Directors Report of CTIL Ltd.

Mar 31, 2014

Dear members,

The Directors have pleasure in presenting the Seventeenth Annual Report together with the Audited Accounts for the year ended 31st March, 2014

FINANCIAL RESULTS:

The Financial Results both Consolidated and Standalone for the year ended 31st March, 2014 are summarized below:

(Rs. in Lakhs)

Particulars Consolidated Standalone Consolidated Standalone for 2013-14 for 2013-14 for 2012-13 for 2012-13

Income from 4726.73 683.97 3226.30 1404.41 Operations

Expenditure 4549.16 568.67 2705.72 1271.89

Operating Profit 177.57 115.30 520.58 132.51 (PBDIT)

Interest 113.94 100.93 144.88 105.64

Depreciation 31.27 13.12 49.33 21.15

Profit before Tax 32.36 1.25 326.36 5.72

Provision for 11.52 0.38 52.44 1.09 Income Tax

Deferred Tax (1.52) (1.14) -7.65 -4.45

Profit / Loss 22.36 2.39 281.57 9.08 after Tax but before extraordinary items

Extraordinary items 3.12 ----- 1.23 ---- Minority Interest

Net Profit carried to 19.24 2.39 280.34 9.08 Balance Sheet

CONSOLIDATED PERFORMANCE:

During the year 2013-14, company has achieved a turnover of Rs.4726.73 Lakhs as against Rs3226.30 Lakhs translating into growth of 46.50% over the previous year 2012-13. However your Directors regrets to inform you, that there was a drastic decline in Net profit (after extraordinary) items which stands at Rs.19.24 Lakhs as against previous year net profit of Rs.280.34 Lakhs. It was mainly due to excessive operational overheads in relation to fixed price contracts where input costs were disproportionally high beyond expectations of the company. Further, there was no alternative, for the Board of Directors except the completion of the projects which was mandatory as per the terms of the contact and to retain the customers and image of the company among the circles. However your Directors are confident of regaining the business repeat orders from those customers whose projects the company has completed on time not withstanding that the company has suffered serious hit on its profits from those contracts.

Your Directors regrets rather beg a pardon from all the members for the reason that the company is not in a position to declare the dividend this year also and expressed their unhappiness about the successive failures and inability to declare dividend and reward the shareholders. However, your Directors expresses confidence in the operational strengths of the company and skill sets of teams thus able to perform better in the following years.

RESEARCH AND DEVELOPMENT:

The Company continues to invest in innovating and developing state of the art technologies that are core for providing key solutions in different industry verticals of interest. This includes critical investments in:

- Comprehensive e-learning solutions project

- Improving in the e-Governance Executive Strengths

- Technology & Solutions for Shipping & Ports

- Technology & solutions for Insurance business

A big thrust was made in the past three years in the aforesaid areas in R&D. In the space of e-learning, big strides have been possible to not only have a two way video interactivity, but also chat both in ‘open'' as well as ‘private'' environments. This is coupled with a robust e-learning support system having full- fledged e-content upload, on line testing, online submission of assignment and their valuation, attendance tracking etc.

The Directors hope that the R & D initiatives made by the company will yield good results and boost up the revenues of the company in the coming years.

DEPOSITS:

The Company has not accepted any deposits from the public under section 73 of the Companies Act, 2013, during the year.

AUDITORS:

M/s Balaji Viswanath & Co., Chartered Accountants, Hyderabad, the Company''s Auditors'' retire at the conclusion of the ensuing Annual General Meeting. They have signified their willingness to accept re-appointment and have further confirmed their eligibility under Section 141 of the Companies Act, 2013.

In accordance with the provisions of Section 139 of the Companies Act, 2013 and Rules made there under, your Board of Directors recommends their re-appointment for a term of three years from the conclusion of 17th Annual General Meeting till the conclusion of the 20th Annual General Meeting subject to ratification every year, by the shareholders at every Annual General Meeting.

SUBSIDIARIES AND DISINVESTMENT:

The following are the subsidiaries of the Company:

1. SPRY Resources India Pvt. Ltd

2. CTIL Infrastructure Pvt. Ltd.

3. CTIL Media Pvt. Ltd.

4. CTIL Hong Kong Limited

During the year 2013-14, the company has divested 11% stake in M/s ACE BPO Services Pvt. Ltd., which ceases to be a subsidiary of the Company.

CONSOLIDATION OF FINANCIAL STATEMENTS:

As prescribed by Accounting Standards 21 read with Accounting Standard 23 issued by the Institute of Chartered Accountants of India, consolidation of Financial Statement of Subsidiaries of the company, have been prepared on the basis of Audited Results received from the subsidiary companies as approved by their respective Boards.

