California Software Company Ltd. कंपली की लेखा नीति

Mar 31, 2025

1. Corporate Information

California Software Company Limited (CIN: L72300TN1992PLC022135) was incorporated on 6th June 1992 under the provisions of the Companies Act and is registered with the Registrar of Companies, Chennai, Tamil Nadu. The Company''s equity shares are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The registered office of the Company is situated at: Workflo, Greeta Towers, Industrial Estate, Perungudi, OMR Phase 1, Chennai - 600096.

Business Overview

Over the last three decades, the Company has transitioned from a traditional IT services enterprise into a multiproduct SaaS provider, delivering digital transformation for SMEs and enterprises. The business model now emphasizes Al, automation, and customer engagement, ensuring seamless integration of commerce, communication, and intelligence.

Product Ecosystem

The Company has developed and commercialized a suite of integrated SaaS platforms:

• dSpeedllp - Al-enabled e-commerce and marketplace solution that enables businesses to launch, scale, and optimize digital stores with predictive insights.

• dBotMinds - Al-powered conversational commerce and chatbot engine for WhatsApp, web, and voice automation, covering lead capture, sales enablement, and customer support.

• dllltima - Modular super-app ecosystem integrating e-commerce, payments, logistics, loyalty, and personalized recommendations.

• dRyZe CRM - End-to-end customer lifecycle management platform with Al-driven sales automation, marketing intelligence, service workflows, and real-time analytics.

These products function as a unified SaaS ecosystem, empowering businesses to thrive in a digital-first economy.

Strategic Direction

Aligned with the theme "Empowering Tomorrow with Today''s Innovations", the Company continues to:

• Leverage Al-first architecture to automate decision-making and engagement.

• Provide affordable and scalable SaaS solutions tailored for SMEs and microbusinesses.

• Strengthen governance and compliance, adhering to SEBI (LODR) Regulations, 2015.

• Focus on sustainable growth through digital inclusion and empowerment of small businesses.

The standalone financial statements were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on May 30, 2025.

2. Significant Accounting Policies

2.1 Basis of Preparation of Financial Statements

The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, read with amendments, as applicable under Section 133 of the Companies Act, 2013.

• Prepared on a historical cost basis, except certain financial instruments measured at fair value.

• Assets and liabilities classified as current or non-current based on operating cycle and realization/settlement expectations.

• Deferred tax assets/liabilities are always classified as non-current

• The Company''s operating cycle is 12 months.

2.2 Use of Estimates

Preparation requires management judgment, estimates, and assumptions that affect reported assets, liabilities, income, and expenses. Key areas include:

• Revenue recognition on SaaS contracts.

• Useful life and capitalization of internally developed software.

• Impairment of intangible assets.

• Provisions for doubtful receivables.

Actual results may differ. Changes in estimates are accounted for prospectively.

2.S Property, Plant and Equipment (PPE)

• Carried at cost less accumulated depreciation and impairment.

• Cost includes purchase price, duties, and directly attributable expenses.

• Major improvements are capitalized; routine maintenance is expensed.

• Derecognized upon disposal or when no economic benefits remain.

• Gains/losses on disposal recognized in the Statement of Profit & Loss.

2.4 Depreciation

Depreciation is on Straight-Line Method (SLM) as per Schedule II of the Companies Act, 2013.
SI. No.	Asset Category	Useful Life
1	Buildings	30 years
2	Plant & Machinery	13 years
3	Computers	3 years
A	Vehicles	10 years
5	Furniture & Fixtures	10 years

2.5 Intangible Assets & Amortization

• Includes internally developed SaaS products (dSpeedUp, dBotMinds, dUltima, dRyZe CRM) and acquired licenses.

• Carried at cost less amortization and impairment.

• Amortized over 3-5 years, aligned to SaaS industry product lifecycles.

• Reviewed periodically for impairment triggers.

2.6 Impairment of Assets

• Assets reviewed annually for indicators of impairment.

• Impairment recognized when carrying value > recoverable amount (higher of fair value less cost to sell or value in use).

• Reversals allowed only to the extent that carrying value does not exceed depreciated cost had no impairment been recognized.

