RISKS IN RELATION TO FIRST OFFER 

This being the first issue of shares of Cerebra Integrated Technologies Limited, there has been no formal market for the shares of the Company. The issue price as has been determined and justified by the Lead Manager and Issuer as stated under " basis of Issue Price" on page number ( ) should not be taken to be indicative of the market price of the equity shares after the equity shares are listed. No assurance can be given regarding an active or sustained trading in the equity shares of the company or regarding the price at which the equity shares will be traded after listing.

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk factors carefully before taking an investment decision in this offering. For taking an investment decision investors must rely on their own examination of the issuer and the issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India nor does the Securities and Exchange Board of India guarantee the accuracy or the adequacy of this document.

The attention of Investors is drawn to the statement of Risk Factors appearing on Page No. ".. "of the offer document.

ISSUER'S ABSOLUTE RESPONSIBILITY

The issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Offer Document contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Offer Document is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

GENERAL DISCLAIMER

INVESTORS MAY NOTE THAT CEREBRA INTEGRATED TECHNOLOGIES LIMITED ACCEPTS NO RESPONSIBILITY FOR STATEMENTS MADE OTHERWISE THAN IN THIS PROSPECTUS OR IN THE ADVERTISEMENTS OR ANY OTHER MATERIAL ISSUED BY OR AT THE INSTANCE OF THE ISSUER COMPANY OR THE LEAD MANAGER AND THAT ANYONE PLACING RELIANCE ON ANY OTHER SOURCE OF INFORMATION WOULD BE DOING SO AT HIS/HER OWN RISK.

LISTING ARRANGEMENTS

The Equity Shares are proposed to be listed on The Stock Exchanges at Bangalore, Ahmedabad and Calcutta. 

LEAD MANAGERS TO THE ISSUE REGISTRARS TO THE ISSUE

CANARA BANK KARVY CONSULTANTS LIMITED

Merchant Banking Division `Karvy House', No.46, Avenue 4 

World Trade Centre Street No. 1, Banjara Hills

FKCCI Building, KG Road Hyderabad - 500 034

BANGALORE - 560 009 Phone No.: 040-3312454

Phone No.:91-80-2283917 Fax No.: 080-3460819

Fax No.:91-80-2256636 

E-mail:canbank@blr.vsnl.net.in 

ISSUE CLOSES ON : . March 2000

Contents Page No. Contents Page No. 

Risk factors and management perception Technologies and process 

Highlights Foreign Collaboration 

PART I Utilities / Power, Water, Manpower Training 

I. GENERAL INFORMATION Export Obligation Company Y2K Compliance 

Licenses/Approval(s) Schedule of Implementation 

Listing Industry Scenario 

Allotment/Refund SWOT Analysis of Indian Software Industry 

Issue Programme SWOT Analysis of the Company 

II. CAPITAL STRUCTURE OF THE COMPANY Marketing 

III. TERMS OF THE PRESENT ISSUE Strategic Marketing Alliance 

Terms of payment Current orders on hand 

Rights of instrument holders Management discussion of financial condition 

Procedure for application/Mode of payment VI. PROJECTED PROFITABILITY General Instructions Basis of Issue Price 

Joint Applications VII. COMPANY UNDER SAME MANAGEMENT 

Multiple applications VIII. OUTSTANDING LITIGATION 

Applications under Power of Attorney Prosecution 

Provisions of Section 269 ss of IT Act Default 

Tax Benefits Material Development 

-To Company RISK FACTORS AND MANAGEMENT'S 

PERCEPTION THEREOF 

-To Resident share holders PART II 

-To Non Resident share holders A GENERAL INFORMATION 

IV. PARTICULARS OF THE ISSUE Authority for the present issue 

Objects of the issue Consents 

Appraisal of the project Experts opinion 

Cost of the project Disposal of application Money received 

Means of finance Utilisation of issue funds 

Working Capital Allotment /Refund 

Bridge Loan Issue of Share Certificate 

Term Loan Schedule and basis of allotment 

V. COMPANY, MANAGEMENT, PRESENT

BUSINESS AND PROJECT Interest on excess application money 

History, Main objects/Present business Investor Grievances redressal system 

Financial Performance B FINANCIAL INFORMATION 

Subsidiaries Auditors report 

Promoters and their back ground C STATUTORY AND OTHER INFORMATION 

Board of Directors Minimum Subscription 

Advisory panel to Board Option to subscribe 

Management Team Capitalisation of reserves 

Details of firms/companies/ ventures connected Previous Issue 

Outstanding litigations/defaults/disputes Revaluation of assets 

Project and Product/services Details Interest of Promoters and Directors 

Location Main provisions of the Articles of association 

Land and Building D MATERIAL CONTRACTS AND INSPECTION

OF DOCUMENTS 

Computers Material Contracts 

Overseas office establishment Documents 

Products and services PART III 

Declaration 

The Act The Companies Act, 1956 

Board The Board of Directors of the company 

Cerebra/ or the Company/CITL Cerebra Integrated Technologies Ltd. 

ROC Registrar of Companies 

RBI Reserve Bank of India 

SEBI The Securities and Exchange Board of India 

USA The United States of America 

PBDIT Profit Before Depreciation, Interest and Tax

PAT Profit After Tax

PAN Permanent Account Number 

RISK FACTORS AND MANAGEMENT PERCEPTION 

INTERNAL 

1. The promoters of the company are first generation entrepreneurs and the project is the first major venture. The project may encounter risks associated with such ventures.

Management Perception: The Company is in operation for the past eight years and the promoters have gained adequate experience in the IT Industry and hence the management does not foresee any problem in completion of the Proposed Venture.

2. The Company is yet to place orders for plant and machinery worth Rs 92.06 Lakhs 

Management Perception: The machinery to be procured are available without any lead time and the company will procure these items at the appropriate time. 

3. The Company is proposing to purchase Land measuring 20000 sq. Feet and to construct a building of 20,000 sq. feet to accommodate the proposed software development centre in the vicinity of Electronic city, Bangalore. The land is yet to be purchased and any delay in acquiring land & constructing building thereon will affect the implementation schedule of the Project and thereby the profitability of the Company.

Management Perception: The Company is in the process of identifying the land for the project. The company is confident of purchase of Land and construction of Building as per schedule. The company till such time intends to expand its software activities in a rented premises for a brief period till the completion of the building and hence the projections will not be affected.

4. The key posts for Software Division are yet to be filled up. 

Management Perception: The Company has identified senior level software professionals with wide ranging experience in the areas the company intends to focus and would complete recruitment by
April 2000. 

5. The company has made a SWOT analysis of its operation vis-a-vis that of the Software Industry in which the company is exposed to certain threats and weaknesses.

Management Perception: The SWOT analysis is general in nature and is applicable to any Software Company. The Promoters have sufficient and necessary experience to effectively overcome the deficiencies referred therein.

6. The Company is yet to set up a branch in USA for which a sum of Rs.210.00 Lakhs are earmarked in the project.

Management Perception: The Company has already identified the location of its office at North Potomac, MD, USA.. and has applied to the Reserve Bank of India on 14.2.2000 for permission to set up an overseas office. The company has entered into a technical tie-up with Any Tech Inc, USA for its overseas activities. 

7. Hitherto, the company's major revenue was attributed to Hardware production and Sales and now the company is entering into software development.

Management Perception: The Company's business hitherto was mostly in Hardware production and Sales. The sales for the period 1st April 1999 to 31st December 1999 includes Software trading sales amounting to Rs. 156.80 lakhs in a total turnover of Rs. 1929.24 lakhs. The company is confident of achieving its

8. In the project a sum of Rs.503.44 Lakhs has been earmarked as working capital requirements of both hardware and software divisions, since no bank borrowings are proposed for working capital, it may be difficult for the company to meet future working capital requirements.

Management Perception: Presently the company is enjoying the working limits of Rs.640.00 lakhs with Canara Bank and Canbank Factors Ltd. For continuous operations, the company is confident of generating adequate revenue from the proposed operations to meet the future working capital requirements besides approaching Canara Bank.

EXTERNAL 

1. The Information Technology industry is characterized by rapid technology obsolescence and intense competition. The liberalised policies of the Government could bring forth competition from domestic players and foreign companies.

Management Perception: The company adopts latest technologies and the technical skills of the personnel are updated on a continuous basis through well designed training programmes.

2. High Employee turnover in the Software Industry.

Management Perception: Excellent working conditions with latest computing environment & the benefits to the employees would be maintained at a level to ensure their continuity. Further, to continuously upgrade the skills of its employees as per the business requirements, the company has various training programs. The Company has created CEREBRA ESOP Trust to retain the best available talents by enabling them to contribute and share in the growth of the Company. Majority of the employees are already shareholders of the Company.

3. Any adverse changes in the Government policies on computer hardware/software Industry levies, Custom regulations etc. may affect the performance and profitability of the company.

Management Perception: The IT industry has been identified as a major thrust area by the Government of India & incentives are being provided to encourage this industry with a major thrust on globalisation and hence the Company does not fore see any shift in the Government's policy which will be detrimental to this industry. 

4. Export turnover is subject to exchange fluctuations and can affect the earnings of the Company.

Management Perception: The company proposes to concentrate on exports mainly to developed economies like USA, UK, etc. where the exchange rate vis-à-vis the rupee has been in favour of the exporter. 

5. The market for Software Products & Services is highly competitive.

Management Perception: The company has inherent strengths with reference to its size, past track record satisfied customer base, marketing reach, constant technology upgradation latest computing and communication infrastructure and professionally qualified, experienced manpower, which will provide the competitive edge.

Information technology sector in which the company is operating in, is witnessing abnormally high valuation presently and possibilities can not be ruled out that the same may not continue in future

The investors are advised to refer to the para on ` BASIS FOR ISSUE PRICE' on page no. " " before making an investment in this issue.

Investors may note that in case of over subscription, allotment shall be on proportionate basis.

HIGHLIGHTS

1. A Profit making, Dividend paying Company with a long standing market presence of over Eight years in the IT Sector, engaged in manufacture of Personal computers, servers, networking, trading of peripherals and software development.

2. One of the few companies to get different range of PCs manufactured and certified under the stringent

3. The project has been appraised and funded by Canara Bank.

4. ISO 9002 certification from KEMA, Netherlands (NVT-QC) India on 01.01.1999 for production, installation, services and software solutions.

5. Participation in the Equity Capital of the Company by,

a. Mutual Funds, viz.- Sun F&C Mutual Funds, Birla Sunlife AMC Fund, GIC Mutual Fund, Reliance Mutual Fund, Empire International Holdings Ltd., 

b. Venture Capital Fund - Karnataka Information Technology Venture Capital Fund (KITVEN Fund), a Karnataka Government undertaking.

c. Financial Institution - Karnataka State Industrial Investment & Development Corporation Ltd.(KSIIDC)

d. Bank - Bank of Madura Ltd.

e. Corporate - Karvy Consultants Ltd.

6. The company has more than 500 major customers viz., Madras Regional Purchase Unit,Accountant General Employees Co-operative Bank Ltd.,Electronics Corporation of India Ltd.,Bharath Electronics Ltd., HTL Ltd.,DOT,ADA, NAL, IGCAR, RBI, Vysya Bank,Bank of India, BPL Telecom Ltd., Trent Ltd., Alcatel Network Systems India Ltd.,John Fowler (India) Ltd., Thermax Ltd.,Karnataka Agro Chemicals Pvt. Ltd.,Evolus India Pvt. Ltd., Technology Media Group, New International House of Travels, Shidore Microsys Pvt. Ltd., Methodex Systems Ltd.,

7. Cerebra Servers have been ranked the No 1 in terms of performance among corporate contenders which included Acer, Compaq, Dart and Nest - Source CHIP Computer Magazine edition February, 2000.

8. Listing at Bangalore, Ahmedabad and Calcutta Stock Exchanges.

This being the first issue of shares of the Company there has been no formal market for the shares of the Company. The issue price should not be taken to be indicative of the market price of the equity shares after the equity shares are listed. No assurance can be given regarding an active or sustained trading in the equity shares of the company or regarding the price at which the equity shares will be traded after listing. 

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision investors must rely on their own examination of the issuer and the issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India nor does the Securities and Exchange Board of India guarantee the accuracy or the adequacy of this document.

ISSUER'S ABSOLUTE RESPONSIBILITY

The issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Offer Document contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Offer Document is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respects.

INVESTORS MAY NOTE THAT CEREBRA INTEGRATED TECHNOLOGIES LIMITED ACCEPTS NO RESPONSIBILITY FOR STATEMENTS MADE OTHERWISE THAN IN THIS PROSPECTUS OR IN THE ADVERTISEMENTS OR ANY OTHER MATERIAL ISSUED BY OR AT THE INSTANCE OF THE ISSUER COMPANY OR THE LEAD MANAGER AND THAT ANYONE PLACING RELIANCE ON ANY OTHER SOURCE OF INFORMATION WOULD BE DOING SO AT HIS/HER OWN RISK.

PART I - GENERAL INFORMATION

GOVERNMENT APPROVAL

The Company has obtained certificate of registration as a permanent Small Scale Industry Unit vide registration No. 08:01:24242:PMT:SSI: ELECT dated 05.11.1992 from Directorate of Industries and Commerce, Government Of Karnataka.

The company is also registered with National Small Industries Corporation vide permanent registration No NSIC/KER/GP/RS/KT C-52/95 dated 15.06.1995. 

The company is registered under Factories Act in the year 1996 vide registration No MYB 9553 dated 6.4.1996 and subsequently vide No MYB 11125 dt 15.02.2000 for S5, 3rd Cross, 2nd Stage Peenya , Bangalore.

The Company was registered under Central Excise, East of Chord Road Range, Rajajinagar Division, Bangalore vide Registration No 1/92/090302 dt 14.07.1992 and is now registered under Central Excise, Peenya IV Range, IX Division, Bangalore vide Registration Certificate No 07/99 dt 04.11.1999 due to shifting of manufacturing activity.

The Company was allotted Importer Exporter Code (IEC) Number 0794005632 vide file no 07/04/130/01038/AM94-95 dated 7/11/1994 by Controller of Imports and Exports, Office of the Joint Director General of Foreign Trade from Ministry of Commerce, Government of India. 

The Company obtained Certificate of registration vide 717-PT-/811/94-95 on 1/4/1994 as "Employer" under Karnataka Tax on Professions, Trades Callings and Employment Act, 1976.

Kst Registration - 7040632-7 Dated 5.4.1994

Cst Registration - 7045632-0 Dated 5.4.1994

It must be distinctly understood that in giving the above permissions, the Central/State Governments do not take any responsibility for the financial soundness of any scheme or for the correctness of any of the statements made or opinions expressed with regard to them. 

Copies of all the above approvals are open to public inspection at the Registered Office of the Company.

SEBI DISCLAIMER CLAUSE

As required, a copy of this draft Prospectus has been submitted to Securities and Exchange Board of India (SEBI). It is to be distinctly understood that the submission of Prospectus to SEBI should not, in any way, be deemed or construed that the same has been cleared or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the issue is proposed to be made, or for the correctness of the statements made or opinions expressed in the offer document. Lead Manager, Canara Bank has certified that the disclosures made in the offer document are generally adequate and are in conformity with SEBI guidelines for Disclosures and Investor protection for the time being in force. This requirement is to facilitate investors to take an informed decision for making investment in the proposed issue. It should also, be clearly understood that, while the issuer Company is primarily responsible for the correctness, adequacy and disclosure of all the relevant information in the offer document, the Lead Manager is expected to exercise due diligence to ensure that the Company discharges its responsibility adequately in this behalf and towards this purpose, the Lead Manager, Canara Bank has furnished to SEBI a due diligence certificate dated 16/02/2000, in accordance with SEBI ( Merchant Bankers) Regulation 1992 which reads as follows:

1) We have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators etc., and other material in connection with the finalisation of the draft prospectus pertaining to the said issue;

2) On the basis of such examination and the discussion with the Company, its directors and other officers, other agencies, independent verification of the statements concerning objects of the issue, projected profitability, price justification and the contents of the documents and other materials furnished by the Company, 

WE CONFIRM THAT:

a) the offer document forwarded to SEBI is in conformity with the documents, materials and papers relevant to the issue;

b) all the legal requirements connected with the said issue as also the guidelines, instructions etc. issued by SEBI, the Government and any other competent authority in this behalf have been duly complied with; and

c) the disclosures made in the offer document are true, fair and adequate to enable the investors to make a well-informed decision as to the investment in the proposed issue.

3) We confirm that besides ourselves, all the intermediaries named in the prospectus are registered with SEBI and that till date such registration is valid.

4) If underwritten, we shall satisfy ourselves about the worth of the underwriters to fulfill their underwriting commitments.

The filing of this offer document does not, however, absolve the Company from any liabilities under Section 63 or 68 of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed issue. SEBI, further reserves the right to take up at any point of time, with the lead manager (merchant bankers) any irregularities or lapses in the offer document.

We certify that written consent from shareholders has been obtained for inclusion of their securities as part of promoters' contribution subject to lock-in and the securities proposed to form part of promoters' contribution subject to lock-in, will not be disposed/sold/transferred by the Promoters during the period starting from the date of filing draft prospectus with the SEBI till the date of commencement of lock-in period as stated in the draft prospectus.

DISCLAIMER CLAUSE OF BANGALORE STOCK EXCHANGE, AHMEDABAD STOCK EXCHANGE and CALCUTTA STOCK EXCHANGE 

The company has made an application to stock exchanges in Bangalore , Ahmedabad and Calcutta for their permission. They have scrutinized this Offer Document for their limited Internal Purpose of deciding on the matter of granting the aforesaid permission to the company. The Exchanges do not in any manner:

a) warrant, certify or endorse the correctness or completeness of any of the contents of this Offer Document, or

b) warrant that the Company's Securities will be listed or will continue to be listed on the respective Exchanges, or

c) take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of the company.

It should not, for any reason, be deemed or construed that this Offer Document has been cleared or approved by the Said Exchanges. Every person who desires to apply for or otherwise acquires any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the said Exchanges whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

STATUTORY DECLARATION BY THE ISSUER:

It should be noted that the company accepts no responsibility for statements made otherwise than in the Prospectus or in the advertisements or any other material issued by or at the instance of the company and that anyone placing reliance on any other source of information would be doing so at his/her own risk.

AUTHORITY FOR THE PRESENT ISSUE 

Pursuant to Section 81(1A) of the Companies Act 1956, the present issue of Equity Shares has been authorised vide special Resolution passed at the Extra Ordinary General Meeting held on 21st January, 2000. 

CREDIT RATING 

Since the present issue is of Equity Shares, credit rating is not applicable.

FILING

A copy of this Offer Document along with the documents required to be filed under Section 60 of the Act, has been delivered for registration to the Registrar of Companies, Karnataka at Bangalore. A copy of the draft offer document has also been filed with the Chennai office of the SEBI.

LISTING 

Applications have been made to the Regional Stock Exchanges at Bangalore, Ahmedabad and Calcutta for Permission to deal in and for an official quotation of the Equity Shares of the Company being offered in terms of this Prospectus as well as the existing equity shares of the Company. In case the permission to deal in and for official quotation of the shares is not granted by the above mentioned stock Exchanges, the Issuer shall forthwith repay without interest , all monies received from applicants in pursuance of this Offer Document and if such money is not repaid within 8 days after the day from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under Section 73(2)/73(2A) of the Act.

IMPERSONATION

As a matter of abundant caution attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies Act, 1956, which is reproduced below: 

"ANY PERSON WHO :-

a) MAKES IN A FICTITIOUS NAME AN APPLICATION TO A COMPANY FOR ACQUIRING, OR SUBSCRIBING FOR, ANY SHARES THEREIN, OR 

b) OTHERWISE INDUCES A COMPANY TO ALLOT, OR REGISTER ANY TRANSFER OF SHARES THEREIN TO HIM, OR ANY OTHER PERSON IN A FICTITIOUS NAME,

SHALL BE PUNISHABLE WITH IMPRISONMENT FOR A TERM WHICH MAY EXTEND TO FIVE YEARS."

MINIMUM SUBSCRIPTION

If the company does not receive the minimum subscription amount of 100% of the amount payable on application from public subscription or if the subscription level falls below 100% after the closure of the issue on account of cheques having been returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after the Company becomes liable to pay the amount, the company shall pay interest as per Section 73 of the companies Act, 1956.

UTILISATION OF ISSUE PROCEEDS 

All the monies received out of the issue will be kept in a separate bank account and the company will not have access to such funds unless allotment of shares has been made in consultation with the regional stock exchange and listing approval has been received from the stock exchanges where listing has been sought.

The Board of Directors of the company certifies that :

All the monies received out of this issue from the Public shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Act.

details of all monies utilised out of the Public Issue referred to in sub-item (i) shall be disclosed under an appropriate separate head in the Annual Report of the Company indicating the purpose for which such monies has been utilized; and 

details of all unutilized monies out of the public issue , if any , referred to in sub-items (i) shall be disclosed under an appropriate separate head in the annual Report of the company indicating the form in which such unutilized monies have been invested.

DESPATCH OF ALLOTMENTS/ REFUNDS/SHARE CERTIFICATES 

Letters of allotment/share certificates/ letters of regret/cancelled stockinvests together with refund orders, if any, will be dispatched at the applicant's sole risk within 10 weeks from the date of closure of this issue. The company shall ensure dispatch of refund orders of value upto Rs. 1500/- under Certificate of Posting and refund orders over the value of Rs. 1500 and Share Certificates by Registered Post only . The Company ,as far as possible will allot the Equity Shares within 30 days from the closure of the offer and shall pay interest @ 15% p.a. ( except to applicants applying through Stockinvests), if the allotment is not made and the refund orders are not dispatched to the investors within 30 days from the closure of the offer for the period of the delay beyond 30 days. The company would also make available adequate funds to the Registrar to the offer for the purpose of dispatch of Refund Orders and Share Certificate/ Letters of Allotment .

ISSUE PROGRAMME/SUBSCRIPTION LIST:

The Subscription list will open at the commencement of Banking Hours and will close at the close of Banking Hours on the days as mentioned below:

Issue opens on : , March, 2000

Issue closes on : , March, 2000 

LEAD MANAGERS TO THE ISSUE

1) CANARA BANK 

Merchant Banking Division, World Trade Centre 

FKCCI BUILDING, KG ROAD, BANGALORE - 560 009 

Ph No.: 91-080-2283917 Fax No.: 91-080-2256636

E-mail : canbank@blr.vsnl.net.in

2) SMIFS CAPITAL MARKETS LIMITED

205, Centre point, 56, Residency Road

Bangalore - 560 025 

Ph No.: 91-080-5592861/862, 5599581, 5597183, 5597190

Fax No.: 91-080-5597794/5098353

E-Mail: smifs.cap@blr.vsnl.net.in

REGISTRARS TO THE ISSUE 

KARVY CONSULTANTS LIMITED

`Karvy House' No 46, Avenue 4 

Street No 1, Banjara Hills

Hyderabad - 500 034

Ph No.: 040-3312454

Regn. No. INR 000000221

AUDITORS TO THE COMPANY

M/s M.S.Reddy & Associates

Chartered Accountants

No.1393, 2nd floor, 5th A Main

D Block, II Stage, Rajajinagar 

Bangalore - 560 010

Ph No.: 91-080-3422430

COMPANY SECRETARY cum COMPLIANCE OFFICER 

Mr. Nagaraj K Y 

1636/S, 1st Floor, Mahakavi Kuvempu Road

2nd Stage, Rajaji Nagar 

Bangalore - 560 021

Ph No.: 91-80-3323054, 3320990, 3328171, 3322490

Fax No.:91-80-3327313

E-mail: cerebra@blr.vsnl.net.in

The investors in this issue are requested to contact the compliance officer in case of any pre-issue/post-issue related problems such as non receipt of letters of allotment/share certificates/refund orders/cancelled stock invests etc.,

TRUSTEES 

Since the present issue is of Equity, appointment of Trustee is not required.

UNDERWRITERS TO THE ISSUE

Underwriting being optional, the company does not propose to underwite the issue.

Share Capital Nominal Value Aggregate Value
(Rs.) (Rs.) 

A) AUTHORISED CAPITAL

1,00,00,000 Equity Shares of Rs. 10/- each 10,00,00,000 

B) ISSUED, SUBSCRIBED & FULLY PAID UP CAPITAL 

44,37,253 Equity Shares of Rs. 10/- each 4,43,72,530 14,79,92,530

out of which

23,64,853 Equity Shares of Rs.10/- each 2,36,48,530

20,72,400 Equity Shares of Rs.10/- each 

for cash at a premium of Rs.50/- per share 2,07,24,000 12,43,44,000

C) PRESENT ISSUE NOW OFFERED IN TERMS OF THIS PROSPECTUS TO INDIAN PUBLIC 

14,79,200 Equity Share of Rs. 10/- Each for cash at a premium 1,47,92,000 8,87,52,000
of Rs. 50/- per share

D) PAID UP CAPITAL AFTER THE PUBLIC ISSUE 

59,16,453 Equity Shares of Rs. 10/- each 5,91,64,530
 

of which

23,64,853 Equity Shares of Rs.10/- each 2,36,48,530 

35,51,600 Equity Shares of Rs.10/- each for cash at a premium of Rs.50/- per share 3,55,16,000

E) SHARE PREMIUM ACCOUNT 

Before the Issue 10,36,20,000

After the Issue 17,75,80,000

THE DETAILS OF EQUITY SHARE CAPITAL ALLOTTED BY CEREBRA ARE AS UNDER:

Date of No. of Shares Total Paid up Issue Consideration Remarks
Allotment (Face Value Rs.10/-) Capital (Rs.) Price (Rs.) (Rs.) 

31.12.93 7 70 10 Cash Subscription to MOA 

26.09.94 81,993 8,19,930 10 Cash Allotment to Promoters & Relatives 

28.10.94 16,000 1,60,000 10 Cash Allotment to Relatives 

07.12.94 2,000 20,000 10 Cash Allotment to Promoters 

26.12.96 40,000 4,00,000 10 Cash Allotment to Promoters, Friends & Relatives 

24.11.97 1,40,000 14,00,000 10 Bonus Ratio 1:5 

24.11.97 16,153 1,61,530 10 take over Allotment of shares for consideration other 
than cash for taking over a firm 

24.11.97 1,03,500 10,35,000 10 Cash Allotment to Promoters, Friends & Relatives 

25.01.99 71,300 7,13,000 10 Cash Allotment to Relatives to promoters and Friends 02.04.99 7,00,000 70,00,000 10 Cash Allotment to promoters, Friends & Relatives 

15.05.99 16,500 1,65,000 10 Cash Allotment to promoters, friends & Relatives 

04.02.00 11,77,400 117,74,000 10 Bonus Ratio 100:99 

21.02.00 20,72,400 2,07,24,000 60 Cash Promoters, Friends & relatives, associates, MFs,FI,VC Total 44,37,253 4,43,72,530

Note :

1. The Company has issued 140,000 Bonus shares on 24.11.97 in the ratio of 1:5 by capitalising reserves of Rs. 14,00,000/-. And further on 04.02.2000,
11,77,400 Bonus shares were issued in the ratio of 100:99 by capitalising reserves of Rs.1,17,74000/-.

2. 16153 equity shares of Rs.10/- each were issued for consideration other than Cash on 24.11.1997 for taking over of a partnership Firm Monolithic
Components & Peripherals on the basis of intrinsic value.

PRE AND POST ISSUE SHAREHOLDING PATTERN :

Existing Proposed After the Public Issue 

No. of Shares % Number No. of Shares %
of Shares

Promoters' Group 2117700 47.73 - 2117700 35.79 

Relatives, Friends & Associates & Employees 1402800 31.61 - 1402800 23.72 

Mutual funds/FI/VC 816600 18.40 - 816600 13.80 

Cerebra ESOP Trust 100153 2.26 - 100153 1.69 

General Public - - 1479200 1479200 25.00 

Total 4437253 100.00 1479200 5916453 100.00 

NOTES:

1. a) If the process of rounding off to the nearer of 100 results in the actual allocation being higher than shares offered, it would be necessary to allow 10% margin i.e. the final allotment may be higher upto 110% of the offering, subject to necessary approval.

b) The shares offered through this issue shall be made fully paid up or may be forfeited within 12 months from the date of allotment of shares in this issue.

2. The Promoters, friends and associates Contribution and the lock in period are as follows:

a) PROMOTERS 

Sl. No. Date of Date when No. of Consid- Face Issue % to D Lock in To Comm- Mode of

Allotment fully paid up Shares eration Value Price Period ence from Payment
(in yrs)

1. 31.12.93 31.12.93 5 Cash 10 10 00 Nil - Cash 

2. 26.09.94 26.09.94 81993 Cash 10 10 1.39 Nil - Cash 

3. 28.10.94 28.10.94 16000 Cash 10 10 0.27 Nil - Cash 

4. 07.12.94 07.12.94 2000 Cash 10 10 0.04 Nil - Cash 

5. 26.12.96 26.12.96 40000 Cash 10 10 0.68 Nil - Cash 

6. 24.11.97 24.11.97 118700 Bonus 10 10 2.00 Nil - Bonus 1:5 

7. 24.11.97 24.11.97 8502 Take over 10 10 0.14 Nil - Other than Cash 8. 24.11.97 24.11.97 67200 Cash 10 10 1.13 Nil - Cash

9. 25.01.99 25.01.99 36400 Cash 10 10 0.61 Nil - Cash 

10. 02.04.99 02.04.99 516800 Cash 10 10 8.73 3 * Cash 

11. 15.05.99 15.05.99 16500 Cash 10 10 0.28 3 * Cash 

12. 04.02.00 04.02.00 1177400 Bonus 10 10 19.90 3 * Bonus 

13. 21.02.00 21.02.00 36200 Cash 10 60 0.62 3 * Cash 

2117700 35.79

The above equity has been allotted to the Promoters and their family members whose names have figured in the para `Promoters and their background'.
Gifted 100153 to Cerebra ESOP trust by the Promoters/Directors on 07.02.2000.

· The lock-in-period of shares forming part of minimum promoters' contribution shall be for a period of three years from the respective dates of allotment
subject to a minimum period of two years from the date of the allotment in the public issue. 

Sl. No. Date of Date when No. of Consid- Face Issue % to D Lock in To Comm- Mode of

Allotment fully paid up Shares eration Value Price Period ence from Payment
(in yrs)

01. 02.04.99 02.04.99 183200 Cash 10 10 3.10 Nil - Gift* 

02. 21.02.00 21.02.00 2036200 Cash 10 60 34.42 Nil - Cash 

Total 2219400 37.52

*These shares which were intially alloted to the promoters are gifted to other relatives and friends. 

c) CEREBRA ESOP TRUST

Sl. No. Date of Date when No. of Consid- Face Issue % to D Lock in To Comm- Mode of

Allotment fully paid up Shares eration Value Price Period ence from Payment
(in yrs)

01. 31.12.93 31.12.93 2 Cash 10 10 0.00 Nil - Cash

02. 24.11.97 24.11.97 21300 Bonus 10 10 0.36 Nil - Bonus 1:5

03. 24.11.97 24.11.97 7651 Take over 10 10 0.13 Nil - Allotment of 

shares for consideration

for taking over firm

04. 24.11.97 24.1197 36300 Cash 10 10 0.61 Nil - Cash

05. 25.01.99 25.01.99 34900 Cash 10 10 0.59 Nil - Cash

100153 1.69

* These shares were initially alloted to the promoters on respective dates and have been gifted to the ESOP Trust on 7.2.2000. 

3. Promoter, Promoters friends & associates & ESOP Trust holding; 

Present Post issue

No. of shares % holding No. of shares % holding

44,37,253 100% 44,37,253 75.00%

4. Specific Disclosures as required under clarification XIII dated 12.10.95 issued by SEBI :

a) Among the promoter group following are the body corporates and their holdings; NIL

b) Among the Promoter group the following are the total share holdings :

No. of Name Face Value Total Date of Pre- Post Issue

Shares Per Share Holding (Rs.) Allotment Issue% %

435800 V.Ranganathan 10 4358000 Different dates 9.82 7.37 

392000 Gururaja K Upadhya 10 3920000 Different dates 8.83 6.63 

349300 V. Krishnan 10 3493000 Different dates 7.87 5.90 

189900 P. Bharath 10 1899000 Different dates 4.28 3.21 

180200 Shridhar S Hegde 10 1802000 Different dates 4.06 3.05 

152800 Uma Ranganathan 10 1528000 Different dates 3.44 2.58 

No. of Name Face Value Total Date of Pre- Post Issue

Shares Per Share Holding (Rs.) Allotment Issue% % 146300 Thankam Krishnan 10 1463000 Different dates 3.30 2.47 

76100 P. Vishwamurthy 10 761000 Different dates 1.72 1.29 

36200 Mythili Kannan 10 362000 19.02.2000 0.82 0.62 

30300 Sivakami RV Iyer 10 303000 Different dates 0.68 0.51 

18000 Medha Hegde 10 180000 Different dates 0.41 0.30 

17900 S.M.Hegde 10 179000 Different dates 0.41 0.30 

16600 Priya Gururaja 10 166000 Different dates 0.37 0.29 

15800 Chitra Vishwamurthy 10 158000 Different dates 0.36 0.27

13900 Champa Hegde 10 139000 Different dates 0.31 0.23

11900 N N Yogish 10 119000 Different dates 0.26 0.20 

10000 S Sumangala 10 100000 Different dates 0.23 0.16 

10000 Preeti Bharath 10 100000 Different dates 0.23 0.16 

7400 K Shama Upadhya 10 74000 Different dates 0.17 0.13 

7300 Geetha Upadhya 10 73000 Different dates 0.16 0.12 

2117700 Total 21177000 47.73 35.79

c) The following are the details of aggregate shareholding of friends and relatives of the promoters.