ACCOUNTS AND FINANCIAL STATEMENTS OF SUBSIDIARIES:

Ministry of Corporate Affairs, New Delhi, vide Circular No: 5/12/2007-CL-III dated February 8, 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956 from the requirement to attach detailed financial statement of each of the Subsidiaries of the company. Pursuant to the said Circular, the Board of Directors of the company gave their consent for not attaching the Balance Sheets of the subsidiary Companies to the Annual Accounts of your company / this Annual Report, for the year ended 31.03.2014.

Accordingly, the Balance Sheets and other financial statements relating to the following subsidiary companies are not attached to the Annual Accounts of the Company / in this Annual Report.

1. SPRY Resources India Pvt Ltd.

2. CTIL Infrastructure Pvt Ltd.

3. CTIL Media Pvt. Ltd

4. CTIL Hongkong Limited

However, pursuant to the provisions of Section 212 of the company''s Act 1956, a statement containing details of interest of holding company in its subsidiary companies is appended to this Report.

Any member who wish to have information on any of the subsidiary Companies may send his / their / request to the company, so that the same could be forwarded. Further performance and financial position of each of the subsidiary companies is included in the consolidated financial statements.

CHANGES IN THE SHARE CAPITAL

The Company has only one class of Share Capital i.e. Equity Share Capital. The Authorised Share Capital of the Company presently stands at Rs.50.00 Crores divided into 5,00,00,000 equity shares of Rs.10/- each. The paid up capital of the company for the year 2013-14 stands at Rs. 30,77,07,570/- and the paid up capital for the previous year 2012-13 stands at Rs.26,21,55,540/-. The reconciliation of the Share Capital has been provided under notes to the Balance Sheet of the company.

However as a measure of prudence, details of further issues resulting in the increase of capital are given here. During the year, 45,55,203 equity shares of Rs. 10 each at a premium of Rs.17/- per share, have been allotted to the promoters and to selected persons other than the Promoters and Promoter Group companies on preferential issue basis, which represented the increase in paid-up capital of Rs.4,55,52,030 during 2013-14.

DIRECTORS:

Resignation of Directors:

01. Mr. GSS Prasad, tendered resignation from the Directorship on account of personal reasons and the same which was accepted by the Board of Directors on 15.07.2013

02. Mr. P. Guru Krishna, resigned from the Directorship on account of personal reasons and it which was accepted by the Board of Directors on 14.11.2013

The Board wishes to acknowledge the valuable services rendered by all the above persons during their tenure as Directors, to the company.

Re-appointment of retiring Directors:

01. Mr.PVV Satyanarayana, Director retiring by rotation at the 17th Annual General Meeting and being eligible, has offered himself for reappointment.

02. Mr. Raj Nagesh Kosaraju, Director retiring by rotation at the 17th Annual General Meeting and being eligible, has offered himself for reappointment.

03. Mr. Ramesh Koritala, Director retiring by rotation at the 17th Annual General Meeting and being eligible, has offered himself for re appointment.

Independent Directors:

Mr. Nandipati Venkata Simhadri and Mr. Sanjeev Sharma, who were inducted as Additional Directors on to the Board w.e.f 24.12.2013 and 08.02.2014 respectively would hold office upto the date of the ensuing Annual General Meeting . Mr. Nandipati Venkata Simhadri and Mr. Sanjeev Sharma, the Additional Directors and Mr. M.Balarama Krishnaiah, Director of the company, having submitted necessary consents to act as Director and declarations to the company informing that they meet the criteria of independence, are seeking appointment as Independent Directors, at the meeting.

The Board recommends consideration and approval by the Members, for the reappointment as Directors retiring by rotation, appointment of those who cease to hold office at the Annual General Meeting (as they were appointed before as the Additional Directors during the year) and appointment of Mr. M. Balarama Krishnaiah, Director, as the Independent Directors as proposed in the Notice of the Annual General Meeting.

Details of Directors seeking appointment / re-appointment at the forthcoming Annual General Meeting in pursuance of Clause 49 of the Listing Agreement.

DIRECTORS'' RESPONSIBILITY STATEMENT:

In pursuance of Clause of sub-sections 3 and (5) of section 134 of the Companies Act, 2013, your Directors confirm:

a) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures.

b) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit and Loss of the Company for that period.

c) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) That the Directors had prepared the annual accounts on a going concern basis;

e) That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively., and

f) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF EMPLOYEES:

There is no employee who is falling under Rule 5 (2) of Companies( Appointment and Remuneration) Rules, 2014. Therefore, the disclosures required to be made here under are not applicable.