2.7 Inventory

The Company is engaged in SaaS-based services and does not deal in physical goods. Hence, Ind AS 2 - Inventories is not applicable.

2.8 Cash and Cash Equivalents

Includes cash in hand, demand deposits, and short-term liquid investments with maturities up to three months.

2.9 Cash Flow Statement

Prepared using the Indirect Method. Operating, investing, and financing activities are presented separately.

2.10 Revenue Recognition

Revenue is recognized under Ind AS 115:

• Subscriptions - over the subscription period.

• Implementation & setup fees - upon completion of obligations.

• Transaction-linked revenue - on transaction completion.

• Custom services - on percentage-of-completion basis.

Revenue excludes GST and similar taxes collected.

2.11 Employee Benefits

• Provident Fund - defined contribution plan, expensed when incurred.

• Gratuity & Leave Encashment - recognized based on actuarial valuation.

• ESOPs (if applicable) - fair value recognized over vesting period.

2.12 Taxation

• Current tax based on enacted tax laws.

• Deferred tax recognized on temporary differences using balance sheet approach.

• Deferred tax assets recognized when future taxable profits are probable.

2.13 Earnings Per Share (EPS)

• Basic EPS - net profit attributable to equity shareholders r weighted average shares.

• Diluted EPS - adjusted for potential dilutive shares.

2.14 Foreign Currency Transactions

• Transactions recorded at transaction-date rates.

• Monetary items revalued at closing rates.

• Exchange differences recognized in Profit & Loss.

2.15 Borrowing Costs

• Capitalized if directly attributable to qualifying assets.

• Otherwise expensed in the period incurred.

2.16 Events after the Reporting Period

Evaluated for adjustments/disclosure. No material events occurred post March 31, 2025.

2.17 Audit Trail Feature

MCA has mandated use of accounting software with audit trail from April 1, 2023. The Company uses Tally Prime.

• Due to technical issues, the audit trail module was not functional in FY 202A-25.

• Books are properly maintained with supporting evidence.

• Management is working to activate this feature at the earliest.

3. Trade Payable Aging Schedule

As on March 31, 2025, the Company has no outstanding trade payables.

A. Dividend Disclosure

The Company has not declared or paid dividends in the last five years. The Board has resolved to conserve resources until operations and profitability stabilize. Dividend distribution will be considered thereafter.

5. Compliance with Benami Transactions Act

The Company confirms no benami transactions were undertaken during FY 202A-25.

6. Utilization of Proceeds from Rights Issue

The Company raised ?A6.37 crores via Rights Issue of partly paid-up equity shares. As of March 31, 2025, ?11.59 crores (25%) has been collected.

Particulars	Amount (? in Crores)
Repayment of Promoter Loan	8.25
Rights Issue expenses & working capital	1.25
Balance held in current account	2.09
Total	11.59
The utilization is consistent with the objectives stated in the Letter of Offer.

7. Promoter Shareholding

As of March 31, 2025, the promoters hold 62.26% of the Company''s paid-up equity share capital.

8. Trade Receivables Aging

As on March 31, 2025, the Company''s receivables stood at ?18.00 crores, comprising:

• ?5.00 crores outstanding for less than 180 days, and

• ? 13.00 crores outstanding for more than 180 days.

The management is actively pursuing recovery of long-outstanding dues.

9. Segment Information

In compliance with Ind AS 108, the Company has identified a single reportable segment - Software Development and Services.

10. Contingent Liabilities

The Company has no contingent liabilities as on March 31, 2025.

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Mar 31, 2024

2 Significant Accounting Policies

2.1 Basis of Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Indian
Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules,
2015, read with Companies (Indian Accounting Standards) Amendment Rules, 2016, as
amended and notified under Section 133 of the Companies Act, 2013 (the Act) and other
relevant provisions of the Act.

The accounting policies adopted in the preparation of the financial statements are consistent
with those followed in the previous year.