Existing Face Issue Total Date of Pre Present Date Total Total Post
Holding Value Price Value (Rs.) Allotment Issue % Allotment of Allot- Holding Value (Rs.) Issue
Share (Rs.) (Rs.) % ment Shares

14,02,800 10 60 8,41,68,000 21.02.00 31.61 - - 14,02,800 8,41,68,000 23.72 

Sl. Name No. of Face Issue Total % to Paid % to Paid
No. Shares Value Price Value up pre up post
(Rs.) (Rs.) (Rs.) issue issue

1. Birla Sunlife AMC Fund 150,000 10 60 90,00,000 3.38 2.54 

2. Sun F & C Mutual Fund 125,000 10 60 75,00,000 2.82 2.11 

3. Empire International Holdings Ltd. 100,000 10 60 60,00,000 2.25 1.69 

4. Reliance Vision Fund 100,000 10 60 60,00,000 2.25 1.69 

5. GIC Growth Fund 100,000 10 60 60,00,000 2.25 1.69 

6. KITVEN Fund 100,000 10 60 60,00,000 2.25 1.69 

7. Sun F&C Value Fund 75,000 10 60 45,00,000 1.69 1.27 

8. KSIIDC 66,600 10 60 39,96,000 1.50 1.12 

Total 816,600 13.80 The total number of shareholders as on 21.02.2000 was 914. 

e) Following are the details of purchases/sales of shares by the promoters/directors/promoter group in the last six months :

Purchases Gifts

1. V. Ranganathan 20500 25002 

2. Gururaja K. Upadhya 9500 25000

3. Shridhar S. Hegde 7000 25031 

4. V. Krishnan 10000 25000 

5. P.Vishwamurthy 17400 - 

6. Mythili Kannan 36200 -

7. T.S.Suresh Kumar 2000 -

8. Uma Ranganathan 33

9. P Bharath 87

10. Gift to Cerebra ESOP Trust 100153

f) Holdings of 10 largest share holders 2 years prior to the date of filing with ROC, 10 days prior to filing with ROC and as on date of
filing with ROC are as under:

1. List of Top Ten Shareholders two years before filing of Prospectus with ROC

Sl.No. Name of the Shareholder Number of Shares % to paid-up 

1. V. Ranganathan 65,202 16.31 

2. Gururaja K. Upadhya 33,600 8.41 

3. Shridhar S. Hegde 32,331 8.09 

4. P.Bharath 27,687 6.92 

5. V.Krishnan 23,600 5.91 

Sl.No. Name of the Shareholder Number of Shares % to paid-up 

6. P.K.Gopalakrishnan 23,000 5.76 

7. Uma Ranganathan 17,733 4.44 

8. P.Vishwamurthy 15,000 3.75 

9. Thankam Krishnan 12,500 3.12 

10. Sivakami R.V.Iyer 11,000 2.75 

2) List of Top Ten Shareholders 10 days prior to filing Prospectus in ROC and as on the date of filing of Prospectus with ROC.

Sl.No. Name of the Shareholder Number of Shares % to paid-up

1. V. Ranganathan 435800 7.37 

2. Gururaja K. Upadhya 392000 6.63 

3. V. Krishnan 349300 5.90 

4. P.Bharath 189900 3.21 

5. Shridhar S. Hegde 180200 3.05 

6. Uma Ranganathan 152800 2.58 

7. Birla sunlife AMC Ltd. 150000 2.54 

8. Thankam Krishnan 146300 2.47 

9. Sun F & C Mutual funds 
unit of ABN Amrobank 125000 2.11

10 a Reliance Vision Fund 100000 1.69 

b Puja Kayan 100000 1.69 

c Empire International holdings 100000 1.69 

d GIC Growth Plus _ II 100000 1.69 

e Kitven Fund 100000 1.69 

g) The Company has not made any Public Issue, within two preceding years. 

5. The Authorised Capital of the Company initially was Rs. 2 crores divided into 20,00,000 equity shares of Rs.10/- each. The Company at its Extra-
Ordinary General Meeting held on 24.11.99 further increased the Authorised Capital to Rs.5.00 crore divided into 50,00,000 equity shares of Rs.10/ - each. Vide EGM dated 21.01.2000 the company has further enhanced the authorized capital to Rs.10.00 Crores divided into 1,00,00,000 equity shares
of Rs.10/- each. The Company has complied with all the formalities in this regard.

6. The equity shares allotted to the promoters are for a minimum amount of Rs.25000/- incase of individuals and Rs.1.00 Lakh in case of corporate bodies
as certified by the company's auditors.

7 a. The Company has not raised any bridge loan against the proceeds of this issue.

b. The Company has not paid any commission, discount to the subscribers for subscribing to their portion of allotment.

8. Subsequent to the public issue, the holding of promoters' group would be 35.79% of the post issue paid up capital of the company.

9. There is no buy-back or standby arrangement for purchase of equity shares offered through this offer document by the promoters, directors, or Lead
Managers.

10. A minimum of 50% of the net offer of shares to the public under `C' above shall initially be made available for allotment to individual applicants who
have applied for allotment of 1000 or less than 1000 shares.

b. The balance of 50 % of the net offer of shares to the public shall initially be made available for allotment to investors, including corporate 
bodies/Institutions and individual applicants who have applied for allotment of more than 1000 shares.

c. The unsubscribed portion of the net offer to any one of the categories specified in (a) or (b) shall/may be made available for allotment to applicants in the other category, if so necessitates.

11. The Company has not revalued its assets since inception. The Company has not purchased any land, assets from the promoters and has not allotted
any shares in consideration thereof.

12. The paid up capital was raised by the promoters through firm allotments. There has been no previous Public Issues or Rights Issues by the Company
except for the Bonus Issue of 140000 shares on 24.11.97 in the ratio of 1:5 to the existing share holders. Bonus issue for 1177400 shares on 04.02.2000
in the ratio of 100 : 99 The company confirms that all these shares are fully paid up and there are no unpaid or party paid shares as on date.

13. The non-resident investors/OCBs are not required to take separate approvals from RBI for making investment in the shares of the Company as per circular
AD(MA)series circular no 29 dt. 20.08.98 Notification No FERA 184/98/RB dt 14.07.98 and notification no FERA/180/98/RB dt. 13.01.98 as amended
upto 13.07.98 issued by exchange control department RBI, Mumbai. No prior approvals is required for issue of equity shares of NRIs with repatriation
benefits under 100% scheme except for filing a declaration by the issuer company to RBI within 30 days from the date of issue of shares of NRIs/OCBs.
Investment in equity shares by Non resident investors will be allowed to be repatriated along with the income thereon subject to deduction of Indian
taxes provided the investment is made by inward remittance from abroad through normal banking channels from out of the funds held in NRE/FCNR
accounts.

III TERMS OF THE PRESENT ISSUE

The equity shares now being issued are subject to the provisions of the Act, Memorandum and Articles of Association of the Company, terms of this Offer Document, the Application Form, the guidelines for listing of securities issued by the Stock Exchanges and Government of India and/or other Statutory Bodies and the guidelines for Disclosure and Investor Protection issued by the Securities and Exchange Board of India (" SEBI Guidelines " ) and the Depositories Act, 1996, to the extent applicable.

In addition, the equity shares shall also be subject to such other terms and conditions as may be incorporated in the letter of allotment, Share certificates, as per guidelines, notifications and other regulations for the issue of the capital and listing of Securities laid down from time to time by the Government of India and/or other authorities and other Documents that may be executed in respect of Equity shares.

TERMS OF PAYMENT 

Face Value : The face value of the Equity Shares will be Rs.10/- per share.

Issue Price : The Equity shares are being offered at a price of Rs.60/- per share.

Applications should be made for a minimum of 100 equity shares and in multiples of 100 shares thereafter. The Issue price of Rs. 60/- per share is payable and will be appropriated in the following manner:

For Indian Public:

Towards Towards Total Amount 
share capital (Rs.) Premium (Rs.) Payable (Rs.)

On Application 5.00 25.00 30.00

On Allotment 5.00 25.00 30.00

Total 10.00 50.00 60.00

A single applicant under the Public Category cannot apply for more than the total number of Securities offered to the Public. Similarly, in case of the reserved Category, no single applicant can make an application for that number of Securities which exceeds the reservation.

ADJUSTMENT OF EXCESS APPLICATION MONEY 

Where an applicant is allotted lesser number of equity shares than he/ she has applied for, the excess amount, if any, already paid on application will be first adjusted against the amount payable towards allotment money for the number of equity shares allotted. The balance, if any, remaining after this adjustment will be refunded to the applicant within 30 days from the date of the closure of the Subscription list in terms of Section 73 of the "Act" and as per listing norms of Bangalore Stock Exchange.

FORFEITURE

It is a condition of the Issue that non-payment of the amount due on allotment including premium will attract interest on the allotment money due commencing from the date appointed for payment thereof till date of actual payment (the actual dates in case of Cheques/ Demand Drafts shall be the date of realization) as mentioned in the Article of association of the Company. Failure to pay the amount as aforesaid, shall render the allotment of equity shares liable to cancellation and the amount paid liable to forfeiture. The Company shall be at liberty to re-issue the equity shares so forfeited to any person or persons as it may in its absolute discretion as mentioned in the Articles of Association of the Company 

THE RIGHTS OF THE INSTRUMENT HOLDERS

The equity shares now being offered shall rank Pari-Passu with the existing equity shares of the company in all respects except that the Holder(s)

INTEREST IN CASE OF DELAY IN DESPATCH OF ALLOTMENT LETTERS/REFUND ORDERS

The company agrees that as far as possible allotment of securities offered to the public shall be made within 30 days of the closure of the public issue. The company further agrees that it shall pay interest at 15% p.a. if the allotment letters/ refund orders have not been despatched to the applicants within 30 days from the date of the closure of the issue. 

ARRANGEMENT FOR DISPOSAL OF ODD LOTS

The company as on date do not have odd lots. The shares allotted to the promoters and which were forming the odd lots have been gifted by the promoters to Cerebra ESOP Trust. 

DESPATCH OF REFUND ORDERS.

The Company shall ensure despatch of refund orders of value over Rs.1500/- and share certificates by registered post only and adequate funds for this purpose shall be made available to the registrars by the Company. 

UNDERTAKING BY THE COMPANY

The Company undertakes that:

a) the complaints received in respect of the issue shall be attended to by the issuer company expeditiously and satisfactorily,

b) the issuer company shall take necessary steps for the purpose of getting the securities listed in the concerned stock exchanges within the specified time,

c) the funds required for the despatch of refund orders/allotment letters/certificates by registered post shall be made available to the registrars to the issue by the issuer company, 

d) the certificates of securities/refund orders to the Non Resident Indians shall be despatched within the specified time,

e) no further issue of security shall be made till the securities offered through this offer document are listed or till the application monies are refunded on account of non-listing, under-subscription etc.

PROCEDURE FOR APPLICATION AND MODE OF PAYMENT

How to apply, Availability of Application Forms And Prospectus

Application forms together with Memorandum containing salient features of the prospectus may be obtained from Registered and Corporate office of Cerebra, Lead Managers, Bankers to the issue named herein or from their branches as mentioned in the Application Form, until the closure of the subscription list

Who Can Apply :

i) Indian nationals resident in India who are major, in single or joint names (not more than 3)

ii) Hindu undivided families in the individual name of the Karta.

iii) Companies, Corporate Bodies and Societies registered under the applicable law in India and authorised to invest in the shares.

iv) Indian Mutual Funds registered with SEBI, Indian Financial Institutions, Commercial Banks, Regional Rural Banks, Co-operative Banks may also apply subject to permission from RBI.

v) Trusts registered under societies regulation Act, 1860 or any other Trust law and are authorised under their constitution to hold and invest in shares.

vi) Overseas corporate Bodies (OCB's). 

Applications in the name of minors, foreign nationals/Companies, Trusts not registered under the Societies Registration Act, 1860, or any other Trust Laws, partnership firms or their nominees will be treated as invalid . 

Quoting of PAN/GIR No.

Where an application is for allotment of equity shares for a total value of Rs. 50,000 or more i.e. the total number of securities applied for multiplied by the issue price is Rs.50,000/- or more, the applicant or in the case of applications in joint names, each of the applicants should mention his/her permanent account number ( PAN) allotted under the Income Tax Act, 1961 or where the same has not been allotted, the GIR number and the Income Tax Circle/Ward/District should be mentioned. In case where neither the permanent account number nor the GIR number has been allotted, the fact of non allotment should be mentioned in the application form. Application forms without this information will be considered incomplete and are liable to be rejected.

APPLICATION BY RESIDENT INDIAN PUBLIC

Application must be made only :

(i) On the prescribed application form accompanying the Memorandum containing the salient features of the Prospectus and completed in full in BLOCK LETTERS IN ENGLISH in accordance with the instructions contained herein and in the Application Form and the applications not so made are liable to be rejected.

(ii) For a minimum of 100 equity shares or in multiples of 100 shares thereof.

(iii) In single name or joint names (not more than three)

(iv) In the name of Individuals, Limited Companies, or Statutory Corporation or Institutions, Hindu Undivided Families through the Karta, Trusts (unless the Trust is registered under the Societies Registration Act, 1860 or any other Trust laws and is authorised under its constitution to hold shares or debenture of a company), and NOT in the names of foreign nationals, minors, Partnership firms or foreign companies or the nominees of any of them.

(v) A separate Cheque or Bank Draft or Stockinvest must accompany each application form.

(a) All cheques, bank drafts must be :

(i) Made payable to any Bankers to the issue.

(ii) Marked "CITL-Public Issue"

(b) Stock Invests should be made payable to the company CEREBRA INTEGRATED TECHNOLOGIES LIMITED.

PROCEDURE FOR PAYMENT BY STOCK INVEST AND DISPOSAL OF APPLICATION MONEY

Only Individuals and Mutual Funds are eligible to apply under Stockinvest Scheme.

Stockinvest can be used in lieu of cash / cheque / bank draft for making application by the Individuals / Mutual Funds. The details of the stockinvest scheme are as under :

1. Stockinvest can be obtained from any bank issuing this instrument by making the necessary application and depositing the amounts with them.

2. Stockinvest is issued in denomination specified by the investor to the issuing Bank.The investor has to fill in the following particulars: 

a. Payees name as mentioned in the application form, i.e., CEREBRA INTEGRATED TECHNOLOGIES LIMITED.

b. Number of equity shares applied for.

c. The amount payable on the equity shares applied for.

d. Application form number on the left hand portion of the stock invest and his name and address in a box on the reverse of the stock invest.

The instrument thereafter should be signed by the applicant. The investors may also note the following :

1. Service charges, if any, for obtaining the stockinvest must be borne by the applicant

2. Stockinvests are payable at par at all the branches of the issuing bank and as such outstation stockinvests can be submitted.

3. Stockinvest is valid for payment only when signed by the issuing banker at the appointed place on its face The instrument should be signed by the applicant. It should also bear a stamp of the Bank issuing the instrument and should be crossed account payee only.

4. The account holder's instructions to the bank therein are irrevocable. It is understood that at the explicit undertaking of the account holder an amount equivalent to the sum mentioned on the left hand side of the stockinvest is either debited to his account or lien marked on his deposit account from the date of its issue till full liability under the stockinvest is extinguished.

5. The name of the purchaser / one of the purchasers should be invariably indicated as the first applicant in the application form. Otherwise, the application would be treated as having been accompanied by a third party stockinvest and will be rejected.

6. The applicants should not fill in the Right hand portion of the stockinvest instrument. The Registrars to the issue will fill up this portion as under:

a. In case of full allotment, the number of equity shares on the right hand side will be the same as on the left hand side of the instrument.

b. In case of partial allotment, the amount filled up by the Registrars to the issue, after adjusting allotment money payable in respect of equity shares so allotted, will be less than the number filled up by the applicant on the left hand side.

c. In case the allotment is Nil, the number filled up by the Registrars to the Issue on the Right hand side of the instrument will be Nil.

7. Stockinvest is paid on the payee / authorised signatory filling the required particulars on the right side as above and presenting it for payment. Payment will be made only by credit to the payee's account with their banker.

8. Stockinvests are neither transferable nor negotiable. The issuing bank undertakes to pay the lower of the two sums indicated in the stockinvest instrument.

9. The Bank shall not be liable for any delay, error, fraud, forgery or any other lapse in the issue or encashment of stockinvest. It shall also be not liable for any losses / damages / incase of death, insanity or insolvency of the drawer before actual allotment / delivery of the relative shares by the payee company. Stock invest is valid for 4 months from the date of its issue indicated on its face and no amount can be claimed on the stock invest at a branch of the issuing bank unless the stock invest is presented to it within 4 months of the date of issue of the stock invest. Stock invest is payable at par at all branches of the issuing bank, including all the centres, where stock exchanges are present.

10. Investors may please note that in case of partial or Non-allotment, lien shall be lifted in the following manner :

a. In case of non-allotment, on the presentation of the Stockinvest by the applicant to the issuing Bank branch of the instrument duly cancelled by the Registrars.

b. In case of partial allotment (for the unutilised amount) on receipt of advice from the controlling branch of the issuing Bank as to the amount collected or surrender of unutilised Stockinvest received by the bank/applicant directly from the Registrars.

c. In case the cancelled / partially utilised Stockinvest is not received by the investor from the Registrars, lien will be lifted by the issuing branch on expiry of four months from the date of issue against an indemnity bond from the investor.

11. No refund order will be issued to the applicant using Stockinvest for payment of application money.

12. The Stockinvest should be used by the purchaser within 10 days from the date of the issue of the instrument, failing which such applications are liable to be rejected. Investors are advised to refer the application form for the ex act date.

13. Registrars to the Issue have been authorised by the Company vide a Board Resolution passed on 12.02.2000 to sign on behalf of the Company for realising the proceeds of the Stockinvest from the issuing bank or to cancel the Stockinvests of the non-allottee or partially successful allottee who has enclosed more than one stockinvest. Such cancelled stockinvests shall be sent back by the Registrars directly to the investor.

14. The company reserves the right to withhold the share certificate till the stockinvest proceeds are credited to the Company's account.

15. A ceiling of Rs.50000/- per individual per capital issue has been imposed by banks for issue of Stock Invests and these ceilings will not be applicable to Mutual funds. The ceiling is subject to change from time to time.

16. Multiple applications under a single stock invest will be rejected as each application is required to be accompanied by a separate instrument.

17. Enquiries relating to Stock Invests may be addressed only to the Registrars to the Issue and not to issuing bank.

18. Stockinvests shall be realised through Canara Bank.

Stockinvest should be marked "A/c Payee" and made payable only to the issuer Company, i.e.., "CEREBRA INTEGRATED TECHNOLOGIES LIMITED" without mentioning the name of the Bank and deliver it to any of the Bankers to the issue mentioned in the Application Form.

To avoid rejection of applications on technical grounds, it is suggested that the applicant should ensure that

a. The date of issue of stock invest by the issuing bank is clearly mentioned in the instrument.

b. The instrument is duly signed by the authorised officer of the bank giving his code number.

c. The stock invest bears the code number and address of the issuing bank / branch.

d. Any correction / alteration in the date of issue, amount, the name of the company etc., should be attested by an authorised officer of the issuing bank.

e. The name of the company and the amount are clearly written and the signature on the instrument should tally with the specimen signature of the first named applicant as appearing on the application form.

f. In case stock invest is purchased from joint account, the names of both the account holders should be mentioned in the instruments at the place mentioned for writing the name of the investor, e.g.. Name (joint account).

g. The amount written in the application form to be deposited and the amount of the stock invest accompanying the application form are the same.

h. The stock invest against their own account are not handed over to any third party. The stock invest is intended to be utilised by the account holder applicants.

GENERAL INSTRUCTIONS

1. Payment shall be made in cash or by cheque or by Bank draft or Stockinvest. Cheques / Bank drafts / Stockinvest should be drawn on any Bank (including a Co-operative Bank) which is situated at and is a member or sub member of the Banker's Clearing House located at the

2. Application forms duly completed together with cash, cheque, bank draft, Stockinvest for amount payable on application must be delivered before the closure of the subscription list to any of the Bankers to the issue at the place mentioned against their names in the application form and NOT to the Company or to the Lead Managers or Registrars to the issue.

Applications received by post will be accepted only up to the close of business hours on the day on which subscription is closed. Hence, investors are advised to mail the applications so as to reach the Bankers to the issue before closure of the subscription list

3. Applications which are not complete in all respects or in contravention to any of the provisions / instructions contained in the prospectus or in the Memorandum containing the salient features of the prospectus are liable to be rejected.

4. No receipt will be issued for the Application money. However, the Bankers to the issue receiving the application will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each application form.

5. The Company shall open a minimum number of mandatory collection centres which would include major stock exchange centres. Investors applying from places where collection centres have not been opened may send their applications alongwith a demand draft (net of commission) payable at Bangalore / Stock invest, for the amount payable on application to the Registrars to the issue, before the closure of the issue.

6. Quoting of PAN/GIR No :

Where an application is for more than 800 shares i.e. the total number of securities applied multiplied by the Issue price is Rs.50,000/- and more, the applicant or in the case of application in joint names, each of the applicants, should mention his/her permanent account number (PAN) allotted under Income Tax Act, 1961 or where the same has not been alloted, the GIR No. and the Income Tax Circle / Ward / District should be mentioned. In case where neither PAN nor GIR No. have been alloted, the fact of non-allotment should be mentioned in the application form. Application without this information will be considered incomplete and are liable to be rejected.

7. The application form number should be mentioned on the reverse of cheques / drafts / stock invest through which the payment is made.

8. No single applicant in the Resident Indian public category can make an application for a number of equity shares exceeding the number of equity shares offered to the Resident Indian Public.

9. No single applicant in the reserved category can make an application for number of equity shares exceeding the number of equity shares offered under the reserved category.

10. FIIs/Body Corporates to whom firm allotments have been made in this issue are not eligible to apply in the Public offer Category except Permanent Employees of the Company. 

11. For further instructions, please read the Application Form carefully.

BANK DETAILS OF THE APPLICANT 

To prevent fraudulent encashment of refund orders by third party, the applicants are advised to indicate the name of their bank branch and the savings / current account number in the application form. In case of refund, the refund order will indicate these details after the name of the payee and the refund orders will be despatched directly to the payee's address. Applications without this information is considered incomplete and are liable to be rejected. The applicants should write the application number and name of the sole / first applicant on the reverse of the Cheque / Demand Draft / Stock Invest.

JOINT APPLICATIONS

An application may be made in single or joint names (not more than three). In the case of a joint application, refund / pay orders, if any, dividend warrants etc., will be made out in favour of and all communications will be addressed to the applicant whose name appears first at his/her address as stated in the Application Form.

MULTIPLE APPLICATIONS

An applicant should submit only one Application (and not more than one) for the total number of shares required. Application may be made in single or joint names (not more than three). Two or more applications in single and/or joint names will be deemed to be Multiple Applications if the sole and/or the first applicant are one and the same. The Board reserves the right to reject in its absolute discretion all or any Multiple Applications.

Applications made by different schemes of a Mutual Fund managed by the same Asset Management Company shall not be treated as multiple application provided the applications made by the AMCs / Trustees / Custodians clearly indicate their intention as to each scheme for which the application has been made.

Applicants who have applied under the reservation for preferential allotment for employees may also apply under the quota offered to the Indian public and these applications will not be treated as multiple applications 

APPLICATIONS UNDER POWER OF ATTORNEY

In the case of Applications under Power of Attorney or by Limited Company or Corporate Bodies, or Registered Societies, the relevant Power of Attorney or the relevant Resolution or Authority to make the application , as the case may be, together with a duly certified true copy thereof along with the certified copy of the Memorandum and Articles of Association and/or Bye-laws must be attached to the Application Form at the time of making the application or lodged for scrutiny separately indicating the Serial Number of the Application Form and the Bank Branch where the application form has been submitted with the Registrars to the issue at their Hyderabad Address , failing which the application is liable to be rejected. 

PROVISIONS OF SECTION 269 SS OF THE INCOME TAX ACT, 1961.

In respect of all the above categories eligible to apply to the issue, having regard to the provisions of Sec 269 SS of the Income Tax Act, 1961, payment of Rs.20000/- or more shall be effected only by Cheque/ Demand Draft/ Stock Invest and not by cash. In the event of any contravention the application is liable to be rejected.

DEPOSITORY OPTION TO INVESTORS:

An application has been made to National Security Depository Limited for offering the depository options to the stock investors.

1. A tripartite agreement would be signed among Cerebra Integrated Technologies Limited, Karvy Consultants Limited and National Securities Depository Limited ("NSDL") & Cerebra Integrated Technologies Limited, Karvy Consultants Limited and CDSIL for offering the depository option to the investors.

2. The investor has an option to seek allotment of equity shares either in electronic or physical mode.

3. Such an option if exercised should be indicated in the relevant blocks in the share application form itself.

4. Separate applications for electronic and physical equity shares by the same applicant shall be considered as multiple applications.

5. Investors who wish to apply equity shares in electronic form need to have atleast one Beneficiary Account with a Depository Participant prior to the allotment.

6. Allotment Advice/Refund Orders will be directly sent to the investors by the Registrars.

8. Responsibility for correctness of applicant's demographic details given in the Share Application Form vis-a-vis, his or her Depository Participant, would rest with the investor.

9. Shares in electronic form can be traded only on Stock Exchanges having electronic connectivity with the NSDL/CDSIL.

10. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares.

However investor may note that all IPO shares hereinafter will be traded compulsorily in demat form for all investors. The investors however will continue to have the option of holding securities upon allotment either in physical form or dematerialised form according to provisions of the Depositories Act.

TAX BENEFITS 

The Company has been advised by the Auditors of the Company namely M/S M.S.Reddy & Associates, Chartered Accountants vide their letter dated 14th February, 2000 that under the current provisions of the Income Tax Act and other Direct Tax laws for the time being in force, the following benefits and deductions will , inter alia, be available to the Company and its members:

a) TO THE COMPANY:

Under the Income Tax Act,1961.

1. Under Section 80 HHC of the Income Tax Act 1961 (in this part defined as Act), the Company shall be entitled to deduction in respect of profits derived from export of goods in accordance with and subject to the conditions specified therein.

2. The Company, in accordance with and subject to the provisions specified in Sec. 80HHE of the Act, would be entitled to deduction of the profits derived from the export of computer software or for providing technical services outside India in connection with the development or production of computer software.

3. Under section 35D of the Act, the company will be entitled to a deduction equal to 1/5 th of the expenditure of the nature specified in the said section, including expenditure incurred on present issue such as Brokerage, Underwriter's commission and other charges, by way of amortization over a period of 5 successive years beginning with the previous year in which the new unit commence production, subject to the stipulated limits.

4. Under Section 80-IA of the Act , the company will be entitled to a deduction of 30% of the Profits derived from the New Industrial Undertaking upto the financial year 2003-04 relevant to the assessment year 2004-05 in accordance with and subject to the conditions mentioned therein.

b) TO THE MEMBERS OF THE COMPANY :

Benefits to Indian Share Holders:

1 By virtue of provisions of sec 10(33) of the Act , the divided income received by the shareholders will be exempt in the hands of the recipient.

2 By virtue of provisions relating to taxes on Capital Gains, the shares will be treated as a Long Term Asset (if held for a period exceeding 12 months).

3 Long term capital gains in respect of shares will be chargeable under section 112 of the Act at the option of the shareholder, at a concessional rate of 20% or 10%. Capital gains would be computed @20% after taking into account cost of acquisition as adjusted by Cost inflation index notified by the Central Government or @ 10% after taking into account the cost of acquisition.

4 In accordance with and subject to the conditions and to the extent specified in section 54EB /54EB of the Act, the shareholders would be entitled to the exemption from long-term capital gains.

5 In case a shareholder being an individual or a Hindu undivided family in accordance with and subject to the conditions and to the extent specified in section 54F of the Act, the shareholders would be entitled to the exemption from long term capital gains.

Benefits to NRI Share Holders:

1. The Equity Shareholder being a Non-resident Indian will be entitled to receive dividend without deduction of tax at source under section 115-O of the Act.

2 A Non-resident Indian has an option to be governed by provisions of chapter XII A of the Act. According to which:

a) The Tax payable by him on his specified investment income excluding income by way of dividends on shares under section 115-O of the Income Tax Act, in the company acquired by him out of convertible foreign exchange and long-term capital gain are taxable as follows:

i) Income from Foreign Exchange Asset 20% Under Section 115-E of the Act.

ii) Long Term Capital Gains 10%: Under Section 115E of the Act.

b) Under Section 115F of the Act, long term capital gains arising on sale of shares in the company acquired out of convertible Foreign Exchange, shall be exempt from income tax, if the net sale consideration is reinvested in specified assets within 6 months of the date of transfer. If only part of the net consideration is so reinvested the exemption shall be given proportionately. The amount so exempted shall be chargeable to tax subsequently the specified assets are transferred or converted within three years from the date of their acquisition.

c) Under Section 115G of the Act, it shall not be necessary for a Non-Resident Indian to furnish his return of Income, if his only source of income is investment income or long-term capital gains or both, provided tax at source has been deducted from such income.

d) Under section 115H of the income tax act, 1961, where a person who is a Non-Resident Indian in any previous year becomes assessable as resident in India in respect of the total income of any subsequent year, he may furnish to the Income Tax Officer under section 139 of the aforesaid act for the assessment year for which he is so assessable to the effect that the special provisions under section 115C, 115I of Act . shall continue to apply to him in relation to the investment income derived from the foreign exchange asset being an asset of the nature referred to in sub clause (ii) to (v) of the said chapter shall continue to apply to him in relation to the assessment year and for every subsequent assessment year until the transfer or conversion (otherwise than by transfer) into money of such assets.

c) To Foreign Institutional Investors

1. Under Section 115AD(1)(b)(iii), income by way of Long Term Capital Gain arising from the transfer of shares will be taxable @ 10%.

2. Under Section 115AD(1)(b)(ii), income by way of Short Term Capital Gain arising from the transfer of shares will be taxable @ 30%.

d) To Non-Resident Indians

1. Under Section 115AC(1)(b)(ii),income by way of Long Term Capital Gain arising from the transfer of shares will be taxable @ 10%

Wealth Tax

Total exemption from wealth tax would be available on investment in shares of the company.

IV. PARTICULARS OF THE ISSUE

OBJECTS OF THE ISSUE

The present issue of equity shares is being made to part finance:

b. Expansion of existing Software Division.

c. To set up full fledged Branch Offices in USA.. 

d. To meet additional working capital requirements of the company.

e. The expenses of the Issue and 

f. The listing of the company's Equity Shares on the stock exchanges.

SCOPE OF THE APPRAISAL OF THE PROJECT

The Cost of the Project, for which the funds are being raised, has been appraised by the Industrial Advisory Division of Canara Bank, H.O.., J.C.Road, Bangalore vide their letter CCW/IAD/0095/MSR/2000 dated 01.02.2000 and CanaraBank, Seshadripuram,Bangalore Branch has sanctioned a term loan of Rs.240.00 Lakhs which exceeds the stipulated 10% of the project cost vide sanction memorandum number ______ dt.________ The Total Cost of the Project has been estimated as Rs.2371.00 lacs and year wise deployment of funds are as follows. The appraisal has been done to necessiate the Company to mobilise the funds towards various items of expenses involved in the project through issue of equity shares and term finance. 

COST OF THE PROPOSED PROJECT:

Particulars Hardware Division Software Division Total 

FY 2000 FY 2001 FY 2000 FY 2001

1.Land - - 80.00 80.00

2.Building 

Factory Building at 
Peenya, Bangalore 36.50 69.18

Branch offices :- 

Chennai 57.00

Coimbatore 51.00

Mumbai 120.00

Software Development Centre 189.20 522.88 

3.Interiors :- Peenya, 57.80

Corporate Office, Bangalore 28.20 

Bangalore Software Development Centre 67.52 153.52

4.Plant & Machinery 92.06 92.06

5.Hardware 150.00 150.00

5.Software 27.44 76.28 103.72

6.Air Conditioners 29.16 39.86 69.02

7.Communication Tower - 19.61 19.61

8. D.G.Sets 5.51 5.51 11.02

9. U.P.S 7.05 21.40 28.45

10.Office Equipments 12.23 26.39 38.62

11.Vehicles 27.73 34.59 62.32

12.Overseas Office 
Establishment - 210.00 210.00

13.Market Development -
Expenses 100.00 112.00 212.00

14.Pre-Operative Expenses - 88.75 88.75

15.Contingency 5.28 9.45 14.73

16.Miscellaneous 10.86 - 10.86

17.Additional Working Capital 250.00 253.44 503.44

Total 176.46 922.54 273.34 998.66 2371.00

Equity Share Capital

A) Promoters, Relatives & Friends, & Associates

20,72,500 Equity Shares of Rs.10/- each
at a Premium of Rs.50/- per Share already brought in
towards the project. 1243.50 

B) Term loan from Canara Bank 239.98

C) Net Public Offer

14,79,200 Equity Shares Rs.10/- each 887.52
at a Premium of Rs.50/- per Share 

2371.00

The entire project is proposed to be completed and commercial production is expected to completed by February, 2001. However, the proposed Software activity would be carried out in a rented premises till such time the building is completed. The issue funds would be utilized within one year from the date of the public issue. Any increase in the Cost of Project will be funded by the Internal accruals. The company has not availed any bridge loans towards the project.

