· CALIFORNIA SOFTWARE COMPANY LTD. Registered Office: Robert V Chandran Tower, Seventh Floor, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai-600 100 Phone: +91-44-428290

CALIFORNIA SOFTWARE COMPANY LTD.Registered Office: Robert V Chandran Tower, Seventh Floor, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai-600 100

Phone: +91-44-42829000-5 Fax: +91-44-42829012

NOTICE TO SHAREHOLDERS

NOTICE is hereby given that the Eighteenth Annual General Meeting of the Company will be held at 10.00 a.m. on Friday, September 17, 2010 at the Registered

Office of the Company at Robert V Chandran Tower, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai-600 100 transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Balance Sheet as at March 31, 2010 and the Profit and Loss Account for the year ended on that date and the report

of the Directors and Auditors thereon.

2. To declare dividend

3. To appoint a Director in place of Mr. Dan George Peterson, who retires by rotation and, being eligible, offers himself for re-appointment.

4. To appoint Auditors and to fix their remuneration.

SPECIAL BUSINESS

5. To consider, and if thought fit, to pass, with or without modification, the following resolution as an ORDINARY RESOLUTION:

“RESOLVED THAT in accordance with Section 257 and all other applicable provisions if any of the Companies Act, 1956,or any statutory modification(s) or

enactment thereof, Mr. Jerome Lazatin Lorenzo, who was appointed as an Additional Director pursuant to the provisions of Section 260 of the Companies Act,

1956,be and is hereby appointed as a Director of the Company, liable to retire by rotation under the provisions of the Articles of Association of the company.”

On behalf of the Board of Directors

Chennai S. Santhosh

June 23, 2010 Managing Director

EXPLANATORY STATEMENT

(As required under Section 173 (2) of the Companies Act, 1956)

Item No. 5:

Mr. Jerome Lazatin Lorenzo was appointed as Additional Director of the company at the Board meeting held on 29th October 2009 under Section 260 of the Companies

Act, 1956. In terms of the provisions of Section 260, he will hold office up to the date of this Annual General Meeting. The Company has received a notice from a member

proposing Mr. Jerome Lazatin Lorenzo for appointment to the office of Director of the Company under Section 257 of the Companies Act, 1956. Hence the proposed

resolution.

Mr. Jerome Lazatin Lorenzo, has vast experience in the field of Finance and Treasury and it will be in the interest of the Company that he is appointed as a Director, who if

appointed, shall be liable to retire by rotation, in accordance with the provisions of the Article of Association of the company. Brief details of his resume with background,

qualifications and other directorships as stipulated in Clause 49 of the Listing agreement are given in the section in this notice on Information on Directors seeking

appointment/re-appointment. The board commends the resolution as set out at item No 5 of the Notice for your approval.

None of the Directors, other than and except Mr. Jerome Lazatin Lorenzo is in any way, concerned or interested in the resolution.

Notes

a. A SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE INSTEAD OF HIMSELF

AND A PROXY NEED NOT BE A SHAREHOLDER.

b. Book Closure: The Register of Members and the Share Transfer Books of the Company will remain closed from 14th September 2010 to 17th September 2010 (both days

inclusive) in connection with the Annual General Meeting.

c. Shareholders are given an option to hold their securities in a depository or in the physical form. However it maybe noted that for trading purposes on NSE & BSE, the Company’s

stock is in compulsory demat trading list.

d. Shareholders of physical format shares opting to convert shares to depository form are requested to notify through their Depository Participant (DP) to the Company’s

REGISTRAR AND SHARE TRANSFER AGENTS through filling the demat request form available with their DP to the address given herein:

INTEGRATED ENTERPRISES (INDIA) LTD. : Unit: California Software Co. Ltd.,

“Kences Towers”, II Floor, 1, Ramakrishna Street, North Usman Road, T. Nagar, Chennai 600 017. India.

g. Shareholders who hold their securities in physical form and need to complete any transfer of holdings or endorsements may forward their securities to the Company’s Registrar

and Share Transfer Agents at the above address alongwith duly filled and stamped share transfer forms.

h. Shareholders holding shares in physical format are requested to notify the Company’s Registrar and Share Transfer Agents any change in their address immediately (with folio no

reference) so as to enable the Company to send any future communication at their correct address. Those holding shares in demat format need to ensure that their correct

address is reflected in their Depository Participant (DP) records and inform DP of any changes as and when relevant.

i Pursuant to section 205C of the Companies Act, 1956, all unclaimed dividends upto and inclusive of the financial year 2000 – 2001 (YE March 31, 2001) have been transferred

to the Investor Education and Protection Fund (IEPF) established by the Central Government. Dividends for the financial year ended March 31, 2003 and thereafter, which remain

unclaimed for a period of 7 years will be transferred by the Company to IEPF.

j Shareholders who have not encashed any of their dividend warrants from the year 2002-03 onwards are requested to submit their claims to the Company Secretary at the

Registered Office of the Company giving due details such as shareholder folio, /DP account no, and details for which year dividend is not received, and bank account details to

be printed on the warrant.

k. Nomination facility is now available for the shareholders. Members holding shares in physical format. may obtain nomination forms from the Registrar & Share Transfer Agent

and send the nomination form back duly filled up and signed. Members holding shares in demat form may kindly send their nominations to their Depository Participant (DP) only

in the format specified by their DP which will be for all their holdings in a client acount.

Attendance slip and proxy form are enclosed.

Information on Directors seeking appointment/re-appointment in Annual General Meeting scheduled to be held on September 17, 2010 (Pursuant to Clause 49(IV) (E) and 49 (IV)(G)(i) of the Listing Agreement)

Name of the Director Mr. Dan George Peterson Mr. Jerome Lazatin Lorenzo

Date of first Appointment 25th August 2006 29th October 2009

Age/Date of Birth 64 / 27th December 1945 42 / 27th October 1967

Expertise in Specific functional areas Management professional with over 40 years of Finance and Treasury

work experience, most of which is in the

Information Technology Industry

Educational Qualifications Bachelor degree in Computer Science BS degree in Finance and Real Estate from

California State University

Master of Business Management degree from

Asian Institute of Management

List of Other Directorships held as on CNHC LLC, dba ePAY Healthcare 1) Anand Sea Shipping 2) Berkshire Energy Ltd.

June 23, 2010 3) Chemoil Chatering Ltd. 4) Chemoil Energy

Philippines Inc. 5) Chemoil Navigation Ltd. 6) Chemoil

Logistics Inc. 7) Chemoil Pacific Pte Ltd. 8) Chemoil

Storage Ltd. 9) Chemoil Terminal Corporation

10) Helios Corporation Terminal Pte Ltd.11) Kemoil Ltd.

12) LGM Land Development Corporation

Chairman/Member of the Committee of the Member - Audit Committee Nil

Board of Directors of the Company as on

June 23, 2010

Chairman/Member of the Committee of Nil Nil

Directors of other Companies as on

June 23, 2010

Number of shares held in the Company as on 251,000 equity shares Nil

June 23, 2010

CALIFORNIA SOFTWARE COMPANY LTD.

Registered Office: Robert V Chandran Tower, Seventh Floor, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai-600 100.

Attendance Slip(To be handed over at the entrance of the Meeting Hall)

I/We hereby record my/our presence at the Eighteenth Annual General Meeting of the Company to be held at Robert V Chandran Tower, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai 600 100 at 10.00 a.m.on Friday, September 17, 2010

Full Name of the Shareholder(in Block Letters)………………………………………………………………………….

Regd.Folio No ( Physical) / I.D. No(Demat)……………………………………………………………

No. of Shares held....................................................

Full Name of the Proxy (in Block Letters)……………………………………………………………………………………..

Signature of the Shareholder/(s) or Proxy present …………………………………………………………………………………

Please complete and sign this attendance slip and handover at the entrance of the meeting hall. Only Shareholder(s) or /their proxy with this attendance slip will be allowed entry to the meeting. Duplicate slips will not be issued at the entrance.

CALIFORNIA SOFTWARE COMPANY LTD.

Regd. Office: Robert V Chandran Tower, Seventh Floor, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai-600 100 | Phone:+ 91-44-4282 9000 Fax:+91-44-4282 9012

Proxy Form

Regd. Folio No. (Physical) / I.D. No (Demat). ………………………………………………

No. of Shares held………………………………………...

I / We …………………………………………………………………… .residing at ……………………………………………… ……………………………………………......... being a Shareholder/(s) of CALIFORNIA SOFTWARE COMPANY LIMITED hereby appoint……………………………………………………………………..of .............................................................or failing him / her …………………………………………of…………………………………………………………………. as my/our Proxy to attend and vote for me/us on my/our behalf at the Eighteenth Annual General Meeting of the Company to be held at Robert V Chandran Tower, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai-600 100 at 10.00 a.m. on Friday, September 17, 2010 and at any adjournment thereof.

Signed at ………………………. …this ……………………….day of………………….. 2010

NotesThe form should be signed across the stamp as per specimen signature registered with the Company.

The Proxy Form duly completed must be deposited at the office of the Share Transfer Agents of the Company not less than 48 hours before the time fixed for holding the aforesaid meeting.

The proxy need not be a shareholder of the Company.

&

&

&

AffixRevenueStamp

Please tear here -

A N N U A L R E P O R T

U n l o c k V a l u e

Company Secretary & Compliance Officer

Jitendra Kumar Pal

Auditors

Consolidated & Standalone

Tomy & FrancisChartered Accountants

Main Bankers

Canara Bank

Stock Exchanges listed on

National Stock Exchange of India LimitedThe Bombay Stock Exchange Limited

For demat & share transfer enquiries - Registrars and share transfer agent

Integrated Enterprises (India) Ltd.(Unit: California Software Co. Ltd.)

nd2 floor, Kencees Towers, 1, Ramakrishna Street, North Usman Road, T Nagar, Chennai 600017 India Tel +91-44- 2814 0801 to 2814 0803Email [email protected]

Board of Directors

Clyde Michael Bandy Chairman

S. (Sam) Santhosh Managing Director & CEO

Jerome Lazatin Lorenzo Non-Executive Director

Dan George Peterson Non-Executive Director

Dr. P. J. George Independent Director

S.Santhanakrishnan Independent Director

At a Glance

California Software Company Limited (Calsoft) is a global Outsourced Product Engineering & Enterprise Solutions company with a strong background in consulting, development and implementation.

Founded

1992

Headquarters

Chennai, India

Employees

1000+

Stock symbol

NSE (cali.ns), BSE (cali.bo)

Chief executive officer

S. (Sam) Santhosh

Web site address

www.calsoftgroup.com

Headquarters

Robert V Chandran Tower, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai 600 100, India.

Phone +91 44 4282 9000 | Fax+91 44 4282 9012

Corporate Information

Realize Your Ideas

Contents

Corporate Profile 02

Board of Directors 04

Leadership Team 05

Letter to the Shareholder 06

Financial Highlights 08

Directors’ Report 10

Annexure to Directors’ Report 13

Corporate Governance Statement 14

Confirmation on Code of Conduct 16

Management's Discussion and Analysis 17

Consolidated Financial Statements 21

Standalone Financial Statements 45

Shareholder Information 65

Frequently Asked Questions 67

Calsoft Annual Report 2009 - 2010|

Company Profile

About Us Our OfferingsFounded in 1992 and headquartered in Chennai; California Software Product Engineering Services

Company Limited (Calsoft) is a global Outsourced Product Engineering Calsoft Labs is the technology arm of the Calsoft group and provides & Enterprise Solutions company with a strong background in consulting, outsourced product engineering services to both established development and implementation. With revenues exceeding $40 Million, companies and start ups. Calsoft employs over 1000 people in 11 locations worldwide.

Calsoft Labs has focused on providing high end solutions and services The Calsoft group has three Business Divisions: Calsoft Labs, Enterprise to Network Equipment Manufacturers, Independent Software Vendors Solutions and Strategic Investments.(ISVs), Computer Hardware and Peripherals, Industrial Automation

companies, Automotive Electronics companies and Mobile, Multimedia Our Businessand Consumer Electronics (MMC) companies. Calsoft Labs is one of the Inorganically the group has grown by partnering or acquiring companies very few product engineering services companies to specialize in three that compliment our existing product and services portfolio, help expand niche areas of Networking and Datacom, MMC/Embedded Systems our customer base and enable us to enter new markets. The key drivers and ISVs.for our organic growth has been our ability to build stronger relationships

with existing clients, acquiring new clients through planned growth and Our full life cycle of services include product development, testing & QA, strategic partnerships in the markets and domains that we operate in. sustenance engineering, embedded hardware design and embedded

software development. Business Divisions

Calsoft labs has over 150 satisfied customers. The key customers in this Calsoft Labs

divison includes Radware, IXIA, Healthland, Kronos etc.,

Calsoft Labs has formed strategic and technology partnerships with key Inatech

global technology providers like Phoenix Technologies, Adobe and IXIA.

InatechCalsoft Strategic Investments

Inatech assists business organizations derive maximum value out of

technology investment through business solutions. As an Oracle

Certified Global Platinum Partner Inatech works with enterprises that are Markets

re-engineering their processes and are adapting to rapid change.

The key focus areas for the Inatech group are:

Managed Services

Consulting & System IntegrationStrategic Investments

Technology Strategy & Planning

Business Process EnablementC

Joint Ventures

¡

¤ Product Engineering Services

¡

¤ Consulting and System Integration

¡

¤ Identify, invest and manage synergic acquisitions, partnerships and

joint ventures

¡

¤ America

¤ Europe¡

¤ Middle East¡

¡

¡¤ ePay.LLC., California, USA

¡¤ Aspire Communications, Mysore, India

¡

¤ Calspence Technologies Private Limited, Colombo, Sri Lanka


02 Realize Your Ideas|


Realize Your Ideas 03|

+ Our own campus at Pallikaranai,

Chennai with state-of-the-art

infrastructure. The facility can

accommodate 2000 Software

Engineers.

Our range of services include Strategic & Operational Business Aspire Communications, India – A leading technology driven

Consultancy, Implementation, RICE Components, Testing, Technical company focused on solutions in the areas of embedded hardware

Architecture, Product development, Training, Managed Services, design, product re-engineering, outsourced product manufacturing,

License Management and Migration. The Enterprise division also has device drivers’ development, RTOS porting and application software

expertise on the Commodities Supply chain segment. development. Calsoft has a 51% stake.

It provides these services across multiple industry segments: Finance & ePay (CNHC LLC) - Based in CA, USA; this is a strategic investment

Banking, Communications, Manufacturing, Services, Retail & of Calsoft. The company operates in the healthcare space and offers

Distribution, Healthcare, Engineering & Construction, Govt. & Public patients a one-stop web service for healthcare payments. Calsoft

Sector, Logistics & Transportation and Energy. holds a 51% stake in this company.

Inatech has over 100 satisfied customers. The key customers in this Calspence - Calspence the joint venture company between Calsoft

divison includes Phones4U, HDNL, TDIC, AP Moller etc., and Aitkin Spence (www.aitkenspence.com) will leverage on the IT

strengths of Calsoft and the domain expertise of AS to come up with Calsoft Strategic Investments

solution offerings for a global market. Calsoft has a 50% stake in this The focus of this Business Division is to identify, complete and manage

company.synergic acquisitions, partnerships and joint ventures. The strategic arm

Calsoft will continue its strategy of specialization in niche areas and identifies companies in the same eco system that compliments our

segments with a focus on geographical expansion. Its inorganic product and services portfolio and would further fuel our growth.

strategy will focus on achieving this by taking minority stakes in niche Current strategic investments and partnerships include:

companies. It is also looking to partnerships and joint ventures that will

leverage the expertise and strengths of both the partnering companies

to create more business value.

¡

¡

¡

Board Of Directors



Clyde Michael BandyChairman

S.SanthanakrishnanIndependent Director

S. (Sam) SanthoshManaging Director& CEO

Dan George PetersonNon-Executive Director

Prof. P. J. GeorgeIndependent Director

Jerome Lazatin LorenzoNon-Executive Director

Leadership Team



Sai SatyamCFO

Ramandeep SinghCTO

Head - Calsoft Labs

Dan George Peterson CEO

ePAY. LLC

Dr. Mahesh RaoCEO

Aspire Communications

Chris D.BakerCEO

Head - Inatech

S. (Sam) SanthoshManaging Director & CEO

Letter to the Shareholder

It gives me immense pleasure to present the achievements of Calsoft for Strategic Investment:the financial year 2009-10.

ePay.LLC: We have made a 51% investment in ePay Healthcare a

California based company. The company operates in the healthcare I am very happy to report that our revenues came in at Rs. 200.50 crores, space and offers patients a one-stop web service for healthcare and our operating profit was Rs. 11.29 crores. Profit after tax increased payments. by a phenomenal 257% year-on-year increase to touch Rs. 35.68 crores,

versus last year’s loss of Rs. 22.74 crores.Informed Decisions Corporation: We successfully sold our strategic

investment subsidiary, Informed Decisions Corporation (IDC) in which Acknowledging our significant profits the Board of Directors has we had a 51% stake through CSWL (a 100 % subsidiary) on 17th Nov recommended a dividend of 20% for the financial year ended 09-10. The 2009. The deal was a 100% buyout and the buyer, Higher One, is a US total outflow on account of the dividend and allied distribution tax is Rs. based privately owned financial services and Payment Company.2.89 crores.

American HealthNet: During the year the assets of one of our Strategic Business Units:Investment co, American Healthnet was sold to a competitor

Calsoft Enterprise: The group's business unit Calsoft Enterprise Healthland. The buyer Healthland is a key player in the healthcare

Solutions will henceforth be known as Inatech a Calsoft Company. industry in the USA. Calsoft has an offshore development center for

Calsoft has appointed Chris Baker to the role of CEO, responsible for Healthland in its Chennai office and continues to provide technology

driving growth in Europe, America, the Middle East and India. and development support to Healthland.

Calsoft Labs: The unit has consolidated its business after the downturn

and has moved into a growth trajectory mode again. Its ODC for

Healthland has grown to a 50 member team over the past year.

Dear Shareholder,

Greetings!

From the CEO’s Desk



Glencore International AG takes 51% stake in our parent Strategic Focus and Company ValueCompany Kemoil Corporation

Our strategic investment group has seen a good amount of traction in

51% shareholding of our parent Company Chemoil Corporation has the last year in terms of return on existing investments. In the case of

been acquired by Singfuel Investment Pte Ltd. (an indirect wholly owned Calsoft the parts are more valuable than the sum and as we move to the

subsidiary of Glencore International AG). In pursuant of this process , an next level we will try and generate more value through our independent

open offer was made by Singfuel Pte Ltd. to the shareholders of business units Calsoft Labs, Inatech and strategic investments.

California Software Limited; other than Chemoil Corporation at the price I thank our investors, customers, employees and all other key

of Rs. 45.03 per fully paid up equity share. stakeholders for the continued support and patronage.

New Accounts

In 2009-10 we added marquee customers like Radware, Healthland,

S. (Sam) SanthoshHigher One and TDIC. Our existing bigger accounts like Kronos, IXIA,

AP Moller Maersk and Phones4U continue to give us repeat business. Managing Director



Consolidated Basis Standalone Basis

March 31 March 31 March 31 March 31 March 31 March 31

2010 2009 2008 2010 2009 2008

FOR THE YEAR ENDED

Total revenues 200.5 268.68 236.39 90.06 81.32 69.08

Operating profit 11.29 (4.92) 26.15 23.17 7.45 12.6

Profit Before Taxes 59.98 (25.09) 21.2 8.26 (5.50) 10.55

Net Profit after taxes and adjustments 35.68 (22.74) 15.47 5.29 (8.05) 7.25

Net Profit as % of Revenues 17.80 NA 6.54 5.87 NA 10.48

AS AT END OF THE YEAR

Fixed assets (Net) 140.95 143.29 111.67 85.23 90.9 78.15

Cash & Bank balances 22.9 40.31 56.48 5.44 2.36 7.71

Share Capital 12.36 12.36 12.36 12.36 12.36 12.36

Total Shareholder fund 109.15 83.41 103.82 100.98 98.58 106.63

Total loan Funds 79.09 92.78 73.23 65.38 79.24 64.52

SHARE RELATED DATA

Earning per share

Basic (Rs) 28.86 (18.39) 13.94 4.28 (6.51) 6.53

Diluted (Rs) 28.86 (18.39) 13.94 4.28 (6.51) 6.53

Dividend per Equity Share (Rs) 2 NIL 1 2 NIL 1

Dividend % 20% NIL 10% 20% NIL 10%

Book value per share (Rs) 88.27 67.46 83.97 81.66 79.72 87.05

Market capitalization - Rs in crores 52.18 17.43 102.62 52.18 17.43 102.62

(Based on Share Price-NSE - 31st March,2010)

*Dividend paid on enhanced capitalPrevious Year's figures have been reclassified to conform to current years figures wherever applicable

(All figures Rs. in Crores, unless mentioned otherwise)

Financial Highlights



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2008 2009 2010

236.39

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2008 2009 20100

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50

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70

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Directors’ Report

I) Consolidated Results Dividend

Your Directors recommend a final dividend of 20% (Rs.2 per equity shares During the year, your Company on a consolidated basis with all its

of Rs.10/- each) to be appropriated from the profits of the year 2009-10 subsidiaries earned total revenue of Rs.200.50 Crores as against Rs.268.68

subject to the approval of the shareholders at the ensuing Annual General Crores earned during the previous year. The EBITDA during the year is

Meeting. Rs.11.29 Crores as against a loss of Rs (4.92) Crores for the previous year.

The register of members and share transfer books will remain closed from After taking into account the tax provisions and adjustments for minority

14th September 2010 to 17th September 2010 (both days inclusive). Our interest, prior period adjustments and extraordinary items if any, the profit

Annual General Meeting has been scheduled for 17th September 2010.for the year is Rs.35.68 Crores as against a loss of Rs.(22.74) Crores of the

previous year. The results of operations of acquired subsidiaries have been Transfer To Reservesconsolidated into the accounts.

We propose to transfer Rs. 40,00,000/-(7.5% of the net profit of standalone

II) Standalone Results operations for the year) to the general reserve.

During the year, your Company on a standalone basis earned total revenue Businessof Rs. 90.06 Crores as against Rs. 81.32 Crores earned during the previous

Your company is primarily engaged in business of providing IT services and year – an increase of Rs. 8.74 Crores (a growth of approx 10.75%).

solutions to its customers in US, Europe, Middle East and India. The The EBITDA during the year is Rs.23.17 Crores as against Rs.7.45 Crores of financial results of the Company both on standalone and consolidated the previous year an increase of 15.72 Crores. have been encouraging despite the challenges faced in terms of

After taking into account the tax provisions and adjustments, the profit for unfavorable currency movements and tight business conditions in our

the year was Rs.5.29 Crores as against a loss of Rs.(8.05) Crores for the primary markets of US and Europe. On standalone basis, vastly improving

previous year. margins despite moderate increase of revenue bear testimony to

improvements in our delivery practices and the strategy of focusing on

existing customers to deliver higher value. Our consolidated revenues

showed a drop but profit margins have shown considerable improvement

on a year over year basis.