Current Vs Non-Current Clarification

The Company presents assets and liabilities in the balance sheet based on current/ non¬
current classification. An asset is treated as current when it is:

? Expected to be realized or intended to sold or consumed in normal operating cycle Held
primarily for the purpose of trading

? Expected to be realized within twelve months after the reporting period, or

? Cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least twelvemonths after the reporting period.

All other assets are classified as non-current.

? A liability is current when:

? It is expected to be settled in normal operating cycle It is held primarily for the purpose of
trading

? It is due to be settled within twelve months after the reporting period, or

? There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period. The Company classifies all other liabilities as non-current.

? Deferred tax assets and liabilities are classified as non-current assets and liabilities.

? The operating cycle is the time between the acquisition of assets for processing and their
realization in cash and cash equivalents. The Company has identified twelve months as its
operating cycle.

The preparation of the financial statements in conformity with Ind AS requires the
Management to make estimates, judgments and assumptions. These estimates, judgments
and assumptions affect the application of accounting policies and the reported amounts of
assets and liabilities, the disclosures of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during the period. The
application of accounting policies that require critical accounting estimates involving complex
and subjective judgments and the use of assumptions in these financial statements have been
disclosed.

Accounting estimates could change from period to period. Actual results could differ from
those estimates. Appropriate changes in estimates are made as the Management becomes
aware of changes in circumstances surrounding the estimates. Changes in estimates are
reflected in the financial statements in the period in which changes are made and, if material,
their effects are disclosed in the notes to the financial statements.

23 Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price (including all duties and taxes
after deducting trade discounts and rebates if any) and any attributable cost of bringing the
asset to its working condition for its intended use. Such cost includes the cost of replacing part
of the plant and equipment and borrowing costs for long-term construction projects if the
recognition criteria are met. Likewise, when a major expenditure is incurred, its cost is
recognized in the carrying amount of the plant and equipment, if it increases the future
benefits from the existing asset. All other expenses on existing fixed assets, including day-to¬
day repair and maintenance expenditure, are charged to the statement of profit and loss for
the period during which such expenses are incurred.

For depreciation, the Company identifies and determines cost of assets significant to the total
cost of the assets having useful life that is materially different from that of the life of the
principal asset.

An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Cains or losses arising from de-recognition of Property, plant and equipment are
measured as the difference between the net disposal proceeds and the carrying amount of the
asset and are recognized in the statement of profit and loss when the asset is derecognized.

The residual values, useful lives and methods of depreciation of property, plant and equipment
are reviewed at each financial year end and adjusted prospectively, if appropriate.

For depreciation, the Company identifies and determines cost of assets significant to the total
cost of the assets having useful life that is materially different from that of the life of the
principal asset.

An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Cains or losses arising from de-recognition of Property, plant and equipment are
measured as the difference between the net disposal proceeds and the carrying amount of the
asset and are recognized in the statement of profit and loss when the asset is derecognized.

The residual values, useful lives and methods of depreciation of property, plant and equipment
are reviewed at each financial year end and adjusted prospectively, if appropriate.

Based on a technical assessment and a review of past history of asset usage, management of
the Company has not revised its useful lives to those referred to under Schedule II to the
Companies Act, 2013 (as amended).

Depreciation is provided on the straight-line method (SLM) using useful life prescribed in Part
C of Schedule II of the Companies Act, 2013.The useful life of the following class of assets
specified in the Part “C” of Schedule II of the Companies Act, 2013 are as follows:

2.5 Intangible assets and amortization

Cost of acquisition of intangible assets & any other direct costs incurred in relation to such
acquisition are recognized as Intangible assets. Following initial recognition, Intangible assets
are carried at cost less accumulated amortization and accumulated impairment losses, if any.
Intangible assets with finite lives are amortized over the available useful life of film rights
acquired while purchase and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortization period and the amortization method for an
intangible asset with a finite useful life are reviewed at least at the end of each reporting
period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortization period or
method, as appropriate, and are treated as changes in accounting estimates. The amortization
expense on intangible assets with finite lives is recognized in the statement of profit and loss,
unless such expenditure forms part of carrying value of asset.