The promoters and friends, relatives and associates of the promoters, mutual funds, NRIs/FIIs have already brought in their contribution of Rs.1243.50 Lakhs in the books of the company at the rate of Rs.60/- per share and shares have already been allotted to them on 21.02.2000. 

TERM LOAN SANCTION DETAILS:

For the proposed project, the company has been sanctioned a term loan of Rs.240.00 Lakhs by Canara Bank, Seshadripuram Branch, Bangalore to part finance the company's expansion plan vide their letter BLC/SSI/CR/693/485/2000 dated 23.2.2000 as per the following details:

Purpose : To partly finance the expansion programme at an estimated project cost of Rs.2371.00 lakhs. Project appraised by IAD, HO.

Margin : 25% on the assets to be acquired under TL.

R O I : 16.32% p.a. (cum tax) MTLR + Max. Spread

Repayment : To be repaid in 3 years in quarterly instalments of Rs.20.00 lakhs each, interest as and when due. Repayment to commence within 3 months from the date of first disbursement.

Disbursement: To procure identified assets with a margin of 25% to be borne by the party.

Security : Exclusive First Charge on the assets created under the project. Project Cost: Rs.2371.00 lakhs.

Collateral

Security : Existing collateral securities such as:

a) EMT of factory landed property at Peenya & hypothecation of Plant & Machinery therein valued at Rs.142.00 lakhs.

b) Agricultural land at Nelamangala valued at Rs.22.65 lakhs.

c) Deposits amounting Rs.36.70 lakhs shall be available as continuing collateral security.

Guarantee : Personal guarantee of 6 of the Directors of the Company.

Others : The sanctioned term loan of Rs.240.00 Lakhs will be disbursed to the company by Canara Bank atleast one day before the opening of the public issue.

WORKING CAPITAL 

Presently, the company is enjoying working capital facilities of Rs.200.00 lacs with Canara Bank and Rs.440.00 Lakhs with Canbank Factors Ltd., for the existing unit. The proposed project envisages additional working capital margin requirements of Rs.250.00Lakhs towards Hardware Division and Rs.253.44 Lakhs towards Software division. As no additional bank borrowings are proposed by the company, the same are included in the project cost. The future working capital requirements of software divisions will be met out of the internal resources of the company. The working capital assessment as appraised by Canara Bank for Hardware and Software Divisions are as below:

WORKING CAPITAL CALCULATIONS (HARDWARE DIVISION)

Particulars Holding 1999-00 2000-01 2001-02

level (Days)

Raw Material 21 118.81 177.21 248.09

Finished Goods 7 47.91 71.02 98.85

Semi Finished Goods 7 45.61 68.12 95.25

Sundry Debtors 60 606.16 723.29 1012.60

Other Current Assets 79.00 119.00 150.00

Total Current Assets 897.48 1158.63 1604.79

Less Sundry Creditors 14 79.21 118.14 165.39

Working Capital Gap 818.28 1040.49 1439.40

Margin on Working Capital 283.62 440.48 639.40

Working Capital Borrowings 600.00 600.00 800.00

WORKING CAPITAL CALCULATIONS (SOFTWARE DIVISION)

Particulars Holding 2000-01 2001-02 2002-03

level (Days)

Operational Expenses 3 96.60 164.63 236.11

Administrative Expenses 1 6.28 8.82 11.79

Marketing Expenses 1 8.90 12.78 17.42

Receivables (Exports) 2 141.67 212.50 297.50

Total Current Assets 253.44 398.74 562.82

Margin on Working Capital 100% 253.44 398.74 562.82

BRIDGE LOAN

The Company has not availed any bridge loan towards the project.

PRESENT STATUS OF THE PROJECT:

Details of the amount of expenditure already incurred by the company towards the project during the period 01.04.99 to 31.1.2000 as certified by M/s. M.S.Reddy & Associates, Chartered Accounts vide their Certificate dt. 15.02.2000 are as follows.

Rs. in lacs

1. Building at Peenya, Bangalore 35.55 

2. Canara Bank, Appraisal fees 3.00 

3. Canara Bank- Lead manager to the Issue 2.00

4. SEBI -filing Fees of Draft Prospectus 0.15

Total 40.70

The Company has raised Rs.1243.50 Lakhs towards this project through shares allotted to promoters, their friends, relatives & associates, mutual funds, FIIs, etc. The balance amount which is not utilised towards the project is lying in accounts with Canara Bank, Seshadripuram Branch, Citi Bank,Bangalore and IDBI Bank Ltd., Mission Road, Bangalore. 

BUY BACK/STANDBY ARRANGEMENTS:

No buyback or standby or similar arrangement have been made for purchase of equity shares offered through this offer document by the promoters, Directors and Lead Managers to the Issue.

V. COMPANY MANAGEMENT, PRESENT BUSINESS AND PROJECT

HISTORY AND BUSINESS OF THE COMPANY

The Company was originally started as a partnership firm under the name and style of "Integrated Technologies" on 25th July, 1992 by

The Company is one of India's leading P.C. manufacturers and a fast growing IT Solutions Provider. The company, due to its long standing presence in the IT Sector and its endeavor for attaining quality, service and reliability has got ISO 9002 Certification for production, installation, service and software solutions from KEMA, Netherlands, (NVT-QC) India on 1.1.99.

Cerebra is one of the few companies to get different range of PCs manufactured and certified under the stringent test standards as defined by the Department of Electronics and Department of Telecom's QA approval for usage with Intel Components in their telephone exchanges. The company was awarded the Intel Server platform validation certificate ensuring the quality of products.

Cerebra Servers have been ranked the No 1 in terms of performance among corporate contenders which includes Acer, Compaq, Dart and Nest - Source CHIP Computer Magazine edition February, 2000.

The Company has developed various kinds of software packages, viz., Financial Accounting Package, Excise Accounting Package, Hospital Management System, Parcel Tracking system, Multimedia based information system and Sales & Purchase order processing Excise Module, etc. All products of Cerebra are Y2K compliant. Besides Cerebra is also engaged in trading of Microsoft software and other reputed software products.

Cerebra as a brand is well known in large corporates, financial institutions, banks, government agencies, public sector units, MNCs and hospitals as a sign of quality, reliability and service on par with any multinational company.

Cerebra has the unique distinction of implementing computerization of many branches of scheduled banks and developing the concept of low cost, quick implementation of MAN (Metropolitan Area Network) between the computerized branches. It was one of the first companies to get its range of PCs manufactured and certified under the stringent test standards as defined by the Department of Electronics. The Company obtained Department of Telecom's DOT-QA Approval for usage with Intel Components in the Telephone Exchanges. The Company was awarded Server platform validation certificate by Intel as a test of quality and compatibility of the components.

The Company is also a member of Microsoft OEM System builder program and an authorized channel partner of Oracle Corporation, Onward Technologies and Novell India and is the distributor for a range of products from TVS Electronics Ltd. which includes printers, backup devices etc. The certifications are available as material documents for inspection. The Company has eight years standing in the market .

It also has a blend of participation in the Equity Capital of the Company by

a. Mutual Funds, viz., Sun F&C Mutual Funds, Birla Sunlife AMC Fund, GIC Mutual Fund, Reliance Mutual Fund, Empire International Holdings Ltd., 

b. Venture Capital Fund - Karnataka Information Technology Venture Capital Fund (KITVEN Fund), a Karnataka Government undertaking.

c. Financial Institution - Karnataka State Industrial Investment & Development Corporation Ltd.

d. Banks - Bank of Madura Ltd.

e. Corporate - Karvy Consultants Ltd.

The company's has more than 500 major customers major of which are as under:

i) These Companies have given their consent for inclusion of their name in the offer document. The same are available as document for inspection.

Government organisations - Madras Regional Purchase Unit.

Banks - Accountant General Employees Co-operative Bank Ltd.,

Public Sector Units - Electronics Corporation of India Ltd., Bharath Electronics Ltd., HTL Ltd.,

Large Corporates - BPL Telecom Ltd., Trent Ltd., John Fowler (India) Ltd., Thermax Ltd.,

Small & Medium Enterprises - Parijma Health Care, Karnataka Agro Chemicals Pvt. Ltd., Evolus India Pvt. Ltd., Technology Media Group, New International House of Travels, Shidore Microsys Pvt. Ltd., Methodex Systems Ltd.,

ii) Customers whose appreciation letters form part of material documents.

Government Organisations - Department of Telecommunications, Bangalore, Department of Telecommunications, Palakkad,

Research Organisations - Aeronautical Development Agency, National Aerospace Laboratories, Indira Gandhi Centre for Atomic Research, Indian Council of Medical Research,

Banks - Reserve Bank of India, The Vysya Bank Ltd., Bank of India, Mumbai, Bank of India, Bangalore, City Union Bank Ltd.

Educational Institutions - University of Agricultural Sciences, R.V.College of Engineering, Vivekananda Institute of Technology, 

Public Sector Units - Bharath Earth Movers Ltd., ITI Ltd., 

Large Corporates - Alcatel Network Systems India Ltd.,

Small & Medium Enterprises - Sutures India Pvt. Ltd.,

iii) Customers whose purchase orders form part of material documents.

Government Organisations - Prasara Bharathi. Andhra Pradesh Technology service, Central Excise, Central railway Mumbai, KSDL, KSIIDC, MSIL, ONGC

Research Organisations - BARC, CPRI, LRDE

MAIN OBJECTS OF THE COMPANY

The main objects of the Company as set out in the memorandum of association of the Company are as under-

1. To carry on the business of manufacturers, assemblers, fabricators, importer, exporters, buyers, sellers, distributors or otherwise dealers in computers like Micro, Mini and/or Personal computers and their components, accessories and peripherals.

2. To undertake the designing and development of systems and application software either for its own use or for sale in India or for export outside and to design and develop such systems and application software for or on behalf of manufacturers, owners, and users of computer systems and digital/electronic equipment in India or elsewhere.

3. To carry on the business as manufacturers, dealers, exporters, buyers and sellers or otherwise users in any manner of the raw materials, stores, components etc., used for the manufacture of electronic goods including computers like micro, mini and/or personal computers and their components, accessories and peripherals.

4. To manufacture, develop, import, export, buy, sell (on installments, hire purchase or other basis), distribute, repair, convert, alter, let on hire and other wise deal in all kinds of electronic data products including calculators, micro computers, mini computers and other similar articles, products, devices and their accessories, spares, parts, components and assemblers and all kinds of instruments, apparatuses, appliances and gadgets used for or in connection with any of the aforesaid items.

5. To manufacture, develop, import, export, buy, sell (on installments, hire purchase or other basis, distribute, repair, convert, alter, let on hire and other wise deal in electronic, electrical, electro-mechanical and other similar equipment, used in the fields of communication, office equipment, instrumentation and process control products and their devices and their accessories, stores, spares, parts, components, assemblies and all kinds of instruments, apparatuses, appliances and gadgets used for or in connection with any of the aforesaid items.

The company has neither defaulted in the repayment of the term loan installments

Nor had requested for any re-scheduling of the term loan installments

PRESENT PROMOTERS/DIRECTORS AND THEIR BACKGROUND

V.Ranganathan, BE

Chairman and Managing Director

Ranganathan earned a BE from Bangalore University . He started Cerebra in 1992. Prior to Cerebra, he was working in Electro systems & Associates(1 Yr). He then started Elco systems; Megatromech systems Pvt. Ltd,(5Yrs) Monolithic Components and Peripherals, Kranion Technologies Pvt. Ltd. He has 13 years of IT experience.

K. Gururaja Upadhya , BE

Director Technical

Gururaj earned a BE from Bangalore University. He joined Cerebra in 1992 . Prior to Cerebra, he held responsibilities in Electro systems & Associates(1Yr). Elco systems, , Megatromech systems Pvt. Ltd. (5 Yrs), Kranion Technologies Pvt. Ltd . He has 13 years of IT experience.

Shridhar S. Hegde, B.Sc., LLB.

Director Marketing

Hegde earned a BSc from Bangalore University. He joined Cerebra in 1992 . Prior to Cerebra, he held responsibilities in Monolithic Components and Peripherals, Kranion Technologies Pvt. Ltd . He has 13 years of marketing experience.

Mythili Kannan, M Tech., B.S (Mathematics), M.S.Electrical Engg.

Director - USA Operations

Mythili earned her M Tech from IIT Madras. She founded Anytech Inc, Maryland, USA in 1994 and is a consultant for Planning Research Corporation, Alcatel Data Networks, Citicorp, Vista IT Inc, Philadelphia Electric Company (PECO), US Dept of Justice, Intel Online Services, Columbia Gas, Fairfax County Government, First Care/Blue Cross/Blue Shield and US internetworking Inc. Prior to Anytech, Mythili held responsibilities at IBM Corporation, ScanData Systems, Chemical Abstracts Services and Overseas Aerospace Corporation. She has 19 years of software experience in the US.

V.Krishnan, BSc, ACA

Director Finance

Krishnan earned a B Sc from Bangalore University and is a qualified Chartered accountant from the Institute of Chartered accountants of India. He joined Cerebra in 1994 . Prior to Cerebra, he held responsibilities in M/s Janardhan & Co., and M/s B.S.Venkatachalapathy & Co., Chartered Accountant firms (5 Yrs), BPL Ltd.(2 Yrs). He has 12 years of financial experience.

P.Vishwamurthy, BE

Director Software

Murthy earned a BE from Bangalore University. He joined Cerebra in 1992 . Prior to Cerebra, he held responsibilities in Vishwa Bharathi Electronics and Sterling Resorts (India) Pvt. Ltd. Now he is the Centre Head of Sri Vidya Education Centre, a Franchisee of Aptech Computer Education. He has 10 years of marketing experience.

BOARD OF DIRECTORS :

Sl. No. Name, Age & Designation Address Qualification Other Directorships 

1 V.Ranganathan, 36 Yrs, S/o Late R.V.Iyer B.E Director

Chairman & Managing 1017, 10th Main, I Block Kranion Technologie (P) Ltd.,

Director. III Stage, Basaveswaranagar 

Bangalore 560 079 

2. Mythili Kannan, 40 Yrs, W/o Kesavan Kannan, M Tech., B.S(Maths), President 

Director- USA Operations 14433, Settlers Landing M.S(Elec. Engg) AnyTech : Inc., USA

Way, North Potomac, 

MD-20878 (USA) 

3 Gururaja K Upadhya, 35 Yrs S/o K. Shama Upadhya B.E Director

Director - Customer Support 1217, 21st Cross, II Block Kranion Technologie (P) Ltd.,

Rajajinagar ,Bangalore 560 010 

4 V.Krishnan, 33 Yrs, S/o Late R.V. Iyer B.Sc, ACA Director 

Director - Finance 1017, 10th Main, I Block III Stage, Kranion Technologie (P) Ltd.

Basaveswaranagar, Bangalore 560 079 

5 Shridhar S Hegde, 39 Yrs, S/o S.M.Hegde B.Sc., LLB Nil

Director - Marketing 156/A, 2nd Block, 36th Cross, 

Rajajinagar, Bangalore 560 010 

6 P.Vishwamurthy, 32 Yrs, S/o G.Phalanetra 

Director - Software 22/A, "Vanasuma" IIIrd Stage, 4th Block B.E Nil 

Basaveswaranagar, Bangalore 560 079 

7 S.Gopalakrishnan, 32 Yrs, S/o Late Seshadri B.Com Nil

Director 445, Ist N Block, Rajaji Nagar 

Bangalore - 560 010 

8 P.E.Krishnan, 36 Yrs, S/o P.K.Eswaran B.Com Nil

Director 11, Nagarthamman Koil Street

Jaffarkhanpet, Chennai - 

9. T. S Suresh Kumar, 33 Yrs, S/o T. Subramanyam B.Sc., PGDMM Nil 

Director No. 522, 53rd Cross,3rd Block, 

Rajajinagar, Bangalore 560 010 

10. Medha Hegde, 32 Yrs, W/o Shridhar Hegde B.Sc. Nil

Director 156/A, 2nd Block, 36th Cross 

Rajajinagar,Bangalore 560 010 

11. Chitra Vishwamurthy, 26 Yrs, W/o P. Vishwamurthy B.Sc. Nil 

Director 22/A, "Vanasuma" IIIrd Stage, 4th Block 

Basaveswaranagar, Bangalore 560 079 

The overall operations of the company are rested in the board of directors. The day to day affairs of the company are managed by all the directors who are supported by the following key management personnel. 

YOGISH N.N

Vice President - Projects

Yogish earned his BE from Bangalore University. He founded Catsoft in 1992. He joined Cerebra in 1997 and is a consultant to Franchise Mortgage Acceptance Company in US, NACAB in U.K. and all Clients of M/s TCA Synergo Ltd. in UK. Prior to this, he has provided consultancy and software development to domestic clients.He has 8 years of Software experience.

Mr. Asit Ahuja - Regional Manager - Mumbai

He is a Bachelor of Commerce with Masters degree in Financial Management from Jamnalal Bajaj Institute of Management, rich experience as director - marketing in Rank Computers P Ltd. From June 1991 to August 1997. Developed business of Cerebra for Mumbai based Corporates, banks etc. Joined Cerebra on 16.10.1997.

Arvind Kannan - Manager Marketing

He is an engineer. He Worked as marketing executives in Advantec Network Systems, and C-Tel Infotech Ltd.. He joined Cerebra on 16.10.1997. Presently he is placed at Mumbai office of the company.

R.M. Madhu - Business Development Manager 

He is an Engineer from National Institute of Engineering and did M.B.A in Production Management. He started his career as small entrepreneur and later joined Cerebra during February 1994. 

Krishnamurthy S - General Manager - Marketing 

He is a bachelor of Science (Hons) and MBA- Marketing. He has rich experience in marketing and has worked in India with MNCs and overseas at Muscat and U.K.

Ramaswamy G S - Marketing Manager 

He is a Bachelor of Engineering from University of Mysore and PGD in Instrumentation Technology and has 27 Yrs Experience in University of Agricultural Sciences, Bangalore. He joined Cerebra on 2.5.98 as Regional Manager in Chennai. 

A.Ashok - Regional Manger - Pune 

He is an engineer from RV College of Engg, Bangalore. He joined Cerebra on 13.4.95. He has experience in Vinayaka CNC Centre Pvt. Ltd., engaged in design and production of tools etc.

Sadanand M Hardikar - Regional Manager - Noida 

He is an engineer. He has 9 Years experience in various companies as marketing manager. He joined Cerebra on 30.12.95. He is mainly responsible for development of business in the North.

V.Sivakumar - Regional Manager - Coimbatore

He is a B. E. (Computer Sciences). He joined Cerebra on 9.4.98 and contributed for development of business in and around Coimbatore and in Kerala State

Ramakrishna Rao M - Senior Manager - Customer Support. 

He is an engineer .He has experience in Computer hardware maintenance etc. He joined Cerebra during Sept. 1993 and is heading the Customer support department.

Harish B.R - Manager - Production

He is a B.E. He has 10 years experience in BFW Ltd. as manager production & inventory control. Joined Cerebra on 10.6.99. 

V.R.Harikumar - Senior Manager - Accounts

He is a B.Com and has more than 20 years accounting experience . He has served in companies like Sundaram Fasteners Ltd., Larsen & Toubro Ltd., and Countrywide Consumer Financial Services Ltd., before joining Cerebra on 27.01.1999.

The company is in the process of identifying and recruiting some more professionals with adequate knowledge and experience.

OTHER DISCLOSURES :

Material Changes in key management personnel:

Save otherwise stated elsewhere, there have been no material changes in the key management personnel during the last one year except the following :

Appointments Designation Date of Appointment

S.Krishnamurthy General Manger - Marketing 09.02.2000

B.R.Harish Manager - Production 10.06.1999

MANAGERIAL COMPETENCE :

Cerebra Integrated Technologies Ltd., an ISO 9002 company for production, installation, service and software solutions.

The company operates under the able leadership and guidance of all experienced and professionally qualified directors who are also overseeing the day to day operations of the company. The Company's expertise and competence in Computer Hardware Industry has already been established under the brand name "CEREBRA". Besides, the support extended by the well qualified professional team of management personnel also led to the growth of the company over the years. The Company has definite plans for technological up-dations and for recruitment of skilled manpower towards future requirements. The operations of the proposed overseas branch would be handled by well qualified and efficient team.

DETAILS OF FIRMS, COMPANIES/VENTURES CONNECTED WITH THE PROMOTERS:

There are no other firms or companies or ventures connected with the promoters except for the Kranion Technologies Pvt. Ltd., and Srividya Education Centre, details of which are furnished below:

Kranion Technologies Pvt. Ltd.

Kranion was launched as backward integration to Cerebra and manufactures full range of mother boards, add on boards and peripherals with supplies to the OEMs in the PC industry. 

Financial Indicators for the last three years are as under :

Particulars 1996-97 1997-98 1998-99

Sales 65.27 64.53 76.31

PAT 2.79 2.05 2.66

Cash Profit/Loss 3.63 2.91 3.52

Srividya Education Centre : 

A Partnership firm established during the year 1995 as a franchisee of Aptech Ltd, pioneers in computer software education and training.

Partners:

Cerebra Integrated Technologies Ltd, and Ashok Chabbria.

Percentage of holding of Cerebra in the firm : 50%

Business: Computer Software education.

Location: Koramangala, Bangalore

Financial Indicators for the last three years are as under:

Particulars 1996-97 1997-98 1998-99

Sales 26.42 24.66 39.24

PAT (5.32) (4.09) (0.45)

Cash Profit/Loss (2.84) (1.02) 9.27

Capital 19.82 21.64 21.64

There are no pending litigations/defaults against Srividya Education Centre and Cerebra in the capacity as partner of the firm

OUTSTANDING LITIGATION/ DEFAULTS/DISPUTES

There are no pending litigations against the promoters of the company which can affect the operations of the company.

There are no over-dues, defaults to the financial institutions/banks, reschedulement of loan to banks/FIs by the company.

There are no pending offences of non payment of statutory dues by the promoters of the company. 

There are no cases of litigations pending against the company or against any other company whose outcome could have a materially adverse effect on the position of the company. There are no pending litigations against the promoters/directors in their personal capacities and also involving violation of statutory regulations or criminal offences.

There are no pending proceedings initiated for economic offences against the directors, promoters, companies and firms promoted by the promoters. There are not outstanding litigations, defaults pertaining to matters likely to affect the operations and finances of the company including disputed tax liability, prosecution under any enactment in respect of schedule XIII of the Companies Act, 1956.

The company, its promoters, directors and other companies with which promoters are associated have neither been suspended by SEBI nor any disciplinary action has been taken by SEBI. None of the directors have resigned from the company during last 12 months. There are no prosecutions launched by the income tax authorities and no liability compounded by the promoters/company/ companies/ventures/firms with which the promoters are associated is subsisting.

There are no cases of pending litigations/defaults in respect of the firms/companies with which the promoters are associated in the past but are no longer associated .

There are no listed companies promoted by the promoters nor there is any default in payment of listing fees nor any action was initiated by the stock exchanges/SEBI.

PROJECT DETAILS :

THE PROJECT :

The proposed project is for expansion of the existing convergence technology activity such as manufacturing and marketing of all types of Personal Computers, High End Servers, Networking, IT Solutions, etc., setting up of an exclusive Software Development Centre in India and an overseas office in the U.S.A.

LOCATION:

The lease/ownership details of the present offices/works of the company at various places are as follows:

Particulars Address Area Lease/Ownership Details

Registered 24,Ground and III Floor, 12th Main, 4500 Sq.Ft. Lease with Mr.C.M.Joseph & Mrs.Annamma Joseph for 2 yrs 
Office I Block Rajajinagar,Bangalore - 560 010 w.e.f. 1st April, 1999 on monthly rent of Rs.8800 against security
deposit of Rs.170000. Renewal with mutual consent.

Factory S5, I Phase, Peenya Industrial Area 5610 Sq.Ft. Land allotted by KSSIDC on lease cum sale basis vide 
Peenya, Bangalore - 560 058 agreement dt 27.3.1997. 

Chennai No 1, Sundaram, 1st Floor, South Road, 1000 Sq.Ft Lease with S.Kasturi initially for 11 months W.e.f Sept., 1999 on
West CIT Nagar, Chennai - 600 035 monthly rent of Rs. 5500 against security deposit of Rs. 85000.
Renewal with mutual consent.

Coimbatore `Lakshmi Nilayam',1st Floor, No.15, 1000 Sq.Ft Lease with Sivasubramaniam initially for 24 months W.e.f 19.11.1999
Ramalinga Nagar, Saibaba Colony, on monthly rent of Rs. 2500 against security deposit of Rs. 25000.
Coimbatore - 641 011 Renewal with mutual consent

Mumbai No 17, Dinshaw Building, 600 Sq.Ft Lease with Sunil Mittal W.e.f 1.8.1999 on monthly rent of Rs. 5000
239, Dr.Cawasji Hornusji Street, against security deposit of Rs. 50000. Renewal with mutual consent
F.M.Lane, Marine Lines, Mumbai - 400 002

Pune Flat No. 4, 2nd Floor, Dongare Building, 800 Sq. Ft. Lease with R.P Wani initially for 24 months W.e.f 1.5.1999 on
Gokhale Road, Pune - 411 016 monthly rent of Rs. 3000 against security deposit of Rs. 55000.
Renewal with mutual consent

Noida E-185, Sector 21, NOIDA 1000 Sq.Ft. Lease with N.S.Mangat initially for 22 months W.e.f 1.4.1998 on
monthly rent of Rs. 10000 against security deposit of Rs. 20000.
Renewal with mutual consent

Hyderabad 1/11/124, 1st Floor, Shyamlal Building, 1200 Sq.Ft. Lease with S.S.Rao initially for 2 Years W.e.f 1.4.1998 on monthly
Begumpet, Hyderabad - 500 016 rent of Rs. 6000 against security deposit of Rs. 20000. 
Renewal with mutual consent

Besides the company has representative offices at Calcutta and Goa also.

In the proposed project, the company is planning to construct a building measuring 17400 Sq.Ft for its hardware division at Peenya, Bangalore, to acquire premises on ownership basis for branch offices at Chennai, Coimbatore and Mumbai at the existing locations or other places to be identified. The company also proposes to set up a software division which will be located in the vicinity of Electronic City, Hosur Road, Bangalore.

LAND & BUILDING 

CEREBRA is planning to construct a building at Peenya, Bangalore with a total carpet area of about 17,400 Sq. ft. at an estimated cost of Rs.105.68 Lakhs, which works out to Rs.607.36 per square feet. Building to the extent of 5900 sq. ft. at Peenya is nearing completion. The land at Peenya is owned by the company. The land was allotted by KSSIDC under lease cum sale agreement dated 27.3.1997. The land is located in a developed area and the company has obtained necessary government approvals/clearances for construction of the building. The owners/promoters of the land bought by the company are nowhere related to the promoters/ directors of the company. The company has appointed M/s. N.V.Raman, building contractors to undertake the construction work. The building is scheduled to be completed by February 2001. 

Cerebra also proposes to acquire a branch office building at Chennai with a total carpet area of about 3000 Sq. ft.. at a rate of Rs.1,900 per Sq.Ft., a branch office building at Coimbatore with a total carpet area of 3000 Sq.ft. at a rate of Rs.1700/- per sq.ft. and another branch office building at Mumbai with a total carpet area of about 3000 Sq.Ft. at rate of Rs.4000/- Sq.ft.

Presently, Cerebra has 8 branch offices in major cities in India which are functioning in leased premises. Cerebra intends to purchase fully furnished buildings at Chennai, Coimbatore & Mumbai as part of its expansion plan. In addition to their existing activity, they propose to utilise these premises for their software activities also. 

Land for Software Division (Rs.80.00 Lakhs)

For the proposed Software Division, CEREBRA proposes to acquire land measuring 20,000 Sq.Ft. at a rate of Rs.400/- Sq.Ft. in the vicinity of Electronic City, Hosur Road, Bangalore.

Building (Software Division) (Rs.189.20 Lakhs)

CEREBRA is planning to construct a Building at Electronic City, Hosur Road, Bangalore as a Software Development Centre with a total carpet area of about 20000 Sq.ft. at an estimated cost of Rs.189.20 Lakhs which works out to Rs.946/- per Sq.ft.

Interiors

Hardware Division (Rs.86.00 Lakhs)

The expenses for interiors include the cost for cabins, water cascades, decorative tables, partitions, chairs, false ceiling, carpets, electrical fittings and other fittings and miscellaneous expenses. An amount of Rs.57.80 Lakhs is estimated towards Interiors for the new building proposed at Peenya, Bangalore which works out at the rate of Rs.475/- per Sq.Ft. for a carpet area of 12180 Sq.Ft.(being 70% of the built up area) and Rs.28.20 Lakhs is estimated towards interiors for the corporate office building at Rajajinagar, Bangalore at the rate of Rs.627/- per Sq.ft. for a carpet area of 4500 Sq.ft.

Software Division (Rs.67.52 Lakhs)

The Expenses for Interiors include the cost for cabins, tables, partitions, chairs, false ceiling, carpets, electrical fittings, water cascades, decorative fittings and other miscellaneous expenses. An amount of Rs.67.52 Lakhs is estimated towards interiors for the new building (Software Development Centre) proposed at Electronic City, Hosur Road, Bangalore for a carpet area of 14000 Sq.ft.(being 70% of the built up area) which works out to Rs.482.25 per Sq.Ft.

Plant & Machinery (Rs.92.06 Lakhs)

This includes various equipments such as Surface Mount Device Machines, Computer Systems, Digital Oscilloscopes, Ovens, Surface Mounted Devices (SMD) Hot air Rework station, Anti-static devices, etc., needed for Hardware division.. A list of equipments proposed to be purchased is furnished as under:

(Rupees in lakhs)

Sl.No. Particulars Supplier Quantity Unit Price Amount

1 S.M.D. Machines Sumitron Marketing Full set 27.05

2 Computer Systems Cerebra Full set 29.74

3 Digital Oscilloscope Scientific & Full set 21.43

Indl. Equip. Co.

4 Ovens High Temp. 2 nos. 1.04 2.08

Furnaces Ltd.

5 SMD Hot Air Rework Hybrid Full set 1.85 1.85

Stations Technologies

6 Anti-static Devices Cir-Q-Techtako Full set 5.52

Technologies Pvt. Ltd. 

Sub Total 87.67

Add Installation and 

Erection charge 4.38

Total 92.06

Hardware (Rs.150.00 Lakhs)

This includes various Hardware equipments required for Software Division, details of which are given below :

(Rs. in Lakhs)

Sl. No. Description Unit Price Qty. Nos Total

1 Cerebra Server with SE 450NX 10.28 4 41.12

2 Cerebra Server with L 440 GX 2.57 12 30.84

3 Cerebra PIII 500 0.448 140 62.72

Printers

4 Laser Jet 4500 N 2.085 2 4.17

5 Desk Jet 810 C 0.094 10 0.94

6 MSP 345 Dot Matrix 0.10 10 1.00

7 Scanners, Bar coding Printers 0.32 5 1.60

8 Dumb Terminals for LAN/WAN 0.118 5 0.59

Networking Accessories

1 24 Port 3Com Switch 0.835 2 1.67

2 24 Port 100MBPS Hub 0.44 5 2.20

IPS-IP S/W 0.50 1 0.50

4 ASM Rad Modem 0.95 1 0.95

5 24 Port Patch Panel 0.09 1 0.09

6 19" Rack 0.12 1 0.12

7 DOT Charges for one year lease line 1.00 - 1.00

Total 150.00

All the above would be sourced internally AT COST by the Company.

