exchangeablewith equity shares at a later date, the date on which the holder of such securities becomes entitledto apply for the said shares, as the case may be. For reasons aforesaid, an enabling resolution istherefore proposed to be passed to give adequate flexibility and discretion to the Board to finalizethe terms of the issue. The securities issued pursuant to the offering would be listed on the Indianstock exchanges.

Section 81(1A) of the Companies Act, 1956 and Listing Agreement entered with the Stock exchanges,provide, inter alia, that where it is proposed to increase the subscribed share capital of the companyby allotment of future shares, such future shares shall be offered to the persons who on the date ofthe offer are holders of the equity shares of the company, in proportion to the capital paid-up onthose shares as of that date unless the Members decide otherwise.

The Special Resolution seeks the consent and authorization of the Members to the Board of Directorsto make the proposed issue of Securities, in consultation with the Lead Managers, Legal Advisorsand other intermediaries and in the events it is decided to issue securities convertible into equityshares, to issues to the holders of such convertible securities in such manner and such number ofequity shares on conversion as may be required to be issued in accordance with the terms of theissue, keeping in view the then prevailing market conditions and in accordance with the applicableprovisions of rules regulations or guidelines.

The Board of Directors accordingly recommends the resolution set out at Item No. 9 of theaccompanying Notice for the approval of the Members.

None of the Directors of the Company, in anyway, concerned or interested in the said resolution,expcet to the extent of their shareholding.

Date: 04-09-10 For COMP-U-LEARN TECH INDIA LIMITEDPlace: Hyderabad

Sd/-K.S.RAO

MANAGING DIRECTOR

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DIRECTOR’S REPORTToThe MembersYou Directors present their Thirteenth Annual Report together with the Audited Accounts for the periodended 31st March, 2010.

FINANCIAL RESULTS:The Financial Results for the period ended 31st March, 2010 are summarized below:

(Rs.in Lakhs)

Particulars Consolidated for Standalone for Standalone for2009-10 2009-10 2008-09

Income from Operations 2846.10 1431.03 543.63

Expenditure 2141.04 1118.95 397.06

Operating Profit (PBDITA) 705.06 312.08 146.57

Interest 70.89 —— ——

Depreciation 120.76 92.68 27.65

Profit before Tax 513.41 219.39 118.92

Provision for Income Tax 2.22 —— ——

F.B.T. —— —— 1.03

Deferred Tax 1.35 1.35 21.39

Profit / Loss after Tax but beforeextraordinary items 509.83 218.04 96.49

Extraordinary items – Minority Interest 141.84 —— ——

Net Profit carried to Balance Sheet 367.99 218.04 96.49

CONSOLIDATED PERFORMANCE:Your Directors are very happy to present the outstanding performance that the Company has faredduring the year under review. Your Company has posted a turnover of Rs. 2846.10 lakhs. and net Profitof Rs.367.99 lakhs. As the Company has been on growth mode, the Working Capital needs would bemore in a bid to attain desired growth levels and hence your Directors were of the view that Profits shouldbe ploughed back into the system so as to take care of the working capital needs.

STANDALONE PERFORMANCE:Your Directors feel proud to report that Company has achieved revenues of Rs.1431.03 lakhs and netProfit Rs.218.04 lakhs as against revenues of Rs.543.63 lakhs, net Profit of Rs.96.49 lakhs for theprevious year thus registering a growth of 163.23% in revenues and 125.97% in profit. Further, operatingprofit margin for the year was 21.80% as against 26.96% in the previous year. There has been slightreduction in margins due to increase in operating cost. As it was inevitable to complete the execution oforders on accepted delivery schedules, the operating costs gone up little more beyond expected levelswhich brought down the profit margins during the year. However the level of growth that the companyhas registered is really remarkable and your Directors are confident that the same growth will be maintainedin future also.

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RESEARCH AND DVELOPMENT:

Your Directors are happy to note that during the year the company has spent sizable amount towards R& D in Pharmaceutical sector for the purpose of coming out with unique products and solutions forfacilitating operational efficiency , effective inventory management and complete financial control, forthe sector. We hope that this R & D initiative will yield good results and boost up our revenues in thecoming years.

STRATAGIC ACQUISITIONS, ALLIANCES AND SUBSIDIARIES:- Major growth initiatives:

In line with the company’s strategy of In organic growth, during the year we have acquired 55% stake inM/s SPRY RESOURCES INDIA PVT LTD – Hyderabad based Technology oriented product basedCompany with focus on software development and E-Governance Projects. Your Directors are of thestrong opinion that this acquisition will be strong vehicle driving the future growth of the Company and itis falling in our core competency area of E-Governance solutions to the Government Departments.

As part of growth initiative through diversification into different activity in software line it self, companyhas acquired 60% stake in M/s ACE BPO SERVICES PVT. LTD. Hyderabad based Health care andInsurance BPO Company with sizable Revenues and good talent based human resources. This willprovide ample scope of growth for the Company in BPO segment in the years to come.

During the year under review, Company has acquired 51% stake in M/s Shouk Investement Consultancy,Dubai for the purpose of business development in Middle east and African countries. Name of the firmhas been changed to M/s COMPULEARN MIDDLE EAST FZC.

To increase global presence and talent pool, the company made acquisition of 100% stake in M/sASTUS TECHNOLOGIES INC,. USA and made it as wholly owned subsidiary which will be used ascatalyst and vehicle to drive the in organic growth of the company in USA & Europe.

Towards the globalization through our presence at every nook and corner of the globe, the companyformed a wholly owned subsidiary by name M/s CTIL Hong Kong Limited – an initiative with twin objectivesto propagate and development of business in Hong Kong, Singapore, Malaysia and neighboring nationson one hand and to mobilize financial resources through this vehicle for funding the midterm and longterm needs of the group.

DEPOSITS:The Company has not accepted any deposits from the public during the year under review.

AUDITORS:M/s Balaji Viswanath & Co, chartered Accountants, Hyderabad, Statutory Auditors of the Company willretire at the conclusion of this Annual General meeting. However, being eligible they offer themselves forreappointment and confirmed that their reappointment will be within the limits specified under section224(1B) of the Companies Act, 1956.

AUDITORS REPORT:The Auditors comments on the company’s accounts for the year ended 31st March, 2010 are selfexplanatory in nature and do not require any explanation as per the provision of section 217 (3) of theCompanies Act. 1956.

INSURANCE:All the fixed Assets and movable assets of the company are adequately insured.

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CHANGES IN THE SHARE CAPITAL:The Company has got only one class of shares i.e. equity shares. The Authorised Share Capital of theCompany presently stands at Rs.50.00 Crores. Paid-up share capital of the company stands atRs.19.15 Crores.

a. 35,00,000 Equity Share Warrants of Rs.10/- each at an issue price of Rs.17.50 per warrant issuedearlier on 16.04.2008 on preferential issue basis to the persons other than Promoters were convertedand allotted on 15.10.2009 into 35,00,000 Equity shares of Rs. 10 each.

b. 20,00,000 Equity Share Warrants of Rs.10/- at an issue price of Rs.12/- per warrant issued andallotted on 30.09.2008 on preferential issue basis to the promoters of the Company were convertedinto 20,00,000 equity shares of Rs. 10 each.

c. 6,55,000 Equity shares of Rs.10/- at a premium of Rs.17/- per share issued and allotted on to thepersons other than Promoters on preferential issue basis.

DIRECTORSMr. P Guru Krishna, who was appointed as Director during the year on 28-10-2009 and holds office uptothe date of this Annual General Meeting and in respect of whom the Company was received a notice inwrting from Member proposing his candidature for the office Director proposed to be appointed asDirector of the Company.

DIRECTOR’S RESPONSIBILITY STATEMENT:

Pursuant to the requirements of Section 217 (2AA) of the companies Act,. 1956, it is hereby confirmed:

(a) that in preparation of annual accounts for the year ended 31st March, 2010, the applicableaccounting standards have been followed and that no material departures have been madefrom the same.

(b) that the Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of the profit ofthe Company for year ended on that day.

(c) that the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities:

(d) that the Directors have prepared the annual accounts for the year 31st March, 2010 on agoing concern basis:

PARTICULARS OF EMPLOYEES:

In accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies(Particulars of Employee) Rules, 1975, the particulars of Employees of the Company are – NIL.

CONSERVATION OF ENERGY ETC, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION,FOREIGHN EXCHANGE EARNINGS & OUTGO.

Information required under section 217 (1)(e) of the companies Act 1956 read with the Companies

(Disclosure of particulars in the report of the Board of Directors) Rules 1988 are provided herein below:

Conservation of Energy:

Some of the energy conversation initiatives.

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a. Walls and Roofs are properly insulated.

b. Turning off all lights in all the work places when not in use.

c. Turning of f the Air Conditioners during non peak hours and holidays.

d. Effective management of ventilation to ensure good air quality.

e. Installation of energy efficient lighting.

f. Using energy efficient computers and equipment,.

A. Technology Absorption – The Company has constantly upgraded its technology to the latest inthe Global Market, for both its training centers and software development.

B. Research and Development : Your Company is constantly working to build a state of Art

C. Research and Development Centre to enhance the quality of its products.

D. Benefits derived from such Research and Development: As the customer uses the end product,the benefit from the customer satisfaction will be ultimately passed on to the company in termsof increase in sales

E. Foreign Exchange earnings and outgo (Rs. in Lakhs)

2009-10 2008-09

Foreign Exchange Earnings 1383.16 486.11

Foreign Exchange Outgo 45.55 NIL

SUBSIADIARY COMPANIES:Company has got the following companies as subsidiaries:

1. Spry Resources India Pvt Ltd2. ACE BPO Services Pvt Ltd3. Compulearn Middle East FZC4. CTIL Infrastructure Pvt Ltd5. ASTUS Technologies INC, USA6. CTIL Hong Kong Ltd7. CTIL Media Pvt LtdAs required under section 212 of the Companies Act, 1956 financial statements of subsidiarycompanies mentioned at 1 to 4 above are enclosed with this Annual Report along with Directorsreport and Auditor’s Report on these Financial statements. As the operations of the subsidiarycompanies mentioned at 5 – 6 above have not commenced, financial Statements of these twocompanies are not enclosed with this Annual Report. Further, the operations and business ofsubsidiary company – CTIL Media Pvt Ltd are put on hold for the time being as there was nobusiness plan conceived yet.

CONSOLIDATION OF FINANCIAL STATEMENTS:The Consolidated Financial Statements, as prescribed by Accounting Standards 21 read with 23issued by the Institute of Chartered Accountants of India, are Annexed to this Annual Report.

CORPORATE GOVERNANCE:The report on the corporate governance is annexed which forms a part of this report.MANAGEMENT DISCUSSION AND ANALYSIS:Management Discussion and Analysis for the year under review as stipulated under Clause 49 of theListing Agreement with the Bombay Stock Exchange is presented as a separate Section forming part of

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this report.PERSONNEL:

Relations with the employees continued to be cordial throughout the year. Your Directors place onrecord the appreciation for the efforts, dedication and active participation of employees in various initiativesduring the year under review:

ACKNOWLEDGEMENTS:

We express our Heart felt gratitude and thanks to our Company’s Bankers, Shareholders, customers andvarious Central and State Government Agencies and Local authorities for their continued support duringthe year. We also wish to place on record our sincere appreciation of unstinted support and co-operationextended by all the personnel at various levels of the Organization. Our growth was made possible bytheir hard work, solidarity, co-operation and support all along so far and we look forward for the same inthe years to come and we wish to maintain whole heartedly continuing relationship with all the above.

Place: Hyderabad For and on behalf of the Board of Directors ofDate : 04.09.2010 COMP-U-LEARN TECH INDIA LTD

Sd/- Sd/-P.V.V. Satyanarayana K.S. Rao

Chairman Managing Director

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REPORT ON CORPORATE GOVERNANCE

Corporate Governance is the application of best management practices, compliance of law andadherence to ethical standards to achieve the Company’s objective of enhancing Shareholders’value and discharge of social responsibility. The Corporate Governance structure in the companyassigns responsibilities and entrusts authority among different participants in the organization viz.the Board of Directors, the Senior Management, Employees etc. The Company had adoptedCorporate Governance and disclosure practices keeping in view the Company’s compliances arein conformity with the clause 49 of the Listing Agreement of the Stock Exchanges, as applicable.Your directors present the Company’s Report on corporate Governance as under:

MANDATORY REQUIREMENTS:

(1) Company’s Philosophy on Corporate Governance:

Corporate governance is a synonym for sound management, transparency and disclosure. TheCompany’s philosophy of corporate governance envisages the highest level of transparency,accountability and equity in all its dealings with shareholders, employees, government and lenders.The Company’s guiding principles are focused to achieve the highest standards of corporategovernance. In Compliance with the disclosure requirements of Clause 49 of the Listing Agreementexecuted with the Stock Exchange, the details are set out below:

(2) Board of Directors

Composition:

The Board has an optimum contribution of Executive and Non-Executive and Non-Executive Directorsand is in conformity with Clause 49 of the Listing Agreement entered in to with the Stock Exchangein which Company’s shares are listed.

Presently the Board consists of ten Directors, whose composition is as under:

SL.NO NAME DESIGNATION CATEGORY

01. P V V Satyanarayana Chairman Executive

02. K S Rao Managing Director Executive

03. Gottipati S S Prasad Director Promoter, Non-Executive

04. P Jagadeesh Babu Director Promoter, Non-Executive

05. V Suresh Babu Director Non-Executive Independent

06. Baljinder Sharma Director Non-Executive Independent

07. Raj Kosaraju Director Non-Executive Independent

08. Bhavani Prasad Kale Director Non-Executive Independent

09. P Obul Reddy Executive Director Executive

10. P. Guru Krishna Director Non-Executive Independent

Meetings held:

During the year ended 31st March, 2010, 11Board Meetings were held on the following dates30.04.2009, 31.07.2009,01.09.2009,07.09.2009,12.10.2009,15.10.2009,28.10.2009,27.12.2009,29.01.2010,19.02.2010, 29.03.2010. The Directors attendance at the Board Meetings, number ofDirectorships and committee Memberships held by them in other companies are given hereunder:

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Name of the No. of Board Attendance “No of other CommitteeDirector Meetings at the last Directorships positions in other

Attended AGM in other public public companiescompanies

Chairman Member

K S Rao 11 YES 1 NIL NIL

G S S Prasad 11 YES 1 NIL NIL

P Jagadeesh Babu 11 YES 0 NIL NIL

PVV Satyanarayana 11 YES 1 NIL NIL

V Suresh Babu 11 YES 0 NIL NIL

Raj Kosaraju 0 NO 0 NIL NIL

Baljinder Sharma 0 NO 6 NIL NIL

Bhavani Prasad 0 NO 1 NIL NIL

P Obul Reddy 11 NO 0 NIL NIL

P. Guru Krishna 7 7 0 NIL NIL

3. COMMITTEES OF THE BOARD

a. (i) AUDIT COMMITTEE

The Audit Committee has been constituted as per section 292 A of the Companies Act,1956 and the guidelines set out in the Listing Agreement with Stock Exchanges.

The Audit Committee inter-alia provides assurance to the Board on the existence andadequacy of an effective internal control systems that ensures.

• Efficiency and effectiveness of internal control and audit.

• Safeguarding of Assets and adequacy of provisions for liabilities

• Reliabilities of all financial and other information and adequacy of disclosures

• Compliance with all relevant statutes.

• Reviewing of Company’s financial reporting process and disclosure of financial information.

• Reviewing the Quarterly, Half yearly and Annual Financial statements with primary focuson accounting policies and practices, compliances with accounting Standards and legalrequirements concerned with the financial statements.

Reviewing the adequacy of internal control system and Internal Audit function, ensuingcompliance of Internal control systems and review of company’s financial and riskmanagement policies.