2.6 Impairment of Assets

The carrying amounts of the Company’s property, plant and equipment and intangible assets
are reviewed at each reporting date to determine whether there is any indication of
impairment. If there are indicators of impairment, an assessment is made to determine
whether the asset’s carrying value exceeds its recoverable amount. Where it is not possible to
estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the cash generating unit to which the asset belongs.

Impairment is recognized in statement of profit and loss whenever the carrying amount of an
asset or its cash generating unit exceeds its recoverable amount. The recoverable amount is
the higher of net selling price, defined as the fair value less costs to sell, and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market rates and risks specific to the asset.

An impairment loss for an individual asset or cash generating unit are reversed if there has
been a change in estimates used to determine the recoverable amount since the last
impairment loss was recognized and is only reversed to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortization, if no impairment loss had been recognized. Impairment losses
were recognized in the statement of profit and loss.

Usually, the company is having inventory in serial content procured from the other parties. The
value of inventory includes cost of content bought from the content provider & cost of dubbing
charges for conversion of content into local regional language. Company has calculated the
value of inventory based on the available period of usage of serial content as per the
agreement entered by the service provider.

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Mar 31, 2015

Not Available

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Mar 31, 2014

1. Basis of preparation of Financial Statements

The consolidated financial statements consist of:

** California Software Company Ltd (Parent company incorporated in India)

** CSWL, Inc., incorporated in USA (100% Equity held by parent company) and its subsidiaries consisting of

* International Innovations Inc, USA (100% Equity held by CSWL Inc.,)

* Waldron Limited a Corporation incorporated in Hongkong in which CSWL, Inc. owns 100% of outstanding voting stock.

* AspireSoft Corporation (Aspiresoft) in which CSWL Inc holds 100% of the outstanding voting stock (P.Y. 51%).

** Aspire Communications Private limited (Aspire) incorporated in India,a 100% subsidiary of parent company and its 100% subsidary Aspire peripherals Private Ltd, Mysore.

All these financial statements have been prepared under the historical cost convention and comply with accounting standards in all material respects. Of the above CSWL Inc (under liquidation), Aspire Communications P ltd and its subsidiary Aspire peripherals P ltd have stopped their operations entirely. During the year Parent company has disinvested Inatech Infosolutions Private Limited, Bangalore and hence the financial statements do not include those companies results.

The consolidated financial statements are prepared in accordance with the Principles and procedures for the preparation and presentation of consolidated financial statements as laid down under AS-21 prescribed by the Institute of Chartered Accountants of India. Consolidated financial statements are prepared using uniform accounting policies.

The financial statements of the parent Company and subsidiaries have been combined on line by line basis by adding together the book values of like items of assets, liabilities, income & expenses after eliminating intra group balances / transactions.

2. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon the management''s evaluations of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from these estimates.

3. Revenue Recognition

Revenue from software development is recognised based on software developed and billed to clients as per the terms of specific contracts. Revenue from consultancy services is recognised when the services have been provided to the customer. Revenue from the sale of software products is recognised when the sale is completed with the passing of title. Revenue from maintenance services is accrued over the period of the contract.

Deferred revenue includes amounts currently due and payable from and payments received from customers for various expenses for services and amounts deferred if other conditions to revenue recognition is not met. Deferred revenue that is expected to be earned in the next twelve months is reflected as current liability.

Software revenue from software license agreements is recognized when collection is probable and the product is shipped.

4. Expenditure

Expenses are accounted on the accrual basis and provisions are made for all known losses and liabilities.

5. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost includes direct costs and financing costs related to borrowing attributable to to qualifying assets. CSWL Inc, Aspire Communications P ltd and its subsidiary Aspire peripherals P ltd is not having any fixed assets.

6. Impairment

Consideration is given at each Balance Sheet date to determine whether there is any modification or impairment of the carrying amount of the fixed assets. If any condition exists, an asset''s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of any asset exceeds recoverable amount.

7. Depreciation & Amortization

The parent Company and its Subsidiaries are charging depreciation under straight line method.

8. Leases

In the case of assets taken under operating lease, the rentals are charged to profit and loss account when due.

9. Inventories

As of 31st March 2014, none of the group companies were holding inventory.