Software (Rs.27.44 Lakhs)

This includes various software licences for the Hardware Division as under :

(Rs. in Lakhs)

Sl. No. Description Unit Price Qty Nos Total

1 Windows NT Server - 5 Clients 0.26 1 0.26

2 Client Licence - Molp A 0.0136 25 0.34

3 Novell Netware 5.0 5 Users 0.375 10 3.75

4 Additional 10 Users 0.72 2 1.44

5 Unnixware 7.1 5 Users 0.656 5 3.28

6 Unnixware Media Kit 0.046 5 0.23

7 Unnixware Additional 10 Users 0.23 1 0.23

8 Windows 95 0.031 25 0.77

9 MSASM 1.00 1 1.00

10 Visual Studio Ver. 6.0 Enterprise Ed'n 0.57 1 0.57

11 Office 97 (Pro) 0.17 1 0.17

12 Sql Server Ver. 7.0 - 5 Clients 0.44 1 0.44

Sql Server Client Licence 0.052 10 0.52

13 Borland C++ Ver 3.0 Ent. Editn 1.16 1 1.16

14 Netscape Suitspot Pro Ser Ver3.5 NT 3.30 1 3.30

15 Oracle 8.0 Workgroup for NT 0.52 1 0.52

16 Oracle 8.0 Workgroup for unix 0.55 1 0.55

17 Adobe Photoshop for Windows Ver 5.0 0.34 1 0.34

18 Adobe Image ready for Windows Ver 1.0 0.09 1 0.09

19 Coral Draw 9.0 Full pack 0.18 1 0.18

20 J Builder-Pro 0.25 1 0.25

21 IBM's Via Voice Speech Recognition 0.39 1 0.39

22 Sun Java Suit (ENT Comp) 5.00 1 5.00

23 3D Studio Max -Ver 2.0 0.22 1 0.22

24 Auto Cad Rel 14 0.81 1 0.81

25 MSASM 1.00 1 1.00

26 Norton Anti-Virus Server NT/Novell 0.0765 3 0.22

27 Norton Anti-Virus Client Licence 0.013 10 0.13

28 Norton Utilities 0.027 10 0.27

TOTAL ` 27.44

All the above items would be procured from various reputed vendors and sourced internally AT COST by the Company to the Software Division.

Software Licenses (Rs.76.28 Lakhs)

This includes various software licenses for software division as below:

(Rs. in Lakhs)

Sl. No. Description Unit Price Qty Nos Total

1 Windows NT Server - 5 Clients 0.26 10 2.66

2 Client Licence - MOLP A 0.0102 150 1.54

3 Novell Netware 5.0 5 User 0.375 2 0.75

4 Additional 10 Users 0.72 2 1.44

5 Unnixware7.1 5 Users 0.657 2 1.31

6 Unnixware Media Kit 0.046 2 0.09

7 Unnixware Additional 10 Users 0.234 2 0.47

8 Windows 98 0.0308 100 3.08

9 MSASM 1.00 1 1.00

10 Visual Studio Ver 6.0 Ent Edn 0.57 2 1.14

11 Visual Studio Ver 6.0MOLP A(client) 0.138 50 6.91

12 Office 97 (Pro) 0.166 1 0.17

13 Office 97 (Pro) MOLP B 0.126 100 12.69

14 SQL Server Ver 7.0 5 Clients 0.445 1 0.45

Boroland C++ Ver 3.0 0.052 50 2.62

15 Netscape Suitspot 1.165 1 1.16

16 Oracle 8.0 WorkGroup for NT 3.26 1 3.26

18 Oracle 8.0 Work Group for Unix 0.55 1 0.55

19 Adobe Photoshop Ver 1.0 0.335 1 0.34

20 Adobe Image Ready Ver 1.0 0.09 1 0.09

21 Corel Draw 9.0 Full pack 0.185 10 1.85

22 J Builder Pro 0.25 20 5.00

23 IBM's Via Voice Speech Recognition 0.39 3 1.17

24 Sun Java Suite (ENT Comp) 5.00 1 5.00

25 3D Studio Max Ver 2.0 0.223 10 2.23

26 Autocad Rel. 14 0.815 5 4.07

27 MSASM 1.00 1 1.00

28 PSPICE 10.34 1 10.34

29 Norton Antivirus Server NT/Novell 0.076 16 1.22

30 Norton Antivirus Client LIC 0.013 140 1.89

31 Norton Utilities 0.027 10 0.27

TOTAL 76.28

The items would be procured from various reputed vendors, assembled inhouse and sourced internally AT COST by the Company.

The company has already identified all the software/hardware equipments required as above. The market for such items continues to be very competitive as all the equipments are of reputed domestic and international brand and are available locally, the company would be procuring the equipment from the original manufacturers/accredited agents directly except for hardware which would be sourced internally from hardware division to the extent of Rs.150.00 Lakhs at market price. The orders for these equipments would be placed at the appropriate time. The accredited agents/firms supplying the equipments/software licences are in nowhere related/connected to the promoters/directors of the company. However the after assembling the desired items to the specifications the same would be sourced at cost to the software division by the hardware division of the Company.The Company, promoters, and directors are not in any way interested in those firms that are supplying the equipments except that most of the hardware and software items would be supplied by Cerebra itself. All the equipments that are being procured by the company will be new. The company has not obtained performance guarantee for the supply of above equipments which are generally under warranties.

MISCELLANEOUS FIXED ASSETS

Air Conditioners

Hardware Division: (Rs.29.16 Lakhs)

CEREBRA proposes to install condensing units having capacities of 7.5TR (2 Nos), 3 TR (1 No), 18 TR (2 Nos), 5 TR(2 Nos), 2 TR (1 No) with an estimated cost of Rs.29.16 Lakhs.

Software Division : (Rs.39.86 Lakhs)

CEREBRA proposes to install condensing unit having a capacity of 120TR for its Software Division at an estimated cost of Rs.39.86 Lakhs.

D.G. Set

Hardware Division: (Rs.5.51 Lakhs)

A total of Rs. 5.51 Lakhs is earmarked for two D.G. Sets of 50 KVA, 66.6 BHP. Cost is inclusive of Excise Duty of 16% and transportation charges of Rs.4000/-.

Software Division: (Rs.5.51 Lakhs)

A total of Rs.5.51 Lakhs is earmarked for two numbers of D.G.Sets of 50 KVA, 66.6 BHP. Cost is inclusive of Excise Duty of 16% and transportation charges of Rs.4000/-.

Un-interrupted Power Supply (UPS) System

Hardware Division: (Rs.7.05 Lakhs)

A total of Rs.7.05 Lakhs is earmarked for 25KVA UPS & Batteries, which is inclusive of all taxes and transportation charges.

Software Division: (Rs.21.4 Lakhs)

This includes the cost of 25KVA UPS & Batteries of Rs.7.06 Lakhs and the cost of 60KVA UPS & Batteries of Rs.14.34 Lakhs, which are inclusive of all taxes and transportation charges.

Office Equipments

Hardware Division: (Rs.12.23 Lakhs)

Cost of office equipment includes the cost of Xerox machines, Fax machines and EPABX System. Total estimated cost of office equipment is Rs.12.23 Lakhs.

Software Division: (Rs.26.39 Lakhs)

Cost of office equipments includes the cost of Xerox Machines, Fax Machines and EPABX System.

Vehicles

Hardware Division: (Rs.27.73 Lakhs)

This includes cost of one Maruti Baleno, two numbers of Maruti Omni, two numbers of Maruti Zen VX, one Matador 307 mini bus and one Tempo Excel Pick-up Van. Total estimated cost of vehicles is Rs.27.73 Lakhs.

Software Division: (Rs.34.59 Lakhs)

This includes the cost of one Maruti Baleno, two numbers of Maruti Omni, two numbers of Maruti Zen VX, two numbers of Matador 307 Mini Bus and two numbers of Tempo Excel Pick-up vans.

Communication Tower (Rs.19.61 Lakhs)

In order to establish a High speed data communication links between CEREBRA's Development Centre in the U.S and their Development Centre in Bangalore, a communication tower is proposed to be set up at the Company's Software Development Centre at Bangalore. The Total Cost of Communication leased line of 64KBPS to USA, cost of cable and cost of other network equipment is estimated at Rs.19.61 Lakhs.

Market Development expenses (Rs.212 Lakhs)

This includes the market development expenses for the new products, the details of which are furnished in the following table :-.

(Rs. In Lakhs)

Sl.No. Particulars Amount

Coimbatore 4.00

Pune 4.00

Mumbai 12.00

Delhi 12.00

Chennai 10.00

Hyderabad 6.00 54.00

2. Price Advertisements for Home Computers 40.00

3. Participation in various Exhibitions 20.00

4. Image building Advertisements 50.00

5. Bus shelters, Police Kiosks, Pole Ads 10.00

6. Hoardings in Various Cities 8.00

7. Catalogues/Brochures, Marketing Materials 10.00

8. Demo Centres 10.00

9. R&D Centre for U.P.S 10.00

Total 212.00

Overseas Office Establishment (Rs.210 Lakhs)

CEREBRA proposes to set up its overseas office at North Potomac, Madison, USA to provide software services to customers in the USA. The estimated cost of establishment of overseas office is Rs.210 Lakhs, the details of which are given below :

(Rs. in lakhs)

Sl. No. Particulars Amount

1. Computers & Network Equipment 37.00

2. Electrical 5.00

3. Office Equipment & Furniture 20.00

4. Deposits

-Rental Deposits 10.44

-Deposits to obtain line of credit to comply

with Ins/Irs requirement for work permits 26.10

5. Preliminary & Pre-Operating Expenses

- Salaries for three months 25.00

- Business Development 30.88

- Company Registration, legal & Ins. Expenses 5.58

6. Working Capital Requirement 50.00

Total 210.00

The company is already in the process of adding professionally skilled manpower to its overseas operations with the active involvement of Anytech.Inc., USA. The company is proposing to employ 6 professionals in various cadres for its US office.

The Company has entered into an agreement for technical tie-up/joint venture with M/s.Anytech.Inc., a US based Software development company with whose support and assistance the proposed overseas branch would function. As per the extent RBI guidelines is in force, the company would open an EEFC Account with Canara Bank, in connection with setting up of overseas office at appropriate time.

Contingency

Hardware Division (Rs.5.28 Lakhs): -

Contingency of Rs.5.28 Lakhs is provided for Building at 5% of factory building cost at Peenya, Bangalore as the building is proposed to be built.

Software Division: (Rs.9.45 Lakhs)

Contingency of Rs.9.45 Lakhs is provided for building at 5% of the cost of SDC building.

Miscellaneous Expenses (Rs.10.86 Lakhs)

This head includes expenses towards overhead projector, slide projector, video systems, water coolers etc., at an estimated cost of Rs.10.86 lakhs.

Pre-Operative Expenses (Rs.88.75 Lakhs)

The pre-operative expenses are mainly towards public issue expenses and are estimated at 10% of the total funds being mobilised from the Public.

Additional Working Capital Margin (Rs.250 Lakhs)

An amount of Rs.250 Lakhs has been estimated towards Working Capital margin requirement of Hardware Division. The details of the requirements has been furnished under the para `working capital calculations'.

Working Capital for Software Division (Rs.253.44 Lakhs)

An amount of Rs.253.44 Lakhs has been estimated towards working capital requirement of Software Division. As no bank borrowings are proposed the entire amount has been included in the project cost.

The details of the requirements has been furnished under the para `working capital calculations'.

PRESENT STATUS OF THE PROJECT:

Details of the amount of expenditure already incurred by the company towards the project during the period 01.04.99 to 31.1.2000 as certified by M/s. M.S.Reddy & Associates, Chartered Accounts vide their Certificate dt. 15.02.2000 are as follows.

Rs. in lacs

1. Building at Peenya, Bangalore 35.55

2. Canara Bank, Appraisal fees 3.00

3. Canara Bank- Lead manager to the Issue 2.00

4. SEBI -filing Fees of Draft Prospectus 0.15

Total 40.70

Products and Services :-

CONVERGENCE TECHNOLOGY DIVISION: - CEREBRA is presently engaged in manufacturing and marketing of the following Hardware items.

CEREBRA DESKTOPS with Intel Celeron and Pentium III Processors

CEREBRA SERVERS (Intel Validated servers)

CEREBRA ULTRA FT (FAULT TOLERENT) SERVERS

CEREBRA RACK MOUNTABLE SERVERS with Intel Pentium III and Pentium III Xeon processors

CEREBRA HIGH END WORKSTATION with Intel Pentium III and Pentium III Xeon Processors

NOTE BOOKS

HOME COMPUTERS

INDUSTRIAL PCs and

PERIPHERALS like Printers, Monitors, Keyboards, Hard disk Drives, Floppy disk Drives, CD-ROM Drives and Scanners etc.

Networking (LAN, WAN)

SOFTWARE DIVISION: 

CEREBRA is presently developing and selling tailor-made Customised Software. These Customised Software are built Modular in Architecture, can be easily Integrated with each other and provide the flexibility to incorporate additional customer required features. This Architecture provides the customer with the near end product leaving only the custom changes for an individual customer's requirement to be added. This not only ensures faster implementation, better functioning and stability (as the core is already tested thoroughly) but also reduces the corresponding overhead for developing a customised software making it a highly cost effective package. Some of these Customised Software are described here under:

Production Planning & Control System:

The system incorporates Production planning based on the current market requirements by rescheduling or eliminating lower priority products. The system has various modules like Purchase Orders, Inventory, Production Planning, Scheduling, Material Requirement Planning, Work In Progress, Quality Analysis, Rejects, Invoicing and up to Despatch.

Multimedia Based Point of Information System:

The system, developed on the MS Windows platform, has a user-friendly interface and is very simple to use. It uses Multimedia features with Audio and Visual supports to enhance ease of use and recollection. The system is targeted at banks and similar organisations where customers need to get acquainted with the procedures and formalities for any dealing / transaction with the organisation. (. E.g. if an account holder would like to apply for a loan, the system will then take him through a guided tour, which will explain the procedures, and the supportive documents needed to initiate the process. The media of communication / description can be selected from the list of languages provided). Another Multimedia based product on the pipeline is a Computer Based Training CBT for a nationalised bank, the above projects will be implemented on Multimedia based SOHO range of Computers infiniti.

Garment Exporter's package:

The system is designed to cater to all the needs of a Garment Export Company starting from Fabrics & Designs as bitmaps with their relevant details to creating Purchases based on Sales Orders, Lead times and Stock levels to handling Jobworks & Processing, QC, Rejects and finally preparation of Invoices, Packing Slips and related Export Documents. The system has a powerful reminding system which helps the customer to follow up on the Order execution, receipts against Purchase orders and job work most essential in a time bound export market. The system is developed on the Windows Platform.

Excise Accounting:

A product to cater the needs of Industrial Electrical Equipment Manufacturers / Distributors in handling Purchase, Sales and Invoicing. The main feature of the product is that it ensures that invoices generated can claim full excise duty benefit under the MODVAT scheme, as proposed by the Govt. India. The package also generates the various statements required by the various departments of the state. It has an integrated financial accounting package along with an inventory system to control and maintain On Line Transactions. It is also having vital decision making reports to ensure the growth of the Company. The product, having a large install base was primarily developed on the DOS platform using FoxPro and is now ported to windows using Power Builder for better user interface and integrity.

Excise Accounting for Manufacturing Units:

The product is designed to maintain all the Excise related documents for any manufacturing concern falling under the excise bracket. The only document the user has to key in is his Receipt invoices. Out going invoice can be generated from the package directly, these will automatically write all the required books such as RG 23 Parts II PLA RG, I I, and finally at the end of the month it generates RT 12, the Monthly report. The other integrated modules may include Purchase Orders, Order processing, Raw material Inventory, Financial accounting etc.

Parcel Tracking System:

The system is designed to cater to the needs of On Line Operations of any Parcel / Courier Service Organisation. The system starts from acceptance of a package up to the delivery at the destination. The user can query on any Bill No. / Voucher No., the result of which would be the exact location of the parcel, even if the parcel is located at any intermediate location. As an additional facility, barcode can be used for billing purposes. The system generates Invoices to the customers, who can be customised to suit any requirement and also allows setting of maximum credit limit for each customer, above which authorisation will be required. Designed to work as a Distributed computing system on Wide Area Networks, care is taken to ensure minimum data transfers, especially on long distance calls in order to cut down the inherent working costs of such a system. Other features like Financial Accounting, Payroll and necessary reports are an integrated part of the system.

Hospital Management System:

The System incorporates all the necessary features for the efficient management of a hospital. The system maintains the complete history of the patient. It maintains the list of drugs and their respective dosages administered to the patient along with a list of medicines he is allergic to and the patient's previous history with the doctor's comments is also available. It also takes care of departments like Lab reports, Operation Theater maintenance, Consultancy, Appointment Scheduling, Doctors details and specialisation, Hospital Details and various such related activities. The systems also integrate features like Payroll, Financial Accounting and a cumulative billing for the various services offered by the hospital.

Sales & Purchase Order Processing:

Developed on Windows, this package assists in forwarding purchase orders to manufacturers based on stock-on-hand and as-per-sales order. This package has the following inter related modules. Quotation, Sales Order, Purchase Order, Receipts, QC, Invoicing and accounting, suitable for any trading organisation.

CEREBRA is offering a wide range of software development and management services. Such services typically fall into three categories or a combination thereof. These are as follows

Bangalore based software development, project management and execution

Client site project management and execution

A combination of the above

Technical expertise:

CEREBRA personnel have adequate experience in project management and execution in the field of software development. Cerebra's primary expertise is in the Client / Server systems area.

Technical expertise includes the following areas

Languages

C/C++

GUI / Front ends

MS-Windows, Visual C++, Power Builder, Visual Basic, Guppy SQL, Lotus Notes and Visual FoxPro

Operating Systems Internals

UNIX (including variants such as Solaris, Sun Os, HP-UX) VAX/VMS

Novell NetWare, Windows NT, OS/2 and DOS

Communications Environments

TCP/IP

LANs such as Novell LANs Manager

Databases

Oracles, Sybase, Progress, Informix

Application Expertise:

CEREBRA has expertise in the areas of software relating to Manufacturing Industry such as MRP & MRP II, Production Planning, Scheduling etc.

Banking Industry,

Stock Broking,

Financial and Commercial Instrumentation.

TECHNOLOGIES AND PROCESSES

Potential areas where CEREBRA is planning to concentrate in the Software Division are furnished here under: -

(a) Software development

Horizontal areas, namely,

i. Client-server technologies.

ii. E-Commerce.

iii. Web Technologies.

iv. Object oriented programs and

v. Networking.

Vertical areas, namely,

i. Supply Chain Management,

ii. Customer Relationship Management,

iii. Enterprise Relationship Management ( SAP ), etc.,

(b) Consulting services and technical support :

CEREBRA proposes to concentrate on consulting services in the above areas outlined in Software development. Software maintenance and technical support for existing applications would be outsourced and performed off-shore.

(c) Custom Software development.

These are things that would be done for prospective clients. In the recent times, especially as preparations for Y2K, lot of companies were using packages like Oracle, etc., most of the custom software development involves using programming interfaces and tuning the packages for specific implementations.

Cerebra proposes to source its entire Hardware and Networking requirement internally and software requirements from Internationally reputed Companies such as Novell, Lotus, Oracle, Microsoft, etc. for establishing an integrated Network for all its offices in India and USA.

(d) Control and Engineering Applications. CEREBRA proposes to gain extensive experience in the development and implementation of a broad range of applications for the engineering and process industries.

CEREBRA plans to tie up with leading software product companies of the world, for designing and developing for them products in areas such as the Internet/Web, Multimedia and Control Automation.

(e) Animation

This is relatively a new area to be developed using Macromedia Director, Authorware and Visual Basic. Animation will be created using 3D Studio, Animator Pro, etc. Imaging & video edit tools such as Adobe range of products, sound edit tools and video digitization capabilities will be made available.

(f) Other Services

Internet Consulting: The company proposes to have a specialized development cell for the execution of projects using Internet technologies. CEREBRA's services can enable companies' legacy applications to take advantage of the externalized environment via the Internet. The company plans to gain expertise in developing Intranet and Extranet solutions as well as Web interfaces for ERP and other applications.

CEREBRA plans to develop expertise for Internet and Web technologies such as HTML, SHTML, Java, Javabeans, VJ++, Visual Cafe, VRML, ActiveX, CGI,ERL, etc..

Relational Databases - Core expertise exists in design and development using relational databases. Specific strengths would be on Oracle, Informix and Sybase. Highly skilled professionals are required to be working with various developments tools such as 4GLs, Form based tools, CASE Tools, SQL, Report-writers and language interfaces with C/C++, COBOL and PL/1.

Development of applications in Instrumentation, process controls and plant automation.

Design and development of commercial applications in manufacturing, marketing and finance for reputed clients using RDBMS, 4GL and GUI tools.

Design and development of user interfaces.

Design and development of MIS applications such as marketing and distribution information reporting, automation of payroll, in client-server environments.

Development of customer specific information systems based on client server database and front end tools.

Development of applications in 3-tier technology in a Client-Server environment.

Development of custodial services management system on a client server platform, for financial services industry.

SECURITIES DIVISION

Cerebra has a new Securities division with an intention to provide finance related solutions including Shares, Bonds and Debentures. The Company has already applied for a separate licence to deal in securities to SEBI, Mumbai through Bombay Stock Exchange and the permission is awaited.

EXISTING INFRASTRUCTURE FACILITIES:

Location: - CEREBRA'S registered and corporate office is located at # 24, 12th main I Block, Rajajinagar, Bangalore, a leased premises with a total area of 4500 sq.ft on the ground and third floor of a four storey building. The Factory is located at S-5, Peenya Industrial Area, Peenya I stage, Bangalore. The land measuring 5610 Sq.ft has been allotted by KSSIDC.

Plant & Machinery: - CEREBRA has various hardware/equipments such as Oscilloscope, .Multimeter, U.P.S, Servers, Nodes, .Q.C.Testing Software, Debugging Tools for the current operations.

Other Facilities: - The development centre of CEREBRA is fully networked and equipped with Pentium based PCs and a Unix Open Server. The hardware is complemented by e-mail facilities, software tools and utilities for client-server based development work.

Operating Systems - SCO Unix, MS-DOS, Windows NT

GUI tools - Visual Basic, Visual C++, Power Builder, X-Windows, Windows- SDK, Guppy SQL, Lotus Notes, Oracle Power Objects, and Visual FoxPro.

Relational Databases - Sybase, Oracle, MS-Access.

Xbase- FoxPro, bTrieve, Paradox, dBase

Manpower:-

The Company presently employs 133 technically, commercially qualified and experienced persons at Bangalore Head Office and other branches. The details of which are furnished below :

Department Bangalore Bangalore Calcutta Chennai Coimbatore Goa Hyderabad Mumbai Noida Pune Total
Office Factory

Accounts & Admin 8 2 0 2 2 0 0 2 2 2 20

Commercial 3 2 0 0 0 0 0 0 0 0 5

CMD's Office 2 0 0 0 0 0 0 0 0 0 2

Customer Support 16 0 1 3 2 2 1 7 6 4 42

Materials & Stores 0 6 0 0 0 0 0 0 0 0 6

Marketing 12 0 0 3 4 0 0 4 3 3 29

Production 0 14 0 0 0 0 0 0 0 0 14

Quality Assurance 0 5 0 0 0 0 0 0 0 0 5

Software Development 10 0 0 0 0 0 0 0 0 0 10

Total 51 29 1 8 8 2 1 13 11 9 133

FOREIGN COLLABORATION

No Foreign Collaboration is proposed for the Project.

UTILITIES:

RAW MATERIALS & CONSUMABLES

The company operates in the technology oriented manufacturing and service industry. The raw materials and components for Hardware activity of the company includes cabinets, mother boards, CPUs, memory modules, hard disk drives, floppy disk drives, cd-rom drives, multi-media kits, monitors, keyboards, mouse, etc. The Software activity being technology oriented service, no raw materials and components are required. The main consumable items required for hardware and software activities are floppy disk, tapes, printer cartridges, Software and Package Tools, computer stationery, packing materials which are all locally available.

POWER

The total power requirements for both hardware and software activities is estimated at 60KVA.The company is presently connected with a load of 25KVA and the balance would be met out of the project cost. The project cost also included acquiring of UPS for both the Hardware and Software Divisions.

WATER

Water is required only for drinking and sanitary purposes and adequate water sources are available at the existing premises and proposed sites.

EFFLUENTS

Since the company is engaged in the computer related activities, the company's operations do not generate any effluents.

HUMAN RESOURCES DEVELOPMENT STRATEGY: In the IT Industry due to rapid changes in technology, Human resource Development is an ongoing process in any organization and Cerebra is no exception. Cerebra, recognizes and stresses due importance to Human Resources & Development as an integral part of its business. Mr.V.Krishnan,Director - Finance, also heads the Human Resources Function, completely supported by an experienced and competent team. HRD policies is a crucial part of the organizations business objectives and is reviewed by top management at regular intervals with emphasis on

a. Manpower Requirement

b. Training

d. Growth

The Company believes in attracting the best talent in the industry and supports the same with in-house training as well as guest faculty. The Company confident that continuous training programs will not only help in the development of Company's employees thereby creating good business opportunity both in India and abroad but also benefit their career growth plan.

Cerebra's strategy in the HRD area to achieve its business objective is:

1. Have in position a high powered software team conversant in a variety of skills covering e-Commerce on Client/Server environment, E R P, Customer Relationship Management, Supply Chain Management Software, etc.,

2. An, exhaustive training program for employees both in-house and through guest faculty. In certain cases Cerebra plans to depute key employees overseas for advanced technical training and familiarization programs.

3. Constant review of the compensation packages with a view to keep it attractive and comparable to industry standards. The company also provides attractive incentive schemes linked to performance.

4. Cerebra also has plans to offer Employee Stock Option Plan which will undoubtedly help in a high degree of commitment, involvement and retention on the part of the employee.

5. Cerebra, adopts a strict professional approach on manpower recruitment. The business results, the future business plan, the compensation package and other benefits offered attracts the best talent in the business. Cerebra also recruits manpower from highly recognized professional institutes.

FORECAST OF MANPOWER REQUIREMENTS FOR NEXT THREE YEARS

As mentioned earlier in an industry where technology is fast changing the crux for continued success of any organization is in recruitment and retention of manpower. Cerebra, accepts this fact and has formed its HRD Strategy accordingly. Currently the company has 133 employees and which is to become 300 by end of 2001. The growth plans forecasted for the coming three years and its corresponding manpower support is tabled below.

ADDITIONAL MANPOWER REQUIREMENT FOR HARDWARE & SOFTWARE DIVISIONS

PERSONNEL 2000-01 2001-02 2002-03

General Manager 2 1 2

Manager 3 3 2

Sr.Cust. Supp. Executive 3 4 3

Support Exec. 2 2 2

Accts. Executive 1 - -

Marketing Exec. 2 2 2

Admin. Executives 2 2 -

Receptionist 2 - -

Company Sec. 1 - -

T O T A L - Hardware 18 14 11

Chief Exe. Officer 1

Project Managers 4

Project Leaders 7 4 3

Sr. Software Engrs. 22 12 9

Software Engineers 55 30 22

Programmer/Trainees 18 10 17

Director 1

Manager(HRD) 1

Managers 3

Admn. Assistants 6 2 1

Others 6 2 2

Marketing Staff-USA 8 4 4

Total - Software 132 64 58

EXPORT OBLIGATION

The company has no export obligation.

Y2K COMPLIANCE

The Company confirms that:

1) All products manufactured are Y2K OK

2) There are no processes/operations/functions of the Company which could be adversely affected due to the year 2000 problem,

3) Transactions of none of the intermediaries depending upon the Company would be affected due to Y2K problem,

4) No material, historical costs, costs of remediation and replacement costs are involved in fixing year 2000 issues, and

5) No contingency plans are warranted in the operations of the Company due to Y2K problem, in the event of system break down/failure.

SCHEDULE AND IMPLEMENTATION OF THE PROJECT

The following is the implementation schedule of the project as per the appraisal done by Canara Bank:-

Sl. No. Particulars Commencement Completion

1 Land For Software Division April 2000 May 2000

2 Building (Including Interiors) 

Peenya, Bangalore Commenced Feb. 2001

Chennai March 2000 July 2000

Coimbatore March 2000 July 2000

Software Division, Bangalore (#) May 2000 Feb 2001

3 Procurement of :

Hardware for Software Division March 2000 April 2000

Plant & Machinery for Hardware Division May 2000 Feb 2001

4 Electricals & Misc. Fixed Assets

Hardware Division Commenced Feb 2001

Software Division April 2000 Feb 2001

5 Recruitment of additional persons for Software April 2000 May 2000

6 Overseas office Establishment April 2000 May 2000

7 Software Commercial Activity May 2000 -

(#) Although the building is expected to be completed by February, 2001, Cerebra proposes to take a leased premises within the city limits of Bangalore to undertake expanded software activities till the completion of own building.

VI. MARKETING

INDUSTRIAL SCENARIO

COMPETITION

The global market for software services is estimated to be worth USD 296 billion dollars and is expected to grow at a CAGR of 11% until the year 2000 AD (Source: IDC June 1998). India has been able to carve a niche for itself in this market primarily due to the availability of trained IT professionals estimated to be 200,000 in 1998-99 (Source: Nasscom report - the software industry in India)

Consequently, the Indian software sector has grown considerably in the last few years to show a compounded Annual Growth Rate (CAGR) of 52.6% over the last five years and the software exports from India are expected to touch Rs. 10,000 crores in 1998-99 establishing a growth of 55.04% over the previous year (Source Nasscom). The domestic software industry has shown considerable growth, CAGR 40% over past 4 years (Source NASSCOM) while IT expenditure has increased by 28% CAGR over the last year (Source IDC Direction '99)

The Size of the Indian IT Industry has been increased by 33% to Rs.23,955 Crores in 1998-99 compared to Rs.18,015 Crores in 1997-98. The industry segmentation was as under:-

Particulars 1997-98 1998-99

Value in Rs. Crores % Share Value in Rs. Crores % Share

Exports 7180 39.86 10751 44.88

Systems 3735 20.73 3717 15.52

Packaged Software 1956 10.86 2246 9.38

Systems Integration 1503 8.34 2224 9.28

Training 856 4.75 1194 4.98

Peripherals 822 4.57 1431 5.97

Maintenance 820 4.55 940 3.92

Networking 635 3.52 952 3.97

Others 508 2.82 500 2.1

Total 18015 100.00 23955 100.00

Source: Data Quest, July 15,1999.

The Sales Turnover and growth of the Indian IT Industry for the past 9 years were as under :

(Rs. in Crores)

Year Domestic Sales Exports Total Sales % Growth

1990-91 1761.4 452.2 2213.6

1991-92 2041 676.2 2717.2 22.75

1992-93 2523.6 930.5 3454.1 27.12

1993-94 3352.5 1405.4 4757.9 37.75

1994-95 4959.4 1881.5 6840.9 43.78

1995-96 7032 2680.9 9712.9 41.98

1996-97 8587.1 4847 13434.1 38.31

1997-98 10835.5 7180.4 18015.9 34.1

1998-99 13204.3 10751.5 23955.8 32.97

Source: Data Quest, July 15,1999.

India, with the availability of English speaking technical manpower, has the potential to earn significant export revenues. Govt of India is encouraging the IT sector through various incentives and by establishing STPs through Department of Electronics.

The impact of union budget 1999-2000 on IT Industry is as under :-

The custom duty on computer systems is reduced by 2-8% for most of the hardware components. These changes will result in decline in the domestic hardware prices and contribute to growth in sales volumes and domestic IT industry.

COMPUTER HARDWARE INDUSTRY :

Computer Hardware Industry posted a lucrative growth during the past years. One of the major gains the industry has scored over the last few years is that computer has been taken into wider spectrum of users. Once confined to Corporate Work Places, today, small time entrepreneurs also are using computers for accuracy, efficiency, proper file management and data storage and retrieval.

The computer hardware industry consists of Desktops, Servers, Work Stations, Note Books, Networking and computer peripherals like printers, scanners and plotters, monitors, keyboards, hard disk drives (HDD), Floppy Disk Drives (FDD) and CD-ROM Drives etc. The Indian Hardware Companies are essentially assemblers since most of the components that go into a computer-memory chips, processors, storage devices, modems,

DESK TOPS -

The Desktop PC Market in 1998-99 went up by 32.4 % in volume terms and just 7.26 % in value terms as compared to 1997-98. The number of units sold, value of units and average selling value (ASV) of Desktops in 1997-98 and 1998-99 are furnished in the following table: -

Units Value (Rs. Lakhs) ASV (in Rs.)

1998-99 1997-98 Unit growth % 1998-99 1997-98 Value growth % 1998-99 1997-98 % Change in ASV

774745 584947 32.4 230099 214500 7.26 29700 36670 (23.5)

Source: Data Quest, July 15,1999.

From the above table, it is clear that average selling value in 1998-99 came down by 23.5% in 1997-98.

The market shares of Desktop PC market players in 1998-99 in unit terms and value terms are furnished in the following table: -

Company Units Unit Company Value Value 
Share % (Rs. Lakhs) Share %

1.HCL 92,000 11.87 1. HCL 42,900 18.65

2.Zenith 57,595 7.43 2. Compaq 37,300 16.21

3.Compaq 56,475 7.29 3. Zenith 16,960 7.37

4.HP 27,000 3.49 4. IBM 14,553 6.32

5.IBM 27,000 3.49 5. HP 13,369 5.81

6.ACER 26,560 3.43 6. ACER 12,598 5.48

7.Minicomp 25,200 3.25 7. Wipro 8,984 3.90

8.Wipro 23,800 3.07 8. Siemens Nixdorf 6,450 2.80

9. Vintron 15,500 2.00 9. Vintron 4,903 2.13

10.Siemens Nixdorf 13,000 1.68 10.Minicomp 4,284 1.86

11.Cerebra 7,825 1.01 11.Cerebra 1,762 0.77

12.Others 4,02,780 51.99 12.Others 66,036 28.70

Total 7,74,745 100.00 Total 2,30,099 100.00

Source: Data Quest, July 15,1999.