Recommending he appointment and removal of statutory auditor, fixation of audit fees andalso to approve payment of other professional services.

Reviewing the reports furnished by the Internal Auditors and Statutory auditors and ensuressuitable follow-ups thereon.

(ii) COMPOSITION:

The Audit Committee comprises of 3 Non-Executive Independent Directors after reconstitutionconsequent to resignation of some Directors and appointment of new Directors.

During the year, the committee held (4) meeting i.e. on 30.04.2009, 31.07.2009, 31.10.2009,30.01.2010.

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The attendance of members of the Reconstituted Committee at the meetings was as follows:

Name of Member Status No.of Meetings attended

P V V Satyanarayana Chairman 4

V Suresh Babu Member 4

P Jagadeesh Babu Member 4

b. (i) REMUNERAION COMMITTEE:

Terms of reference:

To review, assess and recommend the appointment of executive and non- executive. Directors fromtime to time, to review the remuneration package of the Executive.

Directors and recommend suitable revision to the Board, to recommend compensation to the non-executive Directors in accordance with the Companies Act, 1956 to consider and recommendEmployees Stock Option Schemes from time to time and to administer and superintend the same.

(ii) COMPOSITION:

The Remuneration Committee comprises of 3 Non-Executive Independent Directors.

The attendance of members of the Committee at the meetings was as follows:

Name of the Member Status No. of Meetings attended

P Jagadeesh Babu Chairman 4

P V V Satyanarayana Member 4

G S S Prasad Member 4

4. REMUNERATION POLICY:

Remuneration policy of the company is based on review of achievement. The remuneration policyis in consonance with the existing industry practice. The remuneration is decided taking intoconsideration various factors such as qualifications, experience, expertise, prevailing remunerationin the competitive industries, financial position of the company etc.

The details of the remuneration paid to the Directors during the year ended on 31st March, 2010 isgiven below:

Managing director Rs. 9,00,000

i. Non Executive Directors:

No remuneration was paid to non-executive Directors during the period under review.

5. SHARE TRANSFER AND INVESTOR GRIEVANCE COMMITTEE;

The Company has a share transfer and Investors Grievance Committee, to look into redressal ofInvestors Complaints and requests such as delay in transfer of shares, dematerialisation etc,.

The Committee meets at least once in fortnight and deals with various matters relating to

Transfer / transmission of shares

• Issue of shares certificates in lieu of lost, sub-divided, consolidated, re-materilised or defacedcertificates.

• Consolidation / splitting of folios• Review of shares de-materialised and all other related matters• Investors grievance and redressal mechanism and recommend measures to improve the level

of Investor’s services.

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• Letters / complaints were received and resolved to the satisfaction of the shareholders duringthe year under review.

Share transfer and investor Grievance committee consists of 5 members and is Chaired byDirector – Mr. P V V Satyanarayana. The requests for transfer of shares are considered on thebasis of the Memorandum of Transfers prepared by the Registrars and Transfer Agents of theCompany. The Company has not faced any litigation in respect of transfer / transmission ofshares.

During the financial year 2009-10, the committee met at regular intervals and approved sharetransfers / transmissions. The duly transferred / transmitted share certificates - physical weresent to the shareholders within a period of 30 days.

6. DETAILS OF GENRAL BODY MEETINGS HELD:

The location and time of the last three Annual General Meeting were held as under

Financial-Year Date Time Venue

2008-2009 30th September, 2009 10.00 A.M Vasavi Club 6-1-91, 2nd Floor, Vasavi SevaKendram, Opp. Meera Theater, Khairtabad,Hyderabad – 500 004



7. SPECIAL RESOULTIONS PASSED DURING THE PREVIOUS 3 AGMS:

The following special resolutions were passed in the 12th Annual General Meeting:

• Special resolution under section 149 (2A) of the Companies Act, 1956 to accord consent to thecompany to commence business specified in sub clause 4 of clause C of the Objects clause IIIof the Memorandum of Association of the company.

• Special resolution under section 81(1A) of the Companies Act, 1956 to issue, place Equityshares, Convertible warrants or such other financial instruments as the Board thinks fit andappropriate to raise moneys upto Rs. 200 Crores in aggregate.

The following special resolutions were passed in the 11th Annual General Meeting:

• 35,00,000 Equity Share Warrants of Rs.10/- each at an issue price of Rs.17.50 per warrantissued earlier on 16.04.2008 on preferential issue basis to persons other than Promoters wereconverted and allotted on 15.10.2009 into 35,00,000 equity shares.

Special resolutions passed in the 10th Annual General Meeting: NIL

8. DISCLOSURES BY MANAGEMENT:

(a) There were no new materially significant related party transactions i.e. transactions of thecompany of material nature, with its promoters, the directors or the management, theirsubsidiaries or relatives etc, that may have potential conflict with the interests of company atlarge.

(b) There were no instances of non-compliance by the company and no penalties or stricturesimposed on the company by capital markets regulator since listing of the shares i.e. 13.09.2000.

(c) Whistle Blower policy: The Company has in place a whistle blower policy and it affirmed thatno personnel has been denied access to the audit committee.

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(d) The Company has complied with all the mandatory requirements of the clause 49 relatingto the Corporate Governance and has adopted some of the non-mandatory requirementsof the clause 49 like the constitution of the remuneration committee.

(e) The Balance Proceeds of Rs.5,51,25,000/- collected from 35,00,000 convertible equityshare warrants issued earlier on 16.04.2008 and converted into equity shares on15.10.2009 have been deployed for the purposes stated in notice Extraordinary GeneralMeeting held on 27th February, 2008. Balance proceeds of Rs.2,16,00,000/- collected on20,00,000 equity share warrants issued on 30th September, 2008 and converted into equityshares on 27.12.2009 have been deployed for the purposes stated in the notice to the AnnualGeneral Meeting held on 30.09.2008. Proceeds of Rs.1,76,85,000/- collected on 6,55,000equity shares allotted to persons other than Promoters on preferential basis on 24.06.2010have been deployed for the purposes stated in the Notice to the Extraordinary General Meetingheld on 28.04.2010.

9. MEANS OF COMMUNICATION:

Quarterly provisional results are published in prominent daily newspapers viz, Financial Express& Andhra Prabha.

Adoption of Quarterly results for the Financial year 2010-11 ( Tentative and subject to change):

Financial reporting for the first quarter ending 30th June, 2010 : Between 1st and 15th of August, 2010

Financial reporting for the second quarter ending 30th September, 2010: Between 1st and 15th ofNovember, 2010

Financial reporting for the third quarter ending 31st December, 2010: Between 1st and 15th of February,2011

Financial reporting for the fourth quarter ending 31st March, 2010: Between 1st and 15th of May,2011.

01. GENERAL SHEHOLDERS INFORAMTION:

a. Date of Incorporation : 22nd April 1997

b. Registered Office : 4th Floor, My Home Tycoon, Life Style Building, Greenlands, Begumpet, Hyderabad – 500 016, A.P.India

c. Date and time of the 13th AGM : 30th September, 2010, at 9.00 A.M.

d. Venue of the 13th AGM : Royal Pavilion, Ground Floor, Conference Hall,Ameerpet, Hyderabad – 500 016

e. Financial Calendar : 1st April, 2010 to 31st March, 2011

f. Date of Book Closure : 26th September, 2010 to 30th September, 2010(both days inclusive)

g. Dividend payment date : Not Applicable

h. Listing of Equity shares on Stock Exchange at:

(i) The Bombay Stock Exchange Limited1st Floor, New Trading Ring

Rotunda Building, PJ Towers Dalal Street, Fort MUMBAI – 400 001

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Stock Code : Physical Mode: 32363 Dematerialized Mode: 532363

(ii) The Company ISIN Number: INE394B01017

The company confirms that it has paid annual listing fees due to the Mumbai Stock Exchange, CDSL& NSDL for the year 2009-10.

j. Stock Market Price data for the year 2009-10:

BOMBAY STOCK EXCHANGE:

MONTH HIGH LOW

APRIL 2009 5.06 3.12

MAY 2009 6.31 3.51

JUNE 2009 11.18 6.30

JULY 2009 11.87 7.00

AUGUST 2009 10.46 8.20

SEPTEMER 2009 22.15 9.86

OCTOBER 2009 38.60 22.50

NOVEMBER 2009 36.00 25.30

DECEMBER 2009 32.20 24.85

JANUARY 2010 30.00 19.30

FEBRUARY 2010 23.75 18.35

MARCH 2010 22.85 18.00

k. Registrar and Share Transfer Agent: The address of the registrar and share transfer agent is asgiven below:

Big Share Services Private Limited Unit: Comp-U-Lean Tech India Limited G-10, Left Wing, Amrutha Ville, Opp: Yashodha Hospital Somajiguda, Raj Bhavan, Hyderabad – 500 082 Ph. No: 040-23374967, Fax No: 040-23370295

The R & ST agents acknowledges and executes transfers of securities arranges for issue of duplicates/ split share certificates etc. The R & ST agent also accepts deals and resolves complaints ofshareholders.

Share Transfer Systems: Share transfer and Investor and Investor Grievance Committee alsoapproves share transfers and meets at frequent intervals. Big share Services Private Limited,company’s Registrar and Share Transfer Agents process these transfers. Share transfers areregistered and returned with in 30 days from the date of lodgment if the documents are complete inall respects.

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l. Distribution of shareholding as on 31st March, 2010:

Range Number of % of Number of % of

shareholders shareholders shares shares

Up to 5000 5,576 76.73 929582 5.06

5001 – 10000 617 8.48 542870 2.93

10001 – 20000 346 4.75 566386 3.06

20001 – 30000 185 2.54 482528 2.60

30001 – 40000 81 1.11 298499 1.61

40001 – 50000 101 1.38 480759 2.59

50001 – 100000 159 2.18 1293240 6.99

Above 1 lakhs 206 2.83 13906136 75.16

TOTAL 7,271 100.00 18500000 100.00

m. Shareholding Pattern of the Company as on 31st of March, 2010:

Category Number of Shares held % of Total ShareholdingA.Promoters(Incl. Persons Acting in Concert) 2615004 14.13

B. Non Promoters

i. NRI’s / OCBs / FII’sii. Corporate Bodies 48553 .26

3298442 17.82

iii. Public (Individuals other than above) 12538001 67.79

Total: 18500000 100.00

Dematerialization of Shares;

The company’s shares are traded in dematerialized form. As on 31st March, 2010 75.04% of thecompany’s total shares representing 13882425 shares were held in dematerialized from and thebalance 24.96 representing 4617575 shares were in Physical form.

n. Outstanding GDRs/ ADRs/ Warrants or any convertible instruments, conversion date and likelyimpact on equity.

(a) The Company has issued 40,00,000 convertible equity share warrants of which 8,00,000convertible equity shares warrants to Promoters and 32,00,000 equity shares warrantsallotted to persons other than Promoters on preferential basis both issued at an issue priceRs.27/- (including premium of Rs.17/-) per warrant vide special Resolution passed in theExtraordinary General Meeting held on 28.04.2010. Each warrant carries an option toconvert into one equity share of face value of Rs.10/- each within a period of not latter than18 months from the date of issue. Subscription received by the Company accounted for39,00,000 equity share warrants and hence only 39,00,000 equity warrants were allotted.Therefore the resulting equity shares after conversion would be 39,00,000 equity sharesonly and the paid up share capital of the company after conversion would be 23055000equity shares of Rs.10/- each.

o. Address for Correspondence:The Shareholders should address their correspondence to the Company’s Registrar & ShareTransfer Agents at the address mentioned below:Big share Services Private Limited

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Unit: Comp-U-Lean Tech India Limited G-10, Left Wing, Amrutha Ville, Opp: Yashodha Hospital Somajiguda, Raj Bhavan, Hyderabad – 500 082 Ph. No: 040-23374967, Fax No: 040-23370295

Shareholders may also contact for information at the Company’s registered Office situated at4th Floor, My Home Tycoon,Life Style Building, Greenlands,Begumpet, Hyderabad – 500 016,E-mail at : [email protected].

Place: Hyderabad For and on behalf of the Board of Directors ofDate: 04.09.2010 COMP-U-LEARN TECH INDIA LIMITED

Sd/- Sd/- P V V Satyanarayana K.S.RAO Chairman Managing Director

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MANAGEMENT DICUSSION AND ANALYSIS:

BUSINESS ANALYSIS:

Year 2009-10 witnessed recovery from the Global recession and certain amount of volatility for theIT Sector amidst possibilities of growth in Global Economy. The Indian Economy registered growthof 8.5% GDP and expected growth rate of 9% in the current Financial Year 2010-11. With thegovernment spending for E governance expected to touch Rs.100000 Crore over the next fiveyears, there is ample scope for all serious players. With strict cost cutting measures and good orderbook position, the company expects good sizable growth both in revenues and profits during theyear 2010-11 and also following years.

BUSINESS OUTLOOK AND PROSPECTS:

The rise in global spending on technology products and related services and increaseddomestic spending on IT and IT enabled services provides ample scope for faster long term growth.Technology adoption by companies across sectors and rapid evolution of technology andapplications will significantly drive growth in the IT sector. Spending on IT is expected to increaseacross businesses with new sectors driving the new wave of IT growth. The increase in spendingon IT sector will be backed by the growth in offshore spending and preference towards multi-vendor contracts.

According to NASSCOM, Indian IT-ITES exports would reach US$ 60 billion by 2010. Some keyfactors supporting this optimism include the growing effect of technology-led innovation, leadingthe growing demand for global sourcing, favorable policy initiative and gradually evolving socio-political attitudes towards the acceptance of IT in professional and social activities

DIVERSIFICATION PLAN:

Having achieved the growth in software sector and with business exposure gained over the years,the company envisages diversification plans to foray into power sector. Also taking into accountseveral factors such as demand statistics of power in India, supply position, profitability and potentialfuture, diversification is envisaged by the board of directors. This diversification is expected tocontribute its strength to society as part of socioeconomic responsibility besides bringing mileage tothe growth of the company. Your company plans to setup 405 MWS capacity coal fired thermalpower plant in Orissa.

FUTURE OUTLOOK:

The performance for the year under review was just spectacular registering the growth of 423% inrevenues and 281.37% in profits over the previous years. Future of the company is very promisingand bright in view of its growth plans. The Company’s growth plans are based on matrix of organicand inorganic growth. Under the former, company intends to add up one or more software productsand solutions to the existing line of activity for improved performance. Under the latter, companyhas already made during the year 7 companies as its subsidiaries. Some of them are wholly ownedsubsidiaries while others are majority owned subsidiaries. Many of these subsidiaries are in tosoftware business which are expected to boost up revenues of the company and sizable growth. M/s ACE BPO Services Pvt Ltd is another subsidiary which is into Health Care and Insurance BPObusiness and expects to yield good growth for the company. Further, as part of overall growth of theGroup in diversified areas, your company has formed infrastructure subsidiary M/s CTIL InfrastructurePvt Ltd with a focus on Power. Under this arm, company plans to setup 5 MWS Solar Power Projectand 405 MWS Thermal Power Project in Orissa. With all the above growth plans your company willhave bright future ahead.

OPPORTUNITIES AND THREATS:

Software development, e-governance solutions, IT Enabled Services (ITES), call centre andBusiness Process Outsourcing (BPO), Institutional training, strategic alliances etc,. are some ofthe growth areas which your company has been pursuing on continuous basis. On the other

25


side, high rate of staff attrition, high competition, spiraling overheads without a rise in the revenues,technological obsolescence etc., are some of the major concerns.

RISKS & CONCERNS:

Non availability of skilled personnel, high competition resulting into higher attrition, high reliance onUS market, intense competition from small unorganized players in the industry, rising overheads,squeeze on margins, foreign exchange fluctuations, change in Government policies etc may affectthe IT Industry and consequently have impact on company’s operations.