CODE OF CONDUCT:

The Code of Conduct has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them. Code of Conduct has also been placed on the website of the company. A declaration signed by the Executive Director is given in Annexure.

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

The required information as per Sec.134 (3) (m) of the Companies Act, 2013 is provided hereunder

Conservation of Energy:

The Operations of the Company are not energy-intensive. However to ensure reduction in consumption of energy, your Directors are constantly evaluating new technologies, mechanism, investments to make infrastructure more energy efficient.

Some of the energy conservation initiatives initiated:

a. Walls and Roofs are properly insulated.

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

c. Turning off 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 been constantly upgrading its technology to the latest in the market, for both its training centers and software development.

B. Research and Development : Your Company is constantly working to build a State of Art Research and Development Centre to enhance the quality of its products.

C. Benefits derived from such Research and Development: As the customer uses the end product, the benefit from the customer satisfaction will ultimately be passed on to the company in terms of increase in revenues and business prospective.

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 the Listing Agreement with the Bombay Stock Exchange is presented as a separate section forming part of this report.

COMPLIANCE CERTIFICATE OF THE AUDITORS:

The Statutory Auditors have certified that the company has complied with the conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchange and the same is annexed to the Report of Directors.

PERSONNEL:

Relations with the employees continued to be cordial throughout the year. Your Directors place on record their appreciation of the efforts, dedication and active participation of employees in various initiatives taken by the company during the year under review:

ACKNOWLEDGEMENTS:

Your Directors express their heartfelt gratitude and thanks to the Company''s Bankers, Shareholders, customers and various Central and State Government Agencies, Local Authorities for their continued support during the year. Your Directors also wish to place on record their sincere appreciation of unstinted support and co-operation extended by all the personnel at various levels of the Organization. Company''s growth was made possible by the hard work, solidarity, co-operation and support of the employees all along. Your Directors look forward for the same in the years to come and wish to maintain whole hearted continuing relationship with all of them.

BY ORDER OF THE BOARD For CTIL LIMITED

Sd/- Sd/- P.V.V.Satyanarayana P.Obul Reddy Chairman Executive Director

Place: Hyderabad Date:02.09.2014

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Mar 31, 2012

The Directors present their Fifteenth Annual Report together with the Audited Accounts for the period ended 31st March, 2012

FINANCIAL RESULTS:

The Financial Results for the period ended 31st March, 2012 are summarized below:

(Rs.in Lakhs)

Particulars Consolidated Standalone Consolidated Standalone for 2011-12 for 2011-12 for 2010-11 for 2010-11

Income from Operations 8639.45 1550.97 7909.12 2375.09

Expenditure 6492.60 1342.85 6275.58 2157.96

Operating Profit (PBDIT) 2146.85 208.12 1633.54 217.13

Interest 213.60 133.80 128.09 61.89

Depreciation 61.10 34.02 83.38 55.80

Profit before Tax 1872.15 40.30 1422.07 99.44

Provision for Income Tax 25.97 7.47 10.43 6.53

Deferred Tax -8.29 -5.86 -6.65 -5.46

Profit / Loss after Tax but before extraordinary items 1854.47 38.68 1418.30 98.37

Extraordinary items - Minority Interest 857.81 642.86

Net Profit carried to Balance Sheet 996.65 38.68 775.44 98.37

CONSOLIDATED PERFORMANCE:

Your Directors are pleased to present the financial results of the company for the year under review. Your Company has posted a turnover of Rs. 8639.45 lakhs. and net Profit of Rs. 996.65 lakhs. In view of the increased needs of working capital consequent to expansion activities planned by the company, your Directors are of the view that Profits should be ploughed back into the system so as to attain the desired growth levels.

STANDALONE PERFORMANCE:

Your Directors are pleased to inform you that the revenues of the company stood at Rs. 1550.97 lakhs and net Profit Rs. 38.68 lakhs as against revenues of Rs. 2375.09 Lakhs, net Profit of Rs. 98.37 lakhs for the previous year.

RESEARCH AND DVELOPMENT:

Your Directors are happy to note that during the year the company has spent sizable amount towards R & D in e-learning space. The Company continues to invest in innovating and developing state of the art technologies that are core to providing key solutions in different industry verticals of interest. This includes critical investments in:

- Comprehensive e-learning solution

- Improving assets in the e-Governance

- Technology & Solutions for Shipping & Ports

- Insurance Technology & solutions

A big thrust was made last year in the aforesaid areas in R&D. In the space of e-learning, big strides have been made to not only have a two way video interactivity, but also chat both in 'open' as well as 'private' environments. This is coupled with a robust e-learning support system having full fledged e- content upload, on line testing, online submission of assignment and their valuation, attendance tracking etc.

