California Software

1. Change in Accounting policy
 
 The useful life of Computers has been re-estimated by the management
 and accordingly the depreciation rate has been changed from 16.67% to
 33.33%.  As a result of this change, the depreciation charge for the
 year has increased and the profit for the year decreased by Rs.
 15,752,957
 
 2.The 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.
 
 3. 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 dimunition and hence no provision for the decline in value
 has been considered in these accounts.
 
 4. Intangible asset
 
 Product solutions represent cost of Product development capitalized
 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)
 
 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.
 
 5. Debtors include Rs. 443,895,290 due from CSWL .There are significant
 delays in recovery of the outstanding in respect of above balance. As a
 prudent measure an amount of Rs. 58,055,604 has been provided and the
 rest are considered good and recoverable.
 
 6. 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 recognised in these accounts pending completion of the study
 
 7. 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
 
 8. Segment Reporting
 
 8.1 The Company’s operations predominantly relate to providing
 development of software to customers globally operating in various
 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.
 
 9. Obligations on long-term, non-cancelable operating Leases The lease
 rentals charged for the year ended March 31,2009/ 2008 and maximum
 obligations on long-term, non-cancelable operating leases payable as
 per the rentals stated in the respective agreements are as follows :
 
 10. 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.
 
 11. Deferred taxation
 
 The deferred tax liability of Rs 25,500,000 (2008-Rs 11,700,000) has
 arisen mainly on account of difference between book and tax written
 down value of depreciable fixed assets
 
 1.  As at March 31, 2009 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
 
 2. In the absence of details of specific invoice particulars in the
 remittance amounts realized from debtors are adjusted on First in First
 out Basis.
 
 3.  Expenses reimbursed to CSWL of Rs. 109,538,374 and to Chemoil
 Advanced Management Services Pvt. Ltd., India (CAMS) of Rs. 5,448,920
 are based on Debit notes received from them.
 
 4. Except in respect of the following there are no statutory dues of
 Customs Duty, Excise Duty, Cess, Wealth Ta x and Income Tax, which have
 not been deposited on account of a dispute