An integrated approach to risk management will form an important element of company’s overallbusiness strategy.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your company has in place adequate system of internal control commensurate with its size andnature of its operations to ensure that all assets are safeguarded and protected against loss fromun-authorised use or disposition and that transactions are authorized, recorded and reportedcorrectly, Management continuously reviews the Internal Control systems and procedures to ensureorderly and efficient conduct of business.

HUMAN RESOURCES DEVELOPMENT:

Your company operates in knowledge Intensive industry and considers its employees as its mostvaluable asset and lays great emphasis on nurturing an organizational culture that creates jobsatisfaction and performance oriented environment. The staff of your company, at all levels,contributed significantly in pegging the overheads at the lowest possible levels, without compromisingon the quality and efficiency of deliverables, which act in unison is highly appreciated.

The Company believes in nurturing young talents through its people, interventions and managementtraining schemes, which strives to develop business managers of tomorrow.

11. CODE OF CONDUCT AND ETHICS FOR DIRECTORS AND SENIOR MANAGEMENT:

The Company has laid down a code of conduct for all Board members and senior managementpersonnel of the company. The code has been circulated to all the members of the Board andSenior Management and the compliance of the same has been affirmed by them.

12. MD / ED CERTIFICATION:

A certificate from the Managing Director and the Executive Director, relating to the Financial Statementsof the company, is annexed to this report.

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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

ToThe Members ofComp-U-Learn Tech India Limited,Hyderabad

We have examined the compliance of conditions of corporate governance by Comp-U-Learn TechIndia Limited for the year ended on 31st March 2010, as stipulated in clause 49 of the ListingAgreement of the said company with Stock Exchange.

The compliance of conditions of corporate governance is the responsibility of the management. Ourexamination was limited to procedures and implementation thereof, adopted by the company forensuring the compliance of the conditions of the corporate Governance. It is neither an audit nor anexpression 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,subject to:

i. Our reliance upon the certificate received by the company from its Registrar for the number ofcomplaints received from the shareholders and the number of complaints resolved during thefinancial year and that there are no share transfers pending as at the year end as stated underserial number 5 under Committees of Board of the Company’s report on the CorporateGovernance;

ii. Our having relied on the representation of the management that there was no transaction ofmaterial nature with the management of their relatives that may have potential conflict with theinterest of the company at large, as stipulated under serial 12(a) under Disclosure of thecompany’s report on corporate governance:

We certify that the company has complied with the conditions of Corporate Governance as stipulatedin the above-mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the viability of the Company northe efficiency or effectiveness with which the management has conducted the affairs of the Company.

Place: Hyderabad For BALAJI VISWANATH & CODate: 04th of September’2010 CHARTERED ACCOUNTANTS

Sd/-(B. Balaji Viswanath)

Proprietor.Membership No :029357

FRN. 008194S

27


Managing Director and Executive Director Certification:

ToThe Board Of DirectorsComp-u-Learn Tech India Limited

We the undersigned, in our respective capacities as the Managing Director and Executive Directorof Comp-u-Learn Tech India Ltd (“The Company”) to the best of our knowledge and belief certifythat:

(a) We have reviewed Financial Statements and the cash flow statement for the year and that tothe best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material factor contain statements that might be misleading:

(ii) these statements together present a true and fair view of the company’s affairs and are incompliance with existing accounting standards, applicable laws and Regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the companyduring the year which are fraudulent, illegal or violative of the company’s code of conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reportingand that we have evaluated the effectiveness of internal control systems of the companypertaining to financial reporting and we have disclosed to the auditors and the Audit Committee,deficiencies in the design or operation of such internal controls, if any of which they are awareand the steps they have taken or propose to take to rectify these deficiencies.

(d) We have indicated to the auditors and the Audit Committee that there are no :

(i) Significant changes in internal control over financial reporting during the year.(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’sinternal control system over financial reporting.

(e) We affirm that we have not denied any personnel, access to the audit committee of the Company(in respect of matters involving alleged misconduct) and we have provided protection towhistleblowers from unfair termination and other unfair or prejudicial employment practices.

(f) We further declare that all Board members and senior managerial personnel have affirmedcompliance with the code of conduct for the current year.

28

Sd/- Sd/-K.S. Rao P. Obul Reddy

Place : Hyderabad Managing Director Executive DirectorDate : 4th September 2010.


Standalone Audit Report

Auditors’ Report to the Members of Comp-U-Learn Tech India Limited.

We have audited the attached Balance Sheet of Comp-U-Learn Tech India Limited as at 31st March2010, and the Profit and Loss Account and the Cash Flow Statement of the Company for the yearended on that date annexed thereto. These financial statements are the responsibility of theCompany’s Management. Our responsibility is to express an opinion on these financial statementsbased on our audit.

We have conducted our audit in accordance with the generally accepted Auditing Standards inIndia. Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout 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. Anaudit also includes assessing the accounting principles used and significant estimates made by theManagement, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government ofIndia in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

We have obtained all the information and explanations, which to the best of our knowledge andbelief were necessary for the purposes of our audit;

In our opinion, proper books of account as required by law have been kept by the Company so faras appears from our examination of those books;

The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report arein agreement with the books of account;

In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with bythis report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 ofthe Companies Act, 1956;

On the basis of written representations received from the Directors as on 31st March 2010 and takenon record by the Board of Directors, we report that none of the Directors is disqualified as on 31st

March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section274 of the Companies Act, 1956;

In our opinion and to the best of our information and according to the explanations given to us, thesaid Accounts read with the notes thereon 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 accountingprinciples generally accepted in India:

in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For BALAJI VISWANATH & COCHARTERED ACCOUNTANTS

Place: Hyderabad Sd/-Date: 04th September 2010 (B. Balaji Viswanath)

Proprietor. Membership.No:029357

Firm.Regn.No:008194S

29

I SOURCE OF FUNDS1 Share Holder Funds 1

Share Capital 185,000,000 130,000,000Share Warrants Application Money 42,425,000 8,525,000Deferred Tax 2,896,602 2,761,313

2 Reserves and Surplus 2 52,750,000 22,500,0003 Loan Funds 3 6,776,250 250,000

Total 289,847,852 164,036,313

II APPLICATION OF FUNDS1 Fixed Assets 4

a)Gross Block 37,413,187 37,356,187b)Less: Depreciation 23,401,290 14,132,788

c)Net Block (a) 14,011,897 23,223,399

2 Investments 5 105,154,500 -3 Current Assets, Loans and Advances

a) Cash and Bank Balances 6 7,354,777 14,626,331b) Sundry Debtors 7 173,514,932 51,605,485c) Loans and Advances 8 11,090,822 26,689,746

8 -191,960,531 92,921,562

Less: Current Liabilities and Provisionsa) Current Liabilities 9 40,048,335 27,210,836b) Provisions 10 44,059,531 1,000,390

84,107,866 28,211,226

Net Current Assets (b) 107,852,665 64,710,336

4 a) Miscellaneous Expenditure © 11 27,268,980 18,738,500(to the extent not written off oradjusted)b) Profit and Loss Account 35,559,810 57,364,078

Total(a+b+c) 289,847,852 164,036,313

Notes on Accounts 14

STANDALONE STATEMENTSBALANCE SHEET AS AT 31.03.2010

Schedule As at As at31st March 10 31st March 09

Rs Rs

AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARDFor Balaji Viswanath & Co. For Comp-U-Learn Tech India LimitedChartered Accountants

Sd/-B.Balaji Viswanath Sd/- Sd/-Proprietor Chairman Managing Director

P.V.V. Satyanarayana K.S. RaoM.No. 029357Firm Reg. No. 008194S

Place: HyderabadDate :04-09-2010


30


STANDALONE STATEMENTSPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.03.2010


Rs Rs

INCOME: 12 143,103,387 54,363,455

Total (A) 143,103,387 54,363,455

EXPENDITURE:Salaries and other Administrative Expenses 13 111,895,328 39,706,909

Depreciation on Fixed Assets 4 9,268,502 2,764,956

Total (B) 121,163,830 42,471,865

Profit for the period (A-B) 21,939,557 11,891,590

Profit for the period before taxation 21,939,557 11,891,590Provision for Income Tax - -Provision for FBT - 102,770Provision for Deferred Tax 135,289 2,139,829

Profit for the period after taxation 21,804,268 9,648,991Add: Balance brought forward from previous year - -

(Deficit) Carried to Balance Sheet 21,804,268 9,648,991

Earning per share - Basic & Diluted 1.18 0.74Weighted Average Number of Shares 18,500,000 13,000,000Notes on Accounts 14





31


STANDALONE STATEMENTSSCHEDULES FORMING PART OF BALANCE SHEET

As at As at31st March 10 31st March 09

Rs Rs

SCHEDULE 1:SHARE CAPITALAuthorised:5,00,00,000 Equity Shares of Rs.10/- each 500,000,000 500,000,000

500,000,000 500,000,000

Issued, Subscribed and paid up:1,85,00,000 Equity Shares of Rs.10/- each 185,000,000 130,000,000

TOTAL 185,000,000 130,000,000

SHARE APPLICATION MONEYShare warrants Application Money 42,425,000 8,525,000

TOTAL 42,425,000 8,525,000

SCHEDULE 2:RESERVES & SURPLUSShare Premium 52,750,000 22,500,000

TOTAL 52,750,000 22,500,000

SCHEDULE 3:SECURED LOANS 6,776,250 -UNSECURED LOANS - 250,000

TOTAL 6,776,250 250,000

SCHEDULE 5:INVESTMENTSInvestments in Subsidiaries 87,504,500( Unquoted and Valued at Cost)Investments in Others 17,650,000

105,154,500SCHEDULE 6:

CASH AND BANK BALANCES:Cash on Hand 59,773 69,227Balances with Scheduled BanksIn Current Accounts 7,041,601 14,303,701In Deposit Accounts 56,500 56,500In Share Application money refund Account 196,903 196,903

TOTAL 7,354,777 14,626,331

SCHEDULE 7:SUNDRY DEBTORS: (Unsecured)Debts outstanding Over Six MonthsConsidered Good 96,159,157Considered DoubtfulGoodOther Debts Considered Good 77,355,775 51,605,485

TOTAL 173,514,932 51,605,485

32


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Rs Rs

SCHEDULE 8:LOANS & ADVANCES:Loans and Advances recoverable in cashor in Kind or for value to be receivedLoans, Advances and Deposits 10,626,662 26,689,746(Includes due from directors Rs.Nil)TDS receivable 464,160 -

TOTAL 11,090,822 26,689,746

SCHEDULE 9:CURRENT LIABILITIES:Sundry Creditors - For Expenses 39,671,432 26,749,359 - For Others 180,000 264,574Investor Education and Protection Fund - Share application money refund 196,903 196,903

TOTAL 40,048,335 27,210,836

SCHEDULE 10:PROVISIONS: 43,466,907TDS Payable 592,624 402,012IT and FBT Payable - 598,378

TOTAL 44,059,531 1,000,390

SCHEDULE 11:MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Deferred Revenue Expenditure 27,268,980 18,738,500

TOTAL 27,268,980 18,738,500

SCHEDULE 12:INCOME:Software Development Income 141,136,940 51,801,246Training Income 1,489,000 1,781,404Courseware Income - 164,146Other Income 477,447 616,659

TOTAL 143,103,387 54,363,455

34




Rs Rs

SCHEDULE 13:

SALARIES AND WAGES, OPERATION

& ADMINISTRATIVE EXPENSES:

(a) Salaries:

Salaries and Allowances 63,005,353 20,766,339

Managing Director’s remuneration 900,000 900,000

Staff Welfare 1,039,236 1,251,069

(b) Operating & Administrative expenses:

Advertisement Charges 50,553 53,848

AGM Expenses 114,220 126,540

Annual Maintenance Contract 28,000 -

Audit Expenses 20,000 50,595

Bank charges 228,842 331,378

Board Meeting Expenses 340,660 -

Books and periodicles 184,608 85,480

Business Promotion & Incentives 1,165,640 185,432

Computer Consumables and Maintenance 1,276,345 851,242

Electricty Charges 140,200 183,455

Insureance on ECGC 135,000 -

Interest on Foreign Bills Discounting 1,606 -

Internet Expenses 57,600 -

Listing Fees 210,600 -

Licenses & Taxes 296,293 2,460,859

Misc.Expenses Written Off 1,873,850 -

Office Maintenance 1,269,870 227,798

Postage and Telegrams 813,101 125,454

Printing & Stationary 718,936 314,165

Repairs & Maintenance 1,124,058 780,652

Software Development Expenses 33,033,300 10,362,306

Statutory Audit 150,000 75,000

Security Charges 35,787 -

Telephone Charges 369,974 141,908

Traveling Expenses 2,198,663 338,149

Vehicle Maintenance & others 1,113,033 95,240

TOTAL 111,895,328 39,706,909

35

STANDALONE STATEMENTSCASHFLOW STATEMENT FOR THE YEAR ENDED 31st MARCH,2010

A. Cashflow from Operating Activities

Profit before tax and extraordinary activities 21,804,268 9,648,991Add: Depreciation 9,268,502 2,764,956Deferred Tax 135,289 2,139,829

9,403,791 4,904,785

Operating Profit before working capital changes 31,208,059 14,553,776Less:Decrease in trade and other receivables (106,310,523) (33,937,057)(Increase) / Decrease in Inventories(Decrease) in trade payables 55,896,640 (50,413,883) 11,911,989 (22,025,068)

Cash generated from operations (19,205,824) (7,471,292)

Cashflow before extraordinary items (19,205,824) (7,471,292)

Cash Generated in Operating Activities Total A (19,205,824) Total A (7,471,292)

B. Cashflow from Investment ActivitiesInvestments made in others 105,154,500Payment for purchase of fixed assets 57,000 19,694,650Share Application Money received 119,150,000 42,952,300Miscellaneous expenditure 8,530,480 5,408,020 18,738,500 4,519,150

Net cash from Investing Activities Total B 5,408,020 Total B 4,519,150

C. Cashflow from Financing Activities

Loan from a director (1,000,000) (1,000,000)

Temperory overdraft from a Bank 6,526,250 6,526,250 (1,000,000)

Net cash from Financing Activities Total C 6,526,250 Total C (1,000,000)

Net Decrease in cash

and cash equivalents A+B+C (7,271,554) A+B+C (3,952,142)

Opening cash and cash equivalents 14,626,331 18,578,473

Closing cash and cash equivalents 7,354,777 14,626,331

(7,271,554) (3,952,142)

Particulars for the year ended31st March,2010

for the year ended31st March,2009

Rs Rs Rs. Rs.





36



Balance Sheet Abstracat and Company’s General Business Profile

I. REGISTRATION DETAILS State Code

Balance Sheet Date

Date Month Year

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS.THOUSANDS)(Amounts in Rs. Thousands)

Public Issue Rights Issue

Bonus Issue Private Placement

III. POSITION OF MOBILISATION AND DEVELOPMENT OF FUNDS (AMOUNT IN RS. THOUSANDS)(Amounts in Rs. Thousands)

Total Liabilities Total Assets

SOURCES OF FUNDS

Paid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

Share Appl Money Deferred Tax

APPLICATION OF FUNDS

Net Fixed Assets Investments

Net Current Assets Misc.Expenditure

Accumulted Losses

IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)(Amounts in Rs. Thousands)

Total Income Total Expenditure

Profit/Loss(-) before Tax Profit/Loss (-)after Tax

Earnings per share Dividend Rate %

V. GENERIC NAME OF PRINCIPAL PRODUCT/SERVICES OF COMPANY (AS PER MONETARY TERMS)

Item Code No. (ITC Code)

Product Descssription

Item Code No. (ITC Code)

Product Descsription

2 6 9 3 4 0 1

3 1 0 3 2 0 1 0

N I L

N I L

2 8 9 8 4 7

1 8 5 0 0 0

4 2 4 2 5

1 4 0 1 2

1 0 7 8 5 2

3 5 5 6 0

1 4 3 1 0 3

2 1 9 4 0

1 . 1 8

2 8 9 8 4 7

5 2 7 5 0

2 8 9 6

N I L

2 7 2 6 9

1 2 1 1 6 3

2 1 8 0 4

N A

N A

S O F T W A R E

T R A I N I N G D E V E L O P M E N T

8 5 2 4 9 0 0 9 . 1 0

C O M P U T E R S O F T W A R E

6 7 7 6

STANDALONE STATEMENTS

27

1 0 5 1 5 4


Scheule 14:

NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010SIGNIFICANT ACCOUNTING POLICIES:

I. SIGNIFICANT ACCOUNTING POLICIES

1. Basis for preparation of financial statements:

Financial statements are prepared under the historical cost convention on a going concernbasis, with generally accepted accounting principles and relevant requirements of theCompanies Act, 1956.