Carve out product offerings from our portfolio of projects and long running product-line programs - this included Integrated Treasury Management, PACE G2C framework and upcoming paperless office for e-Governance Projects.

CTIL LTD rebranded and productized its G2C service delivery framework adapted from first large scale e-Governance project in India in the form of PACE - was instrumental in winning and delivering G2C services in a large government portal.

We hope that this R & D initiative will yield good results and boost up our revenues in the coming years.

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

AUDITORS REPORT:

The Auditors comments on the company's accounts for the year ended 31st March, 2012 are self explanatory in nature and do not require any explanation as per the provision of section 217 (3) of the Companies Act. 1956.

INSURANCE:

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

CHANGES IN THE SHARE CAPITAL)

The Company has got only one class of shares i.e. equity shares. The Authorised Share Capital of the Company presently stands at Rs.50.00 Crores. Paid-up share of the company stands at Rs. 223855540. During the year 3230554 shares of Rs. 10 each were issued at a premium of Rs. 17 to selected persons other than promoters upon conversion of equity share warrants. The company has forfeited application money on 669446 Warrants due to non- payment of allotment money.

DIRECTORS

Mr. PVV Satyanarayana, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. P. Gurukrishna, Director retires by rotation at the ensuing Annual General Meeting and has offered himself for reappointment.

Mr. Raj Kosaraju, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

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, 2012, the applicable accounting standards have been followed and that no material departures have been made from the same.

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

(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

(d) that the Directors have prepared the annual accounts for the year 31st March, 2012 on a going 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:

The operations of our Company are not energy-intensive. However to ensure reduction in consumption of energy, we are constantly evaluating new technologies, mechanism, investments to make infrastructure more energy efficient.

Some of the energy conversation initiatives.

a. Walls and Roofs are properly insulated.

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

c. Turning off 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 in the 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 Research and Development Centre to enhance the quality of its products.

C. 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 terms of increase in sales

D. Foreign Exchange earnings and outgo

(Rs. in Lakhs)

2011-12 2010-11

Foreign Exchange Earnings 1534.82 1955.81

Foreign Exchange Outgo 5.89 49.46

SUBSIADIARY COMPANIES:

Company has got the following companies as subsidiaries:

1. Spry Resources India Pvt Ltd

2. ACE BPO Services Pvt Ltd

3. CTIL Infrastructure Pvt Ltd

4. CTIL Media Pvt Ltd

5. CTIL Hong Kong Ltd

6. Compulearn Middle East FZC

7. ASTUS Technologies INC, USA

As required under section 212 of the Companies Act, 1956 financial statements of subsidiary companies mentioned at 1 to 7 above are enclosed with this Annual Report along with Directors report and Auditor's Report on these financial statements.

CONSOLIDATION OF FINANCIAL STATEMENTS:

The Consolidated Financial Statements, as prescribed by Accounting Standards 21 read with 23 issued 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 the Listing Agreement with the Bombay Stock Exchange is presented as a separate Section forming part of this report.

PERSONNEL:

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

ACKNOWLEDGEMENTS:

We express our Heart felt gratitude and thanks to our Company's Bankers, Shareholders, customers and various Central and State Government Agencies and Local authorities for their continued support during the year. We also wish to place on record our sincere appreciation of unstinted support and co- operation extended by all the personnel at various levels of the Organization. Our growth was made possible by their hard work, solidarity, co-operation and support all along so far and we look forward for the same in the 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 of CTIL LIMITED

Date : 03.09.2012 (formerly known as COMP-U-LEARN TECH INDIA LTD)

Sd/- Sd/-

P.V.V. Satyanarayana K. Ramesh

Chairman Executive Director

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Mar 31, 2010

The Directors present their Thirteenth Annual Report together with the Audited Accounts for the period ended 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 for 2009-10 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 before extraordinary Hems 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 fared during the year under review. Your Company has posted a turnover of Rs. 2846.10 lakhs, and net Profit of Rs.367.99 lakhs. As the Company has been on growth mode, the Working Capital needs would be more in a bid to attain desired growth levels and hence your Directors were of the view that Profits should be 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 net Profit Rs.218.04 lakhs as against revenues of Rs.543.63 lakhs, net Profit of Rs.96.49 lakhs for the previous year thus registering a growth of 163.23% in revenues and 125.97% in profit. Further, operating profit margin for the year was 21.80% as against 26.96% in the previous year. There has been slight reduction in margins due to increase in operating cost. As it was inevitable to complete the execution of orders on accepted delivery schedules, the operating costs gone up little more beyond expected levels which brought down the profit margins during the year. However the level of growth that the company has registered is really remarkable and your Directors are confident that the same growth will be maintained in future also.

