1.  Share capital and Share Warrants
 
 During the Financial year 2009-10 the Company issued 1,05,25,000 equity
 shares of Rs. 10/- each on Preferential basis at a premium of Rs. 0.50
 per share as per SEBI guidelines. The Company has also allotted
 48,25,000 share warrants at a price of Rs 10.50 per warrants on
 Preferential basis as per SEBI Guidelines. These warrants are
 convertible at the option of the holders at any time before the expiry
 of 18 months from its allotment in to fully paid up equity shares of Rs
 10/-each at a premium of Rs 0.50 per share any time between November
 2009 to May 2011 against which Rs 3 per warrant of the value has been
 received as at 31st March 2011.
 
 2.  Capital reserve
 
 Represents balance brought forward relating to amounts forfeited on non
 subscription of 5,20,000 Share Warrants on due dates.
 
 3.  ESOP Scheme
 
 The shareholders have approved in November 2005, scheme titled SQL
 ESOP 2005, which provides for an option to issue equity shares not
 exceeding 8,01,000 shares constituting 5% of the paid up capital of the
 Company to permanent employees of the company subject to such
 conditions the Board may determine. Under this plan, Company granted
 7,50,000 Employee Stock Options to 37 Employees pursuant to the
 resolution passed at the extra-ordinary general meeting of the Company
 held on 30th November 2005. Out of the options granted, 725,000
 (700,000) options were lapsed due to resignation of the employees and
 25,000 (50,000) options are in force as on 31.03.2011.
 
 SQL ESOP Trust holds 159980 (159980) equity shares as on 31.03.2011
 that were allotted under the ESOP Plan in December 1998 for and on
 behalf of the eligible employees and will be offered to the Employees
 as per the terms and conditions of the ESOP Scheme-2005. The total
 options available for grant is 776,000 (751,000) as on 31.03.2011.
 
 4.  Working Capital Loans are secured by a first charge on current
 assets and movable fixed assets of the borrower (except assets on Hire
 Purchase, both present and future), and further secured by
 
 a) Fixed Deposit with Bank 
 
 b) 33,50,000 Equity Shares in the company held by Super Star Exports
 Pvt Ltd (Promoter)
 
 c) 10,00,000 Equity Shares held by Satyamitra Stock Consultants Pvt
 Ltd.
 
 d) Guaranteed by Super Star Exports Pvt Ltd , Satyamitra Stock
 Consultants Pvt Ltd. and by a Director of the Company
 
 5.  The Company has sent letters of Confirmation during the year to
 Debtors, Creditors and Loans and Advances; however the Company received
 the confirmation only in a few cases.
 
 6.  The Madhya Pradesh State Agricultural Board (MANDI BOARD) has
 resorted to unlawful and unilateral termination of the Service contract
 by their letter dated 17th February 2010 on the purported reason of
 Deficiency/Under performance, besides
 
 a) refusing to settle the dues for services from April 2008 to
 termination date amounting to Rs 28.77 Crores (out of which Rs 20 22
 Crores pertains to billing raised on behalf of Outsourcing partner)
 
 b) refusing to give required documents for billing from April 2009 to
 January 2010
 
 c) invoking performance bank guarantee of Rs 5 Lakhs and
 
 d) Confiscating the assets of the company located in the Mandis.
 
 The matter was referred for Arbitration proceedings. When the
 arbitration proceedings were in progress, the Mandi Board withdrew the
 arbitrator and the new arbitrator is yet to be appointed by the Mandi
 Board. In the meanwhile, the company has filed a petition before the
 Honourable High Court of Madhya Pradesh, Jabalpur Bench seeking to
 appoint an arbitrator to complete the proceedings.
 
 7. The Company has sent letters to the creditors to identify under
 MSMED Act, enterprises which have provided goods and services to the
 Company. Accordingly, the disclosure in respect of the amounts payable
 to such enterprises as at March 31, 2011 has been made in the
 financials statements based on the information received and available
 with the Company.
 
 8.  Related Party Disclosures
 
 (a) List of Related Parties where control exists:
 
 Name of the Related Parties
 
 a) Wholly owned Subsidiaries
 
 SQL Star International Inc., USA International SQL Star Pte Ltd.,
 Singapore
 
 b) Wholly owned subsidiary of US Subsidiary
 
 SQL Star International Pty Ltd., Australia
 
 c) Others
 
 Super Star Exports Private Limited
 
 Systematix Capital Services Private Limited
 
 Systematix Fincorp (India) Limited
 
 Systematix Shares & Stock (I) Limited
 
 Systematix Commodities Services Private Limited
 
 Systematix Corporate Services Limited
 
 Ceepeek Real Estate Limited
 
 Rangsharda Properties Private Limited
 
 Shubhamangalam Real Estate Limited
 
 Snehavardhini Real Estate Limited
 
 Tek Point Properties Private Limited
 
 Funsign Real Estate Limited
 
 Shivshakthi Real Estate Limited
 
 Riteplaza Trading Company Private Limited
 
 Magicline Trading Company Private Limited
 
 Topcity Trading Company Private Limited
 
 Goldflag Exports Private Limited
 
 Coldlife Trading Company Private Limited
 
 Thirdwave Mercantile Company Private Limited
 
 Nikunj Mercantile Private Limited
 
 Systematix Finvest Limited
 
 Technosoft Consulting Resources Pvt Ltd
 
 i) Transaction with related parties other than stated above
 
 i) No amount has been written off or written back during the year in
 respect of debts due from or to related parties
 
 ii) Key Management Personnel : Mr. Sunil Gupta, Co-Chairman and
 Managing Director
 
 Remuneration vide Note 19 (5)
 
 For the year ended March 31, 2011
 
 9.  Contingent Liabilities (In Rs Lacs)
 
                        Estimated Amount 
 S.No. Dscription of                           Indication of     
       Contingent 
       Liability      Year ended  Year ended   Uncertainty   Possible
                                                             Recovery
                      31.03.2011  31.03.2010                 if Liability
                                                             Arises
 
 a)  Guarantees issued 
 by the banks on         65.05       59.95     Performance or     Nil
 behalf of the Company                         Non-performance of
                                               various parties
 
 b) Tax Demands 
 Contested in Appeals:
 
 i) Service Tax*       1917.52     1383.94     All are disputed   Nil
 
 ii) Income Tax         157.49       82.39     before concerned   Nil
 
 iii) Central Sales Tax  21.65       21.65     authorities. The   Nil
                                               company is advised
                                               that the cases are
                                               likely to be
                                               disposed off in
                                               favour of the
                                               Company.
 
 c) Other Claims against
    the Company         228.38      220.40          -do-           -
    not acknowledged 
    as Debts.
 
 d) Export obligation 
    on account of         8.14       62.05           -             - 
    Imports.
 
 * includes penalty of Rs. 1142.95 Lacs.