Dear Shareholders,

Your Directors have pleasure in presenting their Report on the Business & Operations of your Company and its working results

for the year 2009-10.


All figures in Rupees Crores except EPSFinancial Results - Highlights

*Note: Previous year's figures have been reclassified wherever necessary to conform to current year classification.

Consolidated Standalone

Year ended Year ended Year ended Year ended

Details March 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009

Total Revenues 200.50 268.68 90.06 81.32

EBITDA 11.29 (4.92) 23.17 7.45

Interest & Finance Charges 11.40 8.35 8.87 6.87

Depreciation & Amortization 10.54 9.81 6.04 6.09

Profit before Tax 59.98 (25.09) 8.26 (5.50)

Provision for Taxation

Current Tax 15.48 1.80 1.37 1.17

Deferred Tax 8.81 (4.17) 1.60 1.38

Profit after tax (PAT) 35.68 (22.74) 5.29 (8.05)

Surplus available for appropriation 36.77 1.41 21.99 16.70

Appropriations

Dividend Proposed 2.47 0.17 2.47 Nil

Dividend Distribution Tax 0.42 0.06 0.42 Nil

Transferred to General reserve 0.40 0.08 0.40 Nil

Balance Carried to Balance sheet 33.48 1.09 18.70 16.70

Paid-up Equity Share Capital 12.36 12.36 12.36 12.36

Earning per share for the year (Rs)

i) Basic 28.86 (18.39) 4.28 (6.51)

ii) Diluted 28.86 (18.39) 4.28 (6.51)

Results of Operations


Review of Subsidiaries Capital Market Developments

The market capitalizations of your Company stood at Rs.52.18 crores as on I - CSWL, Inc. USA and its subsidiariesMarch 31, 2010, based on the closing quotations on the National Stock

CSWL Inc and its subsidiaries earned total revenue of US$ 24.55 million Exchange.

(equivalent to Rs.109.73 Crores approx) on a consolidated basis during the

Open Offeryear, compared to US $ 37.01 million (equivalent to Rs.171.43 Crores)

achieved during the previous year. Singfuel, a Company incorporated in Singapore has made an Open Offer

pursuant to Regulation 10 and 12 of the SEBI (SAST) Regulations, The subsidiary reported a net consolidated profit of US$ 6.92 million -consequent upon the consummation of the Global Acquisition of Chemoil approx Rs.32.56 Crores as compared to net consolidated loss of US$ 4.9 by the Acquirer, resulting in an indirect acquisition of your Company. Your million (equivalent to Rs. (22.64) Crores) last year. Company is an indirect subsidiary of Chemoil. Chemoil, through its wholly

CNHC LLCowned subsidiary, Kemoil holds 66.04% of the equity shares. The open offer

CNHL LLC was incorporated on September 30, 2009 and doing business was being made by the Singfuel to the public shareholders of the Company

as (dba) ePAY Healthcare, wherein our Subsidiary Company i.e CSWL to acquire 24,73,002 equity shares, being 20% of the share capital. The

holds 51% stake. ePAY Healthcare is an electronic payment processing and open offer was being made at a price of Rs.45.03 per fully paid up equity

a service portal solution for healthcare organizations. ePAY Healthcare shares. The open offer was opened from 22nd April 2010 to 11th May 2010.

partners with health care organizations to provide patients with convenient 3,27,703 shares were tendered during the open offer.

self service options to view and pay health care statements on line. The

Divestment Of Stake In Informed Decisions Corporation simple and secure online portal reduces the ambiguity patients encounter

with paper statements and leads to faster payments. ePAY Healthcare is Inc (IDC)

powered by CASHNet technology. During the year, your Company has successfully concluded the sale of it

strategic investment subsidiary, Informed Decisions Corporation Inc (IDC) The results of existing subsidiaries HealthNet International Inc., Aspire Soft, in which it had a 51% stake through CSWL Inc (a 100% Subsidiary). The International Innovations Inc, Waldron Ltd and CNHC LLC. are included for buyer, Higher One, was a US based privately owned financial services and the full year under review. payment company that enables institutions of higher education to

II - Inatech Infosolutions Pvt. Ltdstreamline business processes while improving student services.

The consolidated results of Inatech including its wholly owned UK (http://www.higherone.com/).

subsidiary and UK Subsidiary's subsidiary Inatech Egypt have been taken The deal was a 100% buyout, in which Higher One bought all of the stock of

into the Company's consolidated results. IDC. The sale transaction reflects a gain of $8,587,822(Rs 42.80 Crore), net

Inatech on a consolidated basis reported revenues of Rs.70.09 Crores and of income taxes. The agreement further provides incentives by which CSWL

profit after tax of Rs.(0.71) Crores against the consolidated reported could earn an additional $4.5Mil (Rs 21.20 Crore) if certain sales goals are

revenues of Rs.61.59 Crores and profits after tax of Rs. 1.29 Crores. met. As these potential future earnings are contingent in nature, they have

IV - Aspire Communications Pvt, Ltd not been reflected in the current year financial statements.

The Consolidated results of Aspire including its wholly owned Subsidiary Joint Venture With Aitken Spence Plc, Colombo

Aspire Peripherals Limited have been taken into Company's Consolidated During the year under review your Company and Aitken Spence PLC,

results for the full year. Colombo, have embarked on a Joint Venture initiative based in Colombo,

Aspire on a consolidated basis has reported revenues of Rs.5.11 Crores SriLanka. Aitken Spence is a conglomerate with major interest in Hotels,

and net profit of Rs0.03 Crores against the consolidated reported revenues Travel and Tourism, Logistic Solutions, Power Generation, Plantation,

of Rs 6.08 Crores and net profit of Rs.1.15 Crore of the previous year.Insurance, Financial Services, IT, Printing and Garments, with an annual

V - EastPoint Solutions Limited turnover of more than Rs.27.5 Billion. The joint venture company is called

“CALSPENCE TECHNOLOGIES PRIVATE LTD”. The joint venture company This company was incorporated as a wholly owned subsidiary in the year

was established to provide Information Technology business, specializing 2007 in order to make appropriate foray in Business Process Outsourcing

in the Hospitality sector. As on date the Company is yet to commence any area (BPO) either on start up basis or with suitable investments

commercial activity and there are no revenues or profits for the period /acquisitions of existing companies in this space. As on date the Company

ended March 31, 2010. is yet to commence any commercial activity and there are no revenues or

profits for the period ended March 31, 2010. Directors

Consolidated Results Publication Mr. Jerome Lazatin Lorenzo was appointed on 29th October 2009 as an

Additional Director of the Company. Mr. Jerome has vast experience in the In terms of approval by the Central Government under Section 212 (8) of the

field of Finance and Treasury function and is the Chief Financial Officer of Companies Act, 1956, a copy of the Balance Sheet, Profit and Loss

Chemoil Group. He will hold office up to the date of the ensuing Annual Account, Report of the Board of Directors and the Report of the Auditors of

General Meeting. Mr. Jerome Lazatin Lorenzo is an independent Director.the above subsidiary companies have not been attached with the Balance

Sheet of the Company. The Company will make available these documents The Company has received notice under Section 257 of the Companies upon request in writing to the Company Secretary at the Registered Office Act, 1956 from a member proposing Mr. Jerome Lazatin Lorenzo for of the Company by any member of the Company interested in obtaining the appointment to the office of Director liable to retire by rotation.same.

Board of Directors vide its meeting held on 31st March 2010 re-appointed However, as required under the Listing Agreements with the Stock Mr. S. Santhosh as Managing Director of the Company for a further period of Exchanges, the Consolidated Financial Statements of the Company and all five years with effect from 08th May 2010. Mr. S. Santhosh re-appointment its Subsidiaries as prepared in accordance with Indian GAAP is enclosed had been approved by members at the extra-ordinary general meeting held and form part of the Annual Report and Accounts. on 05th May 2010.



As per Article 121 of the Articles of Association Mr. Dan George Peterson Conservation of energy, technology absorption, foreign retires by rotation in the forthcoming Annual General Meeting and being exchange earnings and outgoeligible offers himself for re-appointment. The particulars as prescribed under sub-s ection (1) (e) of section 217

of the Companies Act, 1956, read with the Companies (Disclosure of Auditorsparticulars in the report of Board of Directors) Rules, 1988, are set out in the The statutory auditors for Standalone financials, M/s Price Waterhouse, Annexure forming part of this report.Chennai, Chartered Accountants, resigned during the year and M/s Tomy &

Francis, Trichur, Chartered Accountants has been appointed. The auditors Directors' Responsibility statementM/s Tomy & Francis, Chartered Accountants retire at the ensuing Annual Pursuant to section 217 (2AA) of the Companies (Amendment) Act, 2000, General Meeting and have confirmed their eligibility and willingness to the Directors confirm that: accept office, if re-appointed.

+ In the preparation of the Annual Accounts for the year under report, the Deposits applicable accounting standards have been followed;

We have not accepted any fixed deposits and as such no amount of + Appropriate accounting policies have been selected and applied

principal or interest was outstanding as of the Balance Sheet date. consistently and have made judgements and estimates that are

reasonable and prudent so as to give a true and fair view of the state of Corporate Governanceaffairs of the Company as at March 31, 2009; Your Company has been practicing the principles of good Corporate

Governance. A detailed report on Corporate Governance is given as + Proper and sufficient care has been taken for the maintenance of

Annexure to this Annual Report adequate accounting records in accordance with the provisions of the

Companies Act, 1956, for safeguarding the assets of the Company Certificate of the Auditors regarding the compliance with the conditions of and for preventing and detecting fraud and other irregularities;Corporate Governance as stipulated in Clause 49 of the Listing Agreement

is also given in the Annual Report. + The Annual Accounts have been prepared on a Going Concern Basis.

Human Resource Management Acknowledgement

Employees are our vital and most valuable assets. We have created a Your Directors take this opportunity to thank the customers, shareholders,

favorable work environment that encourages innovation and meritocracy. suppliers, bankers, business partners/ associates and Government and

regulatory authorities in India and other countries of operation for their The total number of our Head Count as of 31st March 2010 was 945 as consistent support and encouragement to the Company and look forward against 949 as on March 31st 2009. to their continued support during the coming years. Your Directors place on

Our annual attrition for the year 2009-10 was 25.24% as against 19.7% in the record their appreciation for the valuable contribution made by the

year before. Despite the recession prone economy, we were able to retain employees at all levels.

the best industry talent.

For and on behalf of the Board of DirectorsIn 2010-11, your company will continue to focus on introducing policies,

practices & systems in the area of performance management, recognition, Chennai Dr. P. J. George S. Santhosh

talent management & talent engagement. June 23, 2010 Director Managing Director

Particulars of Employees

In terms of the provisions of section 217(2A) of the Companies Act 1956,

read with the Companies (Particulars of Employees) Rules 1975 as

amended, the names and other particulars of the employees are required to

be set out in the Annexure to the Directors' Report and form part of this

report as Annexure. However, as per the provision of the Section 219 (1) (b)

(iv) of the said Act, the Annual Report excluding the aforesaid Annexure

information is being sent to all the members of the Company and others

entitled thereto. Members who are interested in obtaining such particulars

may write to the Company Secretary at the Registered Office of the

Company for the same.



Particulars pursuant to Companies (Disclosure of Particulars in d. Expenditure incurred

the Report of Board of Directors) Rules, 1988 The expenditure is mainly in the form of salaries and benefits to the

employees involved, which are charged to the revenue account.1. Conservation of Energy3.Technology Absorption, Adaptation and InnovationThe operation of your Company does not consume high levels of energy.

Adequate measures have been taken to conserve energy wherein your Your Company uses the latest technology available in its operations. Your

Company uses the latest technology and energy efficient equipment. As Company continues to keep its thrust in modern technology applications.

energy cost forms a very small part of total costs, the impact on costs is not 4. Foreign exchange earnings and outgo for the year ended

material.March 31, 2010

Energy Conservative Initiatives:

Power Saving:

This year we devoted considerable attention on methods and approaches

to conserve power. Significant steps taken in this regards include the

following:-

+ Turning off monitors during weekends.For and on behalf of the Board of Directors

+ Hibernation of Desktops and notebook computers when not in use.

+ Turning-off lights in all floors during non-working hoursChennai Dr. P. J. George S. Santhosh

+ Operating only 1 lift after 7 PMJune 23, 2010 Director Managing Director

+ Turning-off the Air Conditioners during non-peak hours and weekends

Water Conservation:

There has been increasing awareness of the need to conserve water both in

usage practices and in securing our sources. Some steps that helped to

create an impact include the following:-Auditors' Report on Corporate Governance

Turning-off lights in all floors during non-working hours

To+ Sensors in toilets to optimize water usage

The Board of Directors,+ Sewage Water treatment Plant to recycle water California Software Co. Ltd.

+ Rain water harvesting being planned.

We have examined the compliance of conditions of Corporate Governance Pollution Control & Reporting:by California Software Company Limited for the year ended on 31st March, Towards achieving better environmental standards, regular checks on air 2010 as stipulated in Clause 49 of the listing agreement of the said quality, monitoring of noise levels and monitoring of fuel stock is being Company with the Stock Exchanges. The compliance of conditions of carried out at RVC Tower.Corporate Governance is the responsibility of the management. Our

2. Technology Absorption examination was limited to the procedures and implementation thereof, Technology is witnessing rapid change. We proactively and continuously adopted by the Company for ensuring the compliance of the conditions of invest in developing technology building blocks and solution frameworks Corporate Governance. It is neither an audit nor an expression of opinion on which add value to our customers business. the financial statements of the Company.a. Research & Development

In our opinion and to the best of our information and according to the Your Company continually invests in research and development ensuring a

explanations given to us, we certify that the Company has complied with the high level of technical competence. Research and Development refers to

conditions of Corporate Governance as stipulated in the above mentioned + General Software Development which includes adoption of new

listing agreement.technologies, process improvement etc.

We state that no investor grievances are pending for a period exceeding + Continuous development & innovation in the Software Development

one month against the Company as per the records maintained by the Life Cycle process

Shareholders’/Investors’ Grievance Committee.+ Continuously improving the existing products

We further state that such compliance is neither an assurance as to the b. Benefits Derived

future viability of the Company nor the efficiency or effectiveness with which Your Company achieved a higher degree of methodology standardization

the management has conducted the affairs of the Company. in handling software projects. The results will help the Company in

leveraging these learnings into developing better solutions for its clients. FOR TOMY & FRANCIS

This will also internally improve the Company's quality and productivity and Chartered Accountants

provide it the competitive edge. Chennai K.J. TOMY, B Sc., F.C.Ac. Future Plan of ActionJune 23, 2010 PartnerYour Company plans to strengthen its R&D activities in product and

Membership No 22768application development areas and absorption of new technologies.

Annexure to Directors' Report

(Rs in Crore)

2010 2009

Foreign exchange earnings 84.35 72.58

Foreign exchange outgo 17.61 20.83

(including capital goods and imported software packages)



Corporate Governance Statement

Company’s philosophy on code of governance b. Composition of the Committee:

The Company is committed to good corporate governance and provides The current composition is:

detailed information to its shareholders on various issues concerning the Dr. P. J. George, Chairman

Company’s business and financial performance. The Company is in Dan George Peterson, Member

compliance with the mandatory requirements of the revised guidelines on S.Santhanakrishnan, Member

corporate governance stipulated under Clause 49 of the Listing Agreement c. Meetings and attendance during the year:with the Stock Exchanges. The Committee held five meetings, on 30th June 2009, 31st July 2009; 29th

Board of Directors October 2009; 26th January 2010 and 31st March 2010. .All the meetings

Composition and category of Directors as on March 31, 2010 were attended by atleast two of its members. The statutory auditors of the

Company were also invited to attend the Audit Committee meetings.

Compensation Committee

a. Brief description of terms of reference:

The Committee is to recommend to the Board regarding remuneration to be

paid to the Board members and the grant of Stock Offers and Options to the

employees based on an evaluation of their performance, potential for future

contributions, commitment shown to work, conduct and such other factors b. Number of Board meetings held during the financial year and the as may be specified.dates on which held:

b. Composition of the committee:

Current composition is

Dr P J George, Chairman

S.Santhanakrishnan, Member

c. Meetings and attendance during the year:

The Committee held 1 meeting during the year, which was attended by all its

members.c. Attendance of each Director at the Board meetings and the last AGM:

d. Remuneration policy:

The remuneration policy of the Company is to adequately compensate, by

way of salary and stock options, to motivate and retain all key employees

and officers of the Company.

Audit Committee

a. Brief description of terms of reference:

The Audit Committee is responsible for effective supervision of the financial

reporting process and ensuring financial and accounting and internal

controls and compliance with financial policies of the Company . The

committee will periodically interact with the statutory and internal auditors,

review with the management the Company’s financial and risk

management policies and adequacy of internal controls. The committee

will mandatorily review the Quarterly and Annual financial statements before

they are submitted to the Board for approval. The committee will also

recommend the appointment and removal of statutory auditors and internal

auditors.


Category No. of Directors %

Founder Director 1 16.67

Non-executive Directors 3 50

Independent Non-executive Directors 2 33.33

Total 6 100.00

No. of meetings Dates on which held

7 12th June 2009; 30th June 2009; 31st July 2009,

28th August 2009, 29th October 2009,

26th January 2010 and 31st March 2010.

Sl. No. Name of the No. of Board Attendance

Directors meetings at the last AGM

Attended (Yes/No)

1 Clyde Michael Bandy 2 Yes

2 S. Santhosh 6 Yes

3 Dr P J George 7 Yes

4 Dan G Peterson 2 Yes

5 S.Santhanakrishnan 7 No

6 Jerome Lazatin Lorenzo 1 Not applicable

(inducted from 29th October 2009)


b. Details of non-compliance by the Company, penalties, strictures Investor Grievance Committeeimposed on the Company by Stock Exchange or SEBI or any statutory a. Constitution of the Committee: authority on any matter related to capital markets, during the last three Dr P J George, Chairman years.

Mr.S.Santhanakrishnan, Member NIL

b. Name & designation of the compliance officer:

Means of communication Mr. Jitendra Kumar Pal

a. Half-yearly report sent to each household of shareholders:c. Number of shareholders’ complaints received, number not solved to The unaudited financial results of the Company for the half-year ended the satisfaction of shareholders and the number of pending share September 30, 2009, including a summary of significant events in the half-transfers: year were sent to all shareholders of the Company.The details are provided in the “Shareholder Information” section of this

b. Quarterly results – which newspapers normally published in; any report.website, where displayed; whether it also displays official news

General Body Meetings release; and the presentations made to institutional investors or to the

analysts:a. Location and time where last three AGMs were held:

The quarterly results are normally published in leading newspapers like

Business Standard (in English) and Makkal Kural (Tamil) as statutorily

required The financial results are posted on the Company’s website

www.calsoftgroup.com . The website also displays all official news

releases. As & when presentations are made to institutional investors/

analysts, the same will also be posted on the Company’s website.

c. Whether Management Discussion and Analysis is a part of the

Annual Report or not:

Yes - forming part of the Annual Report

d. General Shareholder Information:b. Whether special resolutions were put through postal ballot last year,

details of voting pattern, person who conducted the postal ballot The details are provided in the “Shareholders Information” Section exercise and procedure for postal ballot: of this reportNo special resolution was put through postal ballot last year.

Disclosures

a. Disclosures on materially significant related party transactions i.e.

transactions of the Company of a material nature, with its promoters,

the Directors or the management, their subsidiaries or relatives etc.

that may have potential conflict with the interest of the Company at

large:

The details as applicable are provided under the paragraph “Related party

transactions” in the “Notes on Accounts’ in Financial statements.

e) Details of remuneration paid to Directors during the year 2009-2010: in Rs.

Sl Name Designation Salary Performance Commission Total Notice Severance No. of Remarks

No Incentive Period fee Options

1 Clyde Michael Bandy Chairman NIL NIL NIL NIL NIL NIL NIL NIL

2 S. Santhosh Managing NIL NIL NIL NIL 6 months NIL NIL He drew Salary from

Director CSWL Inc., a wholly owned

subsidiary of the Company

in the U.S

3 Dan G Peterson Director NIL NIL NIL NIL NIL NIL NIL NIL

4 Dr. P J George Director NIL NIL NIL NIL NIL NIL NIL Sitting fees were paid for

Board and committee

meetings attended

5 S. Santhanakrishnan Director NIL NIL NIL NIL NIL NIL NIL Sitting fees were paid for

Board and committee

meetings attended

6 Jerome Lazatin Lorenzo Director NIL NIL NIL NIL NIL NIL NIL NIL

Year Date Venue Time

2006-2007 Aug 22, 2007 Tidel Park Auditorium,

4, Canal Bank Road,

Taramani, Chennai-600113 4:30 p.m

2007-2008 Aug 29, 2008 Same as above 3.00 p.m.

2008-2009 Aug 28, 2009 Robert V Chandran Tower, 149,

Velacherry Tambaram Main Road,

Pallikarnai, Chennai-600 100 11.00 a.m



Confirmation on Code of Conduct

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT

PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT

ToThe Members,

California Software Co. Ltd.,

This is to declare that the Code of Conduct adopted by the Company for the Board of Directors and the Senior Management Personnel of the Company have

been complied with by all the members of the Board of Directors and all the Senior Management Personnel of the Company. The full text of the Code adopted

is available on the Company’s website.

S. SanthoshDate: June 23, 2010 Managing Director



c) As the recession will impact investment made in IT infrastructure, a. Industry Structure and DevelopmentsCalsoft’s direct revenue and indirect revenue streams may be The year 2009 – 2010 was been very challenging for the entire Indian IT impactedServices industry. With customer IT spending staying mostly flat or showing

In every challenge lies an opportunity. Today’s enterprises are looking for a decline, the focus among client organizations was on diving efficiencies

solutions that can help them reduce their operational cost and derive into their existing IT systems, and pursue projects that higher levels of

maximum value from their IT spend. According to industry analysis like guaranteed return on investments and quicker payback.