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 for facilitating operational efficiency , effective inventory management and complete financial control, for the sector. We hope that this R&D initiative will yield good results and boost up our revenues in the coming years.

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

In line with the companys strategy of In organic growth, during the year we have acquired 55% stake in M/s SPRY RESOURCES INDIA PVT LTD - Hyderabad based Technology oriented product based Company with focus on software development and E-Governance Projects. Your Directors are of the strong opinion that this acquisition will be strong vehicle driving the future growth of the Company and it is 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, company has acquired 60% stake in M/s ACE BPO SERVICES PVT. LTD. Hyderabad based Health care and Insurance BPO Company with sizable Revenues and good talent based human resources. This will provide 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 firm has 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/s ASTUS TECHNOLOGIES INC,. USA and made it as wholly owned subsidiary which wHI be used as catalyst and vehicle to drive the in organic growth of the company in USA & Europe.

Towards the globalization through our presence at every nook and comer of the globe, the company formed a wholly owned subsidiary by name M/s CTlL Hong Kong Limited - an initiative witti twin objectives to propagate and development of business in Hong Kong, Singapore, Malaysia and neighboring nations on one hand and to mobilize financial resources through this vehicle for funding the midterm and long term 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 will retire at the conclusion of this Annual General meeting. However, being eligible they offer themselves for reappointment and confirmed that their reappointment will be within the limits specified under section 224(1 B) of the Companies Act, 1956.

AUDITORS REPORT:

The Auditors comments on the companys accounts for the year ended 31st March, 2010 are self explanatory in nature and do not require any explanation as per the provision of section 217 (3) of the Companies Act. 1956.

INSURANCE:

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

CHANGES IN THE SHARE CAPITAL:

The Company has got only one class of shares i.e. equity shares. The Authorised Share Capital of the Company presently stands at Rs.50.00 Crores. Paid-up share capital of the company stands at Rs.19.15 Crores.

; a. 35,00,000 Equity Share Warrants of Rs. 10/- each at an issue price of Rs.17.50 per warrant issued earlier on 16.04.2008 on preferential issue basis to the persons other than Promoters were converted ! and 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 and allotted on 30.09.2008 on preferential issue basis to the promoters of the Company were converted into 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 the persons other than Promoters on preferential issue basis.

DIRECTORS

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

DIRECTORS 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 applicable accounting standards have been followed and that no material departures have been made from the same.

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

(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

(d) that the Directors have prepared the annual accounts for the year 31st March, 2010 on a going 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.

a. Walls and Roofs are properly insulated.

b. Turning off all Kghts 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 in the 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 wHI be ultimately passed on to the company in terms of 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

SUBSIDIARY COMPANIES:

Company has got the following companies as subsidiaries:

1. Spry Resources India Pvt Ltd

2. ACE BPO Services Pvt Ltd

3. Compuleam Middle East F7C

4. CTIL Infrastructure Pvt Ltd

5. ASTUS Technologies INC, USA

6. CTIL Hong Kong Ltd

7. CTIL Media Pvt Ltd

As required under section 212 of the Companies Act, 1956 financial statements of subsidiary companies mentioned at 1 to 4 above are enclosed with this Annual Report along with Directors report and Auditors Report on these Financial statements. As the operations of the subsidiary companies mentioned at 5 - 6 above have not commenced, financial Statements of these two companies are not enclosed with this Annual Report. Further, the operations and business of subsidiary company - CTIL Media Pvt Ltd are put on hold for the time being as there was no business plan conceived yet.

CONSOLIDATION OF FINANCIAL STATEMENTS:

The Consolidated Financial Statements, as prescribed by Accounting Standards 21 read with 23 issued 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 the Listing Agreement with the Bombay Stock Exchange is presented as a separate Section forming part of this report.

PERSONNEL:

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

ACKNOWLEDGEMENTS:

We express our Heart felt gratitude and thanks to our Companys Bankers, Shareholders, customers and various Central and State Government Agencies and Local authorities for their continued support during the year. We also wish to place on record our sincere appreciation of unstinted support and co-operation extended by all the personnel at various levels of the Organization. Our growth was made possible by their hard work, solidarity, co-operation and support all along so far and we look forward for the same in the 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 of

Date : 04.09.2010 COMP-U-LEARN TECH INDIA LTD

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

Chairman Managing Director