2. Revenue Recognition:

The revenue in respect of Brand License fee is accounted on execution of agreement. Revenuefor software development is recognized on the basis of chargeable time or achievement ofprescribed milestone as relevant to each contract. Revenue from sale of software products andcourseware materials is recognized when sale has been completed with the passing of title orlicenses or raising invoices as the case may be.

Expenses are accounted on accrual basis except for retirement benefits such as gratuity andleave encashment and necessary provisions are made for all known losses and liabilities.

3. Inventories:

There are no inventories during the current financial year

4. Fixed Assets:

Fixed assets are stated at cost of acquisition (inclusive of duties, taxes and incidental expensesrelated to acquisition) less depreciation.

5. Depreciation:

Depreciation is charged in respect of all assets on pro-rata basis by Written Down ValueMethod at the rate specified and in the manner prescribed under schedule XIV of the CompaniesAct,1956. Where the cost of the Assets does not exceed Rs.5,000, depreciation is provided athundred percent rate in the year of purchase.

6. Retirement Benefits:

a) Retirement benefits will be provided on cash basis.

b) Liability towards Gratuity is not provided. Leave encashment is not applicable to thecompany as per the terms and conditions of employment

7. Foreign currency transactions and translation:

All transactions in foreign currencies are recorded on the basis of the exchange rates prevailingas on the date of the transaction. Fluctuation Gain or Loss on realization / payment is chargedoff / credited to profit and loss account. The amounts receivable in foreign currencies at theyear-end are translated at the rate of exchange prevailing on that date and the net resultantgain/loss is dealt with in the profit and loss account.

8. Taxation:

Provision for Taxation, the aggregate of Income Tax Liability on the profits for the year chargeableto tax and Deferred Tax resulting from timing differences between Book and Tax Profits, if any,is considered in accordance with the Accounting Standard- 22(AS-22), Accounting for taxeson income, issued by the Institute of Chartered Accountants of India.


38


II. Notes to Accounts

1. Estimated amount of contracts remaining to be executed on capital accounts Rs. Nil (PreviousYear Rs.Nil)

2. Claims against the company, not acknowledged as debt Rs. NIL (Previous year Rs. Nil)

3. Managerial Remuneration:

Year ended Year ended

31st March, 2010 Rs. 31st March, 2009 Rs.

Managing Director:

Salary 900000 900000

Perquisites Nil Nil

Total 900000 900000

4. Deferred Tax:

The Deferred Tax Liability in adoption of new A.S.22 “Taxation Income” issued by the Institute ofChartered Accountants of India amounting to Rs.1,35,289/- resulting from timing differences betweenbook and tax profits is accounted for under the liability method, at the current rate of tax, to the extentthat the timing differences are expected to crystallize.

5. Related party Disclosures:

Related party disclosures in accordance with AS-18 issued by The Institute of Chartered Accountantof India by virtue of share holding and key management personnel.

1) Related Parties Nature of Relationshipa) Managing Director Key Management Personnel

Transactions with Related Partiesa) Remuneration Rs.9,00,000/-

6. Earning Per Share

2009-2010 2008-02009

Rs. Rs.

Net Profit after Tax 2,18,04,268 96,48,991

Weighted average number of equity shares outstanding 1,85,00,000 1,30,00,000

Basic and Diluted Earnings per share 1.18 0.74

7. There are no amounts due to small-scale Industrial undertakings, to whom the company owes asum which is outstanding for more than 30 days and hence the details in respect of outstandingdues to small-scale Industrial undertakings are not furnished, as required as per the notificationNo.GSR 129(E) dated 22nd February 1999.

8. Expenditure in Foreign Currency:


31st March, 2010 31st March, 2009

Rs. Rs.

Travelling expenses Nil Nil


39

9. CIF Value of Imports:



Rs. Rs.

Capital Goods and Software Nil Nil

10. Earnings in Foreign Currency:



Rs. Rs.

Software Development Services (Rs. In Lakhs) 1383.16 486.11

11. Secured Loan :

During the year Company has obtained working capital facility of Rs. 500 lacks from UCO Bank,Secunderabad Branch and availed an amount of Rs. 67,76,250/- only.

12. Previous years figures have been regrouped wherever necessary to confirm to the current yearclassification.

As per report of even date attached For AND ON BEHALF OF THE BOARDFor BALAJI VISWANATH & CO. For COMP-U-LEARN TECH INDIA LTDCHARTERED ACCOUNTANTS

Sd/- Sd/- Sd/-(B.Balaji Viswanath) Chairman Managing Director Proprietor P.V.V. Satyanarayana K.S. RaoMembership No:029357Firm Regn. No: 008194S

Place: HyderabadDate:04th September 2010



40


CONSOLIDATED AUDIT REPORT

AUDITOR’S REPORT

TO The Board of Directors

COMPU-U-LEARN TECH INDIA LIMITED

We have audited the attached consolidated Balance Sheet of Comp-U-Learn tech India limited(company) and its Subsidiaries (collectively referred to as “the Group”) as at 31st March 2010, andalso the Consolidated Profit and loss Account for the year ended on that date annexed thereto.

These financial statements are the responsibility of the Company’s management and have beenprepared by the Management on the basis of separate financial statements and other financialinformation regarding components. Our responsibility is to express an opinion on these financialstatements based on our audit.

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 aboutwhether the financial statements are free of material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made byManagement, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

1. We did not audit the attached consolidated financial statements of subsidiaries as at 31st March2010. The financial statement and other financial information of M/S SPRY Resources India privateLimited, M/S ACE BPO services private Limited, M/S CTIL Infrastructure private Limited, have beenaudited by their respective auditors whose reports have been furnished to us and our opinion isbased solely on the report of the respective auditors. In case of Comp-U-Learn middle east FZCbeing a subsidiary of the company in Dubai where financial year ends by 30th June and as a matterof prudence, their financial statements prepared in accordance with the normally accepted accountingpolicies and practices have been furnished to us by the Board of directors along with their declaration.Accordingly our opinion and authencity is based solely on the declaration of the Board of directors.

2. We report that the consolidated financial statements have been prepared by the Company’smanagement in accordance with the requirements of Accounting Standards (AS) 21, ConsolidatedFinancial statements and Accounting Standards (AS) 23, Accounting for Investments in Associatesin Consolidated Financial Statements issued by the Institute of Chartered Accountants of India.

3. Based on our audit as aforesaid, and on consideration of reports of other auditors on the separatefinancial statements and to the best of our information and according to the explanation given to usand declaration by the board of directors, we are of the opinion that the attached consolidatedfinancial statements give a true and fair view in conformity with the accounting principles generallyaccepted in India.

I. In the case of the Consolidated Balance Sheet, of the State of Affairs of the Group as at 31st

March 2010.

II. In case of the Consolidated Profit and Loss Account, of the Profit of the Group for the yearended on that date.

AS PER OUR REPORTS OF EVEN DATEFor Balaji Viswanath & Co.

Chartered AccountantsPlace: Hyderabad Sd/-Date: 04-09-2010 B.Balaji Viswanath

ProprietorMembership No: 029357

Firm Regn. No: 008194S

41


CONSOLIDATED FINANCIAL STATEMENTSBALANCE SHEET AS AT 31.03.2010


Sd/-B.Balaji Viswanath Sd/- Sd/-Proprietor Chairman Managing DirectorM.No. 029357 P.V. Satyanarayana K.S. RaoFirm Reg. No. 008194S


Schedule As at31st March 10

Rs


Share Capital 185,000,000Share Warrants Application Money 63,150,000Deferred Tax 2,898,126

2 Reserves and Surplus 2 52,750,000Capital Reserve 5,011,600Minority Interest 52,676,701

3 Loan Funds 3 44,329,135Total 405,815,562


a) Gross Block 80,680,915b) Less: Depreciation 39,496,846

c) Net Block (a) 41,184,069Goodwill 31,574,484

2 Investments 5 42,026,9643 Current Assets, Loans and Advances

a) Cash and Bank Balances 6 19,748,856b) Sundry Debtors 7 247,433,195c) Loans and Advances 8 77,581,070d) Other Current Assets 8 4,525,044

349,288,166Less: Current Liabilities and Provisionsa) Current Liabilities 9 58,917,063b) Provisions 10 49,881,826

108,798,889Net Current Assets (b) 240,489,277

4 a) Miscellaneous Expenditure © 11 29,976,184(to the extent not written off oradjusted)

b) Profit and Loss Account 20,564,585Total(a+b+c) 405,815,562Notes on Accounts 14

42


INCOME: 12 284,610,105

Total (A) 284,610,105

EXPENDITURE:

Salaries and other Administrative Expenses 13 221,192,853

Depreciation on Fixed Assets 4 12,076,278

Total (B) 233,269,131

Profit for the period (A-B) 51,340,974

Profit for the period before taxation 51,340,974

Provision for Income Tax 221,902

Provision for FBT 135,289

Provision for Deferred Tax -

Profit for the period after taxation 50,983,783

Minority Interest (14,184,290)36,799,493

Add: Balance brought forward from previous year (57,364,078)

(Deficit) Carried to Balance Sheet (20,564,585)

Earning per share 1.99

Weighted Average Number of Shares 18,500,000


CONSOLIDATED FINANCIAL STATEMENTSPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.03.2010


Sd/-B.Balaji Viswanath Sd/- Sd/-Proprietor Chairman Managing DirectorM.No. 029357 P.V. Satyanarayana K.S. RaoFirm Reg. No. 008194S



Rs

43


SCHEDULE 1:SHARE CAPITALAuthorised:5,00,00,000 Equity Shares of Rs.10/- each 500,000,000

500,000,000Issued, Subscribed and paid up:1,85,00,000 Equity Shares of Rs.10/- each 185,000,000

TOTAL 185,000,000

SHARE APPLICATION MONEYShare warrants Application Money 63,150,000

TOTAL 63,150,000

SCHEDULE 2:RESERVES & SURPLUSShare Premium 52,750,000

TOTAL 52,750,000

SCHEDULE 3:SECURED LOANS 43,929,834UNSECURED LOANS 399,301

TOTAL 44,329,135

SCHEDULE 5:INVESTMENTSInvestments -Quoted 602,008Investments in Subsidiaries 2,625,000( Unquoted and Valued at Cost)Investments in Others 38,799,956

42,026,964SCHEDULE 6:CASH AND BANK BALANCES:Cash on Hand 898,086Balances with Scheduled BanksIn Current Accounts 18,597,366In Deposit Accounts 56,500In Share Application money refund Account 196,903

TOTAL 19,748,855SCHEDULE 7:SUNDRY DEBTORS: (Unsecured)Debts outstanding Over Six MonthsConsidered Good 136,911,582Considered DoubtfulGoodOther Debts Considered Good 110,521,613

TOTAL 247,433,195

CONSOLIDATED FINANCIAL STATEMENTSSCHEDULES FORMING PART OF BALANCE SHEET

As at31st March 10

Rs

44


SCHEDULE 8:LOANS & ADVANCES:Loans and Advances recoverable in cashor in Kind or for value to be receivedLoans, Advances and Deposits 77,041,710(Includes due from directors Rs.Nil)TDS receivable 539,360

TOTAL 77,581,070

SCHEDULE 9:CURRENT LIABILITIES:

Sundry Creditors - For Expenses 58,457,057 - For Others 263,102Investor Education and Protection Fund - Share application money refund 196,903

TOTAL 58,917,063

SCHEDULE 10:PROVISIONS: 48,720,760TDS Payable 592,624IT and FBT Payable 220,378Others 348,064

TOTAL 49,881,826

SCHEDULE 11:MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Deferred Revenue Expenditure 29,976,184

TOTAL 29,976,184

SCHEDULE 12:

INCOME:

Software Development Income 257,599,833

Training Income 1,489,000

BPO Income 20,241,946

Other Income 774,126

Software Development work in progress 4,505,200

TOTAL 284,610,105


As at31st March 10

Rs

45


SCHEDULE 13:SALARIES AND WAGES, OPERATION &

ADMINISTRATIVE EXPENSES:(a) Salaries:

Salaries and Allowances 146,978,602Managerial Remuneration 4,551,072Staff Welfare 1,728,285

(b) Operating & Administrative expenses:Advertisement Charges 50,553AGM Expenses 114,220Annual Maintenance Contract 28,000Audit Expenses 60,000Bank charges 599,627Board Meeting Expenses 340,660Books and periodicles 186,172Business Promotion & Incentives 1,165,640Computer Consumables and Maintenance 1,276,345Computer hire charges 185,423Conveyance 115,984Consultancy Charges 1,707,075Data Entry Charges 733,000Electricty Charges 663,224Insurance 181,640Interest and other financial charges 7,088,781Internet Expenses 845,571Listing Fees 210,600Licenses & Taxes 396,192Misc.Expenses Written Off 2,760,731Office Maintenance 2,299,430Postage and Telegrams 824,542Printing & Stationary 1,132,259Repairs & Maintenance 1,416,699Rent, rates and taxes 2,015,119Software Development Expenses 34,304,590Statutory Audit 150,000Security Charges 35,787Telephone Charges 947,201Traveling Expenses 4,986,796Vehicle Maintenance & others 1,113,033

TOTAL 221,192,853


As at31st March 10

Rs

46

STATEMENTS OF SUBSIDIARIES

SPRY RESOURCES INDIA PVT LTD

DIRECTORS REPORT:

To

The Members of the Company

Your Directors have pleasure in presenting the 12th Annual Report of your Company along with theAudited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

Financial Results for the year ended 31.03.2010 are summarized below:

(Rs.in lakhs)

PARTICULARS 2009-10 2008-09

Gross Income from Operations 273.95 460.77

Gross Profit / Loss before Depreciation 90.09 78.24

Less: Finance Charges 66.19 54.79

Less: Depreciation 21.82 12.03

Operating Profit 2.08 11.42

Add: Other Income 0.14 1.61

Profit / (Loss) 2.22 13.03

Provision for Tax 0.75 5.54

Provision for FBT 1.46 1.73

Profit/Loss after Tax 1.46 5.76

MAT Credit entitlement —— (4.79)

Balance brought forward from previous Balance Sheet 12.21 11.24

Balance transferred to Balance Sheet 13.67 12.21


During the year under review your company posted turnover of Rs. 273.95 lakhs and Gross Profitof Rs.90.23 lakhs. Due to the increase in Financial charges and Depreciation, there has beenproportionate impact on profits of the year.

During the last financial year we could successfully conclude 22 software development projects ofGovernment of Goa, which has become a hectic task and resulted in low turnovers. After successfulcompletion we have bagged the order of maintenance for all the projects. We are in the process ofinitiation of maintenance of projects with handholding mode.

FUTURE OUTLOOK:

Your Company is mainly focusing on e-governance solutions for the State and Central Governments.Company is fully geared up to meet the challenges and take up e-governance project of any sizeand amplitude.