10. Investments

Long term investments are stated at cost with provisions where necessary, for diminution other than temporary, in the value of investment.

11. Foreign Currency Transactions

Foreign currency transactions including expenses incurred on Trading/Non Trading Overseas offices and revenue accounts of onsite offices are accounted at the exchange rates ruling on the date of transaction. At the year end all monetary assets and liabilities denominated in foreign currency other than investments are restated at the closing exchange rates. Exchange differences arising out of actual payments/realizations and from the year end restatement referred to above are reckoned in the profit and loss account.

Translation of Financial Statements of the Overseas Subsidiaries denominated in US dollar to Indian rupee.

i) For the purpose of consolidation, the operation of overseas subsidiaries are considered non integral in nature and on the basis of AS-9 prescribed by the Institute of Chartered Accountants of India, during the current financial year with effect from 1 April 2005, their assets and liabilities are translated at the year-end exchange rate. The resultant translation adjustment is reflected as a separate component of Shareholders funds as ''Cumulative Translation Reserve''. Only in case of disposal and dissolution of Non Indian Subsidiaries the balance in Currency Translation reserve in relation to the subsidiary will stand transferred to Profit and Loss Account. Income and expenditure are accounted in the consolidated Profit and Loss Account of each year as given below:

a) Revenues and expenses are converted into Indian Currency at the average rate prevailing during the year.

b) Depreciation on Fixed Assets is converted at the average rate prevailing during the year.

12. Employee Benefits

A) California Software company Limited

The company has transferred its entire employees except one in the administrative office before the end of previous year. PF is being paid as per rules.

B) CSWL Inc, USA

The company has stopped its operations and is having no employees.

C) Aspire communications P Ltd and Aspire Peripherals P ltd did not have any employees during the period.

13. Taxation

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.

In view of the substantial losses/stoppage of operations, parent company and subsidiaries except Inatech Infosolutions Limited has not considered deferred tax effect.

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Mar 31, 2013

1. Basis of preparation of Financial Statements

The financial statements are prepared under historical cost convention, in accordance with Generally Accepted Accounting Principles ("GAAP") in India and to comply with applicable Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon the management''s evaluations of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from these estimates.

3. Revenue Recognition

Revenue from software development is recognised based on software developed and billed to clients as per the terms of specific contracts.

Revenue from consultancy services is recognised when the services have been provided to the customer.

Revenue from the sale of software products is recognised when the sale is completed with the passing of title.

Revenue from maintenance services is accrued over the period of the contract.

4. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost includes direct costs and financing costs related to borrowing attributable to qualifying assets.

5. Impairment

Consideration is given at each Balance Sheet date to determine whether there is any modification or impairment of the carrying amount of the fixed assets. If any condition exists, an asset''s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of any asset exceeds recoverable amount.

6. Depreciation

Depreciation on tangible fixed assets is calculated on straight- line method at the rates prescribed in Schedule XIV of the Companies Act, 1956, except for computers which are depreciated over a period of 3 Years. Intangible assets are amortized over their estimated useful lives (Computer Software 2 Years ; Product Solutions 5 Years).

Depreciation charge on additions / deletions is restricted to the period of use.

Assets individually costing $ 5,000 or less are fully depreciated in the year of addition.

In the event the useful life of any fixed assets being assessed to be lower than the life derived from the rates specified above, the book value of such assets is charged off as depreciation over their balance useful lives.

7. Leases

In the case of assets taken under operating lease, the rentals are charged to profit and loss account when due.

8. Investments

Long term investments are stated at cost with provisions where necessary, for diminution other than temporary, in the value of investment.

9. Foreign Currency Transactions

Foreign currency transactions including expenses incurred on Trading / Non Trading Overseas offices and revenue accounts of onsite offices are accounted at the exchange rates ruling on the date of transaction. At the year end all monetary assets and liabilities denominated in foreign currency other than investments are restated at the closing exchange rates. Exchange differences arising out of actual payments / realisations and from the year end restatement referred to above are reckoned in the profit and loss account.