Forrester, enterprises are looking for help making the move from a Time & According to NASSCOM, the IT industry growth rate for financial year 2009-Material model of engagement to a managed services model which not only 10 has been estimated at 5.5 percent. However, for the next financial year, help in driving down costs but also ensures that the projects are more 2010 – 11, NASSCOMM has given healthier projections for IT services outcome oriented. The industry has been talking about this changed exports to grow between at 13 percent to 15 percent. They have forecasted business, engagement and pricing models for some time now. However, the Indian market to grow between 15 percent to 17 percent.they are fast becoming a reality. Further, enterprises are prioritizing at

Customer’s perception of outsourcing has undergone a distinct and projects that involve application consolidation / rationalization and those

perceptible change. They are increasingly looking at outsourcing as a tool which are collaborative and high impact solutions that enhance

to meet their ever changing and dynamic business environment. IT budgets productivity.

are subject to high levels of scrutiny to ensure alignment to their overall In the customer segment of Software Product companies who outsource business strategy. Customers are seeking partners with mature process, their products development to offshore outsourcing companies, there has financial stability and a demonstrated track record in not only delivering cost been a growing preference for engagement modes that align their costs savings but also those who show sustained and continuous improvements with activity levels (output). We have seen an increased level of activity in productivity.among product companies that are relatively new to offshoring – driven by

The year 2009 was the year of speculation and uncertainty brought in by the the need to complete in a challenging economy.

economic downturn which affected almost every economy in the world by With Calsoft’s proven track record in delivering solutions to product the year steadily opened up to be better than expected with good results companies, we are we poised to capitalize on the above trends in the from companies across the industry. The developments during the year, enterprise and product development markets.demonstrated India’s resilience and maturity, driven by sound

The financial upheaval that hit the developed markets last year threw up a macroeconomic fundamentals.

risk which the industry was not really exposed to earlier i.e. ‘Customer The native drivers for IT outsourcing, continue to be strong and we do not sustainability’. Constantly changing business priorities, merges, forsee significant threats to the outsourcing markets. The current recession acquisitions and consolidations of companies require IT service providers will stimulate changes in business process and changes in product to be quick and deliver according changing situations.development infrastructure, which will increase the opportunity for

Companies which are slow to react will get negatively impacted by risks on engineering services at the infrastructure or IT level and at the level of

account of failed projects, unhappy customers and in extreme cases business process execution. These changes will be driven by the need to

customer delinquencies. Further, with costs of delivery from near shore reduce costs by optimization of manufacturing process costs, competitive

locations closing up with that offshore, emergence of these centers sourcing of components and increasing integration between various

coupled with protectionist steps taken by developed economies faced with enterprise level systems.

the recession could threaten the growth prospects of this sector.b. Opportunities and threats

c. Segment wise performanceThe significant opportunities that Calsoft sees for growth and the

For the financial year under consideration, your company has reported achievement of its near term and long term goals are based on the

results of the business units viz Product Engineering Services, Enterprise following:

Solutions, Strategic Investments Solutions and Infrastructure Management a) Exploring innovating business models to move from the linear Services.model and make investments in intellectual property and hosted

The Company recognizes each of the business unit as its primary application

segments. The performances of these segments have been separately b) Calsoft Engineering service delivery model, combining deep domain reported in Note No.14 of Schedule 20 of the Consolidated Financial expertise in proximity locations coupled with process and task level Statements of the Company and Note No17 of Schedule 20 of the scalability in near-shore and off shore locations. As product standalone statements.manufacturers look to increase their competitiveness in the post-

recession economic scenario, Calsoft’s positioning will enable new d.Outlookand broader opportunities to the market. The Company has taken stock of the effect of industrial recession on

The main threats to the growth of the Company will come from: demand and has introduced steps to maintain margins.

a) Foreign exchange rate fluctuations. As the Company uses India as a As our industry moves towards exploring new frontiers, there are many major source of manpower, the exchange rate of the Rupee vis-à-vis reasons that will limit us and it is imperative for stakeholders to break out of the US Dollar and other currencies could affects its ability to the traditional mould that resulted in past successes and step up to the compete, and have short-term impact on profitability. aspirations of the future. This would need new business models, reinvented

service offering and an enabling environment supported by adequate levels b) Continued recession will lead to unplanned pressure on margins and

of infrastructure and talent.topline.

Management’s Discussion and Analysis



We at Calsoft over the last year focused on our existing customer base as

the foundation for its growth. This Strategy has paid rich dividends. We have

been successful in growing the size of our existing teams working for our

existing customers, as well as branch into newer divisions within these

accounts, through ongoing investments in account management

capabilities.

e. Risks and concerns2. Operating Expenses

The risks that face the company are the ones that face the industry today Total operating expenses for the year ended 31st March 2010 was Rs

and these are monitored periodically. These risks include cut down in IT 189.22 crores as compared to Rs 273.60 Crores for the previous year.

budgets, volatility in currencies and withdrawal of tax benefits. Other risks Adjusted for sale of controlled subsidiary Informed decisions Corporation,

that are closely monitored are risks of client concentration, geographical total operating expenses were Rs 189.22 Crores as against Rs 196.4 Crores

spread, competition and financial stability of our customers.of the previous year. Operating expenses % on adjusted revenue was 95.4%

The risks and uncertainties include, but not limited to, risks and versus 105.4% of the prior year.uncertainties regarding fluctuations in earnings and exchange rates, the

3. EBIDTACompany’s ability to manage growth, intense competition in IT services

Earnings before tax, depreciation and amortization for the year ended 31st including those factors which may affect our cost advantage, wage

March 2010 was Rs 11.29 crores as compared to Rs (4.92) Crores for the increases, our ability to attract and retain highly skilled professionals, time

previous year. Adjusted for sale of controlled subsidiary Informed decisions and cost overruns on fixed price contracts, client concentration, restrictions

Corporation, total EBITDA was 4.2% of adjusted revenues for the fy 2010 as on immigration, our ability to manage our international marketing and sales

against (5.4%) of the previous year. operations, reduced demand for technology in our key focus areas,

4. Profit before Taxdisruptions in telecommunication networks, liability for damages on our Profit before tax was Rs 59.98 Crores for the year ended 31st March 2010 as service contracts and product warranty, the success of the companies in compared to a loss of (Rs 25.94 Crores) for the same period last year. The which the Company has made strategic investments, political instability, gain on account of the sale of subsidiary Informed decisions was Rs 69.57 legal restrictions on acquiring companies outside India, and unauthorized Crores.use of our and our customers’ intellectual property, the latter when in our

possession as well as general economic conditions affecting our industry 5. Profit after Tax

and repayment capability of customers in current market scenario. Profit after tax was Rs 35.68 Crores for the year ended 31st March 2010 as

compared to a loss of (Rs 22.74 Crores) for the same period last year. The f. Internal control systems and their adequacyprovision for tax for the current year was higher at Rs 23.2 Crores as against

Calsoft has deployed adequate Internal Control Systems (ICS) in place to a net tax benefit of Rs 2.35 Crores during last year.

ensure a smooth functioning of its business. The Control Systems provide a 6. Interest and Borrowings reasonable assurance of recording the transactions of its operations in all

Interest and finance charges for the year ended 31st March 2010 was Rs material aspects and of providing protection against misuse or loss of

11.4 Crores as against Rs 8.35 Crores for the same period last year. This company’s assets.

was mainly due to higher utilization of working capital and annualized The existing internal control systems and their adequacy are frequently

interest on term loan as against interest charges for nine months in the reviewed and improved upon to meet the changing business environment.

previous year.g. Material development in Human Resources

7. Capital EmployedCalsoft’s biggest assets are its employees. We are continuously working on The Return on Capital Employed (ROCE) for the year ended 31st March innovative initiates to attract, train, retain and motivate our employees. Our 2010 was 19% as compared to (12.9%) for the same period last year.endeavors are driven by a strong set of values imbibed in us and policies

8. Net Worththat we abide by. Our constant goal, and indeed our biggest strength, is a

The Return on Net worth (RONW) for the year ended 31st March 2010 was healthy happy and prosperous work environment for all our employees.32.7% as compared to (-24.3%) for the same period last year.

As on March 31, 2010, our group employee strength stood at 945.9. Fixed Assets

h. Financial and performance highlights Net block stood at Rs.140.95 Crores as of 31st March 2010 as compared to

1. Revenues Rs.142.19 Crores of the previous year. The acquisition goodwill including in

Sales revenues for the year ended 31st March 2010 was Rs.197.45 Crores the net block was Rs 44.5 Crores as compared to Rs 40.3 Crores for the

as compared to Rs.258.65 Crores for the same period last year. Adjusted for previous year.

sale of Controlled subsidiary Informed decisions Corporation, revenues for 10.Receivablesthe year (Rs197.5 crores in fy 2010 Vs 186.4 Crores in fy 2009) increased 6%

Debtors number of days sales stood at 92 days for the year ended 31st as compared to the prior year. Other income reduced by Rs 6.9 Crores

March 2010 as compared to 89 days for the same period last year.mainly due to currency fluctuation movements.

11.Cash Generation

Cash generated from operations was Rs 12.9 crores for the year ended 31st

March 2010 as compared to Rs 16.4 Crores of the previous year.

12.Manpower

The total employee strength as on 31st march 2010 was 945 as against 949

as on 31st March 2009.


Year ended March 31, March 31, % Increase (Decrease)

Revenue details 2010 2009 over Previous year

Sales/Services Rendered 197.45 258.65 (23.66)

Increase in Work-In-progress NIL (0.02) (100.00)

Other Income 3.05 10.05 (69.65)

Total Revenues 200.50 268.68 (25.00)

(Rs. Crore)






CONSOLIDATED FINANCIAL STATEMENTS

Auditors’ Report 21

Financial Statements- Balance Sheet 23- Profit and Loss 24

Schedules to Financial Statements 25

Consolidated Balance Sheet Abstractand General Business Profile 41

Statement of Cash Flow 42

Statement Pursuant to Section 212 (8)

Relating to Subsidiary Companies 43



To

The Members,

California Software Co. Ltd.

We have examined the Consolidated Balance Sheet of California Software Company Ltd. (Parent company) with all its subsidiaries, as at 31st March 2010,

and also the Consolidated Profit & Loss Account and the Consolidated Cash flow statement for the year ended on that date annexed thereto.

The subsidiaries included in the consolidation are:

I. CSWL, Inc. USA (100% equity held by Parent company) along with its subsidiaries

a) Healthnet International Inc, USA (100% equity held by CSWL Inc) and its 100% subsidiary International Innovations

b) CNHC, LLC DBA ePayhealthcare in which CSWL, Inc. owns 51% of the outstanding voting stock,

c) Waldron Limited, Hong Kong (100% of voting stock held by CSWLInc) and

d) AspireSoft Corporation ( 51% outstanding stock held by CSWL Inc)

II. Aspire Communications Pvt Limited, India (57.63% equity held by parent company)

III. Inatech Infosolutions Pvt Ltd, India (100% equity held by Parent company) and its wholly owned subsidiary Inatech Solutions Ltd, UK and sub

subsiidary Inatech Solutions, Egypt ( 51% share held by Inatech Solutions Ltd, UK)

IV. EastPoint Solutions Ltd, India (100% equity held by Parent company)

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial

statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and

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

reasonable basis for our opinion.

We did not audit the Financial Statements of I-CSWL, Inc. USA (consolidated basis with its subsidiaries) II- Inatech Infosolutions Pvt Ltd, India

(consolidated basis with its subsidiary)and lll-EastPoint Solutions Ltd, India as at 31st March 2010. These financial Statements have been audited by

other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of the parent

company and subsidiaries, is based solely on the report of the other auditors.

We draw your attention to the comments made by the Auditors of the subsidiary Inatech Infosolutions Pvt Ltd

1. The Company's share of gross assets as at 31st March 2010 of Rs 48.33 lakhs, share of gross revenue of Rs.55.15 lakhs are included in the

CFS based on unaudited financial statements in respect of step down subsidiary Inatech Soluttions Egypt S A E. Our opinion, so far it relates to

the amounts included of this subsidiary of the subsidiary are based solely on unaudited financial statements certified by the management.

Further effect on these financial statements due to difference in accounting policy of the said subsidiary in respect of depreciation has not been

ascertained.

2. Included in these Consolidated Financial Statements(CFS) are gross assets of Rs. 1,401.73 lakhs as at 31st March 2010 and gross revenue of

Rs.6260.46 of the subsidiary Inatech Solutions Limited UK for the year ended on that date which have not been audited by us. This has been

audited by an auditor based in the United Kingdom whose reports have been furnished to us, and our opinion, in so far it relates to the amounts

included in respect of this entity is based solely on the reports of the said auditor and information and explanations given by the Company.

However effect on these financial statements due to the change in method of charging depreciation , if carried out, is as furnished by the

management and not verified by the auditors.

Further, we report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of

Accounting Standard AS-21 on Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the

separate audited financial statements of California Software Company Ltd. and its subsidiaries included in the Consolidated Financial Statements.

Auditors' Report on the Consolidated Financial Statements of California Software Company Ltd. and its Subsidiaries



Subject to the above, on the basis of the information and explanation given to us and on the consideration of the separate audit reports on individual

audited financial statements of California Software Company Ltd. and its aforesaid subsidiaries, we are of the opinion that

a) The Consolidated Balance Sheet gives a true and fair view of the Consolidated state of affairs of California Software Company Ltd, and its

subsidiaries as at 31st March, 2010 and

b) The Consolidated Profit & Loss account gives a true and fair view of the consolidated results of the operations of California Software

Company Ltd, and its subsidiaries for the year ended on that date and

C) In the case of consolidated cash flow statement, it gives a true and fair view of the consolidated cash flows of California Software Company

Ltd, and its subsidiaries for the year ended on that date.

FOR TOMY & FRANCIS

Chartered Accountants

Chennai K.J. TOMY, B Sc., F.C.AJune 23, 2010 Partner

Membership No 22768

FRN: 010922S



Consolidated Balance Sheet as at

(in Rupees)

The schedules referred to above and the notes thereon form an integral part of the consolidated balance sheet.As per our report of even date attached

March 31, 2010 March 31, 2009

SOURCES OF FUNDS Schedule

SHAREHOLDERS' FUND

Share Capital 1 123,650,060 123,650,060

Reserves and Surplus 2 967,842,604 710,441,047

MINORITY INTEREST 20,228,988 26,158,326

LOAN FUNDS

Secured Loans 3 790,556,820 914,856,580

Unsecured Loans 4 357,589 12,873,640

DEFERRED INCOME TAX LIABILITY 110,499,740 25,894,465

TOTAL 2,013,135,801 1,813,874,118

APPLICATION OF FUNDS

FIXED ASSETS

Original Cost 1,847,418,075 1,799,099,349

Less: Accumulated Depreciation 437,942,971 377,209,419

Net Block 5 1,409,475,104 1,421,889,930

CAPITAL WORK IN PROGRESS NIL 10,994,391

INVESTMENTS 6 42,439,332 14,332,529

DEFERRED TAX ASSET NIL 68,885,687

CURRENT ASSETS, LOANS & ADVANCES

a) Sundry Debtors (Unsecured & Considered Good) 7 497,438,237 632,469,669

b) Inventories 253,575 656,286

c) Cash & Bank Balances 8 229,014,255 403,071,930

d) Other current assets 9 188,941,350 51,821

e) Loans & Advances 10 242,891,193 324,466,355

1,158,538,610 1,360,716,061

Less: Current Liabilities 11 399,995,084 994,589,678

Provisions 12 197,591,190 68,528,319

NET CURRENT ASSETS 560,952,336 297,598,064

MISCELLANEOUS EXPENDITURE 269,029 173,517

(to the extent not written-off or adjusted)

TOTAL 2,013,135,801 1,813,874,118

SIGNIFICANT ACCOUNTING POLICIES 20

NOTES ON ACCOUNTS 21



S. SanthoshManaging Director

S Santhanakrishnan Director

FOR TOMY & FRANCISChartered Accountants

K. J. TOMY, B.Sc, F C A

Partner Membership No. 22768

Dr. P. J. GeorgeDirector

Jitendra Kumar Pal Company Secretary

ChennaiJune 23,2010

Schedule March 31, 2010 March 31, 2009

1. INCOME

Sales/ Service rendered 13 1,974,537,869 2,586,519,785

Interest/ Other income 14 30,489,441 100,450,698

Stock Differential / Work In Progress NIL (209,773)

Total Income 2,005,027,310 2,686,760,710

II. OPERATING EXPENDITURE

Purchases & Related Expenses 15 286,125,290 505,710,904

Employee Costs 16 1,265,233,601 1,569,826,425

General and Administrative Expenses 17 298,427,974 561,032,519

Selling expenses 18 42,370,990 99,421,471

Total Operating Expenses 1,892,157,855 2,735,991,319

Operating Profit Before Interest, Depreciation, Adjustments, write-offs and taxes 112,869,455 (49,230,609)

Less: Interest & Finance Charges 19 114,095,246 83,455,879

Depreciation 49,114,420 67,571,519

Amortization/ Write Offs 56,352,961 30,535,007

Total Finance Charges/depreciation/amortization 219,562,627 181,562,405

Profit Before Prior Period Adj/Extraordinary items, Minority Adj. & Taxes (106,693,172) (230,793,014)

Less:

Prior Period Adj. (38,302) (5,000)

Extraordinary Items(Preacquisition profit) NIL 43,672,423

Loss/(Gain) from sale of subsidiary (695,732,313) NIL

Minority Interest Adjustment (10,713,033) (23,534,091)

Profit Before Tax 599,790,476 (250,936,346)

Less:

Provision For Income Tax 154,782,067 14,737,025

Provision For Fringe Benefit Tax NIL 3,340,073

Provision For Deferred Tax 88,180,209 (41,655,958)

Profit After Tax 356,828,200 (227,357,486)

Profit Balance Brought forward from previous years 10,870,438 241,209,755

Transfer on Amalgamation /Loss of disposed subsidiary(Note 1 on Schedule 21) NIL 283,060

Amount Available For Appropriation 367,698,638 14,135,329

Appropriations Proposed

Proposed Dividend 24,731,662 1,696,450

Dividend Tax & Surcharge 4,203,146 680,080

Transferred To General Reserve 4,000,000 888,361

Balance Carried to Balance Sheet 334,763,830 10,870,438

Earnings Per Share

Weighted average number of Equity Shares outstanding during the year 12,365,006 12,365,006

Basic 28.86 (18.39)

Diluted 28.86 (18.39)

SIGNIFICANT ACCOUNTIND POLICIES 20

NOTES ON ACCOUNTS 21

Consolidated Profit and Loss Account for the Year Ended

(in Rupees)

The schedules referred to above and the notes thereon form an integral part of the consolidated profit and loss accountAs per our report of even date attached










ChennaiJune 23,2010

Schedules Forming Part of Consolidated Accounts for the Year Ended

(in Rupees)

March 31, 2010 March 31, 2009

SCHEDULE 1. SHARE CAPITAL

AUTHORISED CAPITAL

150,00,000 Equity Shares of Rs.10/- each 150,000,000 150,000,000

ISSUED CAPITAL

12,365,006 (P.Y. 12,365,006) Equity Shares of Rs.10/- each 123,650,060 123,650,060

SUBSCRIBED, CALLED UP & PAID UP CAPITAL

12,365,006(P.Y. 12,365,006) Equity Shares of Rs.10/- each 123,650,060 123,650,060

Fully Called up and Paid up

(The paid up share capital of Rs.12,365,006 includes share worth

Rs.724,920 which were issued by the company for a consideration other than Cash)

TOTAL 123,650,060 123,650,060

SCHEDULE 2. RESERVES & SURPLUS

Capital Reserves as per last Balance Sheet 206,250 366,362

Add: Additions During The Year NIL (160,112)

206,250 206,250

Share Premium account as per last Balance Sheet 639,575,545 639,575,545

Add: Additions During The Year

639,575,545 639,575,545

Deductions (Note 1 below)

639,575,545 639,575,545

General Reserve as per last B/s 62,752,611 61,864,250

Add: Additions During The Year 4,000,000 888,361

66,752,611 62,752,611

Deductions

66,752,611 62,752,611

Currency Translation Reserve as per last B/s (2,963,797) (28,428,487)

Add: Additions During The Year (70,491,835) 25,464,690

(73,455,632) (2,963,797)

Profit & Loss Account Balance carried over from Profit & Loss A/c 334,763,830 10,870,438

TOTAL 967,842,604 710,441,047

SCHEDULE 3. SECURED LOAN

Bank Term loans and Working capital loans - India 648,430,770 787,240,349

(Secured by Exclusive charge over the building, machinery, equipments

& current assets and by personal guarantees and corporate guarantee)

Car Loan 204,339 1,194,630

(Secured by hypothecation of Certain vehicles)

Interest Accrued & Due 7,687,030 8,020,817

Mortgage Loan 26,968,505 31,495,788

Working Capital Limits of Overseas subsidiaries 107,266,176 86,904,996

(Collaterised by all the assets )

TOTAL 790,556,820 914,856,580



(in Rupees)

March 31, 2010 March 31, 2009

SCHEDULE 4. UNSECURED LOAN

Notes Payable / Lease Payable 357,589 11,455,024

Loan From directors (Subsidiary TFL)

Loan From Others NIL 1,418,616

Interest payable

City Bank - Term Loan

SIDBI

TOTAL 357,589 12,873,640

March 31, 2010 March 31, 2009

SCHEDULE 6. INVESTMENTS (AT COST)

In government Securitie 5,500 5,500

Trust money in CalSoft Employees Welfare Trust 17,500 17,500

Equity Shares in AHN Inc. USA 41,622,270 14,309,529

Investment in Calspence 794,062 NIL

Other investments

TOTAL 42,439,332 14,332,529




Particulars Cost as on Depreciation WDV

as on 1 Additions as on 31 as on 1 For the as on 31 as on 31 as on 31

April 2009 For the Period Deductions March 2010 April 2009 period Deductions March 2010 March 2010 March 2009

Computer& accessories 242,523,201 9,470,509 26,239,489 225,754,222 192,729,960 24,355,674 22,786,378 194,299,256 31,454,966 49,793,241

Office Equipment 7,953,493 385,080 459,268 7,879,305 2,563,317 1,055,478 298,453 3,320,342 4,558,963 5,390,176

Furniture&Fittings 189,717,189 2,566,732 3,084,134 189,199,787 22,216,707 9,937,104 2,276,299 29,877,512 159,322,275 167,500,483

Plant & Machinary 55,805,569 556,986 2,438,556 53,923,999 3,794,133 2,544,711 1,737,826 4,601,018 49,322,981 52,011,436

Vehicle 9,162,237 NIL 2,298,644 6,863,593 7,460,199 1,030,846 2,049,065 6,441,980 421,613 1,702,038

Building 577,777,120 8,484,916 NIL 586,262,036 10,293,473 9,340,774 NIL 19,634,247 566,627,789 567,483,647

Land 40,567,437 NIL NIL 40,567,437 NIL NIL NIL NIL 40,567,437 40,567,437

Proprietory Software 272,376,985 59,802,566 40,508,125 291,671,425 138,151,631 56,352,315 14,735,328 179,768,617 111,902,808 134,225,344

Goodwill 403,216,118 81,708,180 39,628,026 445,296,272 NIL NIL NIL NIL 445,296,272 403,216,129

1,799,099,349 162,974,969 114,656,243 1,847,418,075 377,209,419 104,616,901 43,883,349 437,942,971 1,409,475,104 1,421,889,931

Previous Year Ended

March31, 2009 744,248,436 1,108,013,821 53,162,907 1,799,099,349 293,581,214 100,826,653 17,198,448 377,209,419 1,421,889,930 399,437,797

Notes :

1. Depreciation for the year include Rs.NIL capitalised Calsoft (PY Rs.2735913)

2. Current year opening balances of original cost and accumalated depreciation incorporate year opening balance of subsiiaries acquired during the year and are adjusted for assets of

subsidiaries divested during the year.