With wide spread product scope of different departments from State Secretariat to Department level,we have shifted our focus to e-district project, a Mission Mode Project (MMP) under National e-Governance Program (NeGP); where we can build a strong revenue model which has great potentialwith an ear-marked funds Rs.46,000 Crores under NeGP policy under Ministry of InformationTechnology, Government of India. We are confident of achieving a good share of this market bybecoming one of the earliest entrant into this spectrum. We hope the company has got bright andpromising future ahead. We firmly believe in our abilities and project execution strength and ourtrack in e-governance space which gives us edge over others to gain market share in the recent

4747


NeGP plan a Mission Mode Project a major e-governance initiative by Department of InformationTechnology, Ministry of Communication and Information Technology (MCIT). We just give belowthe brief of the e-district project.

PROJECT BACKGROUND

The National e-Governance Plan (NeGP), approved by the Government of India for implementationduring the years 2003-2007, aims at creating a citizen-centric environment for Governance. Toimplement the vision of NeGP, twenty-sevenCentral, State and Integrated Mission Mode Project(MMPs) alongwith eight support components have been identified and approved, to enable andfacilitate rapid introduction of e-Governance in the country, with focus on service delivery. The e-District initiative of the Department of Information Technology (DIT), Ministry of Communication &Information Technology (MCIT), and Government of India has been identified as one of the MissionMode Projects at the State level. The project aims at providing support to the basic administrativeunit i.e. “District Administration” to enable content development of G2C services, which wouldoptimally leverage and utilize the three infrastructure pillars, the State Wide Area Network (SWAN)for connectivity, State Data Centre (SDC) for secure and fail safe data storage, and CommonService Centres (CSCs) as the primary frontends for service delivery to deliver services to thecitizens at their Door step. e-District project involves integrated and seamless delivery of citizenservices by district administration through automation of workflow, back end digitization, integrationand process redesigning across participating sections/departments for providing services in amost efficient manner to the citizens.

OBJECTIVES OF E-DISTRICT PROJECT

The aim of the e-District project is to create an integrated IT platform for District Administration andits subordinate offices, to use IT primarily to increase information quality, improve overall efficiencyand effectiveness in the Government processes, along with convenience in operations.

The broad objectives of the project include:

1) IT enabling of internal processes of District Administration and its subordinate offices to increasefunctional efficiency

2) Automation of workflow and internal processes of District Administration

3) Seamless integration of various departments for providing services to the citizens - by integratingvarious District databases.

4) Providing efficient individual department services through delivery channels like CommonService Centres (CSCs)

5) To provide easy access to government services to common man, especially the peoplebelonging to Scheduled Castes, Scheduled Tribes and women.

6) Creation of IT infrastructure for rolling out e- Governance plan right up to Block levels

7) Develop capacities of human resources of Government to operate and maintain IT enabledsystems and applications with confidence and provide services to the people effectively andefficiently.

8) To utilize IT to empower the common man in his dealings with the bureaucracy.

9) To make it easy for the District Administrative Officials to discharge their functions efficiently

DEPOSITS:

The Company has not accepted any deposits from the public during the year under review:

AUDITORS:

M/s Boppudi & Associates, Chartered Accountants, Hyderabad, Statutory Auditors of the Company

48


will retire at the conclusion of this Annual General Meeting. However, being eligible they offerthemselves for reappointment and confirmed that their reappointment will be within the limits specifiedunder section 224 (1B) of the Companies Act, 1956.


In accordance with the provisions of Section 217 (2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules, 1975, the particulars of Employees of the Companyare – NIL.

DIRCTOR’S RESPONSIBILITY STATEMENT:

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, it is hereby confirmed.

i) that in preparation of Annual Accounts for the year ended 31st March, 2010, the applicableaccounting standards have been followed and that no material departures have been madefrom the same.

ii) that the Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of the profit of theCompany for year ended on that date.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequateaccounting record in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

iv)That the Directors have prepare the annual accounts for the year ended 31st March, 2010 on agoing concern basis.

CONSERVATIONOF ENERGY ETC:

Additional information o conservation of energy, technology absorption, foreign exchange earningand outgo as required to e disclosed in terms of Section 217 (1) (e) of the Companies Act, 1956 readwith the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 isgiven hereunder.

Foreign Exchange earning and outgo:

Particulars 2009-10 2008-09


Foreign Exchange Outgo NIL NIL

ACKNOWLEDGEMENTS:

Your Directors take this opportunity to place a record their appreciation and gratitude for the co-operation extended by the Company’s Bankers, Shareholders, customers and various Central andState Government Agencies and Local authorities. Your Directors also wish to place on record theirappreciation of the sincere and dedicated services provided by all the employees of the organization.

For SPRY RESOURCES INDIA PVT LTD

Place: Hyderabad Sd/-Date:04.09.2010 P.GURUKRISHNA

MANAGING DIRECTOR

49


AUDITOR’S REPORT

ToThe Members ofSPRY RESOURCES INDIA PRIVATE LIMITED

We have audited the attached Balance Sheet of SPRY RESOURCES INDIA PRIVATE LIMITED asat 31.03.2010 and also the Profit and Loss Account for the year ended on that date annexed thereto.These financial statements are the responsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial basis for our opinion.

As required by the Companies’ (Auditor’s report) Order, 2003, issued by the Central Government ofIndia, in terms of Section 227(4A) of Companies Act 1956, we enclose in the Annexure a statementon the matters specified in paragraph 4 and 5 of the said order.

Future to our comments in the annexure referred to above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledgeand belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the company sofar as it appears from our examination of those books.

c) The Balance Sheet and Profit & Loss account dealt with by this report are in agreement with thebooks of account.

d) In our opinion, the Balance Sheet and Profit & Loss account dealt with by this report complywith the mandatory Accounting Standards referred to in Sub-Section 3(C) of Section 211 ofCompanies Act 1956.

e) On the basis of the written representation received from the directors and taken on records bythe Board, we report that none of the directors is disqualified as on 31st march 2010 from beingappointed as a director in terms of clause (g) of sub-section (1) of section 274 of the CompaniesAct 1956

f) 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 sorequired and give a true and fair view in conformity with accounting principles generally acceptedin India,

i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st march 2010and

ii) In the case of profit and Loss Account, of the profit of the Company for the year ended on thatdate.

For BOPPUDI & ASSOCIATESCHARTERED ACCOUNTANTS

Sd/-Place: Hyderabad B.APPA RAODate: 04-09-2010 PARTNER

M.No. 028341F.R.N. 0502S

50


ANNEXURE TO AUDITOR’S REPORT

SPRY RESOURCES INDIA PRIVATE LIMITEDReferred to in paragraph 3 of our report of even date:

1. (a) The Company has maintained proper records showing full particulars including quantitativedetails and situation of fixed asset.

(b) All the assets have not been physically verified by the management during the year but thereis a regular programme of verification which, in our opinion, is reasonable having regard to thesize of the company and the nature of its business. No material discrepancies were noticed onsuch physical verification.

2. (a) The inventories have been physically verified by the management during the year at reasonableintervals.

(b) The procedures of physical verification of the inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories and discrepancies noticed onphysical verification of inventories as compared to book records were not material.

3. (a) The Company has not taken loan from any party covered in the register maintained U/s 301 ofthe Companies Act, 1956. The Company has not granted loan to one party covered in theregister maintained under Section 301 of the Companies Act., 1956.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have beentaken from / granted to companies, firms or other parties listed in the register maintained underSection 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of theCompany.

(c) The Company is regular in repaying the principal amounts as stipulated and has been regularin payment of interest. The parties have repaid the principal amounts as stipulated and havebeen regular in the payment of interest.

d) There is no overdue amount of loans taken from or granted to companies, firms or other partieslisted in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion, there are adequate internal control procedures commensurate with the size of theCompany and the nature of its business with regard to purchase of inventories, fixed assets and forthe sale of goods.

5. (a) According to the information and explanations given to us, we are of the opinion that thetransactions that need to be entered into the register maintained under Section 301 of theCompanies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactionsmade in pursuance of contracts or arrangements entered in the register maintained undersection 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs inrespect of any party during the year have been made at prices which are reasonable havingregard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanation given to us, the Company has notaccepted any deposits as defined under section 58 A of the Companies Act, 1956.

7. In our opinion, the Company has an adequate internal audit system commensurate with its size andnature of its business.

8. The Central Government has not prescribed maintenance of cost records under Section 209 (1) (d)Of the Companies Act., 1956 for the company.

51


9. (a) According to the books and records of the company, the company is regular in depositingundisputed statutory dues including Provident Fund, Employees, State Insurance, IncomeTax, Sales Tax, Customs Duty, Excise Duty, Cess and other stator dues with appropriateauthorities whenever applicable. According to the information and explanations given to us,there are no undisputed amounts payable in respect of such, statutory dues which haveremained outstanding as at 31st March, 2010 for a period exceeding six months from the datethey became payable.

(b) Accordingly to the information and explanations given to us, there are no dues of Income Taxand other statutory dues, which have not been deposited on account of any dispute.

10. The Company has no accumulated losses and has not incurred cash losses in the current Financialyear and there was no accumulated losses in the balance sheet in the immediately precedingfinancial year.

11. In our opinion and according to the information and explanations given to us, the Company has notdefaulted in repayment of its dues to banks and financial institutions.

12. The Company has not granted any loans or advances on the basis of security by way of pledge ofshares, debentures or other securities.

13. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, theprovisions of Clause 4 (xiii) of the Companies (Auditor’s Report) order, 2003 are not applicable tothe company.

14. In our opinion, proper records have been maintained by the Company of the transactions andcontracts of dealing or trading in shares, securities, debentures or other investments and timelyentries have been made therein and shares, securities, debentures or other investments havebeen held in the name of the Company.

15. According to the information and explanations given to us, the company has not given any guaranteefor loans taken by other from banks, and financial institutions.

16. The company has taken secured loans from UCO Bank, Secunderabad, as appeareing in Balancesheet.

17. Company has not deployed /used during the year short term funds for long term investments andlong term funds for short term investments.

18. The Company has not made any preferential allotment of shares to parties and companies coveredin the register maintained under Section 301 of the Companies Act, 1956 during the year.

19. No debentures have been issued by the company and hence, the question of creation securities Irespect thereof does arise.

20. The company has not raised any money by way of public issues during the year.

21. On the basis of our examination and according to the information and explanations given to us , nofraud, on or by the company, has been noticed or reported during the year.

For BOPPUDI & ASSOCIATESCHARTERED ACCOUNTANTS

Sd/-Place: Hyderabad B.APPA RAODate: 04-09-2010 PARTNER

M.No. 028341F.R.N. 0502S

52


SPRY RESOURCES INDIA PVT LTDBALANCE SHEET AS AT 31ST MARCH 2010

As per our report of even dateFOR BOPPUDI & ASSOCIATES FOR AND ON BEHALF OF THE BOARDChartered AccountantsSd/- Sd/- Sd/-(C.A. B.APPA RAO) (P. GURU KRISHNA) (K.RAMESH)PARTNER MANAGING DIRECTOR DIRECTORM.No.028341Firm Reg No.0502S

PLACE: HYDERABADDATE: 04.09.2010

I. SOURCES OF FUNDS

1. Share Holders Funds(a) Share Capital “A” 30,000,000 17,840,000

(b) Share Application Money Pending allotment 18,800,000 20,500,000(b) Resrves & Surplus “B” 34,119,453 7,220,906

2. Loan Funds(a) Secured Loans “C” 36,696,346 45,392,239(b) Unsecured Loans -

119,615,799 90,953,145II. APPLICATION OF FUNDS1. Fixed Assets “D”

(a) Gross Block 39,593,636 36,306,307(b) Less: Depreciation 14,771,239 12,589,483(c) Net Block 24,822,397 23,716,824

2. Current Assets,Loans and Advances “E”(a) Sundry Debtors 34,691,678 23,800,790 (b) Cash & Bank Balances 9,789,153 (5,792,170) (c) Deposits 2,726,791 2,728,244

(d) Other Current Assets 4,505,200 - (e) Loans & Advances 35,973,520 37,957,612

87,686,342 58,694,476

3. Less: Current Liabilities & Provisions “F”

(a) Current Liabilities 10,849,462 12,119,317

(b) Provisions 2,645,486 13494948 804,957

Net Current Assets 74,191,394 45,770,202

4. Investments “G” 20,602,008 21,466,1195. Miscellaneous Expenditure - -

(to the extent not written off or adjusted) 119,615,799 90,953,145Notes on Accounts “K”

Particulars

Rs Rs Rs. Rs.

As at31st March 09

Rs

As at31st March 10

RsSched-

ule

53

SPRY RESOURCES INDIA PVT LTDPROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH 2010


Rs RsINCOME

- Software Development Charges 22,889,800 46,077,041

- Other Income 13,628 161,154

- Software Development Work in Progress Cl. B/s 4,505,200

TOTAL 27,408,628 46,238,195

EXPENDITURE

- Software Development Work in Progress Op. B/s - -

- Software Development Expenses “H” 14,708,428 27,622,243

- Administrative Expenses “I” 3,677,088 10,630,703

- Financial Charges “J” 6,619,349 5,479,103

- Depreciation “D” 2,181,756 1,202,984

TOTAL 27,186,621 44,935,033

Net Profit/Loss for the year 222,007 1,303,162

Less: Provision for Income Tax 75,460 606,792

Less: Provision for FBT - 173,165

Deferred Tax Liability - (52,638)

146,547 575,843

Add: MAT Credit Entitlement - (478,764)

Add: Balance brought forward

from previous year 1,220,906 1,123,827

Balance carried to Balance Sheet 1,367,453 1,220,906



54



SPRY RESOURCES INDIA PVT LTDSCHEDULES FORMING PART OF BALANCE SHEET


Rs Rs

SCHEDULE - ASHARE CAPITALAuthorised:

30,00,000 Equity Shares of Rs.10/- each 30,000,000 30,000,000ISSUED,SUBSCRIBED AND PAID UP:

30,00,000 Equity Shares of Rs.10/- each 30,000,000 17,840,000

TOTAL 30,000,000 17,840,000

SCHEDULE - BReserves & Surplus:Share Premium A/c 32,752,000 6,000,000Profit & Loss A/c 1,367,453 1,220,906

TOTAL 34,119,453 7,220,906

SCHEDULE - CSECURED LOANS:

From Banks:- Term Loan 22,825,519 27,958,196- Working Capital Loan 10,073,946 14,908,505- Vehicle Loan 3,796,881 2,525,538- Loan from UCO Bank - -

TOTAL 36,696,346 45,392,239

SCHEDULE - ECURRENT ASSETS, LOANS & ADVANCES:

(a) Sundry Debtors(Unsecured, considered good)- Outstanding more than six months 1525840 1,525,840- Others 33165838 22,274,950

Total (a) 34691678 23,800,790

(b) Cash & Bank Balances:Cash on hand 237675 165,340Balances with Scheduled banks- In Fixed Deposits 8771000 -- In Current Accounts 780478 (5,957,510)

Total (b) 9789153 (5,792,170)

55


(c) Deposits:- In Margin Money Deposits 2134160 2,027,113- In Fixed Deposits 0 71,000- Earnest Money Deposits 482056 525,056- Other Deposits, Investments 110575 105,075

Total (c) 2726791 2,728,244

(d) Other Current Assets:- Software Development Work in Progress 4505200 -

Total (d) 4505200 -

(e) Loans & Advances- Advance for creditors for Expenses - -- Other Advances 34385087 36,531,942- Pre-paid Expenses 74,561 -- Advance Fringe Benefit Tax - -- TDS Receivable 1394441 1,306,239- Deferred Tax Asset 52638 52,638- Mat Credit Entitlement 66793 66,793

Total (e) 35973520 37,957,612Total (a+b+c+d+e) 87686342 58,694,476

SCHEDULE - FCURRENT LIABILITIES & PROVISIONS:Current Liabilities:

Creditors for Expenses 10,849,462 12,119,317

10,849,462 12,119,317Provisions:- for Audit Fee & Audit Expenses 50,000 25,000- for other Expenses 2,041,263 - for Income Tax 554,223 606,792- for FBT - 173,165

2,645,486 804,957

TOTAL 13,494,948 12,924,274


Rs Rs

56




Rs Rs

SCHEDULE - GINVESTMENTS:Quoted InvestmentsShares in Listed Companies 602008 216,119Share Application MoneyCeason Glass Pvt Ltd 12,750,000 12,750,000Innova Childrens Heart Hospital 4,750,000 6,000,000

Vardhaman Voice Call Private Limited 2,500,000 2,500,000

TOTAL 20,602,008 21,466,119

SCHEDULE - H Current PreviousPeriod Year

SOFTWARE DEVELOPMENT EXPENSES Rs. Rs.Data Entry Work Charges 733,000 12,064,599Salaries 13,172,028 13,843,083

Software Consultancy Charges 893,761Internet Expenses 83,400 100,800Managing Directors Remuneration 720,000 720,000

Directors Remuneration -

TOTAL 14,708,428 27,622,243

SCHEDULE - IADMINISTRATIVE EXPENSES

Bank Charges 276,895 579,627Bank Guarantee Commission 77,954 309,794Books & Periodicals - 39,241Postage,Telegrams 10,890 101,184Telephone Expenses 72,898 130,613Conveyance - 99,812Audit Fees 25,000 25,000Business Promotion Expenses 36,830Repairs & Maintenace 9,624 151,492Printing & Stationery 55,686 104,354Rent 414,400 610,036Staff Welfare Expenses 138,360 499,967Interest on FBT 8,063 -Office Maintenance 345,017 890,089Vehicle Maintenance 1,057,613Rates & Taxes 382,140 1,481,377Electricity Charges 210,283 227,365Subscription & Membership Expenses 1,021 -Tender Application Fee 48,000Employer’s contribution to ESI & P F 360,768 490,218Professional Tax 12,500Insurance Charges 66,208 36,157Travelling Expenses - Directors 151,416 911,890


57



Rs Rs

- Staff 1,032,675 1,454,820Car Hire Charges 405,283Processing Charges 13,850 -Training Expenses 903,000VOIP Call Charges 23,940 24,441

TOTAL 3,677,088 10,630,703

SCHEDULE - JFINANCIAL CHARGES

Interest on Term Loan 3,556,223 4,028,201Interest on TDS - -Interest on Working Capital Loan 2,702,299 1,391,406H.P Financial Charges 360,827 59,496

TOTAL 6,619,349 5,479,103


58


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59


SPRY RESOURCES INDIA PRIVAE LIMITED

NOTES FORMING PART OF THE ACCOUNTS AS ON 31.03.2010

Schedule – I

A. Significant Accounting Policies:

1. General:

The Financial Statement have been prepared under the historical cost convention method inaccordance with the provisions of the Companies Act, 1956 and accounting standards issued bythe Institute of Chartered Accountants of India as adopted consistently by the Company. All theIncome and expenditure having a material bearing on the financial statements are recognized onaccruals basis.

2. Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation inclusive of freight, duties, taxes andincidental expenses relating to the cost of acquisition and finance cost.

3. Depreciation:

Depreciation on fixed assets is provided using the straight line method, at the rate specified in theSchedule XIV to the companies Act 1956.

4. Accounting Policies not specifically referred to are consistent with generally accepted accountingpractices.

5. Revenue Recognition:

Revenue from the software Consultancy is recognized on software Consultancy to the Clients andbilled as per the terms of specified contracts. Revenue from the sale of software products isrecognized when the sale has been completed with the passing of title. In case of fixed pricecontract, revenue is recognized based on the specific terms of the contract.

6. Foreign Currency Transactions:

In the case of sale made to clients outside India, income is accounted on the basis of the Exchangerate as on the date of transaction. Adjustments are made for any variations in the sale proceeds onconversion into Indian currency upon actual receipt as per Accounting Standard II.

7. AS_22 Taxation of Income:

Provision for Taxation, the aggregate of Income Tax Liability on the profits for the year chargeableto tax and Deferred Tax resulting from timing differences between Book and Tax Profits, if any, isconsidered in accordance with the Accounting Standard- 22(AS-22), Accounting for taxes onincome, issued by the Institute of Chartered Accountants of India.

B. Notes to Accounts:

1. Quantitative Details: Quantitative details of and the information as required under paragraph 2, 4Cand 4D of part II of the Companies Act, 1956 is not applicable to the Company.

2. Term Loan and Working Capital Terms Loans obtained from Uco Bank, MG Road Branch,Secunderabad is secured by way of hypothecation of office premises and pledge of movable andimmovable properties, both present and future and personal guarantees of Directors.

60


3. Auditors Remuneration 2009-10 2008-09

Audit Fee Rs. 20000/- Rs.20,000/-

Expenses Rs. 5000/- Rs. 5,000/-

4. Directors Remuneration 2009-10 2008-09

Managing Director Rs.720,000/- Rs.720,000/-

5. In the opinion of the Board of Directors and to the best of their knowledge and belief, the value onrealization of current Assets, Loans and Advances in the ordinary course of business will not be lessthan the amount at which they are stated in the balance sheet.

6. Foreign Exchange Earnings 228,89,780/-

7. Expenditure in foreign currencies —Nil—

8. Contingent Liability provided for —NIL—

9. Debit and credit balances are subject to confirmation.

10. Previous year figures have been regrouped / rearranges wherever necessary as per our report ofeven date.



61


ACE BPO SERVICES PVT LTD

DIRECTORS REPORT

To


Your Directors highly delighted to present 5th Annual Report of your Company along with theAudited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS


(Rs.in lakhs)

PARTICULARS 2009-10 2008-09

Income from Operations 202.52 201.34

Expenditure 190.59 171.55

PBDIT 11.93 29.79

Interest 0.99 1.17

Depreciation 5.29 4.54

Profit Before Tax (PBT) 5.65 24.07

Provision for Tax 0.87 3.22

Provision for FBT —— 0.17

Deferred Taxes —— 0.01

Profit after Tax but before extraordinary items 4.78 20.67

Extraordinary items —— ——

Net Profit 4.78 20.067

Balance from previous year

Balance Carried to Balance Sheet


During the year under review your company posted turnover of Rs. 202.52 lakhs, Gross Profit ofRs. 11.93 lakhs and net Profit of Rs. 4.78. Company has been constantly endeavoring to becomea sizable player in BPO Space in all segments. As such, during the year company has spent moreon marketing and developmental aspects which resulted in lower profit margins and impactedproportionately net profits of the company.

FUTURE OUTLOOK:

As you are aware that the Company has been focusing on revenue cycle management relatedactivities for Health Care Industry through Technology driven transformation. Our Company isestablished brand in US market for dependable services. Our competitive edge is our end to endsolutions in revenue cycle management, timely & quality deliveries, cost effective services to clients,scalable infrastructure, deliverable abilities through a mix of on sight resources at clients locationand offshore resources from companys’ facility in India etc,. Our segments are Health Care, Call

62


Centre and Management Services.

Combining leading edge IT capabilities with key EMR strengths and strengths of strategic partnersin USA, huge technology spends of US Government, we are confident company may have promisingfuture with stable growth in the years to come.

DEPOSITS;

During the year, Company has not accepted any deposits from the public within the meaning ofSection 58 A of the Companies Act 1956 read with Deposit Rules issued Central Governmentthereon,

AUDITORS:

M/s Momchuri & Associates, Chartered Accountants, Hyderabad, Statutory Auditors of the Companywill retire at the conclusion of this Annual General Meeting. However, being eligible they offerthemselves for reappointment and confirmed that their reappointment will be within the limits specifiedunder section 224 (1B) of the Companies Act, 1956.



DIRECTOR’S RESPONSIBILITY STATEMENT:


i) that in preparation of Annual Accounts for the year ended 31st March,2010, the applicableaccounting standards have been followed and that no material departures have been madefrom the same.

ii) that the Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of the profit or lossof the Company for year ended on that date.

iii) that the Directors have taken proper and sufficient care for the maintenance of adequateaccounting record in accordance with the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

iv) that the Directors have prepare the annual accounts for the year ended 31st March, 2010 on agoing concern basis.

CONSERVATIONOF ENERGY, TECHNOLOGY ABSORPORTION, FOREIGHN EXCHANGEEARNINGS AND OUTGO:

Additional information on conservation of energy, technology absorption, foreign exchange earningand outgo as required to e disclosed in terms of Section 217 (1) (e) of the Companies Act, 1956 readwith the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 isgiven hereunder.

CONSERVATION OF ENERGY:

The operations of your company are not energy intensive. However wherever possible to reducethe energy consumption adequate measures have been taken to reduce the consumption by usingefficient equipment.

TECHNOLOGY ABOSORPTION:

The Company believes that Technological obsolescence is a reality. Continuous drive for research

63


and development and quest for adoption of newer technologies will enable the company to facefuture challenges and opportunities. We at ACE BPO encourage continuous innovation and thusabsorb Technological upheavals.


(Rs. In Lakhs)



Foreign Exchange Outgo NIL NIL

ACKNOWLEDGEMENTS:

We thank our Customers, Investors, Bankers and various Statutory Authorities for their continuedsupport during the year. Your Directors also wish to place on record their appreciation of thesincere and dedicated services provided by all the employees of the organization. Our consistantgrowth was made possible by their hard work, solidarity, cooperation and support and we lookforward to have the same relationship in the years to come.

For and on behalf of the BoardACE BPO Services Pvt Ltd

Sd/- Sd/-P. Jagadeesh Babu P. Biswasri

Director Director

Place: HyderabadDate: 04.09.2010

64



AUDITOR’S REPORT

To

The Members of


We have audited the attached Balance Sheet of ACE BPO SERVICES PRIVATE LIMITED as at31.03.2010 and also the Profit and Loss Account for the year ended on that date annexed thereto.These financial statements are the responsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements based on our audit.










i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st march 2010and

ii) In the case of profit and Loss Account, of the profit of the Company for the year ended on thatdate.

For MOMCHURI AND ASSOCIATESCHARTERED ACCOUNTANTS

Sd/-M.VENKATA CHALAPATHI REDDY

(PARTNER)M. NO. : 214237FRN : 010730S

Place: HyderabadDate: 04-09-2010

65



ANNEXURE TO AUDITOR’S REPORT

Referred to in paragraph 3 of our report of even date,


(b) All the assets have not been physically verified by the management during the year but thereis a regular programme of verification which, in our opinion, is reasonable having regard to thesize of the company and the nature of its business. No material discrepancies were noticed onsuch physical verification.

2. (a) The inventories have been physically verified by the management during the year at reasonableintervals.

(b) The procedures of physical verification of the inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories and discrepancies noticed onphysical verification of inventories as compared to book records were not material.




d) There is no overdue amount of loans taken from or granted to companies, firms or other partieslisted in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion, there are adequate internal control procedures commensurate with the size of theCompany and the nature of its business with regard to purchase of inventories, fixed assets and forthe sale of goods.





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

66


of the Companies Act., 1956 for the company.

9. (a) According to the books and records of the company, the company is regular in depositionundisputed statutory dues including Provident Fund, Employees, State Insurance, IncomeTax, Sales Tax, Customs Duty, Excise Duty, Cess and other stator dues with appropriateauthorities whenever applicable. According to the information and explanations given to us,there are no undisputed amounts payable in respect of such, statutory dues which haveremained outstanding as at 31st March, 2010 for a period exceeding six months from the datethey became payable.

(b) According to the information and explanations given to us, there are no dues of Income Taxand other statutory dues, which have not been deposited on account of any dispute.



12 The Company has not granted any loans or advances on the basis of security by way of pledge ofshares, debentures or other securities.




16. The company has got secured loan from Banks / Institutions, as appearing in Balance sheet.

17. Company has not deployed /used during the year short term funds for long term investments andlong term funds for short term investments.




21. On the basis of our examination and according to the information and explanations given to us , nofraud, on or by the company, has been noticed or reported during the year.

For MOMCHURI AND ASSOCIATESCHARTERED ACCOUNTANTS

Sd/-M.VENKATA CHALAPATHI REDDY

(PARTNER)M. NO. : 214237FRN : 010730S

PALCE: HYDERABADDATE: 04.09.2010

67



Share Capital 16,205,814 11,006,4602 Reserves and Surplus 2 2,711,705 2,234,0303 Loan Funds 3 856,539 691,916

Total 19,774,058 13,932,406


a) Gross Block 3,263,323 2,649,903

b) Less: Depreciation 1,227,265 698,297c) Net Block (a) 2,036,058 1,951,606

2 Current Assets, Loans and Advancesa) Cash and Bank Balances 5 1,989,626 641,316b) Other Current Assets 31,995 -b) Sundry Debtors 6 - -c) Loans and Advances 7 14,826,553 7,188,078d) Investments 8 1,074,978 3,254,855

17,923,152 11,084,249Less: Current Liabilities and Provisionsa) Current Liabilities 9 64,359 -b) Provisions 10 2,778,001 2,639,778

2,842,360 2,639,778Net Current Assets (b) 15,080,792 8,444,471

3 a) Miscellaneous Expenditure (c) 11 2,637,364 3,516,485(to the extent not written off oradjusted)Deferred Tax Asset 19,844 19,844

19,774,058 13,932,406Notes on Accounts 14

ACE BPO SERVICES PVT LTDBALANCE SHEET AS AT 31.03.2010


Rs Rs.


AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARDFor MOMCHURI AND ASSOCIATES FOR ACE BPO SERVICES PVT LTDCHARTERED ACCOUNTANTS

Sd/- Sd/- Sd/-M.VENKATA CHALAPATHI REDDY P.JAGADEESH BABU P.BISWASRIPARTNER DIRECTOR DIRECTORM.NO.214237FRN: 010730S


68


ACE BPO SERVICES PVT LTDPROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH 2010


Rs Rs.

INCOME: 12 20,252,103 20,133,943

Total (A) 20,252,103 20,133,943

EXPENDITURE:

Salaries and other Administrative Expenses 13 19,158,173 17,271,841

Depreciation on Fixed Assets 4 528,968 454,660

Total (B) 19,687,141 17,726,501

Profit for the period (A-B) 564,962 2,407,442

Profit for the period before taxation 564,962 2,407,442

Provision for Income Tax 87,287 321,896

Provision for FBT - 17,223

Provision for Deferred Tax - 1,274

Profit for the period after taxation 477,675 2,067,049

Add: Balance brought forward from previous year 2234030 166981

(Deficit) Carried to Balance Sheet 2711705 2234030





69


SCHEDULE 1:SHARE CAPITALAuthorised:20,00,000 Equity Shares of Rs.10/- each 20,000,000 20,000,000

20,000,000 20,000,000Issued, Subscribed and paid up:20,00,000 Equity Shares of Rs.10/- each 20,000,000 11,006,460Calls in Arrears (7,794,186) -Share Premium 4,000,000 -TOTAL 16,205,814 11,006,460SCHEDULE 2:RESERVES & SURPLUSProfit & Loss Account 2,711,705 2,234,030TOTAL 2,711,705 2,234,030SCHEDULE 3:SECURED LOANS 457,239 691,909UNSECURED LOANS 399,300 7TOTAL 856,539 691,916SCHEDULE 5:CASH AND BANK BALANCES:Cash on Hand 65,362 98,596Balances with Scheduled BanksIn Current Accounts 1,849,288 491,232In Deposit Accounts 74,976 -TDS Receivable - 4,922Deposits - 26,795It Refundable - 19,771TOTAL 1,989,626 641,316SCHEDULE 6:SUNDRY DEBTORS: (Unsecured)Debts outstanding Over Six MonthsConsidered Good - -Considered DoubtfulGoodOther Debts Considered Good - -

TOTAL - -

SCHEDULE 7:LOANS & ADVANCES:Loans and Advances recoverable in cashor in Kind or for value to be receivedLoans, Advances and Deposits 14,826,553 7,188,078(Includes due from directors Rs.Nil)Advance to Suppliers - -

TOTAL 14,826,553 7,188,078

ACE BPO SERVICES PVT LTDSCHEDULES FORMING PART OF BALANCE SHEET


Rs Rs.