NOTEBOOKS: 

The Notebooks market in 1998-99 went up by 11.75% in unit terms and 13% in value terms as compared to 1997-98, which indicates an increase in Average Selling Value (ASV) of Notebooks in 1998-99 as compared to 1997-98. The number of units sold, value of units of notebooks sold in 1997-98 and 1998-99 are furnished in the following table: -

Units Value (Rs. Lakhs) ASV (in Rs.)

1998-99 1997-98 Unit growth % 1998-99 1997-98 Value growth % 1998-99 1997-98 % Change in ASV

28545 25546 11.75 291.05 257.51 13 1019.6 1008 1.15

Source: Data Quest, July 15,1999.

SERVERS: - The Servers market is divided into PC Servers and Non-PC Servers. Non-PC Servers are again divided into High End Servers, Medium End Servers and Low End Servers. The High-End Servers category is defined as Non-Intel Servers with an Average Selling Value of Rs.4 Crores and above. Medium End Servers are defined as Non-Intel Servers with an Average Selling Value between Rs.40 Lakhs and Rs.400 Lakhs.

The number of units sold, value of units and Average Selling Value (ASV) of different Servers in 1997-98 and 1998-99 are furnished in the following table: -

Units Value (Rs. Lakhs) ASV (in Rs.)

1998-99 1997-98 Unit growth % 1998-99 1997-98 Value growth % 1998-99 1997-98 % Change in ASV

High End Servers 7 6 16.7 4525 2695 67.9 646.4 449.17 43.9

Medium End Servers 338 571 (40.8) 16039 36181 (55.7) 47.4 63.3 (25.1)

Low End Servers 1792 2082 (13.9) 26842 30089 (10.8) 15 14.45 3.8

Total Non-PC Servers(1+2+3) 2137 2659 (19.6) 47406 68965 (31.26) 22.18 25.9 (14.36)

PC Servers 20685 14991 38 47846 36073 32.6 2.313 2.406 (3.86)

Total Servers (4+5) 22822 17650 29.3 95252 105038 (10.27) 4.17 5.95 30

Source: Data Quest, July 15,1999.

WORKSTATIONS: 

This category of Systems includes Traditional Workstations and Personal Workstations. Traditional Workstations are defined as RISC -based high performance computing terminals with the operating system as UNIX or Open VMS. Personal Workstations are defined as Intel-based computing systems with either UNIX or Windows NT as operating system.

The number of units sold, Value of units and Average Selling Value (ASV) of Traditional and Personal Workstations in 1997-98 and 1998-99 are furnished in the following table: -

Particulars Units Value (Rs. Lakhs) ASV (in Rs.)

1998-99 1997-98 Unit growth % 1998-99 1997-98 Value growth % 1998-99 1997-98 % Change in ASV

Traditional 1346 2352 (42.8) 11454 14515 (21.1) 8.5 6.17 37.8

Personal 2403 3030 (20.7) 4710 5665 (16.9) 1.96 1.87 4.81

Total 3749 5382 (30.34) 16164 20180 (19.9) 4.31 3.75 14.9

Source: Data Quest, July 15,1999.

The Traditional Workstation market declined sharply by 42.8 % in unit terms to 1346 units and by 21.1% in Value terms to Rs.11,454 Lakhs in 1998-99 as compared to 1997-98. A host of reasons is accounted for the shrinkage in the Traditional Workstation market. Poor economic conditions and the surge of the PC Workstations are the main reasons, which ate into its stronghold market. With far lower cost of ownership, users running power applications prefer Personal Workstations as compared to Traditional Workstations. The growing pool of Software available for Personal Workstations and vendor efforts at developing the market have also resulted in greater acceptance of the Personal Workstations.

The Personal Workstation market declined by 20.7 % in unit terms to 2403 units and by 16.9 % in Value terms to Rs.4710 Lakhs in 1998-99 as compared to 1997-98. However, though the number of units sold in Personal Workstations were 2403, it accounted for just Rs.47.1 Crores,

The list of market players of the Traditional Workstations is furnished in the following table: -

Rank Company Units % Share in units Value (in Crores) % Share in Value

1997-98 1998-99 1997-98 1998-99 1997-98 1998-99 1997-98 1998-99

1 SUN 750 491 31.89 36.48 21.5 25.5 14.80 22.30

2 Silicon Graphics (SGI) 668 355 28.40 26.37 50.0 59.0 34.50 51.50

3 HP 550 500 23.38 37.15 53.2 30.0 36.70 26.20

4 Compaq 308 - 13.10 - 16.0 - 11.00 -

5 IBM 76 - 3.23 - 4.4 - 3.00

Total 2352 1346 100.00 100.00 145.1 114.5 100.00 100.00

Source: Data Quest, July 15,1999.

From the above table, it can be observed that the four major players HP, SGI, SUN and Compaq accounted for 90% of the market.

The list of market players of the Personal Workstations are furnished in the following Table:

Rank Company Units % Share in units Value (in Crores) % Share in Value

1997-98 1998-99 1997-98 1998-99 1997-98 1998-99 1997-98 1998-99

1 Compaq 1509 1010 49.80 32.60 29.60 21.10 52.30 35.20

2 Hewlett Packard (HP) 1083 840 35.70 27.20 18.30 18.00 32.30 30.00

3 IBM 188 353 6.20 11.40 5.00 4.00 8.80 6.60

4 SGI N.A. 190 N.A. 6.10 N.A. 6.40 N.A. 10.70

5 Siemens Nixdorf N.A. 200 N.A. 6.50 N.A. 4.00 N.A. 6.70

6 Others 250 500 8.30 16.20 3.80 6.50 6.60 10.80

Total 3030 3093 100.00 100.00 56.7 60.00 100.00 100.0

Source: Data Quest, July 15,1999. (N.A. - Not Available)

PERIPHERALS:

The Peripherals industry which consists of Printers, Monitors, Key-boards, Hard Disk Drives, CD-ROM Drives,Scanners, U.P.S., etc., has gone up by 74% in value terms as compared to 1997-98. Details are furnished in the following table: -

Particulars 1998-99 1997-98 % Value Growth

Value(Rs.Lakhs) % Share Value(Rs.Lakhs) % Share

Printers 65688 45.90 53065 64.50 23.80

Others* 77402 54.10 29183 35.50 165.20

Total 143090 100.00 82248 100.00 74.00

*Others include Key-Boards, Monitors, Hard Disk Drives, CD-ROM Drives, Scanners, U.P.S., etc.

Source: Data Quest, July 15,1999.

Earlier, Printers dominated the Peripherals industry . But, in 1998-99, the other segments' market share has gone up by 165.2% to Rs.77,402 Lakhs from 29,183 Lakhs in 1997-98.

PRINTERS: -

The value of printers sold in 1997-98 and in 1998-99 and % Value growth are furnished in the following table: -

Particulars 1998-99 1997-98 % Value Growth

Value(Rs.Lakhs) % Share Value(Rs.Lakhs) % Share

Impact Printers 24957 38.00 22636 42.60 10.3

Line Printers 5735 8.70 3377 6.40 69.8

Inkjet Printers 15050 22.90 10800 20.40 39.4

Laser Printers 19946 30.40 16252 30.60 22.7

Total 65688 100.00 53065 100.00 23.8

Source: Data Quest, July 15,1999.

The list of top 3 vendors of Inkjet printers in 1998-99 is furnished in the following table: -

Name of the Company Units Value (Rs. Lakhs)

Hewlett Packard (HP) 1,49,000 9996

Epson 27,568 2195

Wipro 17,958 1228

Others 31,009 1631

Total 225,535 15050

Source: Data Quest, July 15,1999.

The list of top 3 vendors of laser printers in 1998-99 is furnished in the following table:

Name of the Company Units Value (Rs. Lakhs)

Hewlett Packard (HP) 51030 17635

Xerox 2780 1267

Tektronix 685 322

Others 2200 722

Total 56695 19946

Source: Data Quest, July 15,1999.

Overall the Computer Hardware industry has made its mark in the IT industry in 1998-99, with each of the product lines having grabbed a distinct identity, size and stature of its own. In the coming few years, the same upward trend in sales of Computer Hardware items is expected.

Computer Software Industry: 

Software is one of the fast growing sectors of the economy world over. As skilled manpower is the vital input to this industry, India is well positioned to take advantage of the global opportunities in software development.

Internet and convergence of technologies in communication, computing and broadcasting have created vast opportunities for those who can realise the synergy of technologies.

The services offered by various companies in India are on-site consultancy and offshore development. Till recently, professional services offered at customer site, referred to as on-site consultancy, were a major source of revenue. But, with the advancement of STPs and availability of high speed communication links, offshore development projects are on the rise.

Infosys, Wipro and NIIT are the leading players. Satyam and Tata Infotech are the other key players in the industry. Digital, CMC, DSQ, HCL Infosys, Leading Edge and Mastek are in the second line. Maars and Sierra are the two small players strongly placed in the niche segments.

With exports of $ 2.75 billion expected in the current year and expected to touch nearly $ 10 billion by 2002 and $ 38 billion within the next decade, the industry is set to emerge as the top foreign exchange earner for the country.

The global software market ($ 375 billion) can be divided into software products, custom software and other software services :-

Software product exports :

It is a high lead time, high investment proposition. The margins are attractive. However, the proportion of this component in our country's total software export revenue is very small.

Software projects :

They are custom built solutions undertaken for client abroad. Based on specification given by customers, software is developed in our country. The main advantage in our country is skilled manpower, which is relatively inexpensive.

a) Onsite consultancy :

These assignments are done at customer premises itself. The manpower will be supplied on contract basis and the customer pays an amount towards the service on monthly basis and takes responsibility of software development and implementation on himself.

The total revenue from software industry is as below :-

Year Domestic market Exports Total

1995-96 490 734 1225

1996-97 670 1085 1755

1997-98 900 1750 2650

1998-99 1250 2650 3900

1999-2000* 1725 3925 5650

* NASCOM Forecast, Source : Facts for you, July 1999

From the above, it is clear that software industry is growing rapidly every year. Demand growth for software services is likely to remain robust, driven by major technological changes. Currently, the Euro conversion is the pressing need. Given the constraints of IT budgets of major global companies as also availability of manpower, a number of ongoing software projects are being deferred. This will continue to generate demand for software services, after Euro conversion activity taper off.

USA and Europe are the major countries for software exports from India. While USA accounts for 58% of the software exports, the European countries and Japan together constitute another 25%. The rest of the world constitutes the remaining 17%.(Source: NASSCOM)

The performance highlights of the selected software companies are furnished below:-

Company Year Sales PAT Export Income

Wipro Ltd. 1997-98 1417.81 107.09 417.87

1998-99 1831.19 169.78 652.24

Tata Infotech 1997-98 326.11 30.00 206.60

1998-99 393.00 44.48 266.60

Infosys Tech. 1997-98 258.67 61.86 226.04

1998-99 508.89 144.16 475.29

Pentafour 1997-98 284.56 66.17 225.63

1998-99 525.87 119.19 511.83

Satyam Com. 1997-98 178.49 25.24 159.99

1998-99 378.13 72.91 321.76

DSQ Software 1997-98 116.78 24.92 109.01

1998-99* 275.47 49.93 275.47

Leading Edge 
System Ltd. 1997-98 46.91 10.68 46.91

1998-99 63.47 13.31 63.47

(*) 15 months

Source : CMIE

The current status of the industry is highlighted below :-

During 1997-99 period, Y2K projects accounted for a large portion of growth in software exports. Revenue from Y2K projects is expected to decline after year 2000.

The Euro conversion business is estimated at $ 100 billion. According to Nasscom, during 1999-2001 period, Indian software industry will earn revenues of $ 3 billion from Euro Conversion projects.

In 1999-2000, the growth of software industry will depend on Euro Conversion business, Web based applications, development and implementation

The major problems being faced by the software industry are high degree of obsolescence, high employee turnover and high piracy levels.

In the recent years, the Indian software companies have become more speciality oriented and have a definite focus on specific segments of software development. Nearly two thirds of the companies are engaged in developing end-user application system to specialised niche market products or customised services.

INDIAN SOFTWARE INDUSTRY-SWOT ANALYSIS

A strategic review of the Indian Software Industry by NASSCOM through SWOT Analysis depicts :

STRENGTHS

· High Quality-Low cost.

· Large English speaking, scientific and trainable manpower pool.

· Use of the State-of-art Technologies.

· Flexibility and adaptability to new technologies.

· Reliability of Programmes to provide expertise for small or large
projects.

· Off-shore development through Datacom Links providing immense
cost and time savings.

· Ability to handle Large & Turnkey projects.

· High domestic & exports demand with annual growth of around 50%.

· Good Educational base for software engineering and related studies.

· Government's active encouragement & support by way of tax and
duty benefits, amendment of copyright laws, promotion of STP
Schemes etc.

WEAKNESSES

· Lack of package orientation for the products developed.

· Low Domestic Computerisation.

· Lack of efforts to develop original technology.

· Inadequate availability of project management skills.

· Lack of adequate venture capital finance.

· Bureaucratic hurdles with regard to Government policies and
procedures still exist.

OPPORTUNITIES

· Immense opportunities in the Global Markets, especially in
outsourcing business is yet to be tapped.

· Good Domestic Demand potential.

· Multinationals are increasingly resorting to outsourcing.

· Strong base of UNIX presents lot of scope for developing internet
related projects,.

· Multinationals are increasingly setting up shop in India with R & D
facilities.

THREATS

· Inadequate and expensive infrastructure.

· High Inflationary tendencies of cost.

· Protectionism by developed countries including non-tariff barriers.

CEREBRA INTEGRATED TECHNOLOGIES LIMITED

SWOT ANALYSIS

Strengths

1. Cerebra is an ISO 9002 certified Company for production, installation, service and software solutions.

2. The low cost, quick implementation of MAN (Metropolitan Area Network)developed by Cerebra has wide application between computerized branches of scheduled banks.

3. Cerebra has more than eight years' active presence in the IT industry.

4. Cerebra is one the first companies to get its range of PCs manufactured and certified under the stringent test standards as defined by the department of Electronics.

5. The Products developed by Cerebra with Intel components has wide applications in telephone exchanges as approved by DOT.

6. Company is a member of Microsoft OEM Systems builder program ensuring software support of all Microsoft products to its customers.

7. Cerebra Servers have been ranked the No 1 in terms of performance among corporate contenders which included Acer, Compaq, Dart and Nest - Source CHIP Computer Magazine edition February, 2000.

8. Company's strong presence in the IT industry having more than 500 reputed clients including government organizations, banks, educational institutions, public sector units, small and medium enterprises. To name a few Madras Regional Purchase Unit,Accountant General Employees Co-operative Bank Ltd.,Electronics Corporation of India Ltd.,Bharath Electronics Ltd., HTL Ltd.,DOT,ADA, NAL, IGCAR, RBI, Vysya Bank,Bank of India,BPL Telecom Ltd., Trent Ltd., Alcatel Network Systems India Ltd.,John Fowler (India) Ltd., Thermax Ltd.,Karnataka Agro Chemicals Pvt. Ltd.,Evolus India Pvt. Ltd., Technology Media Group, New International House of Travels, Shidore Microsys Pvt. Ltd., Methodex Systems Ltd.,

9. Cerebra has technical/marketing tie-up with Anytech.Inc., USA.

10. Promoters and senior managers are all professionals /technocrats with good educational background and well experienced in Information technology.

11. A strong focus on Quality with systems and process.

12. A consistent profit making track record.

13. All products are Y2K compliant.

15. Cerebra has assured business of AMC from existing clientele.

Weakness

1. Extensive Marketing of software is in the process of being achieved

3. Size of organisation still not very large to have strategic relationship with world leaders in IT services.

4. Penetration of International Market not achieved

5. Company has the risk of falling average selling value for hardware products.

Opportunities

1. Fast changing technology offers tremendous opportunities for business - like E-commerce services to ISPs/Telecom companies,E-consultants etc.

2. With product superiority and promoters rich experience in the marketing of the product, the company is confident of having a good share in the growing market.

3. Higher Government spending and support to IT Industry.

4. Convergence of Technologies.

Threats

1. Shortage of good, trained manpower

2. The company may face competition from existing as well as new companies specially from Multinational Companies.

3. Other countries like China, Philippines, etc. making rapid progress.

4. Competition in domestic market from major IT hardware companies and new companies.

MARKETING OBJECTIVES:

CEREBRA's main objectives are

To consolidate its position in the field of networking and penetrate the market with greater intensity.

The essence of Cerebra marketing has been one of customer retention through good service support backup. No customer has ever thought of an alternative source once they have come into the Cerebra fold. The Company has been able to muster customer confidence through consistent quality and faultless after sales service.

The Government's policy is directed towards opening the floodgate for the IT Industry. The market potential will be one of abundant opportunities for the product range Cerebra is ready with. Computer awareness has started in a big way in educational institutions. Financial institutions and banks are offering financial support to individual buyers also. Considering the massive population of India and limiting it to genuine customers the demand particularly for Home PCs is tremendous. The marketing plan in the coming year is to capture a significant portion of this demand.

The market potential for Desktop PCs is approximately 10 lakhs for the year 1999-2000 (source of information DQ) and is currently growing at 30% per annum. Cerebra's share is 4% of the market and are confident to double it in the coming financial year and also maintain this growth rate every year.

Yet another area which is growing rapidly, is the communication sector including Internet Service Providers where there is a tremendous potential for SERVERS supported on Pentium III processors and high ended servers supported on Pentium III Xeon processors. The purchase sentiment in this segment is guided by Quality, Reliability and Performance. Cerebra Servers matches world quality standards and is Intel Validated. The server market is growing at 20% per annum and Cerebra's growth in this area is 30%. The confidence level to better this growth rate in the year 2000 and maintain it thereafter is positive. Here again customer coverage is exhaustive and a list exhibiting some major installations is attached separately.

Cerebra, plans in the coming financial year to penetrate the dealer market which has a very good potential. Cerebra already have a wide range of dealer network in certain locations of the country. The plan is to extend this significantly. The success of effort will begin to show results from early April 2000. An independent marketing setup, only to concentrate on the dealer network is in position and are confident to achieve success in a big way.

Opportunities in the export market particularly to third world countries is abundant for the range of products that Cerebra has to offer. Good enquires from Countries like Nigeria and the Middle East are being addressed and the Company hopes to make a beginning in this direction.

PENDING ORDER STATUS:

Order book position for February 18, 2000 Rs. 298.99 Lakhs

Domestic - Hardware -

Export - Software in US $ 500,000 In Indian Rs.217.50 Lakhs

Total Rs.516.49 Lakhs

SOFTWARE

Industry attractiveness

The software sector, a high value-add and a net foreign exchange earning industry, offers Indian businesses an once-in-a-generation opportunity to deliver world-class software products and services to end-users and businesses. The availability of highly qualified personnel, the IT friendly policies of the government, and the market's fascination for IT companies all serve as fertile grounds for launching new software Indian businesses. The potential to generate wealth, earn foreign exchange and provide quality employment have already caught the imagination of India's businessmen, citizens, economists, bureaucracy and politicians, alike. Software driven IT industry is today at the top of India's national agenda as an instrument and a model, for the modernization of India's economy.

In India, there has been a shift towards usage of IT in government, public sector, private sector as well as public services and education. However, usage of computers is yet to reach many homes in the country. In the last two years the Government's thrust is bringing IT to the daily life of the commoners in India.

Pioneering work done by Indian software companies in the new paradigm of offshore software development has been recognized as representing one of the most successful business models that can help to sustain high growth and competitiveness. Thus, with software as the driving engine, the Indian IT industry and India's globalization plans have been growing at a phenomenal growth rate.

By marshalling its vast human, industrial and technological resources, especially with expansion of its software sector - the engine of the IT Industry, India can raise productivity of domestic manufacturing and service and thus the domestic opportunity is evident.

India's own competitive advantage in the software business is: cost-effectiveness, world-class quality, high reliability, and rapid delivery, all of it powered by state-of-the-art technologies. More and more multinational companies are outsourcing their software requirements to retain competitive advantage. As per a recent analysis by McKinsey & Co., India is best positioned to offer competitive cross-border IT Services and enterprise IT solutions scoring high on multiple parameters of vendor sophistication as well as people sophistication.

The C.A.G.R. (Compounded Annual Growth Rate) for the Indian software industry revenues in the last five years has been 56.3%. Here the C.A.G.R. for the software export industry has been 60.71% while that for the domestic industry has been 46.05%. As on 31 March 1999, the software

Domestic Software Industry

In 1998-99, the domestic software industry has been estimated at Rs. 49.5 billion (US $ 1.25 billion) and this does not include the in-house development of software by end-users. The domestic software market has shown a C.A.G.R. of 46.05%, which has been steadily improving in the last few years.

The domestic software market is expected to gross Rs. 73 billion in 1999-2000. With the rigorous enforcement of Copyright laws, increased government spending on IT due to Task Force recommendations, it is expected that in the coming years, the domestic market for software can even register more than 50% annual growth rates. Also, the government has implemented zero import duty on software. This would have a buoyant effect on the market and the increasing trend of buying software through Internet. It is expected that by the year 2008, revenues of Indian domestic software market would equal revenues from India's software and services exports, touching US $ 35 billion by the year 2008. The maximum growth in domestic software market is expected from banking, e-governance, defence, SOHO, etc.

Software Export Industry

The Indian software export industry continues to show impressive growth rates. In terms of Indian rupees, the C.A.G.R. over the past five years has been as high as 60.71%. The industry exported software and services worth Rs. 0.30 billion in 1985; in 1998-99, a total export of US $ 2,650 million (Rs. 109.4 billion) was achieved and it is expected that during 1999-2000, software exports will be worth Rs. 167 billion.

The software industry in India expects to reach an export level of US $ 6.3 billion by year 2000-01 and US $ 9.5 billion by the year 2001-02. The National IT Task Force has set a target of US$ 50 billion of annual software and services exports by 2008.

In 1998-99, India exported almost 61% of its total software exports to USA. Export to Europe was at 23% and more market opportunities in Japan, South Africa, Canada, France and Middle East were discovered. The six OECD countries (U.S.A, Japan, U.K., Germany, France and Italy) together have almost 71% of the market share of the worldwide software market. Interestingly, India's exports to these countries is also almost 79% of its total software exports.

For achieving this velocity of business, both the software industry and Government of India are currently taking some bold and purposeful steps. Amongst others, this exercise includes path-breaking measures adopted by National IT Task Force to further liberate the economy, simplification of procedures, deployment of additional resources for technical manpower development, new marketing channels, enhancing global brand equity and providing state-of-the-art infrastructure for software development. E-Commerce, Software Development, Interactive Integration services and I. T. Enabled Services are leading the way.

Types of Services

Till almost 1995, the bulk of Indian software exports have been in the form of professional services. A detailed analysis indicates that majority of software exports are in the areas classified as ``projects'' or ``professional services''. However, since last few years, there has been a visible shift towards off shore project development which also includes offshore package development. With the proliferation of Software Technology Parks, high speed data communications services provided by Videsh Sanchar Nigam Limited, liberalized economic policy, liberalised visa policies by U.S.A. and some Western European countries, the component of offshore development is expected to increase further.

The degree of on-site development is still very high, with about 59% of the work being done at the client's site, but it is expected to decrease further in the coming years with improved data communication links. In 1988, the percentage of on-site development was almost as high as 90%. During 1999-2000, the offshore component is expected to increase to about 45% of total software exports.

Source - NASSCOM

Break-Up of Software Activity

Software Activity Domestic Software Software Export

Rs. Million Percentage Rs. Million Percentage

Projects 14,100 28.5% 39,950 36.50%

Professional Services 2,500 5% 48,300 44.15%

Products & Packages 23,900 48.5% 8,650 7.90%

Training 2,300 4.5% 1,880 1.72%

Support and Maintenance 2,000 4% 4,650 4.25%

I.T Enabled Services 4,700 9.5% 5,970 5.48%

Total 49,500 100% 1,09,400 100%

Source - NASSCOM

An analysis of break-up of software activity of both domestic as well as export industry demonstrated interesting facts. Products & Packages tops the list with a share of 48.5% in domestic market, whereas professional services command a share of almost 44.15% in the export market. But, it is interesting to note that increasingly projects are gaining strength in both domestic market as well as exports. They almost command 36.5% market share in export and 28.5% in domestic market.

The above table shows the segment-wise break up of the software export industry and domestic software market for the year 1998-99. The revenues from training only include revenues as related to sale of products; project execution and corporate training. The domestic market's revenue does not include any figures pertaining to in-house development by end-users.

Projections

It is projected that during the year 2001-02, software industry in India would be close to Rs 55,500 Crore. At current level of dollar-rupee parity, this would translate to almost US$ 13 billion industry in that year.

Source - NASSCOM

Cerebra - Competitive advantage

Talented Pool of Skilled Resources

The team at Cerebra is a committed group of professionals, with a good mix of senior members with overseas business exposure and enthusiastic young technocrats. The team of the seasoned and the fresh provides the necessary skills and expertise to take up and execute challenging projects.

World-class Quality - ISO 9002 certified

Cerebra is very process oriented and their confidence stems from the fact that if the process is adhered to, the results will follow. Different process models have been developed to cater to different types of business models and projects. The process models are flexible but the adherence to the process ensures outputs of the highest quality.

Close to Customer - US office

To succeed in any business, one needs to be present where the customers are. To adhere to Cerebra's mission of "Thinking globally and Acting Locally", Cerebra is engaged with AnyTech Inc, an IT services company, since 1994. The Company's tie-up with AnyTech will enable them to

Indian Branch at IT Capital of India

The software development centre, located in Bangalore, will help the Company to attract and retain talented IT professionals; Presence of adequate infrastructure in power, high-speed data lines should enable Cerebra to provide continued support and services to their clientele around the world in a seemless fashion. It is Cerebra's intent to duplicate these software development centres around major metropolitan areas, as the business needs dictate.

State-of-the-art Infrastructural facilities

Cerebra's core competencies in managing networks, and managing IT solutions, complemented by their state-of-the-art facilites targeted for export oriented units, will enable Cerebra to take advantage of the resources in executing software projects in a timely fashion.

Long Term Relationship Orientation

Cerebra takes pride in their long term relationship with their customers, as evidenced by a long list of repeat customers. The Company intends taking the same rigor and discipline to their software venture and earn the trust of existing as well as new customers.

Cost Effectiveness

By maintaining a strong fiscal discipline, Cerebra has grown both its top-line and bottom-line in a consistent fashion over a period of 8 years. Even though the cost advantage of Indian software industry as a whole is dropping due to increasing costs, increasing salaries etc., Cerebra intends to keep a rein on costs by employing effective cost-control measures and motivating the employees to keep the customer focus. This will be achieved by a focussing on doing things right at the first time, adhering to proven software development techniques. It has been proved that all these efforts result in cost effective solutions, with the benefits, accruing to the customers.

Reliability and Rapid Delivery

One of the traditional strengths of cerebra has been quick deliveries without compromising on quality. Sound estimation techniques and proper planning aid in keeping up the schedules.

Leadership - Technocrats with Market Focus !

The management of Cerebra consists of professionals who are trained and experienced technology specialists. They are high tech-high touch leaders who also understand and appreciate the market needs.

Models

On-site and off-shore services

The initial efforts, in partnership with AnyTech would focus on working with Clients onsite. This will enable the Company to develop the relationship, sense the market and customer needs and help to develop an effective software strategy to respond to customer requirements. The Company's efforts will be focussed on delivering an effective and complete software solution on time, within budget. After gaining their confidence, the off shore development model can be used to develop the software in India.

Consulting Services in Horizontal and Vertical areas

Cerebra intends to compete vigorously in the areas of software development and services in the following segments : client-server technologies, e-commerce, web technologies, object oriented programming, network and systems management, etc.. The Company's focus in these areas is determined by its ability to take skills and deploy them in cross-industries. In addition, Cerebra plans to focus on the emerging B2B and B2C e-commerce initiatives, including Supply Chain Management, Customer Relationship Management, Enterprise Resource Management. The Company's focus in these emerging areas will give the early move advantage and help to consolidate.

Software Maintenance and Technical Support

Software Support, maintenance are key areas that The Company's clients use for competitive differentiation in customer service. Cerebra intends to help its customers maintain and enhance the competitive advantage, by investing in providing services for support and maintenance.

Custom Software Development

These are projects that are done for a specific client. In the recent times, a lot of companies are using packages like Oracle, etc., for most of the custom software development involves using programming interfaces and tuning the packages for specific implementations. Cerebra will explore business partner relationships with leading packaged application software vendors.

Turnkey Solutions

Cerebra has a marquis list of very satisfied domestic clientele. The Company intends bidding on turnkey projects and develop systems, required by its customers.

IT Infrastructure Consultancy

With the skills to integrate hardware and software and provide end-to-end solutions, cerebra can act as total IT infrastructure consultants for the clients to introduce IT or different technologies in their activities. Cerebra has been involved in defining and designing IT strategies for corporate customers.

IT- Enabled Services

IT Enabled Services involves a broad range of information technology based decision making and information delivery services covering a wide gamut of services including Call Centres, Medical Transcription, Data Digitization, Legal Databases, Revenue Accounting, Data Processing, Back Office Operations, Web content development, Animation etc. According to estimates by McKinsey & Co., by 2010, the IT enabled services market is poised to grow from the present US $ 10 billion to US $ 200 billion worldwide market. It will mainly constitute HR Services; Customer Interaction Services; Finance and Accounting; Data Search; Integration Analysis and Remote Education, amongst others.

Customer Engagements

US & Europe

On-site consultancy

Off-shore outsourcing

Support, development and maintenance

Services

India

Consultancy

Turnkey Projects

Packages

Development and Maintenance

Services

IT Architecture and Design

Application Development

Legacy Web Integration

Migration to Web-based models

Web Security Solutions

EDI / Internet EDI Implementation

E-Payment Solutions

Shopping Malls

Portals

E-Business Technologies

Internet Technology Services

Implementation of Web based applications using Java, Java Beans, RMI, XML, Java Script, HTML, VBScript

Server side scripts using ASP,CGI-bin

Web & Distributed Technologies

Java

Web Servers

RAD tools

COM/DCOM

CORBA

Relational Databases

Database Administration for Oracle, Sybase, MS SQL Server

DBMS applications using Oracle, Sybase, MS SQL Server

Proficiency in Database connectivity techniques such as ODBC, and JDBC

Software development on

Linux, Solaris, AIX

Window 2000

Windows NT

ANSI compliant languages such as:

C++

C

Visual C++

ADA

Visual Basic

COBOL

Various scripting languages such as Perl, JavaScript, VBScript, awk, expect, Tcl/Tk

Protocol based application development using:

TCP/IP

SNMP

CMIP

SNA

OSI

ATM

FrameRelay

Network Management Services

Implementation of Network Management solutions and services

Customization, Configuration of Leading Network Management Products

Development of turn-key Network Management Solutions

Network Management Products

Tivoli TME10 NetView

HP OpenView Network Node Manager

CiscoWorks

Cisco Resource Manager

CiscoView

Bay Networks' Optivity

Systems Management Services

Implementation of Systems Management solutions and services

Customization, Configuration of Leading Systems Management Products

Development of turn-key Systems Management Solutions

Systems Management Products

Tivoli TME10 Suite of products

HP OpenView Family (IT/O, IT/A, DTA, ManageX) of products

BMC Patrol Family

Implementation of Service Level Management Solutions

Implementation of Change Management, Service Level Agreements (SLAs)

Help Desk Services

Application Instrumentation

Operations support for Network Control Centers and Data Centers

Performance Management and Capacity Planning Solutions

Service Level Management products

Tivoli Service Desk

ARS Remedy

TelAlert Telamon

BGS Best/1

HP NetMetrix

Firehunter

SiteScope

Supply Chain Management (SCM )

SCM is identified as the fastest systems growth area. The area is set to grow at a CAGR of 48% over next 5 years and estimated $ 18.6 billion by the year 2003. It primarily relates to the management of the Distribution Channels and optimizes the relationship of process, information and physical goods between trading partners; the Company sees significant opportunities in the areas of planning, distribution, integration of legacy systems and supply chain execution.