3. Land has been acquired from KIADB on lease sale cum basis in Inatech InfoSolutions P Ltd. Freehold title will pass to the company on satisfying certain terms and conditions and

payment of balance consideration

4. During the year Aspire Communications P ltd and its subsidiary Aspire peripherals P ltd have changed method of charging depreciation from written down value method to straight line

Method with retrospective effect.

SCHEDULE 5. FIXED ASSETS (in Rupees)

(in Rupees)




SCHEDULE 7. SUNDRY DEBTORS March 31, 2010 March 31, 2009

(unsecured and considered good)

Debts outstanding for a period exceeding six months 348,223,804 330,670,134

Other debts 250,258,432 414,093,668

Sub : Total 598,482,236 744,763,802

Less: Provision for doubtful debts 101,043,998 112,294,133

TOTAL 497,438,237 632,469,669

Notes :

1. Due by Directors or other officers of the Company or any of them NIL NIL

either severally or jointly with any other persons

2. Due by firms or private companies in which any of the Directors is a

Partner or Director or a member

(i) Chemoil Corporation USA 17,612,456 30,184,591

(ii) Chemoil ITC (P) Ltd., Singapore NIL 249,075

(iii) Itochu Petroleum Corpn. Singapore NIL NIL

(iv) Chemoil Euro BV NIL NIL

(v) IPC USA 4,157,100 2,424,000

(vi) Chemoil Middle East DMCC

(vii) California Advanced Management Services (P) Ltd, Chennai

(viii) American Healthnet Inc 141,436,879 179,348,781

(vi) Chemoil Latin America 174,330 196,850

3. Due from Companies under the same management : NIL NIL

CSWL Inc. USA

American Health Net inc USA

4. Maximum amount due by Director or other officers of the

Company at any time during the year NIL NIL

SCHEDULE 8. CASH AND BANK BALANCES

Cash in hand 5,911 36,329

Bank balance with Banks in current A/c -India 46,171,922 22,008,345

Unpaid dividend Account 358,037 364,397

Balances with banks in Current A/c -Foreign banks 161,818,689 180,953,335

Sub : Total 208,354,559 203,362,406

Balance in Deposit Accounts - India 14,267,596 20,427,959

Balance In Deposit Accounts - Foreign Banks 6,392,100 179,281,565

TOTAL 229,014,255 403,071,930

SCHEDULE 9. OTHER CURRENT ASSETS

Consideration receivable 188,075,250

Interest Accrued on deposits 866,100 51,821

TOTAL 188,941,350 51,821

(in Rupees)




March 31, 2010 March 31, 2009

SCHEDULE 10. LOANS & ADVANCES

(unsecured considered good)

Advance Income tax and Tax deducted at Source 73,809,763 54,815,436

Pre paid Expenses 10,684,012 25,470,098

Rent deposits 16,840,150 17,875,102

other deposit 2,999,767 4,205,773

Others (100,266) NIL

Deferred Expenses NIL 55,502,698

Advances recoverable in cash or in kind or for value to be received 133,779,954 160,298,931

Provision for doubtful Advances (6,766,163) (8,200,395)

Loans and Advances- employees 11,643,975 14,498,712

Total 242,891,193 324,466,355

Notes:

i) Due by Director or other officer of the Company or

any of them either severally or jointly with any other persons NIL NIL

(ii) Due by firms or private Companies in which any NIL NIL

Director is a partner or a Director or a member

a) American Healthnet Inc 85,065,754 92,779,812

b) California Software Employee Welfare Trust NIL 3,559,847

c) Andorra Services Ltd 32,000,954 55,460,211

(iii) Due from Companies under the same management NIL NIL

(iv) Maximum amount due by Director or other officers

of the Company at any time during the year NIL NIL

SCHEDULE 11. CURRENT LIABILITIES

Sundry creditors/Expenses payable 123,728,574 450,657,747

Deferred Revenue/Rent 36,181,847 369,377,453

Advance from customers / Rental Deposits 18,917,656 18,911,676

Other Liabilities 220,808,970 155,278,405

Unclaimed dividend * 358,037 364,397

* none of the amount disclosed is more than 7 years old as on the balance

sheet date and all are unclaimed

Total 399,995,084 994,589,678

SCHEDULE 12. PROVISIONS

Proposed Dividend 24,731,662 1,696,450

Dividend Tax 4,203,146 680,240

Provision for Fringe Benefit Tax 1,652,098 6,182,098

Provision for taxes 155,195,302 42,493,263

Gratuity 588,660 6,856,218

Leave Salary 11,220,322 10,620,050

Total 197,591,190 68,528,319

(in Rupees)

March 31, 2010 March 31, 2009

SCHEDULE 13. SALES/ SERVICES RENDERED

Sale of Software 93,364,984 86,634,958

Domestic Sales 37,618,664 59,336,716

Software Consulting Services 1,416,055,527 1,570,830,081

Sale of licenses 411,890,724 330,010,255

Smart Pay Service charge NIL 473,378,977

Annual Maintenance Contracts 15,607,970 10,475,636

Hardware & Others NIL 55,853,162

Total 1,974,537,869 2,586,519,785

SCHEDULE 14. OTHER INCOME

Interest Received 4,100,860 20,281,155

Profit on sale of asset 4,017 910,994

Currency Fluctuation- Others (6,686) 70,182,953

Miscellaneous / Other income 5,377,197 4,648,815

Rental Income 21,014,053 4,426,781

Total 30,489,441 100,450,698

SCHEDULE 15. PURCHASES AND RELATED EXPENSES

Smart Pay Bank Charges / Discounts NIL 332,583,580

Bought Out Items 918,863 604,095

License Fee 182,112,949 105,856,424

Software and consulting Charges 103,093,478 66,666,805

Total 286,125,290 505,710,904

SCHEDULE 16. SALARIES, WAGES & OTHER EMPLOYEE BENEFITS

Salaries, Allowances and Bonus 1,020,921,572 1,160,143,835

Subcontracting Costs - Others 169,689,783 368,642,078

Staff Welfare Expenses 36,498,916 36,389,524

Contribution to Provident and other funds 38,123,330 25,562,322

Sub : Total 1,265,233,601 1,590,737,759

Less : Capitalized/Deferred NIL 20,911,334

Total 1,265,233,601 1,569,826,425





(in Rupees)



SCHEDULE 17. GENERAL, ADMINISTRATIVE AND OTHER EXPENSES March 31, 2010 March 31, 2009

Office Expenses 7,696,177 17,763,105

Repairs & Maintenance NIL NIL

Buildings 5,109,850 7,543,663

Plant and Machinery 2,752,030 5,318,328

Others 4,784,812 2,588,097

Rent 39,854,470 70,090,724

Electricity Charges 16,333,161 20,520,799

Postage And Telephone 14,805,612 21,255,314

Travelling Expenses 125,105,609 156,214,814

Audit fees 6,000,027 7,126,241

Data Circuit Expenses 14,409,208 19,254,966

Recruitment And Training 4,724,897 10,209,727

Service Charges 1,088,908 816,078

Lease Rent 1,083,424 1,678,396

Legal and Professional charges 20,923,537 13,876,813

Insurance Expense 7,063,227 10,122,257

Printing And Stationery 3,040,512 3,521,008

Rates and Taxes 4,773,755 1,474,829

Exchange difference 37,575,356 8,302,868

Loss/(Profit on Sale) on Sale of Assets 404,213 13,539,020

Directors remuneration 45,000 50,000

Provision for doubtful debts / Advances (23,268,182) 172,660,869

Other Expenses 4,122,371 5,115,670

Sub : Total 298,427,974 569,043,586

Less : Capitalized / Deferred NIL 8,011,067

Total 298,427,974 561,032,519

SCHEDULE 18. SELLING EXPENSES

Marketing Expenses

Commissions and Fees 12,367,117 53,007,011

Marketing Expenses 27,587,926 34,115,942

Royalty NIL 4,686,175

Business Promotion 2,349,729 2,550,056

Advertisement 66,218 5,062,287

Total 42,370,990 99,421,471

SCHEDULE 19. INTEREST & FINANCE CHARGES

Finance Charges

Bank charges 4,142,365 6,212,557

Interest NIL NIL

Interest on term loan 77,324,125 60,688,322

Interest on Working Capital Loan 32,626,470 16,343,069

Others 1,201 885,685

Interest on HP- Loan 1,085 12,398

Sub : Total 114,095,246 84,142,031

Less : Capitalized/Deferred 686,152

Total 114,095,246 83,455,879

Schedules to Consolidated Financial Statements

2. Use of EstimatesSCHEDULE 20The preparation of financial statements in conformity with the generally

SIGNIFICANT ACCOUNTING POLICIES accepted accounting principles requires the management to make

estimates and assumptions that affect the reported amount of assets, 1. Basis of preparation of Financial Statementsliabilities, revenue and expenses and disclosure of contingent liabilities as The consolidated financial statements consist of:of the date of the financial statements. The estimates and assumptions

+ California Software Company Ltd (parent company incorporated in used in the accompanying financial statements are based upon the

India)management's evaluations of the relevant facts and circumstances as of

+ CSWL Inc., incorporated in USA (100% Equity held by parent the date of the financial statements. Actual results could differ from these company) and its subsidiaries consisting of estimates. ? Healthnet International Inc, USA (100% Equity held by CSWL

Inc.,) (HNI) and its 100% subsidiary International Innovations 3. Revenue Recognition(Innovations) California Software Company Limited

? CNHC, LLC DBA ePayhealthcare (“ePay”), in which CSWL, Inc. Revenue from software development is recognised based on software owns 51% of the outstanding voting stock developed and billed to clients as per the terms of specific contracts.

? Waldron Limited a Corporation incorporated in Hongkong in Revenue from consultancy services is recognised when the services have which CSWL, Inc. owns 100% of outstanding voting stock been provided to the customer. Revenue from the sale of software products

? AspireSoft Corporation (Aspiresoft) in which CSWL Inc holds is recognised when the sale is completed with the passing of title. Revenue

51% of the outstanding voting stock effective from 1 July 2007. from maintenance services is accrued over the period of the contract.

+ Inatech Infosolutions Private Limited, Bangalore (IIPL) which became CSWL Inca fully owned subsidiary from 1 January 2008, its 100% subsidiary

The company generates revenue from the following primary sources: Inatech Solutions Limited, UK and sub subsidiary Inatech Solutions,

custom software and application development (contract consulting), Egypt in which Inatech Solutions Limited, UK hold 51% shares.

licensing software products, installation and training sevices, electronic + EastPoint Solutions Ltd, Chennai incorporated in India (100% equity payment processing solutions, sale of hardware and third party software

held by parent company) which is yet to commence operations. and providing customers long term technical support.+ Aspire Communications Private limited (Aspire) incorporated in The company recognizes revenue when all of the following conditions are

India, in which parent company acquired 57.63% equity during the met: (i). persuasive evidence of an arrangement between the company and year and its 100% subsidary Aspire peripherals Private Ltd, Mysore the customer exists, (ii)the service has been provided to the costomer, (iii)

Price to the customer is fixed and determinable and (iV) collection of the In September, 2009, CSWL, Inc. divested its investment of 51% of the revenues is probable. The company’ s arrangements do not contain outstanding voting stock of Informed Decisions Corporation DBA CASHNet general rights of return and refund privileges. Revenue from contract (“IDC”). The accounts of IDC and its results of operations for the fiscal year consulting is recognized when the services have been provided to the ended March 31, 2009 and for the period from April 1, 2009 through customer. Revenue from sale of hardware and third party software is September 30, 2009 are included in the consolidated financial statements recognized as expenses incurred in conjunction with customer contracts. as discontinued operations in the financial statements of CSWL.Revenue from annual software licenses, subscriptions and software

maintenance and support contracts is recorded as earned over the life of All these financial statements have been prepared under the historical cost the contract. Revenue from ePAY is recognized monthly and reflects the convention and comply with accounting standards in all material respects. service charge on the items paid by customers using the service.The consolidated financial statements are prepared in accordance with the

Principles and procedures for the preparation and presentation of Deferred revenue includes amounts currently due and payable from and consolidated financial statements as laid down under AS-21 prescribed by payments received from customers for various expenses for services and the Institute of Chartered Accountants of India. Consolidated financial amounts deferred if other conditions to revenue recognition is not met. statements are prepared using uniform accounting policies. Deferred revenue that is expected to be earned in the next twelve months is

reflected as current liability. The financial statements of the parent Company and subsidiaries have

Software revenue from software license agreements is recognized when been combined on line by line basis by adding together the book values of collection is probable and the product is shipped. like items of assets, liabilities, income & expenses after eliminating intra

group balances/transactions. Inatech Infosolutions Private Limited

The revenue from software development on a time and material basis is

recognised based on software developed and billed to clients as per

specific contracts. In the case of fixed price contract revenue is recognised

based on milestones achieved as specified in the contracts on percentage

of completion basis. Revenue from sale of software products is recognised

when the sale is complete with passing of title.

Aspire Communications Private Limited

Revenue from Software and Hardware Development is recognized as per

the percentage of completion method as per the terms of specific

contracts. On-time and materials contracts, the revenue are recognized as

the related services are rendered. Interest is recognized using the time-

proportion method, based on rates implicit in the transaction.

4. Expenditure

Expenses are accounted on the accrual basis and provisions are made for

all known losses and liabilities.

The amount of Goodwill and Capital reservearising on consolidation are as follows: 2009 2010

Goodwill - CSWL Inc& subsidiaries, IIPL andits subsidiary and Aspire Communications private limited and its subsidiary 445,296,272 403,216,129

Minority Interest arising on consolidation of i. Aspire Soft Corp (subsidiary of CSWL Inc.) And ii. Aspire Communications Private limited iii. Inatech Solutions Egyptiv. CNHC LLC 20,228,988 26,158,326

Extraordinary items / Prior period items:

Profit on sale of Informed decisions Corporation 428,095,128 Nil

Prior period profit Aspire Communications Private limited 875,195 1,621,789

Prior period expenditure in Inatech Infosolutions Private Limited 836,894 5,000

(in Rupees)



other than investments are restated at the closing exchange rates. 5. Fixed Assets Exchange differences arising out of actual payments / realizations and from Fixed assets are stated at cost less accumulated depreciation. Cost the year end restatement referred to above are reckoned in the profit and includes direct costs and financing costs related to borrowing attributable loss account. to to qualifying assetsTranslation of Financial Statements of the Overseas Subsidiaries 6. Impairment denominated in US dollar to Indian rupee.

Consideration is given at each Balance Sheet date to determine whether i) For the purpose of consolidation, the operation of overseas subsidiaries

there is any modification or impairment of the carrying amount of the fixed are considered non integral in nature and on the basis of AS- 9 prescribed

assets. If any condition exists, an asset’s recoverable amount is estimated. by the Institute of Chartered Accountants of India, during the current

An impairment loss is recognised whenever the carrying amount of any financial year with effect from 1 April 2005, their assets and liabilities are

asset exceeds recoverable amount.translated at the year-end exchange rate. The resultant translation

During the previous year ended March 31, 2009, the CSWL determined that adjustment is reflected as a separate component of Shareholders funds as Rs. 6,188,352.00 ($133,600 ) of Proprietary Software previously capitalized 'Cumulative Translation Reserve'. Only in case of disposal and dissolution of by Innovations had no remaining value and was charged to Amortization Non Indian Subsidiaries the balance in Currency Translation reserve in expense, and the Company determined that the value of its investments in relation to the subsidiary will stand transferred to Profit and Loss Account. unconsolidated companies had been impaired by Rs.25,905,757/- Income and expenditure are accounted in the consolidated Profit and Loss ($559,278), effect of which was made in the financial statements of that Account of each year as given below:year.

a) Revenues and expenses are converted into Indian Currency at the

average rate prevailing during the year.7. Depreciation & Amortization

b) Depreciation on Fixed Assets is converted at the average rate prevailing California Software Company Limited:during the year.

Till last year Parent company and subsidiaries were following different

depreciation and amortization policies for each company which was not in 12. Employee Benefits

compliance with the Accounting Standard 21 issued by Institute of California Software Company LimitedChartered Accountants of India, which requires that consolidated financial

statements to be prepared using uniform accounting policies for like a. Short Termtransactions. In order to comply to the above requirement Aspire Short term Employee Benefits are recognised as expenses as per the Communications P ltd and its subsidiary and Inatech Infosolutions P ltd company's scheme based on the expected obligation have changed their depreciation policy to straightline method. Due to this

b. Long Termchange in accounting policy the pre tax profits, net fixed assets, reserves

Liability in respect of long term Employee Benefits in the nature of and surplus are higher by, in the case of Aspire Communications P Ltd by accumulated compensated absence is provided for based on actuarial Rs.850,480 and that of Inatech Infosolutions P ltd by Rs 684,490/-valuation using projected unit credit method.

Inatech Infosolutions P ltd's subsidiaries Inatech Solutions Ltd, UK & c. Post RetirementInatech Solutions Ltd, Egypt SAE follow written down value method of i) Provident funddepreciation as against the straight line method followed by the company.

According to the Company, if depreciation is provided as per straight line This is a defined contribution plan and contributions made to the fund, in

method and revised rates, pre tax profits, net fixed assets and reserves and accordance with the applicable rules/statutes are charged to revenue. The

surplus will be lower by Rs.3,11,052/- in respect of Inatech Solutions Ltd, Company has no further obligation for future provident fund benefits other

UK. However, similar details are not available in respect of Inatech Solutions than aforesaid contributions.

Ltd, Egypt SAE . ii) Superannuation

This is a defined contribution plan. The Company contributes a sum 8. Leases

equivalent to 15% of eligible employee's salary towards superannuation In the case of assets taken under operating lease, the rentals are charged to fund administered by Life Insurance Corporation of India and are charged profit and loss account when due. to profit and loss account.

iii) Gratuity9. Inventories This is a defined benefit plan. The Company has subscribed to California As of 31st March 2010, Aspire communications P Ltd is having 49,000 units Software Company Employees' Group Gratuity Scheme, which is being (Forty nine thousand units) of Adobe Flashlite Software Licenses as closing administrated by a Trust set up for this purpose under the aegis of the Life stock. The same is stated at direct cost or estimated net realizable value Insurance Corporation of India (LIC). Liabilities with regard to the Gratuity whichever is lower. payable to the employees are determined by actuarial valuation using

10. Investments projected unit credit method, based upon which, the Company makes Long term investments are stated at cost with provisions where necessary, contribution to the Trust. The funds contributed to the Trust are remitted to for diminution other than temporary, in the value of investment. the LIC. Actuarial gains and losses comprising of experience adjustments

and the effects of changes in actuarial assumptions are recognised Parent Company has renegotiated its existing share purchase agreement immediately in the profit and loss account as income or expense.with the shareholders of Inatech Infosolutions Private Limited and entire

consideration payable is provided for in the financial statements as on Inatech Infosolutions Private LimitedMarch 31,2010 . The resultant increase in Investment in Preference Shares

Liabilities towards Gratuity and leave encashment to the extent applicable of of Inatech Infosolutions Private Limited is Rs.72,765,130. Further during

to Inatech Infosolutions Pvt Limited India are provided as per actuarial the year parent company has made investment of Rs.794,062 in Calspence

valuation. Provident Fund Contributions and Social Security Contributions , Srilanka.

are paid to the respective statutory authorities.11. Foreign Currency Transactions

Aspire Communications Private Limited Foreign currency transactions including expenses incurred on Trading /

(a) GratuityNon Trading Overseas offices and revenue accounts of onsite offices are

The employees are entitled for to gratuity in accordance with the provisions accounted at the exchange rates ruling on the date of transaction. At the of the Payment of Gratuity Act, 1972. The formation of the Aspire year end all monetary assets and liabilities denominated in foreign currency Communications Employees Group Gratuity Scheme is being initiated,



which is being administrated by a Trust (under formation) under the

guidance of the LIC of India. Liabilities with regard to the Gratuity plan are

determined by actuarial valuation, based upon that, the contribution to the

LIC is paid during the year.

(b) Provident Fund.

Employees who are voluntarily opted for the PF are subscribers to the

Employees' Provident Fund to which both the Company and Employees

make monthly contributions equal to the statutory percentage in the case of

the parent company.

Taxation

California Software Company Limited

Provision for current tax is made based on the liability computed in

accordance with the relevant tax rates and tax laws. Provision for deferred

tax is made for timing differences arising between the taxable income and

accounting income computed at current applicable tax rates. Deferred tax

assets are recognised only if there is a virtual certainty that they will be

realised in the foreseeable future and are reviewed for the appropriateness

of their carrying value at each balance sheet date.

CSWL Inc

Deferred income tax assets and liabilities are computed annually for

differences between the financial statement and tax basis of assets and

liabilities that will result in taxable or deductible amounts in the future based

on enacted tax laws and statutory rates applicable to respective periods in

which the differences are expected to affect the taxable income. Valuation

allowances are established when necessary to reduce deferred tax assets

to the amount expected to be realized.

Inatech Infosolutions Private Limited

Provision for current tax and is made based on the liability computed in

accordance with the relevant tax rates and tax laws.

Deferred tax assets and liabilities are recognized for future tax

consequences attributable to the timing differences that result between the

profits offered for income tax and the profit as per the financial statements.

Deferred tax assets and liabilities are measured as per tax rates/laws that

have been enacted or substantively enacted by the Balance Sheet date and

are reviewed for appropriateness of their respective carrying values at each

Balance Sheet date. Deferred tax asset is recognized wherever prudent.

Deferred tax liabilities and assets, which reverse within the tax holiday

period, are ignored


Provision for current tax and fringe benefits tax is made based on the liability

computed in accordance with the relevant tax rates and tax laws. Deferred

Tax has been recognized for all timing difference in Depreciation,

amortization and carry forward losses, subject to consideration of

prudence in respect of deferred tax liability and deferred tax asset.