70



Rs Rs.

SCHEDULE 8:INVESTMENTSInvestments in Subsidaries - -Investments in Others 1,074,978 3,254,855

TOTAL 1,074,978 3,254,855

SCHEDULE 9:CURRENT LIABILITIES:Sundry Creditors (Refer Note Below) - For Expenses 64,359 - - For Others - -

TOTAL 64,359 -

SCHEDULE 10:PROVISIONS: 2,690,097 2,298,860TDS Payable 617 1,799IT and FBT Payable 87,287 339,119

TOTAL 2,778,001 2,639,778

SCHEDULE 11:MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

2,637,364 3,516,485 -

TOTAL 2,637,364 3,516,485

SCHEDULE 12:INCOME:Medical Billing Income 20,148,642 20,101,209

E Publishing Income 93,304 -Other Income 10,157 32,734

TOTAL 20,252,103 20,133,943

71





Rs Rs.

SCHEDULE 13:SALARIES AND WAGES, OPERATION& ADMINISTRATIVE EXPENSES:(a) Salaries:

Salaries and Allowances 15,904,671 13,363,808Managing Director’s remunerationStaff Welfare 248,575

(b) Operating & Administrative expenses:Electricty Charges 157,333 138,056Food Beverage, Water 101,088Internet Expenses 531,801 404,405Rent 118,000 108,000Repairs & Maintenance 199,018 71,841Server Maintenance 84,000 -VOIP Charges 148,831 -Audit Fee 30,000 30,000Fringe Benefit Tax -Advertisements - 2,500Computer Maintenance - 179,282Demat Charges 880 -Forex Difference 14,372 1,222,364Insurance 46,640 58,078Licences & Taxes 99,899 26,700Misc.Expenses Written Off 879,121 879,121Office Maintenance 72,286 212,564Printing & Stationary 2,542 9,132Telephone Charges 65,508 26,663Tours & Travels 448,129 151,884Vehicle Maintenance - 169,418Bank Charges 7,631 19,784Interest on Vehicle Loan 65,390 56,387Interest Paid 33,546 40,766

TOTAL 19,158,173 17,271,841

72


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73


ACE BPO SERVICES PVT LTD18. NOTES FORMING PART OF ACCOUNTS:

I. SIGNIFICANT ACCOUNTING POLICIES:

a) METHOD OF ACCOUNTING:

g) The financial statements have been prepared under the historical cost convention and inaccordance with the applicable Accounting Standards prescribed in the companies (AccountingStandards) Rules, 2006 issued by the Central Government and with the applicable provisionsof the companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are in consonance with prudentaccounting policies.

iii) All incomes, revenue expenses, assets and liabilities having material bearing on thefinancial statements are recognized on accrual basis, unless otherwise stated.

iv) The preparation of financial statements in conformity with generally accepted accountingprinciples requires that the management of the company makes estimates and assumptionsthat effect the reported amounts of income and expenses of the period, the reported balancesof assets and liabilities as of the date of financial statements.

b) FIXED ASSETS:

Fixed Assets are accounted at Cost plus incidental expenses in connection with acquisition of FixedAssets. The Depreciation is provided on WDV Basis at the rates specified in Schedule XIV of theCompanies Act, 1956.

c) RETIREMENT BENEFITS:

The Company’s liabilities towards retirement benefits in the form of Gratuity, Superannuation Fundand Leave Encashment etc., are not provided for in the books. However, the same shall be ascertainedand paid as and when it becomes payable.

d) PRELIMINARY EXPENSES:

Preliminary Expenses are written off equally over a period of 5 years.

e) INVESTMENTS:

Long Term Investments are carried at Cost. f) FOREIGN CURRENCY TRANSACTION:

Export sales in foreign currency are accounted at the exchange rate prevailing at the time oftransaction. Exchage differences arising on foreign currency transactions settled during theyear are recognised in the profit and loss account.

Monetary assets and liabilities denominated in foreign currencies, which are outstandingat the year end are translated at exchange rate prevailing on the last working day of theaccounting year. The resultant exchange differences are recognised in the profit and lossaccount.

II. Notes on Accounts:

a) The company is a Small and Medium Sized Company (SMC) as defined in the GeneralInstructions in respect of Accounting Standards notified under the Companies Act 1956.Accordingly, the company has complied with the Accounting Standards as applicable to aSmall and Medium Sized Company.

b) Expenditure on employees in respect of remuneration of not less than Rs.24,00,000/- perannum, if employed throughout the year or Rs. 2,00,000/- per month, if employed for part of theyear is NIL.

74


ACE BPO SERVICES PVT LTDc) The Company has not received any information from any of the suppliers of their being Small

Scale Industrial Unit. Hence, the amounts due to Small Scale Industrial Units outstanding as on31st March, 2010 are not ascertainable.

d) Taxiation:

Current Tax:

Provision for current income tax is made on the basis of the taxable income under the Income TaxAct, 1961.

Deferred Tax:

Deferred tax is calculated at applicable statutory Income Tax rate and is recognised on timingdifferences between taxable income and accounting income that originated in one period and arecapable of reversal in one or more subsequent periods.

e) Paise have been rounded off to the nearest rupee.

f) Previous year figures have been regrouped, reclassified and recast wherever necessary toconfirm to current years classification.

g) FOREIGN EXCHANGE EARNINGS AND OUTGO :


Foreign Exchange - Earning

- Export Sales 2,01,48,642 2,01,01,209

Foreign Exchange – Outgo -NIL- -NIL-

h) Related Party Transactions as per Accounting Standard-18 are as below:

1. Related Parties:

Name of the Related Particulars Balance

Party As on 31-03-09

P.Jagadeesh Babu Remuneration 0.00

P.Biswasri Remuneration 0.00

Acepro Inc., Receivables 0.00




75


CTIL INFRASTRUCTURE PVT LTD

DIRECTORS REPORT

To


Your Directors take this privilege to present 1st Annual Report of your Company along with the AuditedAccounts for the year ended 31st March, 2010.

FINANCIAL RESULTS


(Rs.in lakhs)

PARTICULARS 2009-10

Income from Operations 38.00

Expenditure 35.98

PBDIT 2.01

Interest ——-

Depreciation 0.09

Profit Before Tax (PBT) 1.92

Provision for Tax 0.58

Provision for FBT ——-

Deferred Taxes 0.02

Profit after Tax but before extraordinary items 1.32

Extraordinary items ——

Net Profit 1.32

Balance Carried to Balance Sheet 1.32


During the year under review your company has made an income of Rs. 38.00 lakhs and GrossProfit of Rs.2.01 lakhs. Company was incorporated during the year under review and there areoperations for few months on trail basis.

BUSINESS AND FUTURE OUTLOOK:

Your Company was incorporated as 100% subsidiary of Comp-u-Learn Tech India Ltd asInfrastructure arm to foray into Infrastructure segment through setting up of power plants. It is a

76


object oriented vehicle of parent Company to be used for diversification plans of the parent company.As such parent company Comp-u-Learn Tech India Ltd has made up major expansion anddiversification plans as mentioned below:

1. Solar Power Project of 5 MWS under the scheme of new grid connected solar photo voltaic projectsof Jawaharlal Nehru National Solar Mission (JNNSM). The tentative project outlay is estimated atRs.100 Crores.

2. Thermal Power Project. It is a major growth initiative under infrastructure segment of the groupwhich is proposed to be setup through your company being 100% subsidiary and specialinfrastructure arm of the group. The proposed Thermal Power Plant of 405 MWS based on coal.The project proposed to be located at Jiral Village, Kamaksha Nagar Tahsil, Dhenkanal Dist. Orissa.Single window for the project expected to be received shortly. Other necessary steps to completethe project are in the process of initiation by the parent Company.

With all the above growth plans on hand your Directors are confident that company will have a greatgrowth in future and which will in turn contribute to the overall growth of the group.

DEPOSITS:

During the year, Company has not accepted any deposits from the public within the meaning ofSection 58 A of the Companies Act 1956 read with Deposit Rules issued by Central Government.

AUDITORS:

M/s Balaji Viswanath & Co, Chartered Accountants, Hyderabad, First Auditors of the Company willretire at the conclusion of this Annual General Meeting. However, being eligible they offer themselvesfor reappointment and confirmed that their reappointment will be within the limits specified undersection 224 (1B) of the Companies Act, 1956.



DIRCTOR’S RESPONSIBILITY STATEMENT:


that in preparation of Annual Accounts for the year ended 31st March,2010, the applicable accountingstandards have been followed and that no material departures have been made from the same:

that the Directors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the profit or loss of the Companyfor year ended on that date:

That the Directors have taken proper and sufficient care for the maintenance of adequate accountingrecord in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities.

That the Directors have prepare the annual accounts for the year ended 31st March, 2010 on a goingconcern basis.

CONSERVATIONOF ENERGY, TECHNOLOGY ABSORPORTION, FOREIGHN EXCHANGEEARNINGS AND OUTGO:

Additional information on conservation of energy, technology absorption, foreign exchange earningand outgo as required to e disclosed in terms of Section 217 (1) (e) of the Companies Act, 1956 read

77


with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 isgiven hereunder.

CONSERVATION OF ENERGY:

The operations of your company so far are minuscule and it will take time to go on swing. Thereforethe operations of the Company doesn’t require any energy and chances for conversation are hardlyanything.

TECHNOLOGY ABOSORPTION:

The Company is in the process of setting up of Solar Power Project and Thermal Power Project ofsizes as stated herein before. During the implementation of the projects and after successfulcommissioning of the projects your company will make all possible endeavors to develop newertechnologies and absorption of the same wherever possible.


Particulars 2009-10

Foreign Exchange Earnings NIL

Foreign Exchange Outgo NIL

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their sincere appreciation of services of employees, Bankersand various Statutory Authorities for their continued support during the year. We look forward tomaintain same cordial relations with all concerned in future also.

For and on behalf of the BoardCTIL INFRASTRUCTURE PVT LTD

Place: HyderabadDate: 04.09.2010 Sd/- Sd/-

P Jagadeesh Babu V. Suresh Babu Director Director

78


AUDITOR’S REPORT

To

The Members of


We have audited the attached Balance Sheet of CTIL INFRASTRUCTURE PRIVATE LIMITED as at31.03.2010 and also the Profit and Loss Account for the year ended on that date annexed thereto.These financial statements are the responsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements based on our audit.










ii) In the case of the Balance Sheet, of the state of affairs of the company as at 31st march 2010and

iii) In the case of profit and Loss Account, of the profit of the Company for the year ended on thatdate.

For Balaji Viswanath & Co.CHARTERED ACCOUNTANTS

Sd/-Place: Hyderabad B.Balaji ViswanathDate: 04-09-2010 Proprietor

M.No: 029357FRN : 008194S

79


CTIL INFRASTRUCTURE PVT LTDANNEXURE TO AUDITOR’S REPORT

Referred to in paragraph 3 of our report of even date,


(b) All the assets have not been physically verified by the management during the year but thereis a regular programme of verification which, in our opinion, is reasonable having regard to thesizeof the company and the nature of its business. No material discrepancies were noticed onsuch physical verification.

2. As the operations of the Company just started and there were no inventories and therefore physicalverification of the inventory, procedure for the verification and other relevant matters does’t arise.




(d) There is no overdue amount of loans taken from or granted to companies, firms or other partieslisted in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion, there are adequate internal control procedures commensurate with the size of theCompany and the nature of its business with regard to purchase of inventories, fixed assetsand for the sale of goods.





8. The Central Government has not prescribed maintenance of cost records under Section 209 (1) (d)of the Companies Act., 1956 for the company.

9. (a) Accordingly to the books and records of the company, the company is regular in depositionundisputed statutory dues including Provident Fund, Employees, State Insurance, Income Tax,Sales Tax, Customs Duty, Excise Duty, Cess and other stator dues with appropriate authoritieswhenever applicable. According to the information and explanations given to us, there are noundisputed amounts payable in respect of such, statutory dues which have remained outstandingas at 31st March, 2010 for a period exceeding six months from the date they became payable.

80



(b) Accordingly to the information and explanations given to us, there are no dues of Income Tax andother statutory dues, which have not been deposited on account of any dispute.



12. The Company has not granted any loans or advances on the basis of security by way of pledge ofshares, debentures or other securities.




16. The company has not taken any secured loan from Banks / Institutions, as appearing in Balancesheet.

17. Company has not deployed /used during the year short term funds for long term investments and

long term funds for short term investments.




21 On the basis of our examination and according to the information and explanations given to us , nofraud, on or by the company, has been noticed or reported during the year.

For Balaji Viswanath & Co.

CHARTERED ACCOUNTANTSSd/-

Place: Hyderabad B.Balaji ViswanathDate: 04-09-2010 Proprietor

M.No: 029357FRN : 008194S

81


I SOURCE OF FUNDS

1 Share Holder FundsShare Capital 1 100,000Share Application Money 1,925,000Deferred Tax Liability 1,524

2 Reserves & Surplus 132,285

3 Loan FundsUnsecured Loans 2 -

Total 2,158,809

II APPLICATION OF FUNDS

1 Fixed Assets 3a)Gross Block 62,130b)Less: Depreciation 9,888c)Net Block (a) 52,242

1 Current Assets, Loans and Advancesa) Cash and Bank Balances 4 189,358b) Loans and Advances 5 1,920,000c) Other Current Assets -

2,109,358Less: Current Liabilities and Provisionsa) Current Liabilities 6 57,631b) Provisions 7 15,000

72,631Net Current Assets (b) 2,036,727

3 a) Miscellaneous Expenditure © 69,840(to the extent not written off oradjusted)Total(a+b+c) 2,158,809



BALANCE SHEET AS AT 31.03.2010

AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARD

for Balaji Viswanath & Co For CTIL Infrastructurre Pvt LtdChartered AccountantsSd/- Sd/- Sd/-B Balaji Viswanath P. Jagadeesh Babu V. Suresh BabuProprietor Director DirectorM.No.029357Firm Reg No.008194S



Rs.

82


I SOURCE OF FUNDS

INCOME: 9 3,800,000

Total (A) 3,800,000

EXPENDITURE:

Salaries and other Administrative Expenses 10 3,598,672

Depreciation 9,888

Total (B) 3,608,560

Profit for the period (A-B) 191,440

Profit for the period before taxation 191,440

Provision for Income Tax 57,631

Provision for FBT

Provision for Deferred Tax 1,524

Profit for the period after taxation 132,285

Add: Balance brought forward from previous year -

(Deficit) Carried to Balance Sheet 132,285



PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31.03.2010

AS PER OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARD

for Balaji Viswanath & Co For CTIL Infrastructurre Pvt LtdChartered AccountantsSd/- Sd/- Sd/-B Balaji Viswanath P. Jagadeesh Babu V. Suresh BabuProprietor Director DirectorM.No.029357Firm Reg No.008194S



Rs.

83


SCHEDULES FORMING PART OF BALANCE SHEET

As at31st March 10

Rs.

SCHEDULE 1:

SHARE CAPITAL

Authorised:

50,000 Equity Shares of Rs.10 each 500,000

500,000

Issued, Subscribed & Paid up Capital

10,000 Equity Shares of Rs.10/- each 100,000

100,000

SHARE APPLICATION MONEY

Share Application Money 1,925,000

1,925,000

SCHEDULE 4:

CASH AND BANK BALANCES:

Cash on Hand 34,358

Balances with Scheduled Banks

In Current Accounts 155,000

TOTAL 189,358

SCHEDULE 5:

LOANS & ADVANCES:

Loans, Advances and Deposits 1,850,000

(Includes due from directors Rs.Nil)

TDS Receivables 70,000

TOTAL 1,920,000

SCHEDULE 6:

CURRENT LIABILITIES:

Sundry Creditors -

Income Tax 57,631

TOTAL 57,631

SCHEDULE 7:

PROVISIONS:

Audit Fee Payable 15,000

TOTAL 15,000

84



SCHEDULES FORMING PART OF BALANCE SHEETAs at

31st March 10Rs.