Key independent software development partners

Research & development laboratories

Provide the critical intra & inter-enterprise solution integration platform Support and Education

Practice Offerings

Supply Chain Strategy

Supply Chain Analysis & Metrics

Supply Chain I/T Strategy & Architecture

Supply Chain Process Transformation

Supply Chain Market Drivers

Key areas of SCM

Manufacturing

Products & services offered

Target marketing & custom services

Manufacturing & distribution cycle time

Responsive service capabilities

Distribution / Transportation

Order complexity

Service standards

Delivery times

Special services & value-add

Visibility through the delivery

Retailing

Focus on value

Brand Loyalty

Variety of goods & services

Expect special treatment and exceptions

Unpredictability

Supply Chain Practice Competencies

Customer Order Fulfillment

Materials Management

Strategic Sourcing and Supply Management

Distribution Network and Warehouse Operations

Transportation and Shipment Management

Integrated Supply and Demand Chain Management

Continuous Flow Manufacturing

e-business

Business Transformation services

Business Assessment

Business Process Consulting

Integration and Implementation services

Implementation Planning

Integration and Customization

Solution Delivery

Supply Chain Software

Key independent software development partners

Provide the critical intra & inter-enterprise solution integration platform Support and Education

Customer Relationship Management (CRM)

CRM encompasses the totality of business processes which an organization performs to identify, select, acquire, develop and retain its customers. It is the process of using customer level data (buying history, financial, demographic & psychographic) to better understand your customer's wants and needs and deliver the right product with the right promotion at the right time via the right channel.

Provide leading edge business intelligence solutions

Provide sophisticated call center and self-service technologies

Provide Business Process Management Services

Provide strategy and implementation services

Provide strong Business Partner solutions

Provide core technologies for the e-business infrastructure

Extensive integration of the internet, voice & data technologies will impact the CRM processes significantly. Massive growth in pervasive computing will provide new access channel choices and there will be extensive personalization and one-to-one marketing applications. Cerebra sees significant opportunities in HR Services, Customer Interaction Services, Back Office Operations, Web content development, Animation etc.

Customer

SOFTWARE TRAINING

Cerebra has set up an Aptech Training Franchisee at Bangalore centre since 1995. The bright students at the institute are given live projects during their training. They are later absorbed as employees of Cerebra. The students at the centre are trained on the latest technologies and platforms.

FOREIGN TIE-UP

CEREBRA has entered into a teaming agreement dated 7th February, 2000 with AnyTech Inc., Incorporated in the state of Maryland, USA and located at No 14433, Settlers Landing Way, North Potomac, MD 20878, USA. The Salient features of the said agreement are as detailed below:

Anytech and Cerebra will seek to expand the business bases through aggressive marketing activities. It is also understood that during these marketing activities, Anytech and Cerebra marketing representatives will identify opportunities and will work diligently in presenting Anytech's and Cerebra's capabilities and interests to prospective clients.

AnyTech & Cerebra :

will establish a sales & marketing and a services infrastructure in U.S.

will work on a joint marketing plan.

AnyTech, will regularly inform Cerebra of its marketing activities

may use the name and logo of Cerebra in its marketing literature

will Work with Cerebra's sales and project management staff in

procuring projects

provide technical assistance in generating proposals, evaluation of architecture, etc.,

project management and execution of projects in the US

tracking the results and managing the relationship with the clients

facilitate the follow-up with potential clients in the US

Cerebra as a supplier of information technology services

will provide sales, marketing and technical personnel in U.S.

will provide the technical skills and infrastructure to execute offshore projects in India.

will provide the technical personnel necessary for the execution of projects in U.S.

has the right to use the communication address of Cerebra in all their correspondences as their US office.

may include the name and logo of Anytech in its marketing literature

will provide Anytech materials such as presentation scripts, marketing literature etc. to market its services

Cerebra will regularly inform Anytech about its business plans and activities

The above agreement is initially valid for three years and renewal on mutual consent.

MANAGEMENT DISCUSSIONS AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF THE OPERATIONS:

1. Comparitive study of the significant items of Income & Expenditure for the last three years are as under:

(Rs. In Lakhs)

Particulars As on 31.03.1997 As on 31.03.1998 As on 31.03.1999

Total income 855.76 1341.45 1782.72

Expenditure 810.67 1237.09 1654.24

PBDIT 45.09 104.36 128.48

Taxation 3.88 7.60 13.00

Depreciation 5.58 6.42 8.00

Interest 25.42 66.14 68.30

Profit after Tax 10.21 24.20 39.18

Dividend amount 0.70 1.21 2.09

The Company's total revenue has increased from Rs.855.76 Lakhs during the fiscal 31.03.97 to Rs1341.45 Lakhs during 31.03.98 and to Rs.1782.72 lakhs during 31.03.99 showing a growth by 56.76% and 32.50% respectively. Hardware revenue has grown from Rs.840.42 Lakhs to Rs.1274.98 Lakhs (52%)during the same period and Software revenue has grown from Rs 46.32 Lakhs to Rs.55.13 Lakhs (19%). The PAT has increased from Rs.24.20 Lakhs to Rs.39.18 Lakhs(62%).

2. UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS

There has been no unusual or infrequent transactions in the Company.

Software sector has been identified as thrust area for Economic development of the Nation. In view of the support and encouragement given by Government to IT Industry the management does no foresee any adverse Trade or Fiscal policies which would affect the growth of Software Industry.

4. KNOWN TRENDS OR UNCERTAINTIES THAT HAVE HAD OR ARE EXPECTED TO HAVE A MATERIAL ADVERSE IMPACT ON SALES REVENUE OR INCOME FROM CONTINUING OPERATIONS:

Organisations in the IT Industry are prone to obsolescence if they do not continually improve and upgrade themselves. The company adopting the most flexible technologies in the Software world which not only incorporates the latest technologies, but can also be easily adaptable to changes in the trends which feature ensures that the Company and its operational revenues are insulated from obsolescence.

5. FUTURE CHANGES IN RELATIONSHIP BETWEEN COSTS AND REVENUES, IN CASE EVENTS SUCH AS LABOUR OR MATERIAL COSTS OR PRICES THAT WILL CAUSE A MATERIAL CHANGE ARE KNOWN:

Most Software Projects are valued in terms of complexity and man hours employed. Increase in manpower costs are usually a consequence of increased skills, experience and improvements in the quality of output. These factors are accounted for in the valuation of the project which are borne by the client, which is a normal practice in the Software Industry. Thus the profitability margins of software development Companies is not materially affected by increase in manpower costs. On the other hand decreasing costs of hardware allows faster up-gradation to remain competitive in the global market.

6. THE EXTENT TO WHICH MATERIAL INCREASE ON NET SALES OR REVENUE ARE DUE TO INCREASED SALES VOLUME, INTRODUCTION OF NEW PRODUCTS OR SERVICES OR INCREASED SALES PRICES:

The incremental growth in the Projected sales and revenues of the Company is based on the assumption that the Company will enjoy the benefits of increased productivity, expansion of business and the repeat business anticipated from its clients, for the quality of the services that would be rendered for them. The experience and skills of the Company's professionals would further enable the Company to solicit large Projects, contributing substantially to the Company's sales and profitability in the long run.

7. TOTAL TURN OVER OF EACH MAJOR INDUSTRY SEGMENT IN WHICH OTHER COMPANY OPERATES:

The Company operates in the Software Industry/Segment which has compounded annual growth of 55%. The Turnover in Software Exports has grown from 15.35 billion in 1994-95 to Rs.1000 billion in 1997-98 which is expected to cross Rs. 1522 Billions during this fiscal.

8. STATUS OF ANY PUBLICITY ANNOUNCED NEW PRODUCTS OR NEW SEGMENT:

The Company is focussing on Software Market Segments which comprises ERP, E-Commerce etc. which are included in the top 10 emerging technologies in the World. The Company is among the few Indian Corporates who have expertise in all theses fields.

9. THE EXTENT TO WHICH THE BUSINESS IS SEASONAL:

Software Industry is non-seasonal in nature and business volumes are only dependent on the marketing efforts of the Company. Besides, the Company is having a long list of existing Client from whom the Company is getting regular AMC.

10. ANY SIGNIFICANT DEPENDENCE ON A SINGLE OR FEW SUPPLIERS OR CUSTOMERS:

The Company has exclusive project marketing division consisting of professionals with proven track record in Software Project Marketing. The Company will have marketing divisions in India, USA, Canada to promote the Company on global basis. Thus the Company is not dependent on a single or few clients for its business either for purchases or for sale of its products.

11. COMPETITIVE CONDITIONS

The Company is focussing on the latest technology, emerging markets and futuristic trends which provided it with a niche market segment in the Global IT Industry. The niche markets includes, Software development projects, Software Consultancy services, re-engineering in the field of ERP, Banking and Insurance Hospitals, Hotels E-Commerce, Data Warehousing etc. Thus the Company gas a clear business plan for both domestic and global IT Markets and is on par with other Software Companies. As such the Company faces no significant competitive threats from Indian companies.

VI. PROJECTED PROFITABILITY

Based on the profitability projections estimated by the company and as appraised by Canara Bank vide their appraisal report no CCW/IAD/0095/MSR/2000 dt 01.02.2000, following are the financial projections for the next two years. However, as a matter of abundant caution, attention of the investors is drawn to the fact that the figures mentioned in the statement below are only indicative and are subject to change.

(Rs in lakhs)

PARTICULARS 2000-01 2001-02

TOTAL INCOME 5300.00 7510.00-Hardware Division 4400.00 6160.00-Software Division 900.00 1350.00

PBDIT 

-H/W Division 446.00 669.50

-S/W Division 331.46 432.25

- TOTAL 777.46 1101.75

PBDIT/Total income %

-H/W Division 10.14 10.87

-S/W Division 36.83 32.02

-TOTAL 14.67 14.67

PAT

-H/W Division 189.77 309.04

-S/W Division 199.33 290.27

- TOTAL 389.10 599.31

PAT/Total income %

-H/W Division 4.31 5.02

-S/W Division 22.15 21.50

- TOTAL 7.34 7.98

DSCR 5.60 8.38

Earnings per Share (Rs.) * 6.58 10.13

Equity Capital 591.65 591.65

Reserves & Surplus 2148.21 2617.36

Tangible Networth 2359.53 2959.09

Book Value 46.31 54.24

*Annualised

MAJOR ASSUMPTIONS

A. HARDWARE DIVISION

1. Hardware sales are assumed as Rs.2500.00 Lakhs for the year 1999-2000 and 60% increase is assumed for the year 2000-01 and 40% increase is assumed for further years.

2. Networking sales are assumed at 10% of the hardware sales for all the years.

3. Packaged software sales which are normally sold along with hardware are assumed as Rs.200.00 Lakhs for the year 1999-2000.

4. Purchases (Raw-materials, components, etc.) are assumed as 70% of the total income for all the years.

5. Wages and salaries are assumed as Rs.15.00 Lakhs for the year 1999-2000 and an increase of 33.33% is assumed for the year 2000-01 and an increase of 25% is assumed for the remaining years.

6. Power and fuel expenses are assumed as Rs.3.00 Lakhs for the year 1999-2000 and Rs.12.00 Lakhs for the year 2000-01. An increase of 15% is assumed for the remaining years.

7. Other direct expenses are assumed as 10% of the total income for all the years.

8. Administrative expenses are assumed as Rs.50.00 Lakhs for the year 1999-2000 and a 20% increase is assumed for the year and 15% increase is assumed for the remaining years.

9. Administrative salaries are assumed as Rs.70.00 Lakhs for the year 1999-2000 and a 30% increase is assumed for the remaining years.

10. Selling and distribution expenses are assumed as Rs.50.00 lakhs for the year 1999-2000 and a 50% increase is assumed for the year 2000-01 and a 20% increase is assumed for the remaining years.

11. Marketing and publicity expenses are considered at 4% of the total income.

12. Depreciation is calculated as per straight line method.

B: SOFTWARE DIVISION

1. Domestic sales are assumed as Rs.50.00 lakhs for 2000-01 and an increase of Rs.25.00 lakhs per year is assumed for further years.

2. Export sales for off-shore projects are assumed as 70 employees working for 6 months amounting to 420 man months. Revenue per man month is assumed as US $18.00 per hour, 8 hours per day and 25 days per month are assumed for the year 2000-01.

Export sales for on-site consultancy are assumed as US$46.00 per hour per employee.8 hours per day and 25 days per month are assumed. It is further assumed that at any time, 6 employees will be on this project for a period of 8 months per year for the year 2000-01. 50% increase in export sales is assumed for the year 2001-02 and 40% increase is assumed for further years. One US$ is assumed as Rs.43.50 for all calculations.

3. Operational expenses are assumed as US$ 2500.00 per employee per month. Further, it is assumed that 6 employees, 10 employees, 16 employees and 30 employees would be on the rolls during the years 2000-01, 2001-02, 2002-03 and 2003-04 respectively.

4. Repairs and maintenance expenses are assumed at 2% of the total income for the year 2000-01 and 5% of the total income for further years.

5. Communication expenses are assumed as 5% of the total income for all the years.

6. Power and fuel expenses are assumed at 2% of the total income for all the years.

7. Training expenses are assumed as Rs.10,000/- per employee for the year 2000-01 and Rs.15,000/- per employee for future years. Further, it is assumed that training will be given to 100 employees, 120 employees, 160 employees and 200 employees for the years 2000-01, 2001-02, 2002-03 and 2003-04 respectively.

8. Other expenses are assumed at 5% of the total income for all the years.

9. Administrative expenses are assumed at 5% of the total income for all the years.

10. Marketing expenses are assumed at 4% of the total income for all the years.

11. Preliminary and pre-operative expenses of Rs.88.75 Lakhs are assumed to be written off in 5 years.

12. Miscellaneous expenditure pertaining to overseas office establishment expenses of Rs.210.00 Lakhs are assumed to be written off in 5 years.

13. Canara Bank's Term loan of Rs. 240.00 Lakhs is assumed to be repaid in three years starting from 2000-01. Interest on term loan is assumed at 16.32% p.a.

STOCK MARKET DATA

Since this is the first Public Issue of the Company and since the shares are yet to be listed there is no stock market data available for the shares of the Company.

BASIS FOR ISSUE PRICE

Qualitative Factors :

1) The company was awarded ISO 9002 Certification for production, installation, service and software solutions from KEMA, Netherlands (NVT-QC) India on 1.1.1999.

2) The concept of low cost, quick implementation of MAN (Metropolitan Area Network) Developed by Cerebra has wide application between computerized branches of scheduled banks.

3) Cerebra was one of the first companies to get its range of PCs manufactured and certified under stringent test standards as defined by the Department of Electronics and approval from Department of Telecommunications for usage with Intel component in the Telephone exchange

4) Company is a member of Microsoft OEM system builder program ensuring thereby Software support of all Microsoft Products to its customer.

5) Cerebra Servers have been ranked the No 1 in terms of performance among corporate contenders which included Acer, Compaq, Dart and Nest - Source CHIP Computer Magazine edition February, 2000.

6) As on 31.12.99, the company achieved a Gross Income of Rs.1995.43 lacs and on a equity of Rs.118.75 lacs company reported net profit after tax of Rs.65.51 lacs

7) Tie up with Anytech.Inc., USA vide Teaming Agreement dated 07.02.2000

Quantitative factors

1. Adjusted E.P.S (Rs.)

(a) 1996-97 7.29 1 7.29

(b) 1997-98 6.05 2 12.10

(c) 1998-99 8.32 3 24.96

(d) As on 31.12.99
Annualised 6.85 4 27.40

Total 10 71.75

2. P/E Ratio in relation to issue price of Rs.60/-

(a) Based on 1998-99 EPS : 7.21 (on issue price of Rs.60/- per share)

(b) Industry P/E

Highest : 47.40

Lowest : 4.70

Composite Average : 42.20

(Computer Hardware Industry)

(Source : Capital Market 23.01.2000)

3. Average Return on Networth :

Year RONW% Weights used Total Weights Average RONW

(a) 1996-97 19.83 1 19.83

(b) 1997-98 29.79 2 59.58 23.02%

c) 1998-99 19.57 3 58.71

Total 6 138.12

4. Minimum return on total net-worth after Issue needed to maintain pre issue EPS at 8.32 = 5.25%

5. Net Asset Value

a. As on 31.03.99 Rs.42.51

b. As on 31.12.99 Rs.22.87

c. After the Issue Rs.12.61

d. Issue Price Rs.60.00

The company has already posted RONW to the extent of 19.57% for the year ending 31st March 1999 as against a minimum return on total net-worth after the Issue is needed to maintain pre-issue EPS of 5.25%. The project has been appraised by Canara Bank. Promoters along with friends, relatives and associates, others (MFs/VCs/FIs) are contributing to the extent of 75% of the total post issue capital of which 46.70% is being contributed at same premium.

VII COMPANY UNDER THE SAME MANAGEMENT U/S 370 (1B) OF THE COMPANIES ACT, 1956

There is no company under the same management as that of the company as per section 370 (1B) of the Act.

VIII OUTSTANDING LITIGATION

Except for the details furnished under the Para Outstanding Litigation/Defaults/ Disputes, there are no other litigation pending on any matters which are likely to affect the operation and finances of the Company or any other Firm or Company under the same management or associated with the Company.

PROSECUTION

There are no criminal prosecution cases pending against the Company or its Directors under the enactments specified in Paragraph 1 of part I of Schedule XIII of the Companies Act, 1956.

DEFAULT

There has been no default in meeting the statutory dues, bank or Institutional dues by the Company.

MATERIAL DEVELOPMENT

The Directors of the Company undertake that in their opinion except for the progress achieved in the implementation of the Project as mentioned elsewhere in the Prospectus, there are no circumstances, since the date of last financial statements disclosed in the Prospectus that would materially and adversely affect or is likely to affect the trading or profitability of the Company or the value of its assets or its liability to pay its liability within the next 12 months.

RISK FACTORS AND MANAGEMENT PERCEPTION THEREOF

INTERNAL

1. The promoters of the company are first generation entrepreneurs and the project is the first major venture. The project may encounter risks associated with such ventures.

Management Perception: The Company is in operation for the past eight years and the promoters have gained adequate experience in the IT Industry and hence the management does not foresee any problem in completion of the Proposed Venture.

2. The Company is yet to place orders for plant and machinery worth Rs 92.06 Lakhs 

Management Perception: The machinery to be procured are available without any lead time and the company will procure these items at the appropriate time. 

3. The Company is proposing to purchase Land measuring 20000 sq. Feet and to construct a building of 20,000 sq. feet to accommodate the proposed software development centre in the vicinity of Electronic city, Bangalore. The land is yet to be purchased and any delay in acquiring land & constructing building thereon will affect the implementation schedule of the Project and thereby the profitability of the Company.

Management Perception: The Company is in the process of identifying the land for the project. The company is confident of purchase of Land and construction of Building as per schedule. The company till such time intends to expand its software activities in a rented premises for a brief period till the completion of the building and hence the projections will not be affected.

4. The key posts for Software Division are yet to be filled up. 

Management Perception: The Company has identified senior level software professionals with wide ranging experience in the areas the company intends to focus and would complete recruitment by
April 2000. 

Management Perception: The SWOT analysis is general in nature and is applicable to any Software Company. The Promoters have sufficient and necessary experience to effectively overcome the deficiencies referred therein.

6. The Company is yet to set up a branch in USA for which a sum of Rs.210.00 Lakhs are earmarked in the project.

Management Perception: The Company has already identified the location of its office at North Potomac, MD, USA.. and has applied to the Reserve Bank of India on 14.2.2000 for permission to set up an overseas office. The company has entered into a technical tie-up with Any Tech Inc, USA for its overseas activities. 

7. Hitherto, the company's major revenue was attributed to Hardware production and Sales and now the company is entering into software development.

Management Perception: The Company's business hitherto was mostly in Hardware production and Sales. The sales for the period 1st April 1999 to 31st December 1999 includes Software trading sales amounting to Rs. 156.80 lakhs in a total turnover of Rs. 1929.24 lakhs. The company is confident of achieving its projected turnover in the software area too due to the promoters past experience and its tie up with Anytech-Inc., USA.

8. In the project a sum of Rs.503.44 Lakhs has been earmarked as working capital requirements of both hardware and software divisions, since no bank borrowings are proposed for working capital, it may be difficult for the company to meet future working capital requirements.

Management Perception: Presently the company is enjoying the working limits of Rs.640.00 lakhs with Canara Bank and Canbank Factors Ltd. For continuous operations, the company is confident of generating adequate revenue from the proposed operations to meet the future working capital requirements besides approaching Canara Bank.

EXTERNAL

1. The Information Technology industry is characterized by rapid technology obsolescence and intense competition. The liberalised policies of the Government could bring forth competition from domestic players and foreign companies.

Management Perception: The company adopts latest technologies and the technical skills of the personnel are updated on a continuous basis through well designed training programmes.

2. High Employee turnover in the Software Industry.

Management Perception: Excellent working conditions with latest computing environment & the benefits to the employees would be maintained at a level to ensure their continuity. Further, to continuously upgrade the skills of its employees as per the business requirements, the company has various training programs. The Company has created CEREBRA ESOP Trust to retain the best available talents by enabling them to contribute and share in the growth of the Company. Majority of the employees are already shareholders of the Company.

3. Any adverse changes in the Government policies on computer hardware/software Industry levies, Custom regulations etc. may affect the performance and profitability of the company.

Management Perception: The IT industry has been identified as a major thrust area by the Government of India & incentives are being provided to encourage this industry with a major thrust on globalisation and hence the Company does not for see any shift in the Government's policy which will be detrimental to this industry. 

4. Export turnover is subject to exchange fluctuations and can affect the earnings of the Company.

Management Perception: The company proposes to concentrate on exports mainly to developed economies like USA, UK, etc. where the exchange rate vis-à-vis the rupee has been in favour of the exporter. 

5. The market for Software Products & Services is highly competitive.

Management Perception: The company has inherent strengths with reference to its size, past track record satisfied customer base, marketing reach, constant technology upgradation latest computing and communication infrastructure and professionally qualified, experienced manpower, which will provide the competitive edge.

Information technology sector in which the company is operating in, is witnessing abnormally high valuation presently and possibilities can not be ruled out that the same may not continue in future

The investors are advised to refer to the para on ` BASIS FOR ISSUE PRICE' on page no " " before making an investment in this issue.

Investors may note that in case of over subscription, allotment shall be on proportionate basis.

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision investors must rely on their own examination of the issuer ("issuer"/ "offeror") and the issue("issue"/ "offer") including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India nor does the Securities and Exchange Board of India guarantee the accuracy or the adequacy of this document. The attention of Investors is drawn to the statement of Risk Factors appearing on Page No. i of the offer document.

ISSUER'S ABSOLUTE RESPONSIBILITY

The issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Offer Document contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Offer Document is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respects.

INVESTORS MAY NOTE THAT CEREBRA INTEGRATED TECHNOLOGIES LIMITED ACCEPTS NO RESPONSIBILITY FOR STATEMENTS MADE OTHERWISE THAN IN THIS PROSPECTUS OR IN THE ADVERTISEMENTS OR ANY OTHER MATERIAL ISSUED BY OR AT THE INSTANCE OF THE ISSUER COMPANY OR THE LEAD MANAGER AND THAT ANYONE PLACING RELIANCE ON ANY OTHER SOURCE OF INFORMATION WOULD BE DOING SO AT HIS/HER OWN RISK

PART-II

A. GENERAL INFORMATION

AUTHORITY FOR THE PRESENT ISSUE 

Pursuant to Section 81(1A) of the Companies Act 1956, the present issue of Equity Shares has been authorised vide special Resolution passed at the Extra Ordinary General Meeting held on 21st January, 2000.

Consents in writing of the Directors, Lead Managers to the Issue, Bankers to the Issue, Brokers to the Issue, Registrars to the Issue, Auditors of the Company, and Bankers to the Company to act in their respective capacities have been obtained and filed with the Registrar of Companies, Karnataka at Bangalore along with a copy of this Prospectus as required under Sanction 60 of the Companies Act, 1956 and none of them has withdrawn the said consent upto the time of delivery of a copy of this prospectus for registration with the said Registrar of Companies.

M/s M.S.Reddy Associates, Chartered Accountants, the Auditor of the Company have also given their written consent to the inclusion of "Tax Benefits" as advised by them in the form and context and have also given their written consent to include Auditors Report as advised by them and as appearing elsewhere in the Prospectus and such consent has not been withdrawn upto the time of the filing of a copy of this Prospectus with the Registrar of Companies, Karnataka at Bangalore.

EXPERT OPINION

Save as mentioned else where in the prospectus, the company has not obtained any expert opinion.

CHANGES IN AUDITORS

Following are the changes in Auditors of the Company during the last three years.

Name of the Auditor Date of change Reasons for change

Raghu Srinivasan & Co. 25.03.1999 Resignation 

A.Bhaskaran & Co. 02.09.1999 Resignation 

M.S.Reddy & Associates 09.09.1999 Appointment 

CHANGE IN DIRECTORS DURING LAST THREE YEARS IS AS FOLLOWS

The following directors have been inducted into the company during the last three years.

Sl no. Name Date of Change Remarks

1 Mythili Kannan 07.02.2000 Appointment

2) T.S.Suresh Kumar 21.10.1999 Appointment

PROCEDURE /TIME SCHEDULE FOR ALLOTMENT /REFUND

Disposal of Applications & Application money received

The company reserves full, unqualified and absolute right to accept or reject any application, subject to guidelines of SEBI and Stock Exchanges, in whole or part in either case without assigning any reason thereof. In case, an application is rejected in full, the whole of the application money received will be refunded and Where an application is rejected in part, the excess application money received will be refunded to the applicant. Such refund, if any, will carry interest @ 15% p.a. after 30 days from the date of closure of this issue for the period of delay beyond 30 days. Refund will be made by cheques/payorders/demand drafts (only in case of applications not accompanied by Stock Invest) and will be dispatched to the applicant's address at the applicant's risk. Such cheques or pay orders or demand drafts will be payable at par at all the centres where the application were accepted (subject to the regulations of RBI in the regard). In case of joint applications, refund orders, if any, will be made out in the first applicant's name and all communications will be addressed to the person whose name appears first on the application form.

UTILISATION OF ISSUE FUNDS

The application money received will be kept in separate bank accounts and the company will neither have access to nor appropriate such funds unless approval for the basis of allotment of shares has been obtained from the Regional Stock Exchanges\ at Bangalore and listing approval has been received from all the stock exchanges where listing is sought.

ALLOTMENT/REFUND

The company has undertaken that sufficient funds will be made available to the Registrars to the issue to ensure that allotment letters/certificates/refund orders are dispatched by Registered Post as detailed hereunder.

FOR APPLICATIONS WITH CASH / CHEQUES / DRAFTS :

The company will inform the applicants in respect of the allocations made or applications rejected by dispatch of Acceptance Letters/Share Certificates or Letters of Regret, together with refund cheques or pay orders or Stockinvests, as indicated below, at the applicant's sole risk to the first named/sole applicant within 10 weeks of the closure of the issue. The company, however, as far as possible will allot the shares within 30 days from the closure of the issue and shall pay interest @ 15% p.a. for the delayed period if the allotment is not made and/or the refund orders are not dispatched within 30 days from the closure of the issue.

Refund orders of value over Rs.1500/- will be dispatched by Regd. Post and those upto Rs. 1500/- by certificate of posting. Bank charges, if any, for encashing such cheques or pay orders, will be payable by the applicant. However, such cheques or pay orders will be payable at par at the places where the applications are accepted. In case of joint applications refund orders if any, will be made out in the first applicant's name and all communications will be addressed to the person whose name appears first on the Application Form.

In case of any delay in despatch of refund orders the company would be liable to pay interest at the rate prescribed under section 73(2) and (2A) of the Company's Act 1956.

FOR APPLICATIONS WITH STOCK INVEST

In case of applicants who subscribe with stock invest the following procedure will be followed :

In case of non allotment, the stock invest will be cancelled and returned directly to the applicant.

In case of allotment/partial allotment, stock invest will be presented to the issuing bank for payment to the extent of the allotted amount.

Registrars to the issue have been authorised by the company by Board Resolution passed on to sign on behalf of the company for realising the proceeds of the stock/invest on behalf of successful allottees or to affix non allotment advice on the stock/invest or to cancel the stock/invest of the non - allottees or partially successfull allottees with more than one stock/invest. The canceled stock invest will be returned to the applicant by post within 10 weeks of the date of closure of the issue.

ISSUE OF SHARE CERTIFICATE

The Share Certificates will be delivered by Registered Post within three months from the date of allotment and will be exchanged for allotment letters issued, if any.

SCHEDULE AND BASIS OF ALLOTMENT 

In the event of the present issue of Equity shares being over subscribed the basis of allotment will be finalised in consultation with the Stock Exchange, Bangalore within 30 days from the date of closure of subscription list. The investors are advised that in case of over subscription over two times of the issue size SEBI nominated public representative shall be associated in the process of finalisation of basis of allotment.

The allotment shall be subject to marketable lots, on proportionate basis as explained below.

a. Applicants will be categorised according to the number of equity shares applied for.

c. Number of the equity shares to be allotted to the successful allottees will be arrived at on a proportionate basis, i.e., total number of equity shares applied for by each applicant in that category multiplied by the inverse of the over subscription ratio.

d. In all the applications where the proportionate allotments works out to less than 100 shares per applicant the allotment shall be made as follows:

(i) Each successful applicant shall be allotted a minimum of 100 equity shares and

(ii) The successful applicants out of the total applicants for that category shall be determined by drawl of lots in such a manner that the total number of shares worked out as per (b) above.

e. If the proportionate allotment to an applicant works out to a number more than 100 but is not a multiple of 100 (which is the marketable lot), the number in excess of the multiple of 100 would be rounded off to the higher multiple of 100 if that number is 50 or higher. If that number is lower than 50, it would be rounded off to the lower multiple of 100. All applicants in such categories would be allotted shares arrived at after such rounding off.

f. If the shares allotted on proportionate basis to any category is more than the shares allotted to the applicant in that category, the balance available share as for allotment shall be first adjusted against any other category, where the allocated shares are not sufficient for proportionate allotment to the successful applicants in that category. The balance shares, if any, remaining after such adjustment will be added tot he category comprising of applicants applying for minimum number of shares.

g. If the process of rounding off to the nearer multiple of 100 results in the actual allocation being higher than the shares offered, it would be necessary to allow a 10% margin i.e. the final allotment may be higher up to 110% of the size of the issue

h. Investors may note that in the case of over subscription, the allotment will be on proportionate basis as mentioned above, subject to the following conditions.

(i) A minimum of 50% of the net offer of shares to the public shall initially be made available for allotment to individual applicants who have applied for allotment of 1000 or less than 1000 shares.

(ii) The balance 50% of the net offer of shares to the public shall initially be made available for allotment to investors including corporate Bodies/Institutions and individual applicants who have applied for allotment of more than 1000 shares.

(iii) The unsubscribed portion of net offer to any one of the above categories (a) or h (b) shall/may be made available for allotment to applicants in the other category, if so required.

The Company agrees that - there will be at least 5 public shareholders for every Rs. 1 lakh of net capital offer made to the public out of the Public Issue.

Explanation: For the purpose of this clause a public shareholder shall mean a person who is neither a promoter nor does he hold more than 1 % equity capital in the Company.

INTEREST ON EXCESS APPLICATION MONEY

Payment in respect of refund of excess application moneys beyond the stipulated period of 30 days after the date of closure of the Subscription List, interest @ 15% p.a. on the excess application money will be made to the applicant as per the guidelines issued by the Ministry of Finance, Government of India, New Delhi vide Letter no. F/8/6/SE/79 dated 21st July, 1983 addressed to the Stock Exchanges as amended by letter No. F/14/2/SE/85 dated September 27, 1985.

INVESTOR GRIEVANCES AND REDRESSAL SYSTEMS

Since this is the first Public Issue of Shares of the Company, there is no past history of Investor Grievances. On completion of this Public Issue, the Company has made arrangements with the Registrars to the issue to handle and redress Investor Grievances promptly for the period of 6 months beginning from the last date of dispatch of letters of allotments/share certificates/refund orders and keep the Company appraised of their redressal to complaints/grievances on weekly basis. On completion of this six months period, the Company will device its own suitable mechanism for prompt redressal of Investor Grievances. The Company has nominated Mr. K.Y.Nagaraj, Company Secretary, as compliance officer to deal with grievances and the redressal system.