SCHEDULE 21

NOTES ON ACCOUNTS

1. The Parent Company has obtained approvals dated March 7, 2005 and

October 10, 2005 from Director, Software Technology Park, Chennai to set

up a 100% Export Oriented Units (EOU) under STP Scheme for the

development/ manufacture of computer software. The permission granted

under the STP scheme stipulates that the Company would be required to

achieve positive Net Foreign Exchange (NFE) for a period of five years from

the date of commencement of commercial production. The management is

of the opinion that the NFE will be achieved within the stipulated period.

(In Rupees)

March 31, March 31,

2010 2009

2. Capital Commitments:

California Software company Limited

Estimated amount of contracts remaining NIL 2,275,615

to be executed on capital account and not

Provided for (Net of advances)

3. Contingent Liabilities :


a.Guarantees given on behalf of

other companies 205,090,000 231,235,000

b. Claims against the company not

acknowledged as debt in respect of

certain income tax matters which

are subjudice 14,901,556 14,901,556

c. Amounts payable to Inatech Shareholders

Towards Preference Shares NIL 54,430,300

Inatech Infosolutions P Ltd

Outstanding counter guarantees to Bankers

Rs. 25,75,000 (Rs.175,000) on estimated

liability on Import value of Rs 3,500,000

(P.Y Rs 3,500,000)

i. Disputed Income Tax of Inatech Infosolutions

Private Limited – IndiaThe Income Tax

authorities have raised a demand of

Rs. 18.57 lakhs in respect of year ended

31st March 2004 due to denial of exemption

U/s. 10A of Income Tax Act 1961, (the Act)

on certain grounds including that the company

has commenced operations before registration

with STPI Authorities. The CIT (Appeals) has

allowed a partial relief consequent to which

the revised demand is estimated at

Rs 6.91 Lakhs. The Company has disputed

the demand and preferred an appeal.

ii. Deduction U/s. 10A of the ii) Income Tax

Act 1961 has been allowed for the year ended

31st March 2005. However loss of the unit

not eligible for deduction U/s. 10A of the Act

has been set-off against the profits of the

unit eligible for the deduction U/s. 10A and

certain other disallowances have been made

in the assessment which are also disputed

by the company. ). The CIT (Appeals) has

allowed a partial relief consequent to which

the revised demand/(Refund) is estimated at

Rs 0.55Lakhs . The Company has disputed

the demand and preferred an appeal.

iii. The Company has been advised by its

Counsel that the demands and adjustments /

disallowances are not sustainable and consequently

no provision has been made for the same or for

current income tax for the year due to these

demands / disallowances. However a payment of

Rs.10Lakhs has been paid and no further payments

are likely till the completion of proceedings.



CSWL

During the year ended March 31, 2009 the Company entered into a joint

product development agreement with one of its customers. Under the

terms of the agreement, the Company and its customer will jointly develop

certain software products to be marketed and sold by the customer. The

Company agreed to defer payment for its charges during the year ended

March 31, 2009, in exchange for sharing a certain percentage of future

revenues derived from sales of the products. In future years the Company

will be able to recover its charges as well as a portion of the costs deferred in

2009. During the year ended March 31, 2009 the Company incurred

$1,099,063 in costs associated with this agreement, which has been

included as deferred expenses in the accompanying financial statements.

The Company amortizes these costs over a four year period beginning July

1, 2010. The balance of deferred expense, as of March 31, 2010, is

$886,472( Rs.3,962,598)

Inatech Infosolutions P Ltd

a) Loans and Advances include refund claim of Service tax amounting to

Rs.19.20 lacs including Rs.5.67 lacs pertaining to earlier years representing

credit set off on input services pertaining to exports. However, the refund

claims have not been entertained by the Service Tax Department.

Consequently the Company has preferred an Appeal with Customs Excise

& Gold (Control) Appellate Tribunal. As advised by its counsel, the

Company is confident of the recovering the same and consequently no

provision is considered necessary.

b) According to the company there is a binding agreement to share profits

and losses between Inatech Solutions Limited U K and minority shareholder

of Inatech Egypt S.A.E. Consequently the negative balance in the Minority

Interest has been carried forward in the Balance Sheet.

c) The Company has converted income and expenses for the year of the

foreign subsidiaries on the basis of simple average of the exchange rates

during the year between GBP and INR, as against converting as on the date

of transaction or as near as circumstances permit as required by

Accounting Standard 11. The effect of the same on the operating results for

the year has not been ascertained.

5. Intangible Asset


Product solutions represent cost of Product development capitalized

during the year in respect of the following products:

1. Test Automation Framework (TAF)

2. Virtual IO

3. Diameter

4. Networking File System (NSF) and

5. Bunkering operations Management systems (BOMS)

The future projection in respect of the above products has been

estimated by the technical department, although the existence of a

market for these products is yet to be developed.

CSWL Inc

The Company capitalizes the direct costs and allocated overhead

associated with internally developed software products. Initial costs

incurred are charged to operations as research and development prior to

the product reaching technological feasibility whereby a detailed

program design or a working model must be in place. Capitalization of

these costs ceases once a product is available for general release to

customers. Costs incurred subsequent to the product release, and

research and development performed under contract are charged to

operations.

Capitalized costs are amortized on the straight-line method over the

estimated product life, which ranges from five to six years. Unamortized

costs are carried at the lower of book value or net realizable value.

The Company contracts with Calsoft to develop software that will be

licensed to customers. Certain fees paid to Calsoft to develop software

are included in proprietary software.

(In Rupees)

March 31, March 31,

2010 2009

iv. The Income Tax authorities had raised a

demand of Rs. 13.50 lacs in respect of

year ended 31st March 2007 due to

reduction of exemption amount U/s.

10A of the act on certain grounds

including deduction of communication

and travel expenses from the export

turnover. The Company has disputed

the demand and preferred an Appeal

with the CIT (Appeals). A payment of

Rs.5 lacs has been made and no further

payments are likely till the completion

Of proceeding

4. Other Financial Information:

4.1 Outstanding Bank Guarantees 1,942,369 3,556,304

4.2 Reimbursement of travel expenses to Directors 1,187,081 1,227,409

4.3 Amount due to be credited to Investor

Education and Protection Fund 248,275 248,275

4.4 Sitting fees paid / payable to Directors 45,000 50,000

4.5.Capital Work in Progress includes the

following Advances given –

( Considered good and recoverable ) Nil 10,994,392

4.6 The Company’s investments in subsidiaries are considered as long term

and strategic in nature. Accordingly, the excess of the carrying value over

the net book value of the investments is considered as temporary

diminution and hence no provision for the decline in value has been

considered in these accounts.

4.7 Debtors include Rs.41,673,419 due from Inatech Solutions Limited UK, and

out of that Rs.26,942,544 has been provided for as doubtful debts

4.8 Rent receivable amounting to Rs 88,24,000 from Roxanne Research Private

Ltd has been shown under Loans and Advances, and the company is

contemplating initiating legal proceeding against Roxanne Research Pvt Ltd

for the default.

4.9 Except in respect of the following there are no statutory dues of Customs

Duty, Excise Duty, Cess, Wealth Tax and Income Tax, which have not been

deposited on account of a dispute

S. Name of the Nature of the dues Amount Rs. Forum where

No Statute dispute is pending

1. Income Tax Income Tax ( A.yr 2000-01) 1,084,617 Commissioner of

Act, 1961 Income Tax(appeals)

2. Income Income Tax ( A.yr 2001-02) 1,524,090 Madras High Court

Tax Act, 1961


Tax Act, 1961


Tax Act, 1961

5. Income Income Tax ( A.yr 2004-05) 5,676,083 Commissioner

Tax Act, 1961 Appeals



Aspire Communications P Ltd 8. Quantitative Details

As all the companies in the group is engaged in the development and The Product Development Expenditure incurred by the parent company

export of computer software, the production and sale of which cannot be during the previous years is regrouped under Intangible assets during

expressed in any generic unit, the quantitative details etc., as required the financial year 2007-08 and is being amortized in a period of 5 years,

under the Companies Act, 1956 are not furnished except in the case of beginning from F.Y.2007-08.

Aspire Communications P Ltd as detailed below6. Transfer Pricing

Quantitative Particulars: The study of international transactions entered into by the Company with

its overseas associates regarding the extent of compliance to the March 31, 2010 March 31, 2009transfer pricing regulations of the Income Tax Act, 1961 is yet to be Printed Circuit Boardscompleted and the impact, if any, arising out of such study has not been

Opening Stock Nil Nilrecognised in these accounts pending completion of the study

Purchases Nil NIl7. Deferred taxation

Sales Nil NilCalifornia Software Company Limited Closing Stock Nil NilThe deferred tax liability of Rs 41,529,352 (2009-Rs 25,500,000) has MMF Cash Drawer Boardsarisen mainly on account of difference between book and tax written

Opening Stock Nil Nildown value of depreciable fixed assets

Purchases 1200 1000CSWL Inc and its subsidiaries have a net Deferred Tax Liability of Rs.

Sales 1200 100067,711,560/- Closing Stock Nil NilInatech InfoSolutions Limited, India Adobe Flashlite SW Licences

The details of deferred tax Liability is as under: Opening Stock 50000 Nil

Purchases Nil 1,200,000

Sales 1000 11,50,000

Closing Stock 49,000 50,000

Year Ended March 31, 2010 March 31, 2009Aspire Communication Private Limited

Rs. Rs.During the year net deferred tax liability of Rs.2,28,976/- arising from

9. Auditors' Remunerationtiming differences mainly on account of depreciation has been

Statutory Audit 5,193,915 5,001,919recognized in the accounts. The breakup of deferred tax is given here Tax Audit 150,000 150,000under:

Certification 533,700 150,000

Out of Pocket expenses 122,412 47,045

Others 317,277

Total 6,000,027 7,126,241

10. As at March 31, 2010 there is no interest payable to Micro and

Small Enterprises as defined under the Micro Small and Medium

Enterprises Development Act, 2006. This information and that disclosed

under schedule 11 have been determined to the extent such parties have

been identified on the basis of information available with the Company.

Aspire Peripherals Private Limited

During the year net deferred tax liability of Rs.4,27,432/- arising from

timing differences (mainly on account of depreciation and carry forward

losses) has been recognized in the accounts. The breakup of deferred

tax asset is given here under:

Tax effect of Timing Difference on Amount in Rs. Amount in Rs.

account of: 2009 10 2008 09

(a)Depreciation 589,612 165,483

Net Deferred tax Liability / Asset 589,612 165,483

Deferred tax

(Asset) / liability

as on 31.03.2010

Difference between WDV as per books and WDV

as per Income Tax 4,57,090

Difference in Preliminary Expenses 605

Carry forward business losses (30,264)

Total 4,27,432

Deferred tax Current year Deferred tax

(asset) / liability charge / (asset) / liability

as on 01.04.2009 (Credit) as on 31.03.2010

Difference between written

down value as per books

and as per IT Act 2,21,975 15,819 237,794

Difference in Preliminary

Expense 7,001 (3,009) 3,992

Total 2,28,976 12,810 241,786



March 31, 2010 March 31, 2009

Rs. Rs.

11. Value of Imports on CIF basis

Calsoft Capital Goods NIL 5,664,839

Aspire Communications Private Limited 598,625 590,690

12. Dividend remitted in Foreign Currency

Years 2010 2009

Number of Non resident shareholders 4

Dividend remitted during the year Rs. Nil 81,631

Number of shares Nil 81,631

13. Acquisitions & Disinvestment 14. Segment Reporting

During the year there has been no major acquisitions by the group. 14.1. The Company’s operations predominantly relate to providing

However there has been a investment of 10% the equity of Calspence , development of software to customers globally operating in various

Srilanka amounting to Rs.794, 062. industry segments. Accordingly, software product and development

revenues along industry classes comprise the primary basis of segmental During the year ended March 31, 2010, American Healthnet Inc. (“AHN”) information set out in these financial statements. The accounting policies entered into an agreement to sell its assets to a third party. As a result of this adopted for segment reporting are in line with the accounting policies of the transaction, CSWL management has determined AHN has sufficient assets Company. Revenue and expenses have been identified to segments on the to support the carrying values of CSWL’s investment in AHN and certain basis of the above primary segment information viz industry segments. receivables from AHN, and impairment has not occurred at March 31, 2010. Revenue and expenses, which relate to the enterprise as a whole and are During the year ended March 31, 2010 CSWL entered into a stock sale not allocable to the segments on a reasonable basis, have been included agreement whereby it sold its entire 51% interest in IDC to Higher One Inc., a under unallocable corporate income/ expenses.U.S. based financial services company that enable institution of higher

learning to streamline business processes while improving the quality of

student services. The accompanying financial statements reflect a gain of The Industry segments of the Company consist of: Technology Solutions

$8,587,822 (Rs.428,095,128), net of income taxes from the transactions. (TS), Enterprise Solutions (ES) , Infrastructure Management Services (IMS),

The agreement further provides incentives by which CSWL could earn an and strategic Investments (SI)

additional $4,488,000 if certain sales goals are met. As these potential

future earnings are ontingent in nature, they have not been reflected in the

accompanying financial statements.

14.2 Primary Segment

Particulars TS ES IMS SI Inter Company Unallocated Total

1.Segment Revenue 8916.50 9786.07 586.87 1074.43 618.50 Nil 19745.37

(7467.08) (9847.06) (619.92) (8362.13) (431.00) (NIL) (25865.19)

Less: Inter Segment Revenue Nil Nil Nil Nil Nil Nil

(Nil) (Nil) (Nil) (Nil) (NIL) (Nil)

Net Sales/ Income from Operations 8916.50 9786.07 586.87 1074.43 618.50 Nil 19745.37

(7467.08) (9847.06) (619.92) (8362.13) (431.00) (NIL) (25865.19)

2.Segment Results 1325.12 - 869.28 -38.45 -648.26 Nil Nil -230.87

(-511.00) (-462.00) (-53.00) (-1450.93) (Nil) (NIL) (-2476.93)

Less:1.Interest & Finance Charges Nil Nil Nil Nil Nil 1140.95 1140.95

(Nil) (Nil) (Nil) (Nil) (Nil) (834.56) (834.56)

2.Other Unallocable Expenditure,

Net of Un-allocable Income Nil Nil Nil Nil Nil -304.89 -304.89

(Nil) (Nil) (Nil) (Nil) (Nil) (-1004.00) (-1004.00)

Profit before Tax 1325.12 - 869.28 -38.46 -648.26 Nil 836.06 -1066.93

(-511.00) (-462.00) (-53.00) (-1654.00) (Nil) 169.00 (2307.93)

Figures in brackets relate to the year ended March 2009

(Rs. in Lakhs)



The company believes that it is currently not practicable to provide segment 15.2 Inatech InfoSolutions P Ltddisclosures to total assets and liabilities since a meaningful segregation of 1) (a) Contribution to Defined Contribution Planavailable data is onerous.

15. Disclosure under AS 15 revised on Employee benefits

15.1 California Software Company Limited

Gratuity

(b) The details of defined benefit plans of the Company are reported

below. However, and according to the management there are no defined

benefit obligation in the subsidiaries.

The amounts recognized in the income statement are determined as

follows:



Amount in Rs

Particulars 2009 -10 2008 -09

a) Changes in present value of benefit obligation

Projected value obligation as at beginning

of the year 12,029,672 5,311,829

Current service cost 3,764,404 1,805,232

Interest cost 962,374 376,049

Actuarial loss/(gain) (3,716,380) 5,759,003

Benefits paid (647,106) (1,222,441)

Projected value of obligation as at end of the year 12,392,964 12,029,672

b) Changes in fair value of Plan Assets

Fair value of the plan assets 6461,192 5,274,882

Expected return on plan assets 570,590 447,254

Contributions 0 18,54,027

Benefits paid 647,106 1,222,441

Actuarial gain on plan assets NIL 107,470

Fair value of plan assets at the end of the year 6,384,676 6,461,192

c)Amounts recognised in the balance sheet

Projected value of obligation at the end of the year 12,392,964 12,029,672

Fair value of plan assets at end of the year 6,384,676 6,461,192

Funded status of the plans – ( asset )/ liability 6,008,288 5,568,480

d)Cost for the year



Expected return on plan assets (570,590) (447,254)

Net actuarial (gain)/loss recognised in the year (3,716,380) 5,651,533

Past Service Cost 5,568,480 36,947

Contributions 0 (1,854,027)

Net cost 6,008,288 5,568,480

E)Principal actuarial assumptions

Discount rate 8% 8%

Estimated rate of return on plan assets 8% 8%

Expected rate of salary increases 5% 6%

Any other material actuarial assumptions-Attrition 1-3% 1-3%

Leave Encashment:

Obligations at period beginning 7,341,134 6,723,808

Service Cost 9,862,345 5,642,037

Interest on Defined benefit obligation 253,649 470,667

Benefits settled (8,341,038) (5,452,321)

Actuarial (gain)/loss 1,265,362 (43,057)

Past Service Cost 0 0

Obligations at period end 10,381,452 7,341,134

Long Term - PBO - Actuarial 9,557,574 6,873,353

Short Term - Compensated absence - Actual 823,878 467,781

10,381,452 7,341,134

Principal actuarial assumptions

Discount rate 8% 7%


Attrition rate 1-3% 1-3%

Gratuity (Funded) Leave (unfunded)

Particulars Current Previous Current Previous

Year year year year

Current Service Cost 627,403 954,231 106,435 605,237

Interest Cost 50,192 65,564 65,586 37,922

Expected return on

plan assets (118,428) 38,413 Nil Nil

Actuarial gain/loss (285,346) (134,236) (51,076) (47,313)

Total gratuity/Leave costs 273,821 847,146 120,945 595,846

Actual return on plan

assets Gain/(Loss) 118,428 40,814 NIL Nil

Present value of defined benefit pension obligations funded by plan assets.

Gratuity Leave

Particulars Current Year Previous year

Defined benefit pension obligations 2,048,619 1,656,370

Fair value of plan assets 1,459,959 1,001,148

Unrecognized actuarial(gains)/losses NIL Nil

Unrecognized past service cost NIL Nil

Net defined benefit pension plan

assets/(liability) (588,660) (655,222)

Movement in the present value of the defined benefit Gratuity and

Leave obligations.

Gratuity (Funded) Leave (unfunded)


Year year year year

Obligations at period

beginning 1,656,370 803,602 921,737 452,867

Service Cost 627,403 954,231 106,435 605,237

Interest Cost 50,192 65,564 65,586 37,922

Benefits settled Nil Nil (203,812) Nil

Actuarial (gain)/loss (285,346) (131,835) (51,076) (47,313)

Settlements Nil (35,192) 0 (126,976)

Obligations at period end 2,048,619 1,656,370 838,870 921,737

The movement in fair value of plan assets during the financial year

Gratuity Leave


Beginning of the financial year 1,001,148 Nil

Balance correction Actual return 22,410 Nil

Expected return on plan assets (estimated) 118,428 38,413

Actuarial (gain)/Loss Nil 2,401

Administration Cost Nil Nil

Pension Contributions 312,088 995,526

Equitable Interest Transfer 5,885 Nil

Settlements 0 -35,192

End of the financial year 1,459,959 1,001,148

Actual Return on Plan Assets 118,428 63,224


Contribution to Provident Fund and

Social Security 21,388,836 20,541,431

The principal actuarial assumptions used are as follows.

15.3 Aspire Communications P Ltd & Aspire Peripherals P

Ltd

1. Aspire Communication Private Limited

16. Obligations on long-term, non-cancelable operating

Leases

The lease rentals charged for the year ended March 31,2010/ 2009 and

maximum obligations on long-term, non-cancelable operating leases

payable as per the rentals stated in the respective agreements are as

follows :

CSWL and its subsidiaries capital lease obligations

The Company has entered into various leases for office space, temporary

living quarters, office equipment and vehicles used by the Company.

Certain leases, which are long-term, non-cancelable and contain rent

escalation clauses, expire through 2012 and are accounted for as

operating leases. Rental expense under all leases, including property

taxes, amounted to Rs. 11,861,815($265,365) for the year

Future minimum rental payments under these leases as of March 31, 2010,

are as follows:

Year ending March 31, Rs.

2011 7,878,464

2012 1,729,398

2013 NIL

Total minimum future lease payments 9,607,862

Inatech has renewable operating leases for office facilities that are

cancelable at its option. Rental expenses thereof has been charged off to

the profit and loss account is Rs 9,966,695/- (Rs. 18,632,397/-).

Gratuity (%) Leave (%)


Year year year year

Weighted average discount rate 8 7 8 7

Expected return on plan assets 8 8 0 0

Salary escalation rate 5 NIL 5 NIL

a. Particulars Amount (Rs.)

Changes in Present value of obligations

Obligations at period beginning 561,701

Service cost 153,414

Interest on Defined Benefit Obligation 44,936

Benefits settled NIL

Actuarial ( Gain ) / loss (91,566)

Obligations at period end 668,485

Change in plan assets

Plan assets at period beginning, at fair value 741,279

Expected return on plan assets 66,715

Actuarial ( Gain ) / loss NIL

Contributions NIL


Plan Assets at period end, at fair value 807,994

Closing Value of Obligations / Assets

Present value of obligations 668,485

Fair value of plan assets 807,994

Funded Status 139,509

Unrecognized actuarial (gains) / Losses NIL

Net Asset / ( Liability) 139,509

Expenses Recognized

Service Cost 153,414

Interest cost 44,936

Expected Return on Plan Assets (66,715)

Actuarial (gain) / Loss (91,566)

Net gratuity cost 40,069

Assumptions

Discount Factor 8%

Salary Escalation 4%

2. Aspire Peripherals Private Limited

Particulars

Changes in Present value of obligations

Obligations at period beginning 50,877

Service cost 3,222

Interest on Defined Benefit Obligation 4,070


Actuarial ( Gain ) / loss 18,485

Obligations at period end 76,654

March 31, 2010

Amount (Rs.)