10. Employee Benefits

The Company has transferred its entire employees except one in the administrative office before the end of this year. However till the date of such transfer following employee benefits were provided.

a. Short Term

Short term Employee Benefits are recognised as expenses as per the company''s scheme based on the expected obligation.

b. Long Term

Liability in respect of long term Employee Benefits in the nature of accumulated compensated absence is provided for based on actuarial valuation using projected unit credit method.

c. Post Retirement

i) Provident fund

This is a defined contribution plan and contributions made to the fund, in accordance with the applicable rules/statutes are charged to revenue. The Company has no further obligation for future provident fund benefits other than aforesaid contributions.

ii) Superannuation

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employee''s salary towards superannuation fund administered by Life Insurance Corporation of India and are charged to profit and loss account.

iii) Gratuity

This is a defined benefit plan. The Company has subscribed to California Software Company Employees'' Group Gratuity Scheme, which is being administrated by a Trust set up for this purpose under the aegis of the Life Insurance Corporation of India (LIC). Liabilities with regard to the Gratuity payable to the employees are determined by actuarial valuation using projected unit credit method, based upon which, the Company makes contribution to the Trust. The funds contributed to the Trust are remitted to the LIC. Actuarial gains and losses comprising of experience adjustments and the effects of changes in actuarial assumptions are recognised immediately in the profit and loss account as income or expense.

11. Taxation

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 incomes 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. As the company has been incurring losses for several years now entire deferred tax asset has been written back in the previous year.

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Mar 31, 2011

1. Basis of preparation of Financial Statements

The financial statements are prepared under historical cost convention, in accordance with Generally Accepted Accounting Principles (“GAAP”) in India and to comply with applicable Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon the management's evaluations of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from these estimates.

3. Revenue Recognition

Revenue from software development is recognised based on software developed and billed to clients as per the terms of specific contracts. Revenue from consultancy services is recognised when the services have been provided to the customer.

Revenue from the sale of software products is recognised when the sale is completed with the passing of title. Revenue from maintenance services is accrued over the period of the contract.

4. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost includes direct costs and financing costs related to borrowing attributable to qualifying assets.

5. Impairment

Consideration is given at each Balance Sheet date to determine whether there is any modification or impairment of the carrying amount of the fixed assets. If any condition exists, an asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of any asset exceeds recoverable amount.

6. Depreciation

Depreciation on tangible fixed assets is calculated on straight-line method at the rates prescribed in Schedule XIV of the Companies Act, 1956, except for computers which are depreciated over a period of 3 Years. Intangible assets are amortized over their estimated useful lives (Computer Software 2 Years ; Product Solutions 5 Years).

Depreciation charge on additions / deletions is restricted to the period of use.

Assets individually costing Rs.5,000 or less are fully depreciated in the year of addition.

In the event the useful life of any fixed assets being assessed to be lower than the life derived from the rates specified above, the book value of such assets is charged off as depreciation over their balance useful lives.

7. Leases

In the case of assets taken under operating lease, the rentals are charged to profit and loss account when due.

8. Investments

Long term investments are stated at cost with provisions where necessary, for diminution other than temporary, in the value of investment.

9. Foreign Currency Transactions

Foreign currency transactions including expenses incurred on Trading / Non Trading Overseas offices and revenue accounts of onsite offices are accounted at the exchange rates ruling on the date of transaction. At the year end all monetary assets and liabilities denominated in foreign currency other than investments are restated at the closing exchange rates. Exchange differences arising out of actual payments / realisations and from the year end restatement referred to above are reckoned in the profit and loss account.

10. Employee Benefits

a. Short Term

Short term Employee Benefits are recognised as expenses as per the company’s scheme based on the expected obligation.

b. Long Term

Liability in respect of long term Employee Benefits in the nature of accumulated compensated absence is provided for based on actuarial valuation using projected unit credit method.

c. Post Retirement

i) Provident fund

This is a defined contribution plan and contributions made to the fund, in accordance with the applicable rules/statutes are charged to revenue. The Company has no further obligation for future provident fund benefits other than aforesaid contributions.

ii) Superannuation

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employee’s salary towards superannuation fund administered by Life Insurance Corporation of India and are charged to profit and loss account.

iii) Gratuity

This is a defined benefit plan. The Company has subscribed to California Software Company Employees’ Group Gratuity Scheme, which is being administrated by a Trust set up for this purpose under the aegis of the Life Insurance Corporation of India (LIC). Liabilities with regard to the Gratuity payable to the employees are determined by actuarial valuation using projected unit credit method, based upon which, the Company makes contribution to the Trust. The funds contributed to the Trust are remitted to the LIC. Actuarial gains and losses comprising of experience adjustments and the effects of changes in actuarial assumptions are recognised immediately in the profit and loss account as income or expense.