COMPANY INFORMATION

REGISTERED OFFICE 

24, 12th Main I Block

Rajajinagar, Bangalore - 560 010

Ph No.: 91-080-3323054, 3320990, 3328171, 3322490 

Fax No.: 91-80-3327313 

E-Mail: cerebra@blr.vsnl.net.in 

Web: www.cerebracomputers.com 

ISSUE MANAGEMENT TEAM

LEAD MANAGERS TO THE ISSUE

CANARA BANK 

Merchant Banking Division, World Trade Centre 

FKCCI BUILDING, KG ROAD, BANGALORE - 560 009 

Ph No.: 91-080-2283917 Fax No.: 91-080-2256636

E-mail: canbank@blr.vsnl.net.in

SMIFS CAPITAL MARKETS LIMITED

205, Centre point, 56, Residency Road

Bangalore - 560 025 

Ph No.: 91-080-5592861/862, 5599581, 5597183, 5597190

Fax No.: 91-080-5597794/5098353

E-Mail: smifs.cap@blr.vsnl.net.in

REGISTRARS TO THE ISSUE 

KARVY CONSULTANTS LIMITED

`Karvy House', No.46, Avenue 4 

Street No 1, Banjara Hills

Hyderabad - 500 034

Ph No.: 040-3312454

Regn. No. INR 000000221

M/s M.S.Reddy & Associates

Chartered Accountants

No. 1393,2nd floor, 5th A Main

D Block, II Stage, Rajajinagar 

Bangalore - 560 010

Ph No.: 91-080-3422430

COMPANY SECRETARY cum COMPLIANCE OFFICER 

Mr. Nagaraj K Y 

1636/S, 1st Floor, Mahakavi Kuvempu Road

2nd Stage, RajajiNagar 

Bangalore - 560 021

Ph No.: 91-80-3323054, 3320990, 3328171, 3322490

Fax No.:91-80-3327313

Email :nagarajreddy@yahoo.com

BANKERS TO THE COMPANY

CANARA BANK 

SESHADRIPURAM BRANCH

Roopa Complex, Ist Main, Seshadripuram

Bangalore - 560 020

Citi Bank, N.A.

M.G.Road

Bangalore - 560 001

IDBI Bank Ltd.

Mission Road

Bangalore - 560 027

BANKERS TO THE ISSUE

CANARA BANK

Capital Market Service Branch

World Trade Centre

FKCCI BUILDING, KG ROAD

BANGALORE - 560 009

BROKERS TO THE ISSUE

All members of the recognised Stock Exchanges in India can act as brokers to the Issue. 

To

The Board of Directors

Cerebra Integrated Technologies Limited

No.24,12th Main, 1st Block, Rajajinagar

Bangalore - 560 010

Dear Sirs,

We have examined the books of accounts of M/s. Cerebra Integrated Technologies Limited for `the year ended 31st March 1999 and for the period ended 31st December 1999 being the last `date upto which the accounts have been made up and Audited by us and for the year ended 31.3.1995, 31.3.1996, 31.3.1997 and 31.3.1998 which were audited by other auditors . In accordance with the requirements of Clause-B(1) and (2) of Part II of Schedule II of the Companies Act, 1956 as amended from time to time we report that the Profit, Assets and Liabilities Dividends of the Company are as set out below.

(Rupees in lakhs)

Period Ended Year Ended Year Ended Year Ended Year Ended Period Ended

31.3.1995 31.3.1996 31.3.1997 31.3.1998 31.3.1999 31.12.1999

Income:

Sales:

Hardware - Manufacturing 515.26 550.82 707.13 962.45 1144.49 1395.13

Hardware - Trading 81.06 133.29 312.53 560.50 377.31

Software -Trading 46.32 55.13 156.80

Other Income 4.04 11.35 15.34 20.15 22.60 26.31

Increase (decrease) in Inventories 21.49 48.29 11.28 84.24 85.02 39.88

Total 540.79 691.52 867.04 1425.69 1867.74 1995.43

Expenditure:

Purchases 477.47 521.87 635.32 1096.46 1320.95 1428.89

Staff Cost 7.06 12.57 28.08 21.71 46.40 58.51

Other Manufacturing Expenses 6.39 67.97 103.28 117.46 141.92 182.37

Administration Exp. 13.90 21.01 20.05 37.46 64.07 46.68

Selling & Distribution Expenses 8.35 23.05 28.19 41.16 158.84 107.33

Interest & Finance Charges 13.24 21.05 25.42 66.14 68.30 74.56

Depreciation 0.65 5.13 5.58 6.42 8.00 6.13

Miscellaneous Exp. W/Off 7.08 7.03 7.08 7.08 5.35

Total 527.06 679.73 852.95 1,393.89 1,815.56 1,909.82

Taxation 0.57 0.81 3.88 7.60 13.00 24.63

Net Profit after Tax before Extraordinary Items 13.16 10.98 10.21 24.20 39.18 60.98

Extraordinary Items 0.26 (0.10) (0.06) (2.19) 4.53

Net Profit after Extraordinary Items 13.16 11.24 10.11 24.14 36.99 65.51

Profit brought forward from Previous Year 13.16 24.40 33.81 42.74 77.64

Total Available for Appropriations 13.16 24.40 34.51 57.95 79.73 143.15

Appropriations:

Dividend nil nil 0.70 1.21 2.09 0.00

Bonus Shares 0.00 0.00 0.00 14.00 0.00 0.00

Transfer to General Reserve 0.00 0.00 0.00 0.00 0.00 0.00

Balance Carried to Balance Sheet 13.16 24.40 33.81 42.74 77.64 143.15

NOTES:

Other Income Includes Equipment Lease Rentals, Interest on Deposits, Sales Commission, etc.

2. ASSETS & LIABILITIES:

The Assets and Liabilities of the Company as at 31.12.1999 which is the last upto which Accounts of the Company have been made up and audited by us and subject to notes appearing hereinafter, are as set out below:

(Rupees in lakhs)

As At As At As At As At As At As At

31.3.1995 31.3.1996 31.3.1997 31.3.1998 31.3.1999 31.12.1999

A. Fixed Assets:

Gross Block 47.81 56.69 61.04 79.69 85.02 127.32

Less: Accumulated Depreciation 0.65 5.78 11.35 18.04 26.04 32.17

Net Block 47.16 50.91 49.69 61.65 58.98 95.15

Capital work-in-Progress & Advances 8.50

Total 47.16 50.91 49.69 61.65 67.48 95.15

B. Current Assets, Loans & Advances:

Current Assets:

I. Inventories 41.09 89.38 100.66 184.90 269.92 309.79

ii. Sundry Debtors 112.62 102.04 136.27 191.51 403.27 519.06

iii. Cash & Bank Balance 29.88 51.56 51.91 78.39 84.81 75.43

iv. Other Current Assets 16.73

v. Loans & Advances 8.55 37.56 19.39 28.23 22.96 100.94

Total (I) 192.14 280.54 308.23 483.03 780.96 1,021.95

Current Liabilities & Provisions:

I. Current Liabilities 125.29 196.66 255.56 161.00 222.76 320.83

ii. Provisions 1.05 0.33 5.86 8.83 6.30 40.74

Total (ii) 126.34 196.99 261.42 169.83 229.06 361.57

Total. B (I-ii) 65.80 83.55 46.81 313.20 551.90 660.38

C. Loan Funds:

I. Secured Loans 83.59 118.89 32.82 244.78 387.25 482.90

ii. Un-Secured Loan 6.21 5.50 12.20 48.84 31.89 1.07

Total. C 89.80 124.39 45.02 293.62 419.14 483.97

Net Assets (A+B-C) 23.16 10.07 51.48 81.23 200.24 271.56

E. Represented by:

Shareholder's Funds:

I. Share Capital 10.00 10.00 14.00 39.97 47.10 118.75

ii. Reserves & Surplus 13.16 24.40 33.81 54.17 89.08 154.59

iii. Share Appl. Money 4.00 24.97 1.30 71.20

23.16 38.40 72.78 95.44 207.38 273.34

LESS:

Miscellaneous Exp. To the 0.00 28.33 21.30 14.21 7.14 1.78
Extent not written off. 23.16 10.07 51.48 81.23 200.24 271.56

3. FINANCIAL RATIOS:

a) EPS (Rs.) 13.16 10.98 7.29 6.05 8.32 6.85*

b) Net Assets Value 23.16 10.07 36.77 20.32 42.51 22.87

c) Return on Networth 56.82 109.04 19.83 29.79 19.57 29.94*

(NPAT/Shareholders' fund)

Note : * indicates that the figures are annualised.

4. DIVIDEND:

A. Rate of dividend nil nil 0.05 0.05 0.05 nil

(% pro-rata)

B. Amount of dividend nil nil 0.70 1.21 2.09 nil

Please note that the above financial statements have been drawn by the company in compliance with clarification XIII and XIV issued by the Securities & Exchange Board of India

M.S.REDDY & ASSOCIATES

CHARTERED ACCOUNTANTS

Sd/-

M.SRIDHAR REDDY

PROPRIETOR

Dated 14.02.2000 Membership No. 201103

Bangalore

I `SIGNIFICANT ACCOUNTING POLICIES:

1. Fixed Assets

Fixed Assets are stated at cost of acquisition less depreciation. Depreciation is provided on straight line method at the rates specified in Schedule XIV to the Companies Act, 1956.

2. Accounting Convention

Accounts are maintained on an accrual basis under historical cost convention as a going concern and comply with mandatory Accounting Standards and statements issued by the Institute of Chartered Accountants of India.However Payment of Gratuity, & Other Retirement Benefits are accounted for as and when settled . Pre-Paid expenses and provisions for outstanding expenses are considered wherever material and ascertainable.

3. Revenue Recognition

Sales include applicable excise duty but exclude sales tax. Sales are recognized on despatch of goods. Other Income is recognized on accrual basis wherever material

4. Inventories

Raw material including Components, Stock in process and Stock - in - trade are valued at cost or net realisable value whichever is lower. The Raw materials, Stock-in-Process & Stock in Trade were valued at cost in the previous year. The change in accounting policy is to comply with the mandatory accounting standard prescribed by ICAI. However there is no impact on profit due to the above change in accounting policy.

5. Amortisation of Miscellaneous expenses (to the extent not written off)

The expenditure incurred which has long enduring benefits is classified under this head and written off over a period of 5 years.

6. Foreign Currency Transaction

Imports are initially accounted at the exchange rate prevailing on the date of documentation and the Difference in the rate of exchange arising on actual payment of proceeds in foreign exchange is accounted as exchange gain or loss as the case may be.

II NOTES TO ACCOUNTS

1) Authorised Capital of the Company as at 31.12.99 is Rs.50,000,000 Divided into 50,00,000 equity Share of Rs. 10 Each. Issued and Subscribed and Paid up Capital as at 31.12.99 is Rs.11,844,530 Divided into 1,187,453 Equity Shares of Rs. 10 Each, Out of Which 140000 Shares were issued as fully paid bonus shares by capitalisation of Profits during the year 1997-98 and 16153 equity shares were issued as fully paid up pursuant to contract without payment being received in cash.

2) Secured Loans :

a. Working capital loan from Canara Bank is secured by hypothecation of inventories, plant & machinery, furniture and fixtures and other fixed assets present and future and charge on book debts, land and guaranteed by managing director and three other directors.

b. Hire Purchase Loan :

GE Capital Transportation Financial Services Ltd., Rs. 430,443.00 outstanding as on 31.12.1999

The Loan is Secured against Hypothecation of Cars/Vans

3) The Company has no outstanding dues to Small Scale Industrial undertakings as on 31st December 1999

4) Contingent Liabilities are in respect of:

a) Bank guarantees Rs.86.80 Lakhs

b) Book Debts factored and prepayment received from Canbank Factors Ltd., as at 31st December 1999 is Rs.4,10,05,596.49

5) Balances of Sundry Debtors and Creditors loans and advances are pending confirmation.

6) Provision for taxation is made for 9 months upto 31.12.1999.

7) No Provision for Gratuity is however made in respect of Present Value of future Payments Which is not Ascertained.

8) Stocks and their Values are as Certified by the Management.

9) Earning in Foreign Currency is Rs. Nil

10) Expenditure in Foreign Currency Rs. 2,12,843 towards travelling of directors

11) Value Of Imports on CIF Basis : Rs . Nil

12) Current period Figures Being for a period of nine months are not comparable with the figures of the previous years

13) Figures of the Previous Years have been Re-Grouped wherever considered Necessary.

CAPITALISATION STATEMENT : (Rs. In Lakhs)

Pre-Issue as at Post -Issue
31.12.99 (as adjusted)

A) SHORT TERM DEBT 483.97 483.97

B) LONG TERM DEBT 0 240

TOTAL DEBT ( A + B ) 483.97 723.97

SHARE HOLDERS FUNDS

A) SHARE CAPITAL 118.75 591.65

B) RESERVES 154.55 1812.66

TOTAL SHAREHOLDERS FUNDS 273.30 2404.31

LONG TERM DEBT / EQUITY NA 0.10

Year Ended Year Ended Year Ended Year Ended Period Ended

31.03.99 31.03.98 31.03.97 31.03.96 31.03.95

Tax Rate 0.35 0.35 0.43 0.46 0.46

Net profit before tax and

Extraordinary items as per P & L a\c. 52.18 31.74 13.98 12.04 13.73

Tax on Notional Rate 18.26 11.11 6.01 5.54 6.32

Adjustments:

Difference between Tax depreciation

& Book depreciation -5.05 -0.76 -0.6 -9.93 -12.04 

Other Adjustments -11.97 -8.9 -4.02 -0.41 -0.46

Net Adjustments -17.02 -9.66 -4.62 -10.34 -12.5

Tax saving on Net Adjustment -5.96 -3.38 -1.99 -4.76 -5.75

Total Taxation 12.31 7.73 4.02 0.78 0.57

Note : Other adjustment includes Deductions under Section 80IA, Disallowances Under Section 43(b) etc.

For M S Reddy & Associates

Chartered Accountants.

Date : 14.2.2000 Sridhar Reddy

Place : Bangalore Proprietor.

C. STATUTORY AND OTHER INFORMATION

MINIMUM SUBSCRIPTION

The minimum subscription which, in the opinion of the Board must be raised by the issue of shares in order to provide for the sums required, in terms of the Act, and in terms of this prospectus is Rs.887.52 Lacs being 100% of the issue amount. The Board will proceed to allot the equity shares on receipt of application money payable on equity shares as mentioned elsewhere in this prospectus. If the company does not receive the minimum subscription amount of 100% of the issued amount on the date of closure of the issue or if the subscription level falls below 100% after the closure of the issue on account of cheques having been returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after the Company becomes liable to pay the amount, the company shall pay interest as per Section 73 of the companies Act, 1956.

EXPENSES OF THE ISSUE

The expenses of the present issue, including brokerage, fees of the Lead Managers, Legal Advisor and Registrar to the issue, stamp duty, printing and stationery, distribution and publication expenses, legal charges, listing fees, charges of Bankers to the issue, Auditors fees, and other miscellaneous expenses such as estimated at Rs. 88.75 lakhs will be met out of the proceeds of this issue.

FEES PAID TO SEBI

As per regulation 24A of SEBI (Merchant Bankers) Amendment Regulation 1996 dated 27.06.96, the Company paid a sum of Rs.15,000/- to SEBI vide DD No.070541 dated 14.02.2000 drawn on Canara Bank, Seshadripuram Branch, Bangalore. at the time of filing of draft prospectus.

FEES PAYABLE TO LEAD MANAGERS TO THE ISSUE 

The fees payable to the Lead Managers to the issue are as set out in their letter of appointment. The lead managers are also to be reimbursed all other out of pocket expenses incurred as agreed in their letters. Copies of the letters of appointment are kept open for inspection at the registered office of the company.

FEES PAYABLE TO THE REGISTRARS TO THE ISSUE

The fees payable to Registrar to issue is set out in their letter of appointment. Copy is kept open for inspection at the Registered Office of the Company.

BROKERAGE

No sums have been paid or payable as commission, brokerage or discount for subscribing or agreeing to subscribe or procuring or for agreeing to procure subscriptions for any previous issue of the Company during last five years.

Brokerage will be paid by the company @ 1.5% on the issue price of the equity shares on the basis of allotment made against application bearing the stamp of a member of any recognised Stock Exchange in India. Brokerage at the same rate will also be payable to the Bankers to the Issue in respect of allotment made against applications procured by them provided the relative forms of applications bear their respective stamps in the Brokers column.

In case of tampering or overstamping of broker/agents codes on the application form, the issuer's decision to pay brokerage in this respect will be final and no further correspondence will be entertained in this regards.

OPTION TO SUBSCRIBE

Save as otherwise stated elsewhere in the prospectus, the company has not entered into any contract or arrangement and does not presently propose to enter into any contract or arrangement, whereby any option or preferential right of any kind has been or is proposed to be given to any person to subscribe for any equity shares or Shares of the Company.

CAPITALISATION OF RESERVES AND PROFITS

The Company had issued 1,40,000 shares of Rs 10/- each on 24.11.1997 as bonus in the ratio of 1:5 to the existing share holders by capitalising an amount of Rs. 14,00,000/- out of the free reserves of the Company. The company also issued 11,77,400 shares of Rs. 10/- each on 04.02.2000 as Bonus shares in the ratio of 100:99 by capitalising an amount of Rs.1,17,74,000/- out of free reserves of the Company. 

CLASSES OF SHARES

The share capital of the Company at present consists of ordinary Equity Shares of Rs.10/- each only.

ISSUE OF SHARES OR DEBENTURES FOR CONSIDERATION OTHER THAN FOR CASH

To date there has been no issue of shares, debentures or any other such instruments for consideration other than cash.

The company has issued 20,72,400 equity shares of Rs.10/- each for cash at a premium of Rs.50/- per share to promoters, friends, relatives and associates of promoters, NRIs/FIIs/ Mutual Funds during the year 1999-2000. No shares of the company have been issued at a discount.

PREVIOUS ISSUE

The company has not made any public issue previously and will be approaching the capital market for the first time.

REVALUATION OF ASSETS

The Company has not revalued any of its assets since the date of incorporation.

PREVIOUS COMMISSION, BROKERAGE AND DISCOUNT ON SHARES

No sums have been paid as commission/brokerage. Commission/brokerage are payable only in respect of the present Issue.

DEBENTURES AND REDEEMABLE PREFERENCE SHARES

The company has not issued any debentures, debenture-stock, or Redeemable Preference Shares since the date of incorporation.

PURCHASE OF PROPERTY

Save in respect of the property purchased or acquired or to be purchased or acquired as mentioned elsewhere in this prospectus, there is no property which the Company has purchased or acquired or presently proposes to purchase or acquire, which is to be paid for wholly or partly out of the proceeds of the present issue or the purchase or acquisition has not been completed on the date of issue of this prospectus, other than the following:

1. The contract for the purchase or acquisition whereof was entered into in ordinary course of the company's business, the contract not being made in contemplation of this issue nor this issue is consequence of such contract or

2. In respect of which the amount of purchase money is not material except as stated elsewhere in this prospectus, the company has not purchased any property in which any of its promoter or Director had or have any direct or indirect interest or in respect of any payments made thereof. 

INTEREST OF PROMOTERS AND DIRECTORS

Save as elsewhere stated in the Prospectus, all the directors are deemed to be interested to the extent of fees, if any, payable to them for attending the meetings of the Board or Committees thereof and reimbursement of travelling and other incidental expenses if any, for such attendance as per the articles. 

The promoters and directors are also interested to the extent of the shares, if any, already held by them, in the company or that may be subscribed by and allotted to them out of the present issue. The promoters and the directors are deemed to be interested in the shares that are held or may be allotted to the companies in which they are interested as directors and/or members.

PRESENT CHAIRMAN AND MANAGING DIRECTOR AND WHOLE TIME DIRECTORS

In accordance of provision of section 198, 269 & 309 and in accordance with schedule XIII and in accordance with Articles of Association of the company, Mr. V Ranganathan was appointed as Chairman and Managing Director of the Company with effect from 01.01.2000. Apart from the Managing Director, Mr.V.Krishnan, Mr.P.Vishwamurthy, Mr.K.Gururaja Upadhya and Mr.Shridhar S Hegde, being the whole time directors of the Company are paid the uniform remuneration.

Following are the details of monthly remuneration and perquisites payable to the Chairman and Managing Director and other whole time directors.

Consolidated Rs.50,000/- 

Apart from the above the following are the perquisites.

Leave Travel Concession once in a year in accordance with the rules specified by the Company.

Personal accident insurance Rs.4000/- per annum, expenditure incurred on gas, electricity and water subject to a maximum of 10% of salary.

The above remuneration payable are in accordance with the schedule XIII of the Companies Act, 1956.

Mr.T.S.Suresh Kumar, director is paid a consolidated pay of Rs.15000/- per month with effect from 01.11.1999.

MAIN PROVISIONS OF ARTICLE OF ASSOCIATION OF THE COMPANY 

SHARES AND CERTIFICATES

11 The company shall cause to be kept a Register and index of Members in accordance with sections 150 and 151 of the Act. The Company shall be entitled to keep in any State or country

12 The shares in the capital shall be numbered progressively according to their several denominations, and except in the manner herein before mentioned, no share be subdivided. Every forfeited or surrendered share shall continue to bear the number by which the same was originally distinguished

13 a. Where at any time after the expiry of two years from the formation of the Company or at any time after the expiry of one year from the allotment of shares in the Company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the Company by allotment of further shares, whether out of unissued share capital, then such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of the company, in proportion, as nearly as the circumstances admit, to the capital paid up on these shares at that date. Such offer shall be made by a notice specifying the number shares offered and limiting time not being less than thirty days from the date of the offer within which the offer, if not accepted, will be deemed to have been declined. After the expiry of the time specified in the notice afore-said or on receipt of earlier information from the persons to whom the such notice is given that he declines to accept the shares offered, the Board may dispose of them in such manner as they think most beneficial to the Company.

b. Notwithstanding anything contained in the preceding sub-clause, the Company may:- 

a. By special resolution: or 

b. Where no such special resolution is passed, if the votes cast (whether on a show of hands or a poll, as the case may be) in favour of the of the proposal contained in the resolution moved in that general meeting (including the casting vote, if any, of the Chairman) by the members who being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any cast against the proposal by the members so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf, that the proposal is most beneficial to the company, offer further shares to any person and persons, and such person or persons who at the date of offer , are the holders of the equity shares of the company

c. Notwithstanding anything contained in the sub-clause (a) above, but subject however, to Section 81(3) of the Act, the Company may increase its subscribed capital on exercise of any option attached to the debentures issued or loans raised by the Company to convert such debentures or loans into shares, or to subscribe for shares in the Company.

14 Subject to the provisions of the Articles and of the Act, the shares (including any increased capital of the Company) shall be under the control of the Directors, who may allot or otherwise dispose of the same to such persons in such proportion, on such terms and conditions, and at such times as the Directors think fit and subject to the sanction of the Company in the General Meeting with full power, to give any person

15 In addition and without derogating from that purpose conferred on the Board under articles 13 and 14, the Company in the General meeting may, subject to provisions of Section 81 of the Act, determine that any shares (whether forming part of the original capital or any increased capital of the Company) shall be offered to such person (whether members or not) in such proportion and on such terms and on such terms and conditions and either (subject to compliance with provisions of Sections 78 and 79 of the Act) at a premium or at par or at a discount, as such general meeting shall determine and with full power to give any person (whether a member or not) the option to call for or be allotted shares of any class of the Company, either (subject to compliance with the provisions of Section 78 and 79 of the Act)at a premium or at par or at a discount, such option being exercisable at such time and for such consideration as may be directed by such General Meeting or the Company in general meeting may make any other provision whatsoever for the issue allotment or disposal of any shares. 

16 Any application signed by or on behalf of an applicant for shares in company, followed by an allotment of any shares within the meaning of these Articles and every person who thus or otherwise accepts any shares and whose name is on the Register shall, for the purpose of the Articles, be a Member.

17 The money (if any) which the Board shall, on allotment of any shares being made by them, require or direct to be paid by way of deposit, called otherwise, in respect of any shares allotted by them, shall immediately on the insertion of the name of the allottee in the Register of Members as the name of the holder of such shares, become a debt due to and recoverable by the Company from the allottee thereof, and shall be paid by him accordingly.

18 Every member or his heirs, executors or administrators, shall pay to the company the portion of the capital represented by his share or shares which may, fore the time being, remain unpaid thereon, in such amounts, at such times, and in such manner as the board shall, from time to time in accordance with the Company's regulations, require for the payment thereof.

19 a. every member or allottee of shares shall be entitled, without payment, to receive one certificate specifying the name of the person in whose favour it is issued, the shares to which it relates and amount paid up thereon. Such certificate shall be issued only in pursuance of a resolution passed by the Board and on surrender to the company of its letter of allotment or its fractional coupons of requisite value, save in case of issues of bonus shares. Every such certificate shall be issued under the seal of the Company, which shall be affixed in the presence of two Directors, or persons acting on behalf of the Directors under a duly registered power of attorney, and the Secretary or some other person appointed by the board for the purpose, and two Directors or their attorneys and the Secretary or other person shall sign the share certificate, provided that if the composition of the Board permits it, at least one of the aforesaid two Directors shall be the person other than a Managing or whole time Director. Particulars of every share certificate issued shall be entered in the Register of Members, against the name of the persons to whom it has been issued indicating the date of issue.

b. Any two or more joint allottees of a share shall, for the purpose of this Article, be treated as be treated as single member, and the certificate of any share, which may be subject of joint ownership may be delivered to the any one of the such joint owners on behalf of the all of them. For any further certificate the Board shall be entitled, but not bound , to prescribe a charge not exceeding rupee one. The Company shall comply with the provisions of Section 133 of the Act.

c. Director, may sign a share certificate by affixing his signature thereon by means of any machine, equipment of other mechanical means, such as engraving in metal or lithography, but not by means of a rubber stamp, provided that the Director shall be responsible for the safe custody of such machine 

20 a. No Certificate of any share or shares shall be issued either in exchange for those which are subdivided or consolidated or in replacement of those defaced, torn or old, decrepit, worn-out, or where the cages on the reverse for recording transfers have been duly utilised, unless the Certificate in lieu of which it is issued is surrendered to the Company.

b. When a new share certificate has been issued in pursuance of clause (a) of this Articles, it shall state on the face of it and against the stub or counter-foil to the effect that it is "issued in lieu of share certificate No. subdivided / replaced / on consolidation of the shares".

c. If a share certificate is lost or destroyed a new certificate in lieu thereof shall be issued only with the prior consent of the Board and on such terms, if any, as to evidence and indemnify as to the payment of out of pocket expenses incurred by the Company in investigating the evidence, as the board thinks fit.

d. When a new share certificate has been issued in pursuance of clause © of this Article, it shall state on the face of it and against the stub or counterfoil to the effect that it is "duplicate issued in lieu of the share certificate No.". The word "Duplicate " shall be stamped or punched in bold letters across the face of the share certificate.

e. Where a new share certificate has been issued in pursuance of clause (a) or clause (c) of this Article, particulars of every such share certificate shall be entered in the Register of renewed and Duplicate indicating against the names of the persons to whom the certificate is issued, the number and date of issue of share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the register of Members with suitable cross reference in the "remarks" column.

f. All blank forms to be issued for issue of share certificates shall be printed and the printing shall be done only on the authority of a resolution of the Board. The blank forms shall be consecutively numbered and the forms and blocks, engravings, facsimiles and hues relating to the printing of such forms shall be kept in safe custody of the Secretary or such other person aforesaid shall be responsible for rendering an account of these forms to the Board.

g. The Managing Director of the Company for the time being or if the Company has no Managing Director, every Director of the Company shall be responsible for the maintenance, pre-servant, on and safe custody of all the books and documents relating to the issue of share certificates except the blank forms of share certificates referred to in Article (f).

h. All books referred to in the sub-Article (g) shall be preserved in good order permanently 

21 If any share stands in the names of two or more persons, the persons first named in the register shall as regards receipt of dividends or bonus or service of notices and all or any other matter connected with the Company, except voting at meetings and the transfer of the shares, be deemed the sole holder thereof but the joint holders of a share shall be severally, as well as jointly liable for the payment of all installments and calls due in respect of such share and for all incidents thereof according to the Company's regulations.

22 Except as ordered by a court of competent jurisdiction, or as by law required, the Company shall not be bound to recognise any share, or (except only as is by these Articles otherwise expressly provided ) any right in respect for a share other than an absolute right thereto, in accordance with these Articles, in the person from time to time registered as the holder thereof; but the Board shall at liberty at their sole desecration to register any share in the joint names or any two or more persons or the survivors or survivors of them.

23 Subject to the Provisions of Section 77A and any other applicable provision of the Act, for the time being in force, the Company shall be empowered to purchase its own securities in an manner provided by the Act.

24 Subject to the provisions of Section 76 of the Act, the company may at any time pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares or procuring, or agreeing to procure subscription whether absolute or conditional for any shares or debentures in the Company, but so that the commission shall not exceed in the case of shares five percent of the price at which the shares are issued , and in case of debenture, two and a half percent of the price at which the debentures are issued. Such commission may be satisfied by payment of cash or by allotment of fully or partly paid shares or partly in one way and partly in the other.

FORFEITURE OF SHARES

41 If any member fails to pay any call or installment of a call on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the Board may at any time thereafter, during such time as the call or installment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.

42 The notice shall name a day ( not being less than fourteen days from the date of the notice ) and a place or places on and at which such call or installment and such interest thereon at such rate not exceeding nine percent per annum as the Directors shall determine from the day on which such call or installment ought to have been paid and expenses as aforesaid are to be paid. The notice shall also state that, in the event of the non-payment at or before the time and at the place appointed, the shares in respect of which the call was made or installments payable, will be liable to be forfeited.

43 If the requirement of any such notice as aforesaid shall not be complied with, every or any share in respect of which such notice has been given may at any time thereafter before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of forfeited share and not actually paid before the forfeiture.

44 When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whole name it stood immediately prior to the forfeiture and an entry of the forfeiture, with the date thereof, shall forthwith be made if the Register of Member, but no forfeiture shall in any manner invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.

45 Any share so forfeited shall be deemed to be the property of the Company, and may be sold, reallotted, or otherwise disposed of, either to the original holder thereof or to any other person, upon such terms and in such manner as the Board shall think fit.

46 Any member whose shares have been forfeited shall not-with-standing the forfeiture, be liable to pay and shall forthwith pay to the Company, on demand, all calls, installments, interest and expenses owing upon or in resect of such shares at the time of forfeiture, together with interest thereon from the time of forfeiture until payment, at such rate not exceeding nine percent per annum as the Board may determine, and the Board may enforce the payment thereof, if it thinks fit.

47 The forfeiture of a share shall involve extinction, at the time of the forfeiture, of all interest in the all claims and demands against the Company in respect of the share and all other rights incidental to the share, except only such of those rights as the Articles are expressly saved.

48 A declaration in writing that the declarant is a director or secretary of the Company and that share in the Company has been duly forfeited in accordance with these Articles on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share.

49 Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers herein before given, the Board may appoint some person to execute an instrument of transfer of the shares sold and cause the purchaser's name to be entered in the Register in respect of the shares sold and the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the purchase the validity of the sale shall not be impeached by any person aggrieved by the sale shall be in damages only and against the Company money, and after his name has been entered in the Register in respect of such shares, exclusively.

50 Upon any sale, re-allotment or other disposal under the provisions of the proceeding Articles, the certificate originally issue in respect of relative shares shall ( unless the same shall on demand defaulting member ) stand cancelled and become null and void and of no effect and the Directors shall be entitled to issue a duplicate certificates in respect of the said shares to the person or persons entitled thereto.

51 The Board may at any time before any share so forfeited shall have been sold, re allotted or otherwise disposed of annual the forfeiture thereof upon such conditions as it thinks fit. 

TRANSFER AND TRANSMISSION OF SHARES

52 The Company shall keep a "Register of Transfers", and therein shall be fairly and distinctly entered particulars of transfer or transmission of any share.

53 The instrument of transfer shall be in writing and all the provisions of Section 108 of the Act shall be duly complied with in respect of transfers of shares and the registration thereof.

55 The Board shall have power on giving not less than seven day's previous notice by advertisement in some newspaper circulating in Transfer Books , the Register of Member or Register of debenture holders at such time or times and for such period or periods, not exceeding thirty days at a time and not exceeding aggregate forty five days in each year.

56 Subject to the provisions of Section 111 of the Companies Act, and to any other law for the time being in force, the Board may refuse to register any transfer of, or the transaction by operation of law, of the right to any shares or interest of a member in the Company.

Provided, however, that the Registration of shares shall not refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever, except where the Company has a lien on the shares

Provided, further that in the event of the refusal to register any such transfer of, or the transmission of the right to any shares or interest of a member in the Company, the Company shall, within two months from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be was delivered to the Company, send notice of such refusal to the transmission, as the case may be, giving reasons for such refusal.

57 Where, in the case of partly paid shares, an application for registration is made by the transferor, the Company shall give notice of the application to the transferee in accordance with the provisions of the Section 110 of the Act.

58 In the case of death of any one or more of the persons named in the Register of Members as the joint holders of any share, the survivors or survivors shall be the only persons recognised by the Company as having any title to or interest in such share, but nothing herein contained shall be taken to release the estates of the deceased joint holder from any liability on the shares held by him jointly with any other person. 