Change in plan assets

Plan assets at period beginning, at fair value 86 893

Expected return on plan assets 7,862

Actuarial ( Gain ) / loss NIL

Contributions 725


Plan Assets at period end, at fair value 95,480

Closing Value of Obligations / Assets

Present value of obligations 76,654

Fair value of plan assets 95,480

Funded Status 18,826

Unrecognized actuarial (gains) / Losses

Net Asset / ( Liability) 18,826

Expenses Recognized

Service Cost 3,222

Interest cost 4,070

Expected Return on Plan Assets (7,862)

Actuarial (gain) / Loss 18,485

Net gratuity cost 17,915

Assumptions

Discount Factor 8%

Salary Escalation 7%

March 31, 2010

March 31, 2010 March 31, 2009

Lease rentals recognized during the year 678,514 838,308

Lease Obligations

Within one year of the balance sheet date NIL 489,013

Due in a period between one and five years NIL NIL

(In Rupees)



17. Related Party Disclosure17.1 Names of related parties and description of Relationship

a) List of related parties where control Exists

1) California Software Company Limited

Companies Having Substantial Kemoil Limited, Hong Kong *

Interest Chemoil Energy Limited, Hong Kong *

b) Key management personnel Mr.Sam Santhosh

Mr.Clyde Michael Bandy

c) List of related parties where

no control Exists

Fellow Subsidiaries of Kemoil

Limited Chemoil corporation USA *

Chemoil International Pte. Ltd.,

Singapore *

Chemoil Europe B.V., The Netherlands *

Chemoil Terminals Corporation California,

USA

Royal Melbourne Insurance Company

Limited, British Virgin Islands

Chemoil Logistics Inc. British Virgin

Islands

Baltic Fuel Inc. British Virgin Islands

Belgrave Investors Corp. British Virgin

Islands

Cypress Maritime Ltd. British Virgin

Islands

Dryden Agency Inc. British Virgin Islands

Spy Glass Maritime Ltd. British Virgin

Islands

Soham Corporation. British Virgin Islands

GPS Chemoil LLC (FZC) U.A.E

Galaxy Energy Group Ltd. British Virgin

Islands

Subsidiaries of the abovementioned Chemoil Advanced Management Services

fellow subsidiaries Pvt. Ltd., India *

Chemoil Latin America, Inc. Panama *

Chemoil Middle East DMCC *

IPC (USA) Inc California, USA

Andorra Services Inc. British Virgin

Islands

Chemoil North America Corporation

Connecticut, USA

Chemoil Pacific Pte Ltd Singapore

Ocean Connect.com Inc Delaware, USA

St.Andrews Insurance Brokers, Inc

California USA

Berkshire Energy Ltd. British Virgin

Islands

Chemoil Energy Philippines Inc.

Philippines

Chemoil Storage Limited Marshall Islands

Chemoil Belgium N.V. Belgium

Chemoil Office Support B.V. The

Netherlands

Burando Holding B.V. The Netherlands

Anand Sea Shipping Limited Marshall

Islands

Faith IV Pte Ltd Singapore

Olympic Shipping Pte Ltd Singapore

Chemoil Navigation Limited - Marshall

Islands

Pacifico Bunkering Services SA Panama

Cypress Bunkering Services, SA Panama

Spy Glass Bunkering Services, SA

Bonifay International Corp Panama

Inatech Infosolutions Limited

1. Vedante Srihari - Director for part of the year and Key Managerial

Person of Inatech Solutions Limited, UK

2. Ravindra Krishnappa - Director Key Managerial Person

1. Aspire Communications Private Limited

a) Dr. Mahesh. K. Rao, CEO & Director.

b) Mrs. Vijaya Rao, Director Finance.

2. CSWL Inc and its subsidiaries

a) IPC USA Inc

b) Itochu Corporation

c) Chemoil Corporation

d) American Healthnet inc

17.2 The above information regarding related parties

have been determined to the extent such parties have

been identified on the basis of information available with

the Company.

Companies having Fellow subsidiaries of

Description Substantial interest Kemoil Corporation

2009 - 10 2008 - 09 2009 - 10 2008 - 09

TRANSACTIONS DURING

THE YEAR

Sales of services 0 NIL 46,214,926 86,417,768

Reimbursement of Expenses

and Others NIL 5,448,920

Interest received

Dividend Paid

Purchase of Services 0 8,166,208

Commission Paid

Purchase of Fixed Assets

Purchase of Investments

Issue of shares

Issue of Debentures

Advances made

Loans Repaid

Guarantees given during

The year

BALANCE AT YEAR END

Investments

Sundry Debtors 8,591,996 14,686,804

Loans and Advances

Interest Receivable

Unsecured Loans

Sundry Creditors - 6,591,736

Guarantees outstanding



Sl No Name Nature of Transaction Value of Transaction Balance Outstanding

Of CSWL Inc and its subsidiaries Rs. Rs.

1. Chemoil Corporation, USA Advance receivable by CSWL 9,735,660

2. American Healthnet Inc. Loan received by American Healthnet Inc. 85,065,754

3. Shareholder and Director of E pay. Loan received by CSWL and repayment 357,600

4. Andorra Services Inc., Loan Received by Andorra Services Inc 32,000,954

5 IPC (USA) Inc Advance receivable by CSWL 4,157,100

6. American Healthnet Inc Advance receivable by CSWL 141,436,879

7. Chemoil latin America Advance receivable by CSWL 174,330

. Inatech InfoSolutions Limited & Subsidiaries

1. Vedante Srihari Remuneration Share Purchase Consideration 9,075,600 NIL

22,36,410 22,36,410

2. Ravindra Krishnappa Director Remuneration 3,129,669 NIL


1. Dr. Mahesh Rao Salary 1,594,369 NIL

Incentive 700000

Reimb of Expenses 3,59,077

2. Smt. Vijaya Rao Salary 217,560 NIL

17.3 Related Party Transactions of subsidiaries

2. Earnings per share

Basic Earnings Per Share:

March 31, 2010 March 31, 2009

Rs Rs

Weighted average - No. of shares 12,365,006 12,365,006

Profit after Tax 356,828,200 (227,357,486)

Basic Earnings per Share 28.86 (18.39)



3. Consolidated Balance Sheet Abstract and Company’s General Business Profile Information Pursuant to Part IV of Schedule VI of the Companies Act,1956

I. REGISTRATION DETAILS

Registration No. State Code

Balance Sheet Date

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)

Public Issue Rights Issue

Bonus Issue Private Placement

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities Total Assets

SOURCES OF FUNDS:(Amount in Rs. Thousands)

Paid Up Capital Reserves & Surplus

Secured Loans Unsecured Loans

Minority Interest Deferred Tax

APPLICATION OF FUNDS (Amount in Rs. Thousands)

Net Fixed Assets Investments

Net Current Asset Misc. Expenditure

Deferred Tax

IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)

Turnover (including other income) Total Expenditure

Profit/(loss) Before Tax Profit/(loss) After Tax

Earnings Per Share (basic) in Rs. Dividend Rate %

(weighted average)

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/ SERVICES OF COMPANY (AS PER MONETARY ITEMS)

Item Code No.

Product Description

N I L

N I L

1 8

2 0 1 3 1 3 5 . 8 0 1

As per our report of even date attached

N I L

9 6 7 8 4 2 . 6 0 4

3 5 7 . 5 8 9

4 2 4 3 9 . 3 3 2

2 6 9 . 0 2 9

1 8 9 2 1 5 7 . 8 5

3 5 6 8 2 8 . 2 0 0

2 0

3 1 0 3 2 0 1 0

2 2 1 3 5

2 0 2 2 8 . 9 8 8

1 2 3 6 5 0 . 0 6 0

5 6 0 9 5 2 . 3 3 6

N I L

1 4 0 9 4 7 5 . 1 0 4

2 0 0 5 0 2 7 . 3 1 0

5 9 9 7 9 0 . 4 7

2 8 . 8 6

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

8 5 2 4 9 0 0 9

7 9 0 5 5 6 . 8 2 0

N I L

4. Regrouping and Rearranging of figures

The previous year figures have been regrouped, rearranged/ amended wherever necessary to conform to the current year's classification.

Signature to Schedules 1 to 23

N I L

2 0 1 3 1 3 5 . 8 0 1








ChennaiJune 23,2010



Consolidated Statement of Cash Flow for the Year Ended

(in Rupees)

Note: Cash outflow on account of purchase of fixed assets includes effect of foreign exchange fluctuations of fixed assets of overseas subsidiaries from their date of acquisition and year-end rate.Figures in brackets indicate outflows As per our Report of even date attached


March 31, 2010 March 31, 2009

CASH FLOW FROM OPERATIONS

Net Profit Before Tax and Extraordinary and Prior (106,693,172) (230,793,014)

Period Items

Adjustment for:

Loss on disposal of asset 404,213 13,539,020

Profit on sale of asset (4,017) (910,994)

Depreciation 48,263,940 67,571,519

Deferred expenses written off 56,352,961 30,535,007

Interest Income (4,100,860) (20,281,155)

Interest expense 114,095,246 83,455,879

Prior period adjustment and extra ordinary items 694,919,593 (43,677,423)

Transfer to general reserve (4,000,000) 888,361

Minority Interest changes 10,713,033 23,534,091

809,950,937 (76,138,709)

Adjustment for:

Current Assets, Loans and Advances 28,119,777 (112,027,941)

Current Liabilities & Provisions (465,531,723) 328,971,687

Increase/ Decrease in net current asset (437,411,946) 216,943,746

Cash generated from operations 372,538,991 140,805,037

Current Taxation (154,782,067) (18,077,098)

Deferred Taxation (88,180,209) 41,655,958

Other Items to be adjusted NIL (283,060)

NET CASH FROM OPERATIONS 129,576,715 164,100,837

CASH FLOW FROM INVESTING

Purchase of fixed Assets net (162,977,559) (428,142,121)

Cash generated from sale of assets 70,372,698 NIL

Deferred tax Asset Increase 68,885,687 (63,293,557)

Increase in expenses to be amortized (95,512) (12,893)

Change in Investments (28,106,803) 20,384,108

Interest Income 4,100,860 20,281,155

NET CASH FROM INVESTING (47,820,629) (450,783,308)

CASH FLOW FROM FINANCING

Loans borrowed ( Net of repayment) (136,815,811) 195,381,019

Deferred tax liability reduction 84,605,275 12,923,906

Increase in capital NIL NIL

Increase in Share premium NIL NIL

Increase / (Decrease) in other resereves (54,643,833) 26,192,939

Minority Interest changes (5,929,338) (23,780,894)

Dividend Tax (4,203,146) (680,080)

Interest Expense (114,095,246) (83,455,879)

Addition to Capital Reserve NIL NIL

Dividend (24,731,662) (1,696,450)

NET CASH FROM FINANCING (255,813,761) 124,884,560

Net increase/ decrease in cash or cash equivalents (174,057,675) (161,797,911)

Cash & Cash equivalents at the beginning of the year 403,071,930 564,869,841

Cash & Cash equivalents at the close of the year 229,014,255 403,071,930








ChennaiJune 23,2010




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STANDALONE FINANCIAL STATEMENTS

Auditors’ Report and Annexure 45

Financial StatementsBalance Sheet 48Profit and Loss 49

Schedules to Financial Statements 50

Balance Sheet Abstract

and General Business Profile 62

Statement of Cash Flow 63

Statements Pursuant to Section 212 Relating to Subsidiary Companies 64

Shareholder Information 65

Frequently Asked Questions 67


To

The Members,

California Software Co. Ltd.,

1. We have audited the attached Balance Sheet of California Software Company Limited as at March 31,2010 and the related Profit and Loss Account and

Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the

responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and

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

reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by The Companies (Auditor's Report) (Amendment) Order, 2004 issued by the

Government of India in terms of section 227(4A) of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records

of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the

matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) Subject to our remarks in paragraph 4 above, we have obtained all the information and explanations, which to the best of our knowledge and belief

were necessary for the purposes of our audit;

(b) Proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in all material

respects in compliance with the applicable accounting standards referred to in section 211(3C) of the Act.

(e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the directors is

disqualified as on March 31, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Act.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes

thereon and attached thereto, give in the prescribed manner the information required by the Act give a true and fair view in conformity with the

accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010 ;

ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

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

CA K J TOMY BSc FCA

Partner

(Membership No: 0 22768)

Chennai For and on behalf of

June 23, 2010 Tomy & Francis

Chartered Accountants

FRN: 010922 S

Auditors' Report to the Members of California Software Company Limited



(I) (a) The Company is in the process of maintaining proper records to show full particulars including quantitative details and situation of fixed

assets.

(b) It has been represented to us that the fixed assets of the Company are physically verified by the management during the year; however

documentation of the same comparing the physical inventory and the book inventory is not made available to us.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the

Company during the year.

(ii) (a) The Company has granted an unsecured loan to a company covered under register maintained under Section 301 of the Act. The maximum

amount involved during the year Rs.7,000,000/- and the year end balance of the loan was Rs.1,000,000/-.

(b) In our opinion, the rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the Company

(c) In respect of the aforesaid loan, reasonable steps have been taken by the Company for the recovery of the principal amount and interest,

where applicable.

(d) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained

under Section 301 of the Act.

(iii) In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased/

services rendered are of special nature for which suitable alternative sources do not exists for obtaining comparative quotations, there is generally

an adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fixed assets

and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the

information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major

weaknesses in the aforesaid internal control system.

(iv) (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section

301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, having regards to our comments in paragraph 3 above, the

transactions made in pursuance of such contracts or arrangements entered into the register maintained in pursuance of Section 301 of

the Act and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices which are

reasonable having regard to the prevailing market prices at the relevant time.

(v) In our opinion and according to the information and explanations given to us, the Company has in general, complied with the provisions of

Sections 58A and 58AA of the Act and the rules framed there under, with regard to the deposits accepted from public. According to the

information and explanations given by the Company, no order under aforesaid sections has been passed by the Company Law Board on the

Company in respect of the aforesaid deposits

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

(vii) The Government of India has not prescribed maintenance of cost records by the Company under Section 209(1)(d) of the Act for any of the

products of the Company.

(Viii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company has

generally been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund,

Employees' State Insurance, Income-Tax, Sales tax, Value Added Tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other

material statutory dues as applicable with the appropriate authorities in India.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of Sales Tax,

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

The particulars of dues of Income Tax which has not been deposited on account of a dispute are indicated in Note 27 of Schedule 22.

(ix) The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses during the year ended on that date or in the

immediately preceding financial year.

(X) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in

repayment of its due to any financial institution or bank as at the balance sheet date,

Annexure to the Auditors’ Report

(Referred to in paragraph 3 of our Report of even date to the members of California Software Company Limited on the financial statements for the year ended March 31,2010)



(xi) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company

during the year for loans taken by others from banks or financial institutions, are not prejudicial to the interest of the Company.

(xiii) In our opinion and according to the information and explanations given to us, on an over all basis, the term loans have been applied for the

purposes for which they were obtained.

(xiv) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations

given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

(xv) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301

of the Act during the year.

(xvi) During the course of our examination of the books of account, carried out in accordance with the generally accepted auditing practices in India,

we have neither come across any instance of fraud on or by the Company, noticed or reported during the year nor have we been informed of such

case by the management.

(xvii) Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the Companies (Auditor's Report) Order 2003 as amended by the Companies (Auditor's

Report) (Amendment) order, 2004, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which

arises to be reported in the aforesaid order.

CA KJ TOMY BSc FCA

Partner

(Membership No.0 22768)

For and on behalf of

Chennai TOMY & FRANCIS

June 23, 2010 Chartered Accountants

FRN:010922S



Standalone Balance Sheet as at March 31, 2010



K.J.TOMY B.Sc, FCAPartnerMembership No 22768

For and on behalf ofTOMY & FRANCISChartered Accountants

ChennaiJune 23, 2010

Dr.P.J.George Director


Schedules referred to above form an integral part of these accountsThis is the Balance Sheet referred to in our report of even date



Schedule As on March 31, 2010 As on March 31, 2009

(Rs) (Rs) (Rs) (Rs)

SOURCES OF FUNDS:

Shareholders' Funds

Share Capital 1 123,650,060 123,650,060

Reserves and Surplus 2 886,111,086 862,166,922

1,009,761,146 985,816,982

Loan Funds

Secured Loans 3 653,774,683 792,353,035

653,774,683 792,353,035

Deferred Tax (Note 20 on Schedule 22) 41,529,352 25,500,000

TOTAL 1,705,065,181 1,803,670,017

APPLICATION OF FUNDS

Fixed Assets :

Gross Block 4 1,080,503,739 1,070,757,608

Less: Depreciation 228,212,666 172,774,678

Net Block 852,291,073 897,982,930

Capital Work-in-Progress NIL 10,994,391

852,291,073 908,977,321

Investments 5 877,264,677 803,705,485

Current Assets, Loans and Advances

Sundry Debtors 6 334,156,606 464,718,482

Cash and Bank Balances 7 54,375,157 23,623,147

Loans and Advances 8 44,864,130 38,753,096

433,395,893 527,094,725

Less : Current Liabilities and Provisions

Liabilities 9 418,788,438 426,235,479

Provisions 10 39,098,024 9,872,035

457,886,462 436,107,514

Net Current Assets (24,490,569) 90,987,211

TOTAL 1,705,065,181 1,803,670,017

Significant Accounting Policies 19

Notes on Accounts 20

Standalone Profit and Loss Account for the Year Ended

Schedules referred to above form an integral part of these accountsThis is the Profit and Loss Account referred to in our report of even date










Schedule Year Ended March 31, 2010 Year Ended March 31, 2009

(Rs) (Rs) (Rs) (Rs)

INCOME

Sales and Services 11 874,479,447 726,123,736

Other Income 12 26,099,551 87,093,637

900,578,998 813,217,373

EXPENDITURE

Purchases 13 98,164,282 57,778,936

Employee Costs 14 428,969,438 412,636,862

General, Administration and Other Expenses 15 130,717,340 253,954,401

Selling Expenses 16 10,987,016 14,328,778

668,838,076 738,698,977

Profit before Interest and Finance Charges, Depreciation and Tax 231,740,922 74,518,396

Interest and Finance Charges 17 88,700,209 68,685,115

Depreciation 18 60,434,316 60,867,028

149,134,525 129,552,143

Profit / (Loss) before Tax 82,606,397 (55,033,747)

Tax Expenses

Current Tax 13,700,000 9,200,000

Deferred Tax 16,029,352 13,800,000

Fringe Benefits Tax NIL 2,500,000

29,729,352 25,500,000

Profit/ (Loss) After Tax 52,877,045 (80,533,747)

Balance brought forward 167,011,488 247,545,235 247,545,235

PROFIT AVAILABLE FOR APPROPRIATION 219,888,533 167,011,488

Appropriations

Proposed Dividend 24,730,012 NIL

Tax on Dividend 4,202,866 NIL

Transfer to General Reserve 4,000,000 NIL

Balance Carried to Balance Sheet 186,955,655 167,011,488

219,888,533 167,011,488

Earnings per Share

Number of Equity Shares outstanding 12,365,006 12,365,006

Basic earnings per share (Rs.) 4.28 (6.51)

Significant Accounting Policies 19

Notes on Accounts 20

As on As on

March 31, 2010 March 31, 2009

RS RS

SCHEDULE 1. SHARE CAPITAL

AUTHORISED


ISSUED


SUBSCRIBED & PAID UP

12,365,006 Equity Shares of Rs.10/- each fully paid up. 123,650,060 123,650,060

Notes :

Of the above, 724,920 equity shares of Rs.10/- each were issued as

fully paid-up for consideration other than cash

SCHEDULE 2. RESERVES & SURPLUS As on March 31, 2010 Additions / (Deductions) As on March 31, 2009

Rs Rs Rs

Capital Reserve 206,250 NIL 206,250

Share Premium 633,084,932 NIL 633,084,932

General Reserve 61,864,252 4,000,000 65,864,252

Profit and Loss Account balance 167,011,488 19,944,167 186,955,652

862,166,922 23,944,167 886,111,086

As on As on

March 31, 2010 March 31, 2009

Rs Rs

SCHEDULE 3. SECURED LOANS

Loans from Canara Bank

Term loan 546,158,475 682,161,634

Other Loan NIL NIL

Packing credit (Note 3 below) 99,929,178 102,095,065

Interest Accrued and due 7,687,030 8,020,817

Foreign Currency Loan

Car Loan NIL 75,519

653,774,683 792,353,035

Notes :

1. 1. Loan repayable within one year NIL 60,075,519

2.1 Term Loan is secured by a first charge by way of an equitable mortgage of land and building situated at Pallikaranai, Chennai together with structure and fixtures

there on Also secured on a pari passu basis by way of hypothecation of Electrical Equipment,Furniture and Fixtures, Plant and Machinery situated at the building

situated at Pallikaranai, Chennai. Also secured by guarantee given by Chemoil Energy Limited, Hongkong

2.2 Packing credit is secured by a fixed charge over networking equipment, software licence and software Products and also secured on a pari passu basis by way of

hypothecation of Electrical Equipment, Furniture and Fixtures, Plant and Machinery situated at the building situated at Pallikaranai, Chennai.