11.Taxation

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 incomes 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.

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Mar 31, 2010

1. Basis of preparation of Financial Statements

The financial statements are prepared under historical cost convention, in accordance with Generally Accepted Accounting Principles (“GAAP”) in India and to comply with applicable Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon the managements evaluations of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from these estimates.

3. Revenue Recognition California Software Company Limited

Revenue from software development is recognised based on software developed and billed to clients as per the terms of specific contracts. Revenue from consultancy services is recognised when the services have been provided to the customer. Revenue from the sale of software products is recognised when the sale is completed with the passing of title. Revenue from maintenance services is accrued over the period of the contract.

4. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost includes direct costs and financing costs related to borrowing attributable to qualifying assets.

5. Impairment

Consideration is given at each Balance Sheet date to determine whether there is any modification or impairment of the carrying amount of the fixed assets. If any condition exists, an assets recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of any asset exceeds recoverable amount.

6. Depreciation

Depreciation on tangible fixed assets is calculated on straight-line method at the rates prescribed in Schedule XIV of the Companies Act, 1956, except for computers which are depreciated over a period of 3 Years. Intangible assets are amortized over their estimated useful lives (Computer Software 2 Years ; Product Solutions 5 Years).

Depreciation charge on additions / deletions is restricted to the period of use.

Assets individually costing Rs.5,000 or less are fully depreciated in the year of addition.

In the event the useful life of any fixed assets being assessed to be lower than the life derived from the rates specified above, the book value of such assets is charged off as depreciation over their balance useful lives.

7. Leases

In the case of assets taken under operating lease, the rentals are charged to profit and loss account when due.

8. Investments

Long term investments are stated at cost with provisions where necessary, for diminution other than temporary, in the value of investment.

9. Foreign Currency Transactions

Foreign currency transactions including expenses incurred on Trading / Non Trading Overseas offices and revenue accounts of onsite offices are accounted at the exchange rates ruling on the date of transaction. At the year end all monetary assets and liabilities denominated in foreign currency other than investments are restated at the closing exchange rates. Exchange differences arising out of actual payments / realisations and from the year end restatement referred to above are reckoned in the profit and loss account.

10. Employee Benefits

a. Short Term

Short term Employee Benefits are recognised as expenses as per the company’s scheme based on the expected obligation.

b. Long Term

Liability in respect of long term Employee Benefits in the nature of accumulated compensated absence is provided for based on actuarial valuation using projected unit credit method.

c. Post Retirement i) Provident fund

This is a defined contribution plan and contributions made to the fund, in accordance with the applicable rules/statutes are charged to revenue. The Company has no further obligation for future provident fund benefits other than aforesaid contributions.

ii) Superannuation

This is a defined contribution plan. The Company contributes a sum equivalent to 15% of eligible employee’s salary towards superannuation fund administered by Life Insurance Corporation of India and are charged to profit and loss account.

iii) Gratuity

This is a defined benefit plan. The Company has subscribed to California Software Company Employees’ Group Gratuity Scheme, which is being administrated by a Trust set up for this purpose under the aegis of the Life Insurance Corporation of India (LIC). Liabilities with regard to the Gratuity payable to the employees are determined by actuarial valuation using projected unit credit method, based upon which, the Company makes contribution to the Trust. The funds contributed to the Trust are remitted to the LIC. Actuarial gains and losses comprising of experience adjustments and the effects of changes in actuarial assumptions are recognised immediately in the profit and loss account as income or expense.

11. Taxation

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 incomes 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.