AGM Statement and Trading Update

24 May 2011

SQS Software Quality Systems AG

("SQS" or the "Company")

Annual General Meeting Statement and Trading Update

SQS Software Quality Systems AG (AIM: SQS.L), the world's largest pure play supplier of independent software testing and quality management services, is pleased to provide an update on trading ahead of its annual general meeting to be held at 10 a.m. (CET) today at the Company's headquarters, Stollwerckstraße 11, 51149 Cologne, Germany.

Investments made in 2010 into sales staff and infrastructure, and the continuing investment into offshore consultancy staff and our Managed Services business, continue to bear fruit. In recent months the Company has signed a number of significant contracts as well as winning substantial consultancy projects.

SQS has signed a €3 million Managed Services contract with a telecommunications provider. The contract is to deliver onshore and offshore testing services over the next two years.

In addition, SQS has extended a Managed Services contract with a UK headquartered international law firm. The contract has been extended for two years and will be worth an additional €1.1 million during that period.

In terms of traditional consultancy revenues, SQS has extended its business in the public market with a €0.5 million contract for project consultancy work for an international organisation. In Germany, SQS has signed an extension of its engagement with a logistics company, securing an order worth over €0.7 million for services to be delivered this year.

In the Nordic region, SQS has signed a number of contracts with banking industry clients. These include a contract worth €0.9 million, to provide test management for a new internet banking service, and a further contract with the same client, worth €0.3 million, to provide a full suite of testing and process enhancement services. The third contract is with a new banking client and is to provide acceptance testing, worth €0.3 million.

Rudolf van Megen, Chief Executive Officer of SQS, will, at today's annual general meeting, make the following comment, "In line with our stated strategy, SQS' Managed Services offerings continue to increase as a proportion of total revenue, whilst the Group secures contract wins in traditional consulting projects across all areas of the business. In addition, we have a substantial pipeline of new business, of which Managed Services contracts are an increasingly significant element. These developments are giving us improved revenue visibility and are expected to lead to higher margins and profitability in the medium term. We are therefore confident of meeting full year market expectations."

Enquiries:

Helen Westaway

About SQS

SQS is the world's largest pure play supplier of independent software testing and quality management services. SQS consultants design and oversee quality management processes during the software and IT systems life cycle and test the resulting products for errors and omissions.

Headquartered in Cologne, Germany, SQS has approximately 2,000 employees across Europe, Asia, North America and Africa. The Group has a presence in Germany (Cologne, Munich, Frankfurt, Stuttgart, Goerlitz and Hamburg), the UK (London, Woking, Birmingham, Manchester, Belfast), Ireland, the Netherlands, Switzerland, Austria, Sweden, Norway, Finland, India, Egypt, the United States and South Africa. SQS also has a minor stake in an operation in Portugal and a partnership operation in Spain.

With more than 5,000 completed projects, SQS has a strong customer base including 20 FTSE-100 companies, more than half of the DAX 30 and a third of the STOXX-50. It supports clients in a wide range of industries, including major corporations such as Allianz, Beazley, BP, Centrica, Commerzbank, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters and Volkswagen.