Schedules Forming Part of Standalone Accounts for the Year Ended



March 31, 2010 March 31, 2009

Nos Rs Nos Rs

SCHEDULE 5. INVESTMENTS

Long Term - At Cost

Non-Trade

Unquoted

In Subsidiary Companies

Equity shares of Rs 10/- each fully paid up

Aspire Communications Pvt. Limited 1,020,000 38,940,438 1,020,000 38,940,438

East Point Solutions Limited. 50,000 500,000 50,000 500,000

Equity shares of Re. 1/- each fully paid up

Inatech Infosolutions Private Limited 490,385 120,596,000 490,385 120,596,000

Equity shares of US$ 1/- each fully paid up

CSWL Incorporated, USA 9,662,800 413,126,806 9,662,800 413,126,806

Preference shares of Re. 1/- each fully paid up

Inatech Infosolutions Private Limited 16,503,600 303,289,871 16,502,400 230,524,741

Equity Shares in Calspence 188,753 794,062 NIL

Others:

Trust money in California Software Employees' Welfare Trust 17,500 17,500

877,264,677 803,705,485



Particulars Gross Block Depreciation/Amortisation Net Block

Cost as at Cost as at Upto For The Upto As at As at

March 2009 Additions Deletions March 2010 March 2009 Year Deletions March 2010 March 2009 March 2010

Tangible

Buildings 565,708,870 8,484,916 NIL 574,193,786 8,769,998 9,354,429 NIL 18,124,427 556,069,359 556,938,872

Plant and machinery 53,331,986 556,986 53,888,972 2,243,905 2,544,711 4,788,616 49,100,356 51,088,081

Furniture and fittings 175,673,100 2,545,289 62,146 178,156,243 13,242,730 10,374,094 37,095 23,579,729 154,576,514 162,430,370

Office equipment 4,230,615 251,304 204,340 4,277,579 549,713 1,127,471 71,636 1,605,548 2,672,031 3,680,902

Computers and accessories 163,268,962 3,231,459 2,850,742 163,649,679 133,087,113 17,425,394 2,838,532 147,673,975 15,975,704 30,181,849

Vehicles 3,169,277 NIL 2,298,644 870,633 2,148,478 211,261 2,049,065 310,674 559,959 1,020,799

Intangibles

Computer Software 2,127,430 92,049 NIL 2,219,479 1,866,044 251,250 NIL 2,117,294 102,185 261,386

Product Solutions 103,247,368 NIL NIL 103,247,368 10,866,697 19,145,706 NIL 30,012,403 73,234,965 92,380,671

1,070,757,608 15,162,003 5,415,872 1,080,503,739 172,774,678 60,434,316 4,996,328 228,212,666 852,291,073 897,982,930

PREVIOUS YEAR 236,404,411 865,488,609 31,135,412 1,070,757,608 120,890,907 63,602,941 11,719,170 172,774,678

Capital Work-in-progress (Note 6 on schedule 22) NIL 10,994,391

852,291,073 908,977,321

Notes :

1. Building include undivided share of land admeasuring 4/7 of 1 acre and 55 cents

SCHEDULE 4. FIXED ASSETS (in Rupees)


As on As on

March 31, 2010 March 31, 2009

Rs Rs Rs Rs

SCHEDULE 6. SUNDRY DEBTORS

(unsecured)

Debts Outstanding for a period exceeding six months

Considered Good 17,885,601 132,269,722

Considered Doubtful 46,258,754 75,168,603

64,144,355 207,438,325

Other Debts Considered Good 316,271,005 332,448,760

380,415,360 539,887,085

Less: Provision for doubtful debts 46,258,754 75,168,603

334,156,606 464,718,482

Notes :

1. Due by firms or private companies in which any of the Director is a

Partner or Director or a member

(i) Chemoil Corporation USA 7,876,796 7,782,791

(ii) Chemoil ITC (P) Ltd., Singapore NIL 249,075

(iii) Chemoil Advanced Management Services Private Limited, Chennai 715,200 NIL

2. Due from Companies under the same management :

(i) CSWL Incorporated. USA 265,835,726 443,895,284

(ii) Inatech InfoSolutions Limited UK. 41,673,419 23,953,623

(iii) Inatech Egypt 2,243,940 NIL

(iv) Aspire Communication Pvt Ltd. 5,629,535 NIL

SCHEDULE 7. CASH AND BANK BALANCES

Cash in hand NIL NIL

Balance with Scheduled Banks

On current accounts 32,125,585 16,524,871

On Dividend accounts 358,037 360,824

On Fixed deposit accounts (Note 1 below) 2,567,596 4,128,652

Balance with non Scheduled Banks

On current accounts (Note 2 below) 19,323,939 2,608,800

54,375,157 23,623,147

Note:

1.Includes Margin money deposits 2,567,596 4,128,652

2. Balances with non-scheduled banks

Maximum Maximum

As on March amount As on amount

31,2010 outstanding at 31,2009 outstanding at

anytime during anytime during

the year the year

Rs Rs Rs Rs

Canbank London 523,235 2,011,194 1,011,002 1,333,628

Bank of America, Pleasanton 2,179 10,844 10,844 306,242

Overseas Chinese Banking Corporation, Singapore 425,903 656,532 453,218 453,218

Emirates Bank, Dubai (US Dollar Account) 16,399,663 17,524,616 1,031,031 6,274,387

Emirates Bank, Dubai (Dhiram Account) 1,972,958 2,527,967 102,705 3,630,048




As on As on

March 31, 2010 March 31, 2009

Rs Rs Rs Rs

SCHEDULE 8. LOANS & ADVANCES (Unsecured - Considered Good Except Otherwise Stated)

Loans and Advances to Subsidiaries 4,539,690 10,614,310

Advances recoverable in cash or in kind or for value to be received

Considered good 23,361,750 8,906,476

Considered Doubtful 6,766,164 30,127,914 8,200,395 17,106,871

Deposits 14,801,303 13,637,363

Advance Income Tax and Tax deducted at source 48,987,887 38,721,447

Less :Provision for Taxation 46,826,500 2,161,387 33,126,500 5,594,947

51,630,294 46,953,491

Less: Provision for doubtful advances 6,766,164 8,200,395

44,864,130 38,753,096

Notes:

Due from Companies under the same management : Maximum

amount

outstanding at

As on March anytime during

31,2010 the year

Rs Rs

Team Frontline Limited NIL NIL

Webspectrum Software Limited NIL NIL

Inatech Infosolutions Private Limited 1,240,881 7,478,621

CSWL Incorporated, USA 3,298,809 3,554,409

California Software Employee Welfare Trust NIL NIL

As on As on

March 31, 2010 March 31, 2009

Rs Rs

SCHEDULE 9. LIABILITIES

Sundry creditors (Other than small and micro enterprises) 260,544,898 173,836,235

[Note 20 on Schedule 22]

Deposits 17,968,700 17,968,700

Advance from customers 6,077,387 49,822,940

Unclaimed Dividend 248,275 364,397

Other Liabilities 133,949,178 184,243,207

418,788,438 426,235,479

*None of the amount disclosed is more than seven years old as on the Balance Sheet date and all are unclaimed

As on As on

March 31, 2010 March 31, 2009

Rs Rs

SCHEDULE 10. PROVISIONS

Proposed Dividend 24,839,774 NIL

Tax on Dividend 4,202,866 NIL

Leave Encashment 10,381,452 9,698,313

Fringe Benefits Tax 6,272,253 6,272,253

Less : Advance Tax paid 6,598,321 (326,068) 6,098,531 173,722

39,098,024 9,872,035




Year Ended Year Ended

March 31, 2010 March 31, 2009

Rs Rs

SCHEDULE 11. SALES AND SERVICES RENDERED

Sale of Software 684,303,462 647,008,856

Sale of licenses 141,211,559 38,750,078

Annual Maintenance Contracts 15,607,970 10,475,636

Consultancy Services 33,356,456 29,889,166

874,479,447 726,123,736

SCHEDULE 12. OTHER INCOME

IInterest on loan to subsidiary (Gross) (Tax deducted at source- Rs. Nil and (2009- Rs. 11,896) NIL 52,500

Interest on bank deposit (Gross) (Tax deducted atsource- Rs. Nil (2009- Rs.231,599) NIL 1,053,591

Interest Others NIL 131,446

Rental Income 21,014,053 4,426,781

Profit on sale of investments NIL 564,100

Profit on sale of assets

Exchange difference (Net gain) NIL 61,795,905

Dividend Income 2,307,573 NIL

Miscellaneous income 2,777,925 19,069,314

26,099,551 87,093,637

SCHEDULE 13. PURCHASES

Purchase of Software Licenses 47,232,042 24,552,103

Project Expenses - Bought outs 50,932,240 33,226,833

98,164,282 57,778,936

SCHEDULE 14. EMPLOYEE COSTS

Salaries ,Allowances and Bonus 377,815,113 378,361,330

Contribution to Provident and other funds 15,671,807 20,560,395

Staff Welfare Expenses 35,482,518 34,626,471

428,969,438 433,548,196

Less : Capitalised 20,911,334

428,969,438 412,636,862

SCHEDULE 15. GENERAL, ADMINISTRATIVE & OTHER EXPENSES

Electricity Charges 15,526,983 19,311,425

Rent 22,158,210 31,393,376

Rates and taxes 2,048,730 187,182

Insurance 704,799 787,612

Repairs and Maintenance

Buildings 5,109,850 7,365,893

Plant and Machinery / Computers 1,872,533 1,334,511

Others 3,863,789 5,325,829

Communication 4,740,057 4,193,144

Traveling Expenses 43,625,968 60,597,870

Data Circuit Expenses 8,987,181 12,197,419

Service Charges 1,061,333 741,608

Legal and Professional charges 6,839,510 10,637,381

Exchange difference (Net Loss) 26,985,931 NIL

Loss on sale of assets 404,213 13,199,853

Provision for doubtful debts (27,684,954) 65,062,553

Provision for doubtful advances NIL 8,200,395

Advances Written off NIL 2,451,641

Other Expenses 14,473,207 18,977,776

130,717,340 261,965,468

Less : Capitalised NIL 8,011,067

130,717,340 253,954,401




Year Ended Year Ended

March 31, 2010 March 31, 2009

Rs Rs

SCHEDULE 16. SELLING EXPENSES

Commission 6,988,618 5,511,189

Business Promotion 3,998,398 4,131,414


Advertisement NIL NIL

10,987,016 14,328,778

SCHEDULE 17. INTEREST AND FINANCE CHARGES

Interest

On Term Loan 76,708,176 81,451,584

On Working Capital Loan 11,431,668 6,382,992

On Car Loan 1,085 12,399

On Income Tax NIL 531,893

Others 1,201 12,625

88,142,130 88,391,493

Finance charges

Bank Charges 558,079 2,816,882

88,700,209 91,208,375


88,700,209 68,685,115

SCHEDULE 18. DEPRECIATION

As per Schedule 5 60,434,316 63,602,941


60,434,316 60,867,028




Schedules to Standalone Financial Statements

7. LeasesSCHEDULE 19In the case of assets taken under operating lease, the rentals are charged to

SIGNIFICANT ACCOUNTING POLICIES profit and loss account when due.

1. Basis of preparation of Financial Statements 8. InvestmentsThe financial statements are prepared under historical cost convention, in Long term investments are stated at cost with provisions where necessary, accordance with Generally Accepted Accounting Principles (“GAAP”) in for diminution other than temporary, in the value of investment.India and to comply with applicable Accounting Standards notified under

9. Foreign Currency TransactionsSection 211 (3C) of the Companies Act, 1956 and the relevant provisions of

the Companies Act, 1956. Foreign currency transactions including expenses incurred on Trading /

Non Trading Overseas offices and revenue accounts of onsite offices are 2. Use of Estimates

accounted at the exchange rates ruling on the date of transaction. At the The preparation of financial statements in conformity with the generally year end all monetary assets and liabilities denominated in foreign currency accepted accounting principles requires the management to make other than investments are restated at the closing exchange rates. estimates and assumptions that affect the reported amount of assets, Exchange differences arising out of actual payments / realisations and from liabilities, revenue and expenses and disclosure of contingent liabilities as the year end restatement referred to above are reckoned in the profit and of the date of the financial statements. The estimates and assumptions loss account.used in the accompanying financial statements are based upon the

10. Employee Benefitsmanagement's evaluations of the relevant facts and circumstances as of

the date of the financial statements. Actual results could differ from these a. Short Term

estimates. Short term Employee Benefits are recognised as expenses as per the

company’s scheme based on the expected obligation.3. Revenue Recognitionb. Long TermCalifornia Software Company LimitedLiability in respect of long term Employee Benefits in the nature of Revenue from software development is recognised based on software accumulated compensated absence is provided for based on actuarial developed and billed to clients as per the terms of specific contracts. valuation using projected unit credit method.

Revenue from consultancy services is recognised when the services have c. Post Retirementbeen provided to the customer.i) Provident fund

Revenue from the sale of software products is recognised when the sale is This is a defined contribution plan and contributions made to the fund, in completed with the passing of title. accordance with the applicable rules/statutes are charged to revenue. The

Revenue from maintenance services is accrued over the period of the Company has no further obligation for future provident fund benefits other contract. than aforesaid contributions.

4. Fixed Assets ii) Superannuation

This is a defined contribution plan. The Company contributes a sum Fixed assets are stated at cost less accumulated depreciation. Cost

equivalent to 15% of eligible employee’s salary towards superannuation includes direct costs and financing costs related to borrowing attributable

fund administered by Life Insurance Corporation of India and are charged to qualifying assets.

to profit and loss account.5. Impairment

iii) GratuityConsideration is given at each Balance Sheet date to determine whether This is a defined benefit plan. The Company has subscribed to California there is any modification or impairment of the carrying amount of the fixed Software Company Employees’ Group Gratuity Scheme, which is being assets. If any condition exists, an asset's recoverable amount is estimated. administrated by a Trust set up for this purpose under the aegis of the Life An impairment loss is recognised whenever the carrying amount of any Insurance Corporation of India (LIC). Liabilities with regard to the Gratuity asset exceeds recoverable amount.payable to the employees are determined by actuarial valuation using

6. Depreciation projected unit credit method, based upon which, the Company makes Depreciation on tangible fixed assets is calculated on straight-line method contribution to the Trust. The funds contributed to the Trust are remitted to at the rates prescribed in Schedule XIV of the Companies Act, 1956, except the LIC. Actuarial gains and losses comprising of experience adjustments for computers which are depreciated over a period of 3 Years. Intangible and the effects of changes in actuarial assumptions are recognised assets are amortized over their estimated useful lives (Computer Software 2 immediately in the profit and loss account as income or expense.Years ; Product Solutions 5 Years).

11. TaxationDepreciation charge on additions / deletions is restricted to the period of

Provision for current tax is made based on the liability computed in use.

accordance with the relevant tax rates and tax laws. Provision for deferred

Assets individually costing Rs.5,000 or less are fully depreciated in the year tax is made for timing differences arising between the taxable incomes and

of addition. accounting income computed at current applicable tax rates. Deferred tax

assets are recognised only if there is a virtual certainty that they will be In the event the useful life of any fixed assets being assessed to be lower

realised in the foreseeable future and are reviewed for the appropriateness than the life derived from the rates specified above, the book value of such

of their carrying value at each balance sheet date. assets is charged off as depreciation over their balance useful lives.



The future projection in respect of the above products has been estimated SCHEDULE 20by the technical department, although the existence of a market for these

NOTES ON ACCOUNTS products is yet to be developed. However the product solutions are being

1. The Company has obtained approvals dated March 7, 2005 and October amortized over a period of 5 years starting Financial Year 2008-09.

10, 2005 from Director, Software Technology Park, Chennai to set up a 8. Debtors include Rs.41,673,419 due from Inatech Solutions Limited UK,

100% Export Oriented Units (EOU) under STP Scheme for the and out of that Rs.26,942,544 has been provided for as doubtful debts

development/ manufacture of computer software. The permission granted

under the STP scheme stipulates that the Company would be required to 9. Rent receivable amounting to Rs 88, 24,000 from Roxanne Research achieve positive Net Foreign Exchange (NFE) for a period of five years from Private Ltd has been shown under Loans and Advances, and the company the date of commencement of commercial production and the company is contemplating initiating legal proceeding against Roxanne Research Pvt has achieved positive NFE as on date and confident of achieving the same Ltd for the default. How ever the rent receivable have been secured by a at the end of the stipulated period. Rental Deposit of Rs 1 crore received from Roxanne.

10. Transfer Pricing

The study of international transactions entered into by the Company with its

overseas associates regarding the extent of compliance to the transfer

pricing regulations of the Income Tax Act, 1961 is yet to be completed and

the impact, if any, arising out of such study has not been recognized in

these accounts pending completion of the study.

11. Quantitative Details

As the Company is engaged in the development and export of computer

software, the production and sale of which cannot be expressed in any

generic unit, the quantitative details etc., as required under the Companies

Act, 1956 are not furnished

6. The Company’s investments in subsidiaries are considered as long term

and strategic in nature. Accordingly, the excess of the carrying value over

the net book value of the investments is considered as temporary

diminution and hence no provision for the decline in value has been

considered in these accounts.

7. Intangible asset- Product solutions represent cost of Product

development and no additions during the year in respect of the following

products:

a. Test Automation Framework (TAF)

b. Virtual IO

c. Diameter

d. Networking File System (NSF) and

e. Bunkering operations Management systems (BOMS)

(In Rupees)

March 31, March 31,

2010 2009

2.Capital Commitments:

Estimated amount of contracts remaining NIL 2,275,615

to be executed on capital account and not

Provided for (Net of advances)

3.Contingent Liabilities :

4.1 Guarantees given on behalf of

other companies 205,090,000 231,235,000

4.2 Claims against the company not

acknowledged as debt in respect of

certain income tax matters which

are subjudice 14,901,556 14,901,556

4.3 Amounts payable to Inatech Shareholders

Towards Preference Shares NIL 54,430,300

4.Other Financial Information:

5.1 Outstanding Bank Guarantees 1,942,369 3,556,304

5.2 Reimbursement of travel expenses to Directors 1,187,081 1,227,409

5.3 Amount due to be credited to Investor

Education and Protection Fund 248,275 248,275

5.4 Sitting fees paid / payable to Directors 45,000 50,000

5.Capital Work in Progress includes the following

a) Advances given –

( Considered good and recoverable ) Nil 10,994,392

b) Buildings/ Development facility under

Renovation/construction Nil Nil

c) Interest on Term Loan availed for development

facility Nil Nil

d) Product Solutions Development Expenditure

In progress Nil Nil

(In Rupees)

Year Ended March 31, March 31,

` 2010 2009

12. Auditors' Remuneration

Payments to Auditors comprise the following:

Statutory Audit 500000 1,575,000

Tax Audit 150,000 150,000

Certification 533,700 1,610,000

Out of Pocket expenses 122412 47,045

1,306,112 3,382,045

13. Value of Imports on CIF basis

Capital Goods NIL 5,664,839

14. Expenditure in Foreign Currency

Travelling Expenses 7,182,373 17,002,493

Salaries and Allowances 81,072,657 91,232,359

License Fees 21,630,346 23,141,793

Commission 5,901,407 5,511,189

Rent 7,351,549 10,856,123


Other Expenses 52,946,686 47,645,282

176,085,018 208,325,239

15. Earnings in Foreign Currency

Sales 843,523,239 706,723,477

Other Income Nil 19,069,314

16. Dividend remitted in Foreign Currency

Number of Non resident shareholders NIL 4

Dividend remitted during the year Rs. NIL 81,631

Number of shares NIL 81,631

For 2007 08 NIL 81,631



17. Segment Reporting 17.3 Secondary Segment Information

Secondary segmental reporting is performed on the basis of geographical 17.1 The Company’s operations predominantly relate to providing locations of customers. Revenue from external customers based on the development of software to customers globally operating in various location of customers is as below. industry segments. Accordingly, software product and development

revenues along industry classes comprise the primary basis of segmental

information set out in these financial statements. The accounting policies

adopted for segment reporting are in line with the accounting policies of the

Company. Revenue and expenses have been identified to segments on the

basis of the above primary segment information viz industry segments.

Revenue and expenses, which relate to the enterprise as a whole and are

not allocable to the segments on a reasonable basis, have been included

under unallocable corporate income/ expenses.

The company believes that it is currently not practicable to provide segment The Industry segments of the Company consist of: Technology Solutions

disclosures to total assets and liabilities since a meaningful segregation of (TS), Enterprise Solutions (ES) and Infrastructure Management Services

available data is onerous.(IMS)

17.2 Primary Segment

Particulars TS ES CS Unallocated Total

1. Segment Revenue 493,987,650 362,968,984 17,522,813 Nil 874,479,447

(495,141,438) (230,982,298) Nil (Nil) (726,123,736)

Less: Inter Segment Revenue Nil Nil Nil Nil Nil

(Nil) (Nil) (Nil) (Nil) (Nil)

Net Sales/ Income from Operations 493,987,650 362,968,984 17,522,813 Nil 874,479,447

(495,141,438) (230,982,298) Nil (Nil) (726,123,736)

2. Segment Results 192,891,340 145,680,508 10,164,082 Nil 348,735,930

(189,350,116) (80,658,172) Nil (Nil) (270,008,288)

Less:1.Interest & Finance Charges Nil Nil Nil 88,629,037 88,629,037

(Nil) (Nil) (Nil) (68,685,115) (68,685,115)

2.Other Unallocable Expenditure,

Net of Un-allocable Income Nil Nil Nil 177,500,496 177,500,496

(Nil) (Nil) (Nil) (256,356,920) (256,356,920)

Profit / (Loss) before Tax 192,891,340 145,680,508 10,164,082 (266,129,533) 82,606,397

189,350,116 80,658,172 Nil (325,042,035) (55,033,747)

Figures in brackets relate to the year ended March 2009

(Rs. in Lakhs)

(In Rupees)

March 31, 2010 March 31, 2009

USA 631,344,514 545,744,256

Europe 75,987,920 74,907,209

India and other countries 167,147,013 105,472,271

Total 874,479,447 726,123,736



18. Disclosure under AS 15 revised on Employee benefits 18.2 Leave Encashment

Gratuity

19. Obligations on long-term, non-cancelable operating

Leases

The lease rentals charged for the year ended March 31,2010 / 2009 and

maximum obligations on long-term, non-cancelable operating leases

payable as per the rentals stated in the respective agreements are as

follows :

(In Rupees)

2009-10 2008-09

a) Changes in present value of benefit

Obligation Projected value obligation

as at beginning of the year 12,029,672 5,311,829



Actuarial loss/(gain) (3,716,380) 5,759,003

Benefits paid (647,106) (1,222,441)

Projected value of obligation as at end of the year 12,392,964 12,029,672

b) Changes in fair value of Plan Assets

Fair value of the plan assets 6461,192 5,274,882

Expected return on plan assets 570,590 447,254

Contributions 0 18,54,027

Benefits paid 647,106 1,222,441

Actuarial gain on plan assets NIL 107,470

Fair value of plan assets at the end of the year 6,384,676 6,461,192

c) Amounts recognised in the balance sheet

Projected value of obligation at the end of the year 12,392,964 12,029,672

Fair value of plan assets at end of the year 6,384,676 6,461,192

Funded status of the plans – ( asset )/ liability 6,008,288 5,568,480

d) Cost for the year



Expected return on plan assets (570,590) (447,254)

Net actuarial (gain)/loss recognised in the year (3,716,380) 5,651,533

Past Service Cost 5,568,480 36,947

Contributions 0 (1,854,027)

Net cost 6,008,288 5,568,480

e)Principal actuarial assumptions

Discount rate 8% 8%

Estimated rate of return on plan assets 8% 8%


Any other material actuarial assumptions-Attrition 1-3% 1-3%

(In Rupees)

2009-10 2008-09

Obligations at period beginning 7,341,134 6,723,808

Service Cost 9,862,345 5,642,037

Interest on Defined benefit obligation 253,649 470,667

Benefits settled (8,341,038) (5,452,321)

Actuarial (gain)/loss 1,265,362 (43,057)

Past Service Cost 0 0

Obligations at period end 10,381,452 7,341,134

Long Term - PBO - Actuarial 9,557,574 6,873,353

Short Term - Compensated absence - Actual 823,878 467,781

10,381,452 7,341,134

Principal actuarial assumptions

Discount rate 8% 7%


Attrition rate 1-3% 1-3%

(In Rupees)

March 31, 2010 March 31, 2009

Lease rentals recognized during the year 678,514 838,308

Lease Obligations

Within one year of the balance sheet date NIL 489,013

Due in a period between one and five years NIL NIL



20. Related Party Disclosure(In Rupees)

20.1 Names of related parties and description of Relationship

a) List of related parties where control Exists

Companies Having Substantial Kemoil Limited, Hong Kong

Interest Chemoil Energy Limited, Hong Kong

Subsidiaries California Software Laboratories Inc., USA

(CSWL) *

EastPoint Solutions Ltd, Chennai

Team Front Line Ltd , Cochin *

Aspire Communications Private Limited,

Mysore *

Inatech InfoSolutions Private Limited,

Bangalore *

Subsidiary of California Software Healthnet International Inc., USA

Laboratories Inc. Waldron Limited, Japan

Informed Decision corporation, USA

Aspiresoft Corporation, USA

Subsidiary of Inatech InfoSolutions Inatech Solutions Ltd, UK *

Private Limited Inatech Solutions Egypt, SAE

Subsidiary of Waldron Limited Codex Co Ltd, Japan

Subsidiary of Aspire Aspire Peripherals P Ltd, Mysore

Communications Private Limited

Subsidiary of Healthnet International Innovations Inc., USA

International Inc

b) Key management personnel Mr.Sam Santhosh

Mr.Clyde Michael Bandy

c) List of related parties where

no control Exists

Fellow Subsidiaries of Kemoil Chemoil corporation USA *

Limited Chemoil International Pte. Ltd.,

Singapore *

Chemoil Energy Limited – Singapore*

Chemoil Europe B.V., The Netherlands *

Chemoil Terminals Corporation California,

USA

Royal Melbourne Insurance Company

Limited British Virgin Islands

Chemoil Logistics Inc. British Virgin

Islands

Baltic Fuel Inc. British Virgin Islands

Belgrave Investors Corp. British Virgin

Islands

Cypress Maritime Ltd. British Virgin

Islands

Dryden Agency Inc. British Virgin Islands

Spy Glass Maritime Ltd. British Virgin

Islands

Soham Corporation. British Virgin Islands

GPS Chemoil LLC (FZC) U.A.E

Galaxy Energy Group Ltd. British Virgin

Islands

(In Rupees)

Subsidiaries of the abovementioned Chemoil Advanced Management Services

fellow subsidiaries Pvt. Ltd., India *

Chemoil Latin America, Inc. Panama *

Chemoil Middle East DMCC *

IPC (USA) Inc California, USA

Andorra Services Inc. British Virgin

Islands

Chemoil North America Corporation

Connecticut, USA

Chemoil Pacific Pte Ltd Singapore

Ocean Connect.com Inc Delaware, USA

St.Andrews Insurance Brokers, Inc

California USA

Berkshire Energy Ltd. British Virgin

Islands

Chemoil Energy Philippines Inc.