SCHEDULE 8:

INCOME:

Income 3,800,000

TOTAL 3,800,000

SCHEDULE 9:

SALARIES AND WAGES, OPERATION & ADMINISTRATIVE EXPENSES:

(a) Salaries and Wages:

Salaries and Allowances 1,289,650

Staff Welfare 325,420

(b) Operating & Administrative expenses:

Postage and Telegrams & Courier 551

Telephone Charges 6,854

Printing & Stationary 102,644

Audit Fee 15,000

Traveling Expenses 135,424

Books and periodicles 1,564

Conveyance 115,984

Computer Hire Charges 185,423

Office Maintenance 98,424

Electricity Charges 42,684

Preliminary Expenses Written Off 7,760

Design & Development Charges 554,865

Software Development Expenses 716,425

TOTAL 3,598,672


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CTIL INFRASTRUCTURE PRIVATE LIMITEDNOTES FORMING PART OF THE ACCOUNTS AS ON 31.03.2010Schedule – IA. significant Accounting Policies:1. General:

The Financial Statement have been prepared under the historical cost convention method in accor-dance with the provisions of the Companies Act, 1956 and accounting standards issued by theInstitute of Chartered Accountants of India as adopted consistently by the Company. All the Incomeand expenditure having a material bearing on the financial statements are recognized on accrualsbasis.

2. Fixed Assets:Fixed Assets are stated at cost less accumulated depreciation inclusive of freight, duties, taxes andincidental expenses relating to the cost of acquisition and finance cost.

3. Depreciation:Depreciation on fixed assets is provided using the straight line method, at the rate specified in theSchedule XIV to the companies Act 1956.

4. Accounting Policies not specifically referred to are consistent with generally accepted accountingpractices.

5. Revenue Recognition:Revenue from the sale of software products is recognized when the sale has been completed withthe passing of title. In case of fixed price contract, revenue is recognized based on the specificterms of the contract.

6. Foreign Currency Transactions: NIL7. AS_22 Taxation of Income:

Provision for Taxation, the aggregate of Income Tax Liability on the profits for the year chargeable totax and Deferred Tax resulting from timing differences between Book and Tax Profits, if any, isconsidered in accordance with the Accounting Standard- 22(AS-22), Accounting for taxes on in-come, issued by the Institute of Chartered Accountants of India.

B. Notes to Accounts:1. Quantitative Details: Quantitative details of and the information as required under paragraph 2, 4C

and 4D of part II of the Companies Act, 1956 is not applicable to the Company.2. Auditors Remuneration 2009-10

—Audit Fee Rs. 15000/-3 In the opinion of the board of Directors and to the best of their knowledge and belief, the value on

realization of current Assets, Loans and Advances in the ordinary course of business will not beless than the amount at which they are stated in the balance sheet.

5. Foreign Exchange Earnings — NIL—-6. Expenditure in foreign currencies —Nil—7. Contingent Liability provided for —NIL—8. Debit and credit balances are subject to confirmation.9. Previous year figures have not been given as this is the first year of operation for the company.

For BALAJI VISWANATH & CO. FOR & ON BEHALF OF THE BOARDCHARTERED ACCOUNTANTSSd/- Sd/- Sd/-B.BALAJI VISWANATH P. JAGADEESH BABU V. SURESH BABUPROPRIETOR Director DirectorM.No:029357FRN 008194S

Place: HyderabadDate: 04-09-2010

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DECLARATION BY THE DIRECTORS

To

The Shareholders,

COMPULEARN MIDDLE EAST FZC

Since the accounting year in Dubai ends with June 30th following year and the auditors have alreadygiven their report as on June 30th, 2010. Directors of your company have taken view based on normalaccounting polices and practices to have a certification and authentication of figures and amountsextracted from the audited ones by the Chartered Accountants in India for the year ended 31st March,2010for the purpose of consolidation of Financial Statements with those of parent company.

Further we, the Directors of Compulearn Middle East FZC, hereby declare that;

1. The Financial statements and notes for the period ended 31st March, 2010 are prepared inaccordance with the accounting policies contained in note 3 of the notes appended to the FinancialStatements.

2. The Financial Statements so prepared gives true and fair view of the financial position of theCompany in case of Balance Sheet and of the Profit or Loss in case of statement of Income.

Sd/- Sd/-

PVV Satyanarayana Mangilal Kalani

Director Director

88


COMPULEARN MIDDLE EAST FZCRAK FREE TRADE ZONE – RAS AL KHAIMAH – UNITED ARAB EMIRATES

Balance Sheet for the year ended 31st March

(In Dirhams)

Particulars Notes 2010 2009

Assets

Non-Current Assets:

Property, Plant and 4 21410 28547

equipments

Current Assets:

Accounts and other 5 4113551 1216628

Receivables

Cash and Bank Balance

With Banks 6 41016 183421

Total Assets 4,175,977 1,428,596

Equity and Liabilities:

Equity share capital 2 365,977 100,000

Retained earnings 7 3,131,934 804,621

Total equity shareholders 8 358,748 350,887

Current Account

Total Funds: 3,856,659 1,255,508

Current Liabilities:

Accounts and other payables 9 319,318 173,090

Total Liabilities and Equity 4,175,977 1,428,596

The accompanying notes form an integral part of this Financial Statements. The declaration by theDirector confirming true and fairness of the statements is Annexed hereto.

The Financial Statements herein were approved and signed by the Director.

For COMPULEARN MIDDLE EAST FZC

Sd/-

DIRECTOR

89


COMPULEARN MIDDLE EAST FZC

RAK FREE TRADE ZONE – RAS AL KHAIMAH – UNITED ARAB EMIRATES

Statement of Income for the year ended 31st March

(In Dirhams)

Particulars 2010 2009

Revenue 7350738 6856720

Other Income 22345 29663

Total 7373083 6886383

Direct Expenses 4306465 5578200

Gross Profit 3066618 1308183

Administrative Expenses 492168 256425

Management Fees 240000 240000

Depreciation 7137 7137

Net Profit for the period 2327313 804621

The accompanying notes form an integral part of these financial statements.

The Declaration by the Directors confirming the true and fairness of the Financial statement isAnnexed hereto.

The Financial Statements contains herein were approved and signed by the Director on this July21st 2010.

For COMPULEARN MIDDLE EAST FZC

Sd/-

DIRECTOR

90


Compulearn Middle East FZC

RAK Free Trade Zone – Ras Al Khaimah – United Arab Emirates

Notes to the Financial Statements for the year ended 31st March,2010

1. Legal status and business activity:

Compulearn Middle East FSC, (Free Zone Company) – United Arab Emirates, was established onJuly 17, 2007 and operates in the United Arab Emirates, under a license issued by the RAK FreeTrade Zone, Ras Al Khaimah.

The Principal activities of the FZC are information technology consultancy

The Registered office of the Company is located at PO Box 16111, RAK Free Trade Zone, UnitedArab Emirates.

The management and control are vested with Mr. Mangilal Kalani.

These financial statements incorporate the operating results of the License No. 6000561.

The name of the company has been changed from Shouk Investments Consultancy FZC toCompulearn Middle East FZC with effect from February 2,2010.

2. Capital:

The capital of the FZE is AED 100,000.

3. Summary of significant accounting policies:

Basis of Preparation:

The financial statements have been prepared on a historical cost basis. The Financial statementsare presented in Arab Emirates Dirhams (AED).

a) Statement of compliance

The Statements of the Company have been prepared in accordance with Generally

Accepted Accounting Principles..

b) Revenue recognition

When the outcome of the transaction involving the rendering of services can be estimated reliably,revenue associated with the transaction shall be recognized be reference to stage of completion ofthe transaction at the balance sheet date. The outcome of a transaction can be estimated reliablywhen all the following conditions are satisfied.

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The amount of revenue can be measured reliably;

It is Probably that the economic benefits associated with the transaction will flow to the entity; Thestage of completion of the transaction at the balance sheet date can be measured reliably; and Thecost incurred for the transaction and the costs to complete the transaction can be measured reliably.

c) Financial expenses

Financial expenses are accounted in the statement of income in the period in which they areincurred. Except to the extent, that the borrowing costs that are directly attributable to the acquisition,construction or production of qualifying assets shall be capitalized as part of cost of the asset.

d) Employees’ terminal benefits

Amounts required to cover end of service indemnity at the balance sheet date are computed pursuantto the United Arab Emirates Federal Labour Law based on the employees’ accumulated period ofservice and current basic remuneration at the balance sheet date.

These are accounted on cash basis.

e) Provisions

Provisions are recognized when the Establishment has a present obligation as a result of a pastevent, which it is probable will result in an outflow of economic benefits that can be reasonablyestimated.

f) Foreign currencies

Transactions denominated in foreign currencies are initially recorded at the rates of exchangeprevailing on the dates of the transactions. Monetary items denominated in foreign currencies aretranslated at the rates prevailing on the balance sheet date. Gains and losses arising are includedin the statement of income. Non-monetary items that are measured in a foreign currency are translatedusing the exchange rate at the when the fair value was determined.

g) Financial instruments

Financial instruments comprise financial assets and financial liabilities. Financial assets and financialliabilities are recognized on the Establishment’s balance sheet when the Establishment has becomea party to the contractual provisions of the instrument. A financial asset is any asset that is cash, acontractual right to receive cash or other financial assets, a contractual right to exchange financialinstruments under conditions that are potentially favourable or an equity instrument. A financialliability is any liability that is a contractual obligation to deliver cash or another financial asset, or toexchange financial instruments under conditions that are potentially unfavourable.

Accounts receivable

Revenue generated on credit and not realized up to the balance sheet date is included in tradereceivables, as reduced by appropriate allowances for estimated doubtful amounts. Bad debts arewritten off as they arise.

Accounts payable

Accounts payables are stated at their nominal value

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Cash and cash equivalents

For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand,balances with bank and deposits with banks, within a maturity date of three months or less from thedate of deposit, free of encumbrances.

Property, plant and equipment and software

Property, Plant and equipment and software are stated at cost less accumulated depreciation/amortization and identified impairment loss, if any. The costs comprises of purchase price, levies,duties and any directly attributable costs of bringing the assets to its working condition. The cost ofproperty, plant and equipment and software is depreciated/amortised using the straight-line methodover their estimated useful economic lives as follows:

Years

Furniture and office equipments 5

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4 Property, plant and equipments Furniture & Total

Equipments

Cost AED AED

Opening balance 35,684 35,684

As at March 31st,2010 35,684 35,684

Accumulated depreciation

Opening balance 7,137 7,137

Depreciation for the year 7,137 7,137

As at March 31st,2010 14,274 14,274

Net book value

As at March 31st,2010 21,410 21,410

As at June 30th,2009 28,547 28,547

5 Accounts and other receivables

31st March 30th June

2010 2009

AED AED

Accounts receivables 3211924 785211

Deposits and prepayments 128665 128665

Loans and Advances 772962 302754

4113551 1216630

6 Cash and balances with banks

Cash and Bank 41016 183421

41016 183421

7 Retained Earnings

Opening balance 804621 0

Net Profit for the period 806632 804621

Closing Balance 1611253 804621

8. Shareholders’ current account

(Belongs to Mr.Mangilal Kalani &

Mr.Somitra Agarwal)

Opening Balance 350887 0

Movements during the year -232139 110887

Management fee 240000 240000

Closing Balance 358748 350887

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31st March 30th June2010 2009AED AED

9. Accounts and other payablesAccounts Payable 284064 143575Other payables 6754 2015Accruals and provisions 28500 27500

319318 17309010. Revenue

Gross Sales 7350738 68567207350738 6856720

11. Direct expensesDirect Expenses 4306465 5578200

4306465 557820012. Administrative Expenses

Salaries and Allowances 220259 117000Communication 35370 18165Transportation 39678 27110Legal 82234 52327Printing and Stationary 20671 12412Utilities 9230 7619Travelling and conveyance 43881 15782Bank Charges 680 535Office and general 40165 5475

492168 256425

13. Contingent liabilities & capital commitmentsExcept for the business obligations which are under normal course of business against which noloss is expected, there has been no other known contingent liability or capital commitment oncompany’s account as of balance sheet date.

14. Financial instrumentsFinancial instruments of the company comprise of cash at bank, accounts receivable, other assets,accounts payable and other liabilities.Credit RiskFinancial assets which potentially expose the company to concentration of credit risk compriseprincipally bank accounts, trade receivables and other receivables. The company’s bank accountsare placed with high credit quality financial institutions.Trade and other receivables are stated net of allowance for doubtful recoveries.Exchange rate riskThere are no significant exchange rate risks as substantially all financial assets and financialliabilities are denominated in Arab Emirates Dirhams or US Dollars to which the conversion ofDirhams into US Dollar is fixed except the following.Interest rate riskThe company is not exposed to any significant interest rate risk.Fair Values

At the balance sheet date, the fair values of financial assets and liabilities at year-end Approximateto their carrying amounts.

Sd/- Sd/-

PVV Satyanarayana Mangilal Kalani

Director Director

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BL

AN

KP

AG

E

FOR NOTES

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COMP-U-LEARN TECH INDIA LIMITED4th FLOOR, MY HOME TYCOON,

LIFE STYLE BUILDING, GREENLANDS,BEGUMPET, HYDERABAD-500016

TEL NO.: 040-23412103, FAX NO. : 040-23414156

PROXY FORM

/We........................... of..................being a member(s) of Comp-U-Learn Tech IndiaLtdhereby appoint ........................ of...................... of failing him................................... ofas my/our Proxy to vote for me/us and on my/our behalf at the “13th Annual GeneralMeeting of the Company on Thursday. 30th of September 2010 at 9.A.M at GroundFloor, Conference Hall, Royal Pavilion, Ameerpet, Hyderabad - 500 016. and / or at anyadjournment thereof.Signedthis........................................day of........................2010Regd. Folio No. /Client ID No..............................................Note:1. The Proxy need not be a member2. The Proxy form must be returned so as to reach the Registered Office of the

company not less than 48 hours before the time for holding the aforesaid meeting.

Comp-U-Learn Tech India Ltd.Regd. Office :4lh Floor, My Home Tycoon, Life Style Building, Greenlands,

Begumpet, Hyderabad-500016

13th Annual General MeetingATTENDANCE SLIP

Please Complete this attendance slip and hand it over at the entrance of the Meeting Hall.Name of the Member(s) (In Block Letters)...................................................................................Name of Proxy, If any, (In Block Letters).....................................................................................Regd. folio No. / Client ID No...............................................................................................................No. of Shares held .....................................................................................................................I hereby record my presence at the 13th Annual General Meeting of the Company at 9.00AM atGround Floor, Conference Hall, Royal Pavilion, Ameerpet, Hyderabad - 500 016. on Thursday, 30thof September, 2010Note :1. Member(s) / Proxy holders are requested to bring this attendance Slip duly filled in and

signed with them when they come for the meeting and hand it over at the entrance of theMeeting Hall.

2. No attendance slip will be issued at the time of the meeting.3. The Copy of Annual Report may please be brought to the Meeting hall.

Affix Re.1/-revenuestamp

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If Undelivered, please return to:COMP-U-LEARN TECH INDIA LIMITED4th FLOOR, MY HOME TYCOON,LIFE STYLE BUILDING, GREENLANDS,BEGUMPET, HYDERABAD-500016TEL NO.: 040-23412103, FAX NO. : 040-23414156

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