THE DESCARTES SYSTEMS GROUP INC.

The goodwill on the Dexx acquisition arose as a result of their assembled workforce and the combined strategic
value to our growth plan. The goodwill is not deductible for tax purposes.
No pro forma results of operations for the Dexx transaction have been presented as it is not material to our
consolidated financial statements.
Note 4 - Cash, Cash Equivalents and Short-Term Investments
January 31, January 31,
2011 2010
Cash and cash equivalents
Cash on deposit with banks 69,644 89,554
Total cash and cash equivalents
Short-term investments
69,644 89,554
Certificates of deposit - 5,071
Total short-term investments - 5,071
Total cash, cash equivalents and short-term investments 69,644 94,625
We have operating lines of credit in Canada aggregating $3.0 million (CAD 3.0 million) as at January 31, 2011,
of which none was utilized (nil at January 31, 2010). Borrowings under these facilities bear interest at prime
based on the borrowed currency (3.0% on Canadian dollar borrowings and 3.25% on US dollar borrowings at
January 31, 2011), are due on demand, and are secured by our investment portfolio and a general assignment of
inventory and accounts receivable.
As at January 31, 2011 we have outstanding letters of credit of approximately $0.1 million (EUR 0.1 million)
related to three of our leased premises (nil at January 31, 2010).
Fair Value Measurements
ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”) defines fair value, establishes a
framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The following fair value hierarchy prioritizes
the inputs used in the valuation methodologies in measuring fair value into three levels:
Level 1 — Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar
assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that
are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Significant unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value.
As at January 31, 2011 and January 31, 2010, no assets were measured at fair value on a recurring basis.
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