Philippines

Chemoil Storage Limited Marshall Islands

Chemoil Belgium N.V. Belgium

Chemoil Office Support B.V. The

Netherlands

Burando Holding B.V. The Netherlands

Anand Sea Shipping Limited Marshall

Islands

Faith IV Pte Ltd Singapore

Olympic Shipping Pte Ltd Singapore

Chemoil Navigation Limited - Marshall

Islands

Pacifico Bunkering Services SA Panama

Cypress Bunkering Services, SA Panama

Spy Glass Bunkering Services, SA

Bonifay International Corp Panama

20.2 The above information regarding related parties have been

determined to the extent such parties have been identified on the

basis of information available with the Company.

* Represents related parties with whom the company had transactions during the year.



21. Earnings per share 25. Expenses reimbursed to CSWL of Rs. 82,462,350 . are based on

Debit notes received from them.Basic Earnings Per Share:

26. Except in respect of the following there are no statutory dues of

Customs Duty, Excise Duty, Cess, Wealth Tax and Income Tax, which

have not been deposited on account of a dispute

22. Deferred taxation

The deferred tax liability of Rs 41,529,352 (2009-Rs 25,500,000) has arisen

mainly on account of difference between book and tax written down value of

depreciable fixed assets

23. As at March 31, 2010 there is no interest payable to Micro and Small

Enterprises as defined under the Micro Small and Medium Enterprises

Development Act, 2006. This information and that disclosed under

schedule 11 have been determined to the extent such parties have been

identified on the basis of information available with the Company

24. In the absence of details of specific invoice particulars in the

remittance amounts realized from debtors are adjusted on First in First

out Basis.

20.3 Related Party transactions for the year ended 31 March, 2010

March 31, 2010 March 31, 2009

Rs. Rs.

Weighted average - No. of shares 12,365,006 12,365,006

Profit after Tax - Rs 52,877,045 (80,533,747)

Basic Earnings per Share - Rs 4.28 (6.51)

(In Rupees)

S. Name of the Nature of the dues Amount Rs. Forum where

No Statute dispute is pending

1. Income Tax Income Tax ( A.yr 2000-01) 1,084,617 Commissioner of

Act, 1961 Income tax

(appeals)

2. Income Tax Income Tax ( A.yr 2001-02) 1,524,090 Madras

Act, 1961 High Court





5. Income Tax Income Tax ( A.yr 2004-05) 5,676,083 Commissioner

Act, 1961 Appeals


(in Rs.)

Companies having Fellow subsidiaries of

Description Substantial interest CSWL Inc. Other Subsidiaries Chemoil Corporation Total

2009- 2010 2008-2009 2009- 2010 2008-2009 2009- 2010 2008-2009 2009- 2010 2008-2009 2009- 2010 2008-2009

TRANSACTIONS DURING THE YEAR

Sales of services 0 NIL 544,000,589 462,165,449 41,843,555 5,952,415 46,214,926 86,417,768 632,059,070 604,535,632

Reimbursement of Expenses

and Others 82,462,350 109,538,374 NIL 5,448,920 82,462,350 114,987,294

Interest received NIL 52,500 NIL 52,500

Dividend Paid NIL 8,166,208

Purchase of Services 0 8,166,208 33,477,154 628,744 33,477,154 628,744

Commision Paid NIL NIL

Purchase of Fixed Assets NIL 5,480,950 NIL 5,480,950

Purchase of Investments 73,559,192 36,600,000 73,559,192 36,600,000

Issue of shares NIL NIL

Issue of Debentures NIL NIL

Advances made (241,038) 879,315 1,166,418 7,074,463 925,380 7,953,778

Loans Repaid NIL NIL

Guarantees given during the year NIL 127,075,000 NIL 127,075,000

BALANCE AT YEAR END

Investments 413,126,806 413,126,806 464,120,371 390,561,179 877,247,177 803,687,985

Sundry Debtors 265,835,726 443,895,290 49,546,894 25,301,468 8,591,996 14,686,804 323,974,616 483,883,562

Loans and Advances 3,298,809 3,539,847 1,240,881 7,074,463 4,539,690 10,614,310

Interest Receivable NIL NIL

Unsecured Loans NIL NIL

Sundry Creditors 189,243,237 125,550,428 15,487,758 193,411,574 NIL 6,591,736 204,730,995 325,553,738

Guarantees outstanding 202,590,000 228,735,000 2,500,000 2,500,000 205,090,000 231,235,000


27, 28. Standalone Balance Sheet Abstract and Company’s General Business Profile Information Pursuant to Part IV of Schedule VI of the Companies Act,1956

I. REGISTRATION DETAILS

Registration No. State Code

Balance Sheet Date

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)

Public Issue Rights Issue

Bonus Issue Private Placement

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities Total Assets

SOURCES OF FUNDS:(Amount in Rs. Thousands)

Paid Up Capital Reserves & Surplus

Secured Loans Unsecured Loans

Deferred Tax

APPLICATION OF FUNDS (Amount in Rs. Thousands)

Net Fixed Assets Investments

Net Current Assets

IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)

Turnover (including other income) Total Expenditure

Profit/(loss) Before Tax Profit/(loss) After Tax

Earnings Per Share (basic) in Rs. Dividend Rate %

(weighted average)

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/ SERVICES OF COMPANY (AS PER MONETARY TERMS)

Item Code No.

Product Description

N I L

N I L

1 8

2 1 6 2 . 9 5 12 1 6 2 . 9 5 1

As per our report of even date attached

8 8 6 . 1 1 1

8 7 7 . 2 6 4

8 1 7 . 9 7 3

5 2 . 8 7 7

2 0

3 1 0 3 2 0 1 0

2 2 1 3 5

4 1 . 5 2 9

1 2 3 . 6 5 0

( 2 4 . 4 9 0 )

8 5 2 . 2 9 1

9 0 0 . 5 7 8

8 2 . 6 0 6

4 . 2 8

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

8 5 2 4 9 0 0 9

6 5 3 . 7 7 5

N I L

N I L

29. Regrouping and Rearranging of figures

The previous year figures have been regrouped, rearranged/ amended wherever necessary to conform to the current year’s classification.

Signature to Schedules 1 to 20






ChennaiJune 23,2010


N I L

Statement of Cash Flow for the Year Ended

This is the Cash Flow Statement referred to in our report of even date










Year Ended March 31, 2010 Year Ended March 31, 2009

(Rs) (Rs) (Rs) (Rs)

A. Cash Flow from Operating Activities

Profit before Tax 82,606,397 (55,033,747)

Adjustment for :

Depreciation 60,434,316 63,602,941

Loss on Sale of Assets 405,253 13,539,020

Profit on Sale of Assets (1,040) (339,167)

Profit on Sale of Investments NIL- (564,100)

Interest Income NIL- (1,237,537)

Interest Expense 88,700,209 149,538,738 91,208,375 166,209,532

Operating profit before working capital changes 232,145,135 111,175,785

Sundry Debtors 130,561,877 (114,431,231)

Loans and Advances (9,544,594) 19,105,805

Current Liabilities 45,339,185 166,356,468 140,797,817 45,472,391

Cash Generated from Operating Activities 398,501,603 156,648,176

Taxes Paid (10,759,404) (15,855,365)

Net Cash from Operating Activities 387,742,199 140,792,811

B. Cash flow from Investing Activities

Purchase of Investments (126,214,710) (36,607,500)

Purchase of Fixed Assets (4,167,612) (210,462,866)

Net increase in fixed deposits with maturity period beyond three months 1,561,056 (1,863,837)

Sale proceeds of Fixed Assets 3,120 6,216,389

Sale proceeds of Invetsments NIL 2,564,100

Interest Received NIL 2,471,875

Net Cash from Investing Activities (128,818,146) (237,681,839)

C. Cash flow from Financing Activities

Long term loan received (1,078,678) 115,818,961

Long term loan repaid (135,000,000) (28,810,778)

Net Increase in packing credit (2,165,887) 55,117,759

Interest paid (88,366,422) (86,221,391)

Dividend paid NIL (12,302,977)

Dividend Tax paid NIL (2,101,433)

Net Cash from Financing Activities (226,610,987) 41,500,141

Net Increase / (decrease) in Cash and Cash Equivalents ( A+B+C) 32,313,066 (55,388,888)

Cash and cash equivalents at the beginning of the year 19,494,495 74,883,382

Cash and cash equivalents at the end of the year 51,807,561 19,494,495

Notes:

1. Cash and cash equivalents at the end of the year 54,375,157 23,623,147

Less: Deposits with the maturity period beyond three months 2,567,596 4,128,652

51,807,561 19,494,495

Cash and cash equivalents at the beginning of the year 23,623,147 77,148,197

Less: Deposits with the maturity period beyond three months 4,128,652 2,264,815

19,494,495 74,883,382

2. The above cash flow statement has been prepared after considering the assets and liabilities transferred on account of amalgamation

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Shareholder Information

1. Dates of Book Closure September14, 2010 to September17, 2010 (both days inclusive)

2. Date and venue of the Annual General Meeting 10.00 a.m. on Friday, September17, 2010

Robert V Chandran Tower, Eighth Floor, # 149, Velachery

Tambaram Main Road, Pallikaranai, Chennai 600100.

3. Listing on Stock Exchanges 1. National Stock Exchange of India Ltd.,

Exchange Plaza, Bandra Kurla Complex,

Bandra(East),

Mumbai 400 051

2. Bombay Stock Exchange Limited,

Phiroze Jeejeebhoy Towers, Dalal Street,

Mumbai 400 001.

4. Listing Fees Paid for both the above stock exchanges for 2009-2010 and 2010-2011

5. Registered Office Robert V Chandran Tower, Seventh Floor, # 149, Velachery Tambaram

Main Road, Pallikaranai, Chennai 600100. India.

Tel: +91 44 4282 9000 - 5 Fax: +91 44 4282 9012

6. Registrars and Share Transfer Agent Integrated Enterprises (India) Limited,

(All Communication on share transfers in physical form, (Unit: California Software Co Ltd.),

share certificates, dividends, change of address, etc., Kences Towers, 2nd Floor,

may be addressed to them.) 1, Ramakrishna Street, North Usman Road,

T. Nagar, Chennai 600 017. India.

email : [email protected]

Tel: + 91 44 2814 0801, 2814 0802 /03

7. Share Transfer System:

The Company's shares are in compulsory Dematerialialization Segment for purposes of trading.

Share Transfers in Physical form are registered within a period of 15 days from the date of receipt by our Share Transfer Agents - Integrated

Enterprises (India) Ltd, provided the documents are complete and the shares under transfer are not in dispute. The share certificates duly

endorsed are being immediately despatched after effecting transfer. The total number of equity shares in physical form transferred during the

financial year 2009-10 was 5125.

8. Stock market data relating to shares

The Monthly high and low quotations as well as the volume of shares traded at National Stock Exchange (NSE) and The Stock Exchange, Mumbai

(BSE) for financial year 2009 2010 are:

9. Investor services – complaints received during the year

The Company /Share transfer agents received no complaints from the investors during the year and all these were resolved by the year end. The

company /registrars received five service /information requests during the year and all these were attended during the year .The opening and closing

balance of complaints and /or information /service requests was nil

Calsoft's share price charts (NSE and BSE) are given below at the end of this shareholder information section (after Sl No 14)

Month NSE BSE

High Low Volume High Low Volume

2009

April 20.05 14.00 23726 20.75 14.90 23245

May 27.15 18.05 110654 27.65 18.50 103108

June 30.00 22.30 78330 30.00 21.95 67937

July 26.95 20.60 49478 26.00 21.00 36112

August 35.15 23.20 174442 34.40 24.00 107119

September 37.60 29.20 226955 37.80 29.50 148699

October 45.00 31.20 161673 42.90 29.00 75021

November 38.95 29.20 76030 39.10 30.45 40063

December 38.60 34.30 55928 39.60 33.60 40930

2010

January 55.45 37.00 143388 53.85 38.70 64973

February 49.90 39.70 46393 49.40 39.55 26503

March 48.90 40.20 68569 48.60 40.60 62718



10. Legal proceedings

There are no legal cases pending against the Company other than appeals pending before Income Tax dept/Tribunals. The company is party in legal

proceedings it has filed in 4 cases in Civil Courts at Chennai for recoveries of amounts it considers due to it from the parties proceeded against.

11. Distribution of shareholding as on March 31, 2010

12. Categories of shareholders as on March 31, 2010

13. Financial calendar (tentative and subject to change)

Annual General Meeting 30th September, 2010

Financial Reporting for the first quarter ending June 30, 2009 July 31, 2009

Financial Reporting for the second quarter ending September 30, 2009 October 30, 2009

Financial Reporting for the third quarter ending December 31, 2009 January 29, 2010

Financial Reporting for the year ending March 31, 2010 June 30, 2010

Annual General Meeting for the year ending March 31, 2010 17th September, 2010

14. Dematerialisation of shares and liquidity

The Company's shares have been admitted as an eligible security in the depository system of National Securities Depository Ltd. [NSDL] and Central

Depository Services (India) Limited [CDSL], bearing an International Securities Identification Number (ISIN) INE526B01014

Trading on exchanges in the company's shares is permitted only in dematerialised form compulsorily as per the circular issued by Securities and

Exchange Board of India (SEBI).

As on March 31, 2010, 1,22,27,471 equity shares representing 98.89% of the Company's equity shares were held in dematerialised form.

The Company is periodically reminding shareholders of physical certificates as well on its website of the benefits and options of holding shares in

dematerialised form and to dematerialise their holdings.

No of Equity No of % of Total No of % of Equity

Shares held Shareholders Shareholders Shares Shareholding

Upto 500 2600 83.28 348055 2.81

501-1000 225 7.21 176731 1.43

1001-2000 128 4.10 196758 1.59

2001-3000 50 1.60 125252 1.01

3001-4000 15 0.48 54302 0.44

4001-5000 11 0.35 52189 0.43

5001-10000 46 1.47 335510 2.71

10000 and above 47 1.51 11075579 89.57

Total 3122 100.00 12365006 100.00

Category No of No of % of

Shareholders Shares held holding

A Promoter group:

Foreign Bodies corporate 1 8166208 66.043

Promoter group subtotal 1 8166208 66.043

B Public shareholding

Financial Institutions-Indian 1 300 0.002

Foreign Institutional investors 1 3230 0.026

Bodies Corporate 100 328541 2.657

Individual shareholders-holding

nominal capital upto Rs 1 lakh each 2955 1187869 9.607

Individual shareholders-holding

nominal capital in excess of Rs 1 lakh each 41 2654282 20.711

Others 23 24576 0.199

Public shareholding sub-total 2921 4198798 33.957

Total 3122 12365006 100.00



Where and in which year was Calsoft incorporated? Ms. N. Anita, Assistant Vice President Corporate Planning

Tel: +91 44 4282 9046Calsoft was incorporated at Chennai (Madras), in the State of Tamil Nadu, Email: [email protected] on February 6, 1992..

The email address for any shareholder enquiries is When did Calsoft commence its business [email protected] commenced its business operations on October 18, 1992.

For general enquiries the email address is : [email protected] did Calsoft have its Initial Public Offer and what was the

issue price? Where can I get more information about Calsoft and its Calsoft made its Initial Public Offer in February 1996. The issue price was Rs activities?30 per share. Information is available on the following website: www.calsoftgroup.com

Links are provided on the website for all other group companies and sites Which Stock Exchanges are Calsoft shares are listed?also.

The shares of Calsoft are listed on the Stock Exchanges at Mumbai (BSE)

and the National Stock Exchange (NSE). How do I transfer my shares or change my address?

a. Shares held in physical form - For transfer of shares held in physical What is the current equity capital of Calsoft?form, you have to write to the Company's Registrar and Share Transfer

Calsoft 's equity capital as on March 31, 2010 was Rs.12,36,50,060 Agents:

comprising 12365006 equity shares of face value Rs10 each.

Integrated Enterprises (India) Ltd, What is the employee strength of Calsoft?

Unit: California Software Co Ltd,As on March 31, 2010 Calsoft group (including all its Subsidiaries) had 945 “Kences Towers”, Second Floor, 1, Ramakrishna Street,employees, on its rolls. North Usman Road, T. Nagar, Chennai 600 017.

In how many locations does Calsoft have development centers Please despatch any certificates only by registered post or reliable courier and marketing offices? service to avoid any losses in transit. As on March 31, 2010 Calsoft has 2 software development centers in India,

For change of address of shares held in Physical form, please write to the 1 in Chennai, and 1 in Bangalore, 1 software development center cum Registrars at the address mentioned above giving reference of your folio marketing office each in USA, UK, Dubai and Singapore. Calsoft’s no. subsidiaries have 6 - development centers - 2 in USA (Fremont,Boston), 1 in

UK, and 3 in India (2 at Bangalore and 1 at Mysore). b. Shares held in demat format - Transfer of shares in electronic form or As on March 31, 2010 Calsoft had 5 marketing offices - India, USA, UK, change in address is effected through your Depository participant (DP). Dubai and Singapore and a representative office at Denmark. Its Please contact your DP.subsidiaries have 7- offices - 3 in India ( Bangalore – 2, Mysore-1), and 2 in

c. Any other general correspondence regarding the shares transfers or USA (Fremont, Boston), and 1 each in UK and Hong Kong . unresolved issues are to be addressed to

What is Calsoft's dividend record?The Company Secretary,Calsoft has been declaring and paying dividend since its inception in California Software Co Ltd.1992,except for the Financial years, i.e. 2000-01, 2001-02, 2003-04 and Robert V Chandran Tower, Seventh Floor,2008-09.# 149, Velachery Tambaram Main Road,

Investor contact. How do I contact Calsoft? Pallikaranai, Chennai-600 100

India.Members can contact the following official at telephone numbers /email

ids/postal addressHow do I convert my physical shares to Dematerialised form?

The Company Secretary. You may approach any authorized Depository Participant for opening of a

Tel: +91 44 4282 9000 demat client Account. They will guide you to fill the demat request form

Fax : +91 44 4282 9012 thereafter and undertake the process of converting the physical shares to

Email: [email protected] Demat form through interaction with our Registrars. The name/s in which

the demat account has been opened in have to be in the same order as they The postal address for all investor queries is: appeared in the physical share certificate.The Company Secretary,

Please visit our website www.calsoftgroup.com and refer the FAQ in California Software Co Ltd.‘investors section’ to get most of the recurring queries answered along with Robert V Chandran Tower, Seventh Floor,downloadable forms and templates (for physical shareholders). You may # 149, Velachery Tambaram Main Road,also write to us at the addresses as mentioned in point 11-c above for any

Pallikaranai, Chennai-600 100further clarity

India.Note: All references to Calsoft above stand for - California Software

The following officials can also be contacted /written to at the above Company Ltd

address for any unresolved issues / queries

Frequently Asked Questions







Global Offices

California Software Company Limited (Calsoft) is a

global Product Engineering & Enterprise Solutions

company with a strong background in development

and implementation. Our approach is to deliver total

solutions to customers leveraging our deep industry,

technology and product expertise, along with our

strategic global partnerships and alliances.

Singapore

UK

IndiaUAE

DenmarkUSA

9, Raffles Place Republic Plaza #48-01Singapore 048619Phone +65 6880 8229Fax +65 6536 8968

Singapore

Bredland 102850 NaerumDenmarkPhone +45 4033 0233Fax +45 3324 0902

Denmark

2 Clock Tower PlaceSuite 430Maynard, MA 01754Phone +1 978 938 4640Fax +1 978 461 1516

US

2 Churchill Court, 58 Station Road North Harrow Ha2 7SAEnglandPhone +44 208 427 9570 Fax +44 870 762 8967

2 Gayton Road, HarrowLondon HA1 2XUUKPhone +44 208 901 7560 Fax +44 870 762 8967

UK

3rd Floor, Cunningham Classic22, Cunningham RoadBangalore - 560 052, INDIAPhone +91 80 4114 8800/01Fax +91 80 4114 8805

Robert V Chandran Tower# 149, Velachery Main RoadPallikaranaiChennai - 600 100, INDIAPhone +91 44 4282 9000 Fax +91 44 4282 9012

India

5 EA 723, Dubai Airport Free ZonePO Box 293523Dubai, United Arab EmiratesPhone +9714 6091 741Fax +9718 4480 348

UAE

64-C1, Hootagalli Industrial Area Kasaba HobliMysore - 570 018, INDIAPhone +91 821 2404 900Fax +91 821 4287 774

39465 Paseo Padre ParkwaySuite 2900Fremont, CA 94538Phone +1 925 249 3000Fax +1 925 249 3031

REGISTERED OFFICE

Robert V Chandran Tower # 149, Velachery Tambaram Main RoadPallikaranai, Chennai 600 100, IndiaPhone +91 44 4282 9000Fax +91 44 4282 9012

[email protected] www.calsoftgroup.com|

Documents

· CALIFORNIA SOFTWARE COMPANY LTD. Registered Office: Robert V Chandran Tower, Seventh Floor, # 149, Velachery Tambaram Main Road, Pallikaranai, Chennai-600 100 Phone: +91-44-428290