CALSOFT TO ACQUIRE INTERNATIONAL INNOVATIONS INC.

Chennai, India - 13 November 2007

California Software Co Ltd (Calsoft) today announced the signing of a Letter Of Intent (LoI) to acquire 100% equity stake of International Innovations Inc., Mountain View, California, USA. The LoI will culminate into a definitive share purchase agreement, subject to standard closing conditions, necessary approvals and completion of all formalities. The entire process is expected to be completed by Dec 31, 2007.

International Innovations Inc. (Innovations) is a technology consulting firm specializing in Information Management Solutions. Innovations delivers Business Intelligence tools, Analytics, Business Rules Management, and Enterprise Search capabilities that helps clients improve their decision making processes across all business functions. Innovations serves clients in diverse sectors such as Mortgage Banking and Financial Services, High Technology, Manufacturing, Travel and Transportation, and Telecommunications. Select clients include Cisco Systems, Charles Schwab, Washington Mutual Inc., APL, and Wells Fargo.

Innovations complements its capabilities through a powerful alliance network, and partnerships with leading software and hardware vendors including Siebel, iLog (for the year 2006, Innovations was voted the best partner by iLog) and Aduna.

Innovations is expected to add $ 2.3 million with $ 300,000 profit after tax to the consolidated revenues and profit of Calsoft in the next 12 months.
“Innovations brings its expertise and presence in the Information Management market in the USA, to Calsoft’s enterprise offerings and capabilities, a key focus area for the company. This will further enhance our value offering globally”, said Mr. S (Sam) Santhosh, Managing Director & CEO, Calsoft.

Mr. Piyush Govil, Founder and CEO of Innovations said, “Calsoft’s strategic equity stake will further enhance Innovations’ capabilities and global reach. Joining the Calsoft Group will allow us to serve our clients even better by offering them greater choice and the support of a ‘glocal’ (global+local) team”.

Innovations valuation will be capped at maximum of $1.32 million (approx Rs 53 million). The deal envisages phased payments by Calsoft over a period of one year from the conclusion of a definitive share purchase agreement and based on certain performance parameters.

Calsoft plans to continue its dual growth strategy – organic growth combined with prudent and focused acquisition that brings synergies to its customer offerings. Calsoft posted consolidated revenues of USD 36 million (Rs.169 crores) in year ended March 31, 2007 and achieved consolidated revenues of USD 28million(Rs 114 crores) in 1st half -year ended Sept 2007 of current fiscal year.

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