59 The executors or administrators or holders of a succession Certificate or the legal representatives of a deceased member ( not being one or two or more joint-holders) shall be only persons recognised by the Company as having any title to the shares registered in the name of such member and the Company shall not be bound to recognize such executors or administrators or holders of a Succession Certificate or the legal representatives shall have first obtained administrators or legal representatives shall have first obtained probate or Letters of Administrators or legal representatives shall have first obtained probate or Letters of Administration or Succession Certificate, as the case may be, from a duly constituted Court in the union of India provided that in any case where the Board in its absolute discretion thinks fit, the Board may dispense with production of Probate or Letters Administration or Succession Certificate, upon such terms as to indemnify or otherwise as the Board in its absolute discretion may think necessary and under Article 62 register the name of any person who claims to be absolutely entitled to the shares standing in the name of a deceased member, as a member

60 No share shall in any circumstances be transferred to any infant, insolvent or person with unsound mind.

61 If any member of the of the Company dies and the Company through any of its principal officers within the meaning of the Estate Duty Act, 1953, has knowledge of the death, it shall not be lawful for the Company to register the transfer of any shares standing in the name of the deceased member unless the Company is satisfied that the transferee has acquired such shares for valuable consideration or there is produced to it a certificate from the Comptroller or Assistant Controller of Estate Duty in respect thereof has been paid or will be paid or none is due

62 Subject to the provisions of the Act and Articles 58 and 59, any person becoming entitled to shares in consequences of the death, lunacy, bankruptcy or insolvency of any member or by any lawful means other than by a transfer in accordance with these Articles may, with the consent of the Board (which it shall not be under any obligation to give) upon producing such evidence that her sustains the character in respect of which he proposes to act under this Article or of such title as the Board thinks sufficient, either be registered himself as the holder of the shares or elect to have come person nominated by him and approved by the Board register as such holder; provided nevertheless, that if such person shall elect to have his nominee registered, he shall testify the election by executing in favour of his nominee an instrument of transfer in accordance with the provisions herein contained and until he does so he shall not be free from any liability in respect of the shares

63 A person entitled to a share by transmission shall, subject to the right of the Director to retain such dividends or money as hereinafter provided, be entitled to receive any may give a discharge for, any dividends or other moneys payable in respect of the share.

64 There shall be paid to the company, in respect of the transfer or transmission of any number of shares to the same party, such fee if any, as the Directors may require.

65 The Company shall incur no liability or responsibility whatsoever in consequence of its registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the Register of Members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notices prohibiting registration of such transfer and may have entered such notice or referred thereto , in any book of the Company and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right title or interest of be under any liability, whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company, but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect there to if the Board shall think fit. 

BORROWING POWERS

67 Subject to the provisions of Sections 292 and 293 of the Act, the Board may, from time to time, at its discretion by a resolution passed at the meeting of the Board accept deposits from members either in advance of calls or other wise and generally raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. Provided, however, where the moneys to be borrowed (apart from temporary loans obtained from the Company's bankers in the ordinary course of business) exceed the aggregate of the paid-up-capital of the Company and its free reserves (not being reserves set apart for any specific purpose), the Board shall not borrow such moneys without the consent of the Company in General Meeting.

68 Subject to the provision of Article 67 hereof, the payment or repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms and conditions in all respects as the resolution shall prescribe, including by the issue of debentures or debenture-stock of the Company charged upon all or any part of the property of the Company (both present and future), Including its uncalled capital for the time being: and debentures, debenture-stock and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued

69 Any debenture-stock other securities may be issued at a discount, premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination and with any privilege conditions as to redemption, surrender , drawings, allotment of shares and attending (but not voting) at general meeting, appointment of Directors and otherwise. Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in general meeting accorded by a Special Resolution.

70 The Board shall cause proper Register to be kept in accordance with Provisions of Section 143 of the Act of all mortgages debentures and charges specifically affecting the property of the company; and shall cause the requirements of Section 118, 125 and 127 to 144 (both inclusive) of the act in that behalf to be duly complied with, so far as they fall to be complied by the Board.

71 The company shall, if any time it issues debentures, keep a Register and Index of Debentures, holders in accordance with Section 152 of the Act. The Company shall have the power to keep in any State or Country outside India branch Register of Debenture holders resident in that State or Country.

VOTES OF MEMBERS

92 No member shall be entitled to vote, either personally or by proxy, at any General Meeting or Meeting of a class of a class of shareholders, either upon a show of hands or upon a poll in respect of any shares registered in his name on which any calls or other sums presently payable by him, have not been paid or in regard to which the Company has and has exercised, any right of lien.

93 Subject to the provisions of these Articles and without prejudice to any special privileges or restrictions as to voting for the time being attached to any class of shares for the time being forming part of the capital of the Company every member, not disqualified by the last proceeding Articles shall be entitled to be present and to speak and vote at such meeting and on a show of hands, every member present in person shall have one vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. Provided , however, if any preference shareholder be present at any meeting of the Company, save as provided in clause (b) of sub-section (2) of Section 87 he shall have a right to vote only on resolutions placed before the meeting which directly affect the rights attached to his preference shares.

94 On a poll taken at a meeting of the Company a member entitled to more than one vote, or his proxy or other person entitled to vote for him; as the case may be, need not, of he votes, use all his votes or cast in the same way all the votes he uses.

95 A member of unsound mind or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands of on poll, by his committee or other legal guardian; and any such or guardian may, on a poll vote by proxy; if any member be minor, the vote in respect of his share or share shall be by his guardian, or any one of his guardians, if more than one, to be selected in case of dispute by the Chairman of the meeting.

96 If there be joint registered holders of any shares, any one of such persons may vote at any meeting or may appoint another person (whether member or not) as his proxy in respect of such shares, as if he were solely entitled thereto but the proxy so appointed shall not have any right to speak at the meeting and if more than one of such joint-holders be present at any meeting, that one of the said persons so present whose name stands higher on the Register shall alone be entitled to speak and to vote in respect of such shares, but the others or other of the joint-holders shall be entitled to be present at the meeting. Several executors or administrators of a deceased member in whose mane shares stand shall for the purpose of these Articles be deemed joint holders thereof.

97 Subject to the provisions of these Articles, votes may be given either personally or by proxy. A body corporate being a member may vote either by a proxy or by representative duly authorised in accordance with Section 187 of the Act and such representative shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf of the body corporate which he represents as that body could exercise if it were individual members.

98 Any person entitled under Article 62 to transfer any share may vote at any General Meeting in respect thereof in the same manner as if he were the registered holder of such shares, provided that at least forty eight hours before the time of holding the meeting or adjourned meeting,

99 Every proxy (whether a member or not) shall be appointed in the writing under the hand of the appointer or his attorney of if such appointer is a corporation under the common seal of such corporation or be signed by an officer or any attorney duly authorised by it, and any committee or guardian may appoint such proxy. The proxy so appointed shall not have any right to speak at the meetings.

100An instrument of proxy may appoint a proxy either for the purpose of the particular meeting specified in the instrument and any adjournment thereof or it may appoint for the purpose of every meeting of the Company or of every meeting to be held before a date specified in the instrument and every adjournment of any such meeting

101A member present by proxy shall entitled to vote only on a poll

102The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certified copy of that power of authority, shall be deposited at the office not later than forty eight hours before the time for holding the meeting at which the person named in the instrument proposes to vote, and in default the instrument or prosy shall not be treated as valid. No instrument appointing a proxy shall be valid after expiration of twelve months from the date of its execution

103Every instrument of proxy whether for a specified meeting or otherwise shall, as nearly as circumstances will admit be in any of the forms set out Schedule IX of the Act.

104A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy of any power of attorney under which such proxy was signed of the transfer of the share in respect of which such proxy was signed or the transfer of the share in respect of which the vote is given, provided that on intimation in writing of the death or insanity , revocation of transfer shall have been received at the office before the meeting

105No objection shall be made to the validity of any vote, except at any meeting or poll at which such vote shall be tendered and every vote whether given personally or by proxy, not disallowed at such meeting or poll shall be deemed valid for all purposes of such meeting or poll whatsoever.

106The chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting. The chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll

107.1. The company shall cause minutes of all proceedings of every General Meeting to be kept by making within thirty days of the conclusion of every such meeting concerned, entries thereof in books kept for that purpose with their pages consecutively numbers

2. Each page of every such book shall be initialed or signed and the last page of the record of the proceedings of each meeting on such book shall be dated and signed by the Chairman of the same meeting within the aforesaid period of thirty days or in the event of death or inability of that chairman within the pried, b a director duly authorised by the board for the purpose

3. In no case the minutes of proceeding of a meeting shall be attached to any such book as aforesaid posting or otherwise

4. In minutes of each meeting shall contain a fair and correct summary of the proceedings there at.

5. All appointments of Officers made at any meeting aforesaid shall be included in the minutes of the meeting

6. Nothing herein contained shall require or be deemed to require the inclusion in any such minutes of any matter which in the opinion of the Chairman of the meeting

a. Is or could reasonable be regarded as, defamatory of any person or any person or

b. Is irrelevant or immaterial to the proceedings or

c. Is detrimental to the interests of the Company

7. Any such minutes shall be evidence of the proceedings recorded therein

8. The Book containing the minutes of proceedings of General Meetings shall be kept at the office of the Company and shall be open during business hours, for such periods not being less in the aggregate than two hours in each day as the directors determine, to the inspection of any member without charge.

DIRECTORS

108.1. Until otherwise determined by General Meeting of the Company and subject to the provisions of Section 252 of the Act, the maximum number of Directors (excluding Debenture and Alternate Directors) shall not exceed fifteen

2. Mr. V Ranganathan Mr. Saibal Sen Mr. K. Gururaja Upadhya

109If is provided by the Trust Deed, securing or otherwise, in connection with any issue of debentures of the Company that any person or persons shall have power to nominate a Director of the Company, then in the case of any and every such issue of debentures, the person or persons having such poser may exercise such power form time to time and appoint a Director accordingly . Any Director so appointed is herein referred to as Debenture Director. A Debenture Director may be removed from office art any time by the person or persons in whom for the time being is vested the power under which he was appointed and other Director may be appointed in his place. A Debenture Director shall not be liable to retire by rotation shall not be bound to hold any qualification shares.

110The Board may appoint an Alternate Director to Act for a Director (hereinafter called "the Original Director") during his absence for period of not less than three months from the State in which the meetings of the Board are ordinarily held. An alternate Director appointed under this Article shall not hold office for a period longer than that permissible to the Original Director in whose place he has been appointed and shall vacate office if and when the Original Director returns to that State. If the term of Office of the Original Director is determined before he so returns to that State, any provisions in the Act or in these Articles for the automatic re-appointment of any retiring Director in default of another appointment shall apply to the Original Director and not to the Alternate Director.

111Subject to the provisions of Section 260 and 264 the Board shall have power at any time and from time to time appoint any other qualified person to be an Additional Director, but so that the total number of Directors shall not at any time exceed the maximum fixed under Article 108. Any such additional Director shall hold office only up to the date of the next Annual General Meeting.

112Subject to the provisions of Sections 261, 264 and 284(6), the Board shall have power at any time and from time to time to appoint any other qualified person to be a Director to fill a casual vacancy. Any person so appointed shall hold office only up to the date up to which the Director in whose place he is appointed would have held office if it had not been vacated by him.

113 A Director shall not be required to hold any share qualification.

114. 1. Subject to the provisions of the Act, A Managing Director or Director, who is in the whole time employment of the Company may be paid remuneration either by way of monthly payment or at a specified percentage of the net profits of the Company. Or partly by one way and partly by the other or by any other mode not prohibited by the Act.

2. Subject to the provision of the Act, a Director, who is neither in the whole-time employment nor a Managing Director, may be paid remuneration either.

i. By way of monthly, quarterly or annual payment with the approval of the Central Government or

ii. By way of commission if the Company by a special resolution authorised such payment

iii. Each Director (including the ex-officio Director) shall be paid out of the funds of the Company, a fee for each meeting of the Board

115 The Board may allow and pay to any Director, who is not a bonafide resident of the place where the meetings of the Board are ordinarily held and who shall come to such place for the purpose of attending any meeting, such sum as the Board may consider fair compensation for travelling, boarding, lodging and other expenses, in addition to his fee for attending such meeting as above specified; and if any Director be called upon to go or reside out of the ordinary place of the his residence of the Company's business, he shall be entitled to ht repaid and reimbursed any travelling or other expenses incurred in the connection with business of the Company

116 The continuing Directors may act not withstanding any vacancy in their body if, and so long as their number is reduced below the minimum number fixed by Article 108 hereof, the continuing Directors not being less than three, may act for the purpose of increasing the number of Directors not being less than three may act for the purpose of increasing the number of Directors to that number or of summoning a General Meeting, but for not other purpose

117 Subject to Sections 283(2) and 314 to the Act, the office of the Director shall become vacant if:

a. He is found to be unsound mind by court of competent jurisdiction; or

b. He applied to be adjudicated an insolvent; or

c. He is adjudged an insolvent; or

d. He fails to pay any call made on him in respect of shares of the Company held by him, whether along or jointly with others, within six months from the date fixed for the payment of such call unless the Central Government has by notification in the Official Gazette removed the disqualification incurred by such failure; or 

e. He absents himself from three consecutive meetings of Directors for a continuous period of three months whichever is longer, without leave of absence from the Board; or

f. He becomes disqualified by an order of the Court under section 203 of the Act; or

g. He is removed in pursuance of Section 284; or

h. He (whether by himself or by any person for his benefit or on this account) or any firm in which he is a partner or any private company of which he is director, accepts a loan, or any guarantee or security for loan, from the Company in contravention of Section 295 of the Act; or

i. He is convicted by a court for an offense involving moral turpitude and is sentenced in respect thereof to imprisonment for not less than six months; or

j. Having been appointed a Director by virtue of his holding any office or other employment in the Company, he ceases to hold such office or other employment in the Company

118.1. A Director or his relative, a firm in which such Director or relative is a partner, or any other partner in such firm or private company of which the Director is a member or director, may enter into any contract with the Company for the sale purchase or supply of any goods, materials, or services or for underwriting the subscription of any shares in , or debentures of the Company, Provided that the sanction of the Board is obtained before or within three months of the date on which the contract is entered into in accordance with Section 297 of the Act.

2. No sanction shall however be necessary for:

a. Any purchase of goods and materials from the Company or the sale of goods or materials to the Company, by any such Director, relative, firm partner or Private Company as aforesaid for each at prevailing market prices.

b. Any contract or contracts between the Company on one said and any such Director, relative firm partner or private company on the other for sale, purchase or supply of any goods materials and services which either the Company or the Directors, relative, firm partner or Private Company, as the case may be, regularly trades or does business where the value of the goods and materials or the cost of such services does not exceed Rs.5,000/- in aggregate in any year comprised in the period of the Contract or Contracts

Provided that in circumstances of urgent necessity, a Director relative, firm, partner or Private Company as aforesaid may without obtaining the consent of the Board enter into any such contract with the Company for the sale, purchase or supply of any goods, materials or services ever if the value of such goods or the cost of such services exceed Rs.5,000/- in the aggregate in any year comprised in the period of the contract if the consent of the Board shall be obtained to such contract or contracts at a meeting within three months three months of the date on which the contract was entered into

119 A director of the Company who is in any way, whether directly or indirectly concerned or interested in a contract or arrangement or proposed contract or arrangement entered into or to be entered into by or on behalf of the Company, shall disclose the nature of his concern or interest at a meeting or the Board in the manner provided in Section 299(2) of the Act; provided that it shall not be necessary for a Director to disclose his concern or interest in any contract or arrangement entered into or to be entered into with any other company where of the Directors of the Company or two or more of them together holds or hold not more than two percent of the paid-up share capital in any such other Company.

120 A general notice given to the Board by the Director, to the effect that he is a director or member of the specified body corporate or is a member of a specified firm and is to be regarded as concerned or interested in any contract or arrangement which may after the date of notice, be entered into with that body corporate or firm, shall be deemed to be a sufficient disclosure of concern of interest in relation to any contract or arrangement so made. Any such general notice shall expire at the end of the financial year in which it is given but may be renewed for a further period of the financial year at a time by a fresh notice given in he last month of the financial year in which it would have otherwise expired. No such general notice and no renewal thereof, shall be of effect unless it is brought up and read at the first meeting of the Board after it is given.

121 No director shall as a director take any part in the discussion of or vote on any contract or arrangement entered into or to be entered into by or on behalf of the Company, if he is in any way, whether directly, or indirectly, concerned or interested in such contract or arrangement nor shall his presence count for the purpose or forming a quorum at the time of such discussion or vote; and if he does vote, his vote shall be void; provided however, that nothing herein contained shall apply to :-

a. Any contract or indemnity against any loss which the Directors or any one or more of them, may suffer by reason of becoming or being sureties or a surety for the company.

b. Any contract or arrangement entered into of to be entered into with public company or a private company which is a subsidiary of a public company in which the interest of the Director consists solely

i. In his being

a. A director of such company and

b. The holder of not more than the shares of such number or value therein as is requisite to qualify him for appointment as a director thereof, he having been nominated as such Director by the Company. 

ii. In his being a member holding note more than 2% of its paid-up share capital 

122 The Company shall keep a Register in accordance with Section 301(1) and shall within the time specified in Section 301(2) enter therein

123 A director may be or become a director of any company promoted by the Company or in which it may be interested as a vendor, shareholder or/otherwise, and no such Director shall be accountable for any benefits received as director or shareholder of such company except in so far as Section 309(6) or Section 314 of the Act may be applicable.

124 At every Annual General Meeting of the Company, one third of such of the Directors for the time being as are liable to retire by rotation or if their number is no three or a multiple of three, the number nearest to one-third shall retire from office.

125 Subject to Section 256(2) of the Act, the Directors to retire by rotation under Article 126 at every annual General Meeting shall be those who have been longest in office since their last appointment, but as between persons who became Directors on the same day, those who are to retire, shall, in default of and fault of and subject to any agreement among themselves, be-determined by lot

126 A retiring Director shall be eligible for re-election.

127 Subject to Sections 258- 261 of the Act, the Company at the General Meeting at which a Director retires in manner aforesaid may fill up the vacated office by electing person thereto.

128 If the place of the retiring Directors is not to filled up and the meeting has not expressly resolved not to fill the vacancy, the meeting shall stand adjourned until the same day in the next week, at the same time and place. If at the adjourned meeting also, the place of the retiring Director is not filled up and that meeting also has not expressly resolved not to fill the vacancy, the retiring Director shall be deemed to have been re-appointed at the adjourned meeting unless.

a. at that meeting or at the previous meeting the resolution for the re-appointment of such Director has been put to the meeting and lost.

b. The retiring Director has, by a notice in writing addressed to the Company or its Board, expressed his unwillingness to be so re-appointed.

c. He is not qualified or is disqualified for appointment

d. A resolution, whether special or ordinary, is required for the appointment or re-appointment by virtue of any provisions of the Act; The Provision in subsection (2) of Section 263 of the Act is applicable to the case.

129 Subject to Section 259 of the Act, the Company may, by Ordinary Resolution, from time to time, increase or reduce the number of Directors and may alter their qualifications and the Company may (subject to the provisions of Section 248 of the Act) remove any Director before the expiration of his period of office and appoint another qualified person in his stead. The Person so appointed shall hold office during such time as the Director in whose place he is appointed would have held the same if he had not been removed.

130.1. A person who is not retiring Director shall subject to the provisions of this Act, be eligible for appointment to the office of Director at any General Meeting, if he or some member intending to propose him has, not less than fourteen days before the meeting left at the office of the Company, a notice in writing under his hand signifying his candidature for the office of Director or the intention of such member to propose him as a candidate for that office, as the case may be, along with a deposit of five hundred rupees which shall be refunded to such member, if the person gets elected as a director.

The Company shall inform its members of the candidature of a person for the office of the Director or the intention of member to propose such person as a candidate for that office, by serving individual notices on the members not less that seven days before that meeting.

Provided that it shall not be necessary for the Company to serve individual notices upon the members as aforesaid if the company advertises such candidature or intention not less than seven days before the meeting, in at least two newspapers, circulating in the place where the Registered Office of the Company is located of which one is published in the English language and the other in the regional language of that place

2. Every person (other than a Director retiring by rotation or otherwise, or a person who has left at the office of the Company a notice under Section 257 of the Act signifying his candidature for the office of the Director) proposed as a candidate for the office of the Director, shall sign and file with the Company, his consent in writing to act as a Director if appointed.

3. A person other than a Director re-appointed after retirement by rotation or immediately on the expiry of his term of office , or an Additional or Alternate Director, or a person filling a casual vacancy in the office of a Director, under section 262 of the Act, appointed as a Director or re-appointed as an additional Director, immediately on the expiry of his term of office, shall not act as a Director of the Company unless he has within thirty days appointment signed and filed with the Register his consent in writing to act as such Director.

131.a. The Company shall keep at its office a Register containing the particulars of its Directors, Managers, Secretaries and other persons mentioned in Section 303 of the Act, and shall otherwise comply with the provisions of the said section in all respect.

b. The Company shall in respect of each of its Directors also keep at its office a Register, as required by section 307 of the Act, and shall otherwise duly comply with the provisions of the said section in all respects.

132.a. Every Director(including a person deemed to be a Director by virtue of the Explanation to subsection (1) of Section 303 of the Act), Managing Director, Manager or Secretary of the Company, shall within twenty days of his appointment to any of the above offices in any other body corporate, disclose to the Company the particulars relating to his office in the other body corporate which are required to be specified under sub-section(1) of Section 303 of the Act. 

b. Every Director and every person deemed to be a Director of the Company by virtue of Subsection(10) of Section 307 of the Act, shall give notice to himself as may be necessary for the purpose of enabling the Company to comply with the provisions of that section. 

MANAGING DIRECTOR

133 Subject to the provisions of the Act and approval of the Company Law Board, the Directors may, from time to time, appoint one or more of their body to be Managing Director or Joint Managing Director as the case may be, of the company for a fixed term not exceeding five years at a time for which he or they, is or are to hold office and may from time to time (subject to the provisions of any contract between him or them and the Company) remove or dismiss him or them from office and appoint another or others in his or their place or places. A retiring Managing Director or Joint Managing Directors may be re-appointed subject to the provisions of the Act. The Managing Director or Joint Managing Directors, as the case may be, shall not while he or they continues or continue to hold that office, be subject to retirement by rotation and shall not be reckoned as Director/s for the purpose of determining the number of Directors to retire by rotation. But he or they shall IPSO-FACTO ceases to be Managing Director or Joint Managing Director and the case may be, if he or they ceases or cease to hold the office of Director/s from any cause.

134.a. Subject to the provisions of sections 198, 309 and other applicable provision of the Act for he time being in force, the Board of Directors may determine the remuneration payable to the Managing Director or the Joint Managing Director as the case may be in any manner they may deem fit. The remuneration may be in any manner they may deem fit. The remuneration may be in the form of a monthly salary or a commission based on profits or partly in one way and partly in another as the Board may deem fit

b. The Directors may, in addition to the remuneration referred to in the proceeding clause, provide to the Managing Director or Joint Managing

c. The Managing Director or the Joint Managing Directors as the case may be, shall be entitled to be reimbursed all his or their out-of pocket expenses incurred by him or them in connection with the business of the company 

135 Provided, however, that the Managing Director/s shall not exercise the following powers, except in accordance with and subject to the terms of resolution of the Board delegating such power, under section 292 of the Act:

a. Make calls on shareholders in respect of money unpaid on their shares in the Company

b. Issue debentures

c. Borrow moneys 

d. Invest the funds of the Company; and 

e. Make Loans 

135 The Company shall not appoint or employ or continue the appointment or employment of , a person as its Managing or Whole-time Director who

a. Is an undischarged insolvent, or has at any time been adjudged an insolvent

b. Suspends, or has at any time suspended, payment to his creditors, or makes or has at any time made, a composition with them; or

c. Is or has at any time been convicted by a court of any offense involving moral turpitude 

136 The Company shall not appoint or employ or continue the appointment or employment of, a person as its Managing or Whole time Director who

a. Is an undischarged insolvent, or has at any time been adjudged an insolvent

b. Suspends, or has at any time suspended, payment to his creditors, or makes or has at any time made, a composition with them; or

c. Is or has at anytime been convicted by a court of any office involving moral turpitude 

137 A Managing Director shall not while he continues to hold that office be subject to retirement by rotation, n accordance with Article 126. If he ceases to hold the office of the Director, he shall IPSO-FACTO and immediately cease to be Managing Director 

DIVIDENDS

157 The profits of the Company, subject to any special rights relating thereto created or authorised to be created by these Articles shall be divisible among the members in proportion to the amount of capital paid-up or credited as paid up on the shares half by them respectively

158 The Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend 

159 No dividend shall be declared or paid otherwise than out of profits of the financial year arrived at after providing for depreciation in accordance with the provision of Section 205 of the Act or out of the Profit of the Company and remaining undistributed or out of both, provided that:-

a. If the Company has not provided for depreciation for any previous financial year or years, it shall, before declaring or paying a dividend for any financial year, provides for such depreciation out of the profits of the financial year or out of the profits of any other previous financial year or years

b. If the Company has incurred any loss in any previous financial year or years, the amounts of the loss or an amount which is equal to the amount provided for depreciation for that year or those years whichever is less, shall be set off against the profits of the company for the year for which the dividend is proposed to be declared or paid or against the profits of the Company for any previous financial year or years 

160 The board may subject to provisions of the Act, from time to time, pay to the members, such interim dividend as in their judgment the position of the Company Justifies.

161 Where capital is paid in advance of call such capital may carry interest but shall not in respect thereof confer a right to dividend or participate in profits

162 All dividends shall be appointed and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but if any share is issued on terms providing that it shall rank for dividend as from a particular date, such shares shall rank for dividend accordingly.

163 The board may retain the dividends payable upon shares in respect of which any person is under Article 62 entitled to become a Member or which any person under that Article is entitled to transfer, until such person shall become a member, in respect of such shares or shall duly transfer the same.

164 Any one of Several persons who are registered as the joint-holders of any shares may give effectual receipts for all dividends or bonus or other moneys payable in respect of such shares.

165 No member shall be entitled to receive payment or any interest or dividend in respect of his share or shares, while any money may be due or owing from him to the Company in respect of such share or shares or otherwise, howsoever, either alone or jointly with any other person or persons and the Board may deduct from the interest or dividend payable to any member all sums of the money so due from him to the company

166 A transfer of shares shall not pass the right to any dividend declared hereon before the registration of the transfer. 

167 Unless other directed, any dividend may be paid by cheque or warrant or by a payslip or receipt having the force of the cheque or warrant sent through the post to the registered address of the member or person entitled or in case of joint holders to that one of them first named in the Register in respect of the joint holders. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. The company shall not be liable or responsible for any cheque or warrant or payslip or receipt lost in transmission; or for any dividend lost to the member or person entitled thereto by the forged endorsement of any cheque or warrant or the forged signature of any payslip or receipt or the fraudulent recovery of the dividend by any other means

168 Dividends unclaimed for one year after having been declared may be invested or otherwise issued by the board for the benefit of the Company until claimed. All dividends unclaimed on becoming barred by law may be forfeited by the Directors for the benefit of the Company. The Directors may remit the forfeiture whenever then may think proper. No unclaimed dividend shall be forfeited before the claim thereto becomes barred by law.

169 No unpaid dividend shall bear interest as against the company

170 The Company after having declared the dividend must transfer the unpaid or unclaimed dividend if any, to special account in a scheduled Bank call the "Unpaid Dividend Account of CERBERA INTEGRATED TECHNOLOGIES LTD" within 7 days after the expiry of 42 days commencing from the date of declaration of dividend.

171 If any dividend remains unpaid or unclaimed for a period of three years after the amount is transferred to the special bank A/c mentioned in Article no. 172, the amount remaining in the special bank A/c will have to be transferred to the General Revenue Account of the Central Government, containing the details of the share-holders who have not been paid the dividend and the amount of dividend unclaimed. Any person who is entitled to receive the said dividend may apply at any time to the Central Government and received the payment after providing proof for that purpose

WINDING-UP

189 The liquidator on any winding up (whether voluntary, under supervision or compulsory) may, with the sanction of a Special Resolutions but subject to the rights attached to any preference share capital, divide among the contributories in specie any part of the assets of the company and may with the like sanction, vest any part of the assets of the company in trustees upon such trusts for the benefit of the contributories as the Liquidator, with the like sanction shall think fit 

INDEMNITY AND RESPONSIBILITY

190 Every Officer or agent for the time being of the Company shall be indemnified out of asset of the Company against all liability incurred by him in defending any proceedings, whether civil or criminal in which judgment is given in his favour or in which he is acquitted or discharged or in connection with any application under section 633 of the Act, in which relief is granted to him by the court 

SECURITY CLAUSES

191.a. Every Director, Manager, Auditor, Treasurer, Trustee member of Committee, Officer, Servant, Agent, Accountant or other persons employed in the business of the company shall, if so required by the Directors, before entering upon his duties, sign and declaration pledging himself to observe strict secrecy respecting all transactions and affairs of the company with the customers and state of accounts with individuals and in matters relating thereto, and shall by such declaration pledge himself not to reveal any of the matters which may come to his knowledge in the discharge of his duties except when required so to do by the Directors, or by law or by the person to whom such maters relate and except so far as may be necessary in order to comply with any of the provisions in these present contained

b. No member shall be entitled to visit or inspect any work of the company without the permission of the Directors or to require discovery of or any information respecting any details of the company's trading, or any matter which is or may be in the nature of trade secret or secret, mystery of trade secret process or any other matter which may relate to the conduct of the business of the company and which in the opinion of the Directors, it would be inexpedient in the interest of the Company to disclose 

MATERIAL CONTRACTS & DOCUMENT FOR INSPECTION :

The following contracts and agreements referred to in para A below, not being entered into the ordinary course of business carried on or intended to be carried on by the company or contracts entered into more than two years before the date of this prospectus which are or may be deemed to be material have been entered into by or on behalf of the company. Copies of these contracts together with copies of the documents referred in Para B below have been attached with the prospectus and delivered to the Registrar of Companies, for registration and may be inspected at the Registered office of the Company between 10.00 am and 1.00 p.m. on any working day until the closing date of the subscription list.

Material Contracts

1. Letters dated 21.12.1999 from Canara Bank, Merchant Banking Division, Bangalore offering their services as Lead Managers to the issue and the Company's acceptance thereof dated 07.02.2000.

2. Letter dated 24.01.2000 from SMIFS Capital Markets Limited, Bangalore consenting to act as Lead Managers to the issue and Company's acceptance thereof dated 07.02.2000.

3. Copy of MOU dated 24.09.1999 entered between the Lead Manager - Canara Bank and the Company.

4. Copy of MOU dated 24.09.1999 entered between Lead Manager SMIFS Capital Markets Limited and the Company.

5. Copy of the inter-se agreement dated 24.09.1999 entered between the Lead Managers.

6. Letter dated 23.09.1999 from the Registrar offering their services and Company's acceptance thereof.

7. Agreement dated 21.10.99 entered between the Registrar to the Issue - Karvy Consultants Limited and the Company and copy of their Registration Certificate.

8. Copy of the Lease Agreement dated 1st May 1999 between the Owners and the Company for the office's premises occupied by the Company presently as Registered Office in Bangalore and branch offices at Chennai, Coimbatore,Hyderabad,Pune, Mumbai and Noida.

9. Copy of Teaming agreement with Anytech Inc.USA dated 7th February 2000.

10. Copies of the Working capital facilities sanction letters No 571 CR dated 24.12.1999 and No 571CR/082/99/KS dated 22.3.1999 from Canara Bank.

11. Copies of Sanction letter No BLB/FF:128/966/99-2000/KGS dated 29.12.1999 and letter No BLB/FF:128/969/99-2000/KGS dated 29.12.1999 from Canbank Factors Ltd., Bangalore.

12. Copy of the Term Loan sanction letter No.BLC/SSI/CR/693/485/2000/MM dated 23.2.2000 from Canara Bank.

Documents for Inspection

1. Memorandum and Articles of Association of the Company.

2. Copy of Partnership Deed dated 25th July, 1992 of Integrated Technologies and Certificate of Incorporation of Cerebra Integrated Technologies Limited vide No 08/15091 of 93-94 Dated December 31, 1993.

3. Copy of Auditors Report dated 14.02.2000 furnishing the consolidated financial reports for the last five years.

4. Certificate from the Auditors of the Company on the tax Benefit available to

a. The Company

b. The Members of the Company

c. The NRIs

5. Copies of the resolution passed under Section 81 (1A) of the Act at the Extra Ordinary General Meeting of the Company held on 12th January, 2000 authorising the public issue.

6. Copies of resolutions passed by the Company in the Extra Ordinary General Meeting held on 21st January, 2000 for

a. Increase of Authorised Share Capital - Section 94 of the Companies Act,1956. 

b. Issue of Shares U/S 81(1A) and on 21.01.2000 for Borrowing Powers of the Company U/S 293 (i) (a), (i) (d) of the Companies Act, 1956.

7. Copies of the Resolution passed at the Board Meeting dated 07.02.2000 regarding :

a. Authorised to the Registrars to endorse/cancel and realise the stock invests on behalf of the Company.

b. Agreeing to provide sufficient funds to the Registrars to the issue to ensure dispatch of Refund orders and share certificates by Registered post.

8. Undertaking by the Company dated 07.02.2000 to 

a. Complete the listing formalities of the designated stock exchanges.

b. To Provide certificate from the Auditors regarding the Promoters/Firm allottees contribution in this issue.

d. Handling of complaints/grievances.

e. Non-issuance of Warrants/Options and convertible debentures.

f. Minimum Subscription declarations.

9. Declarations dated 24.09.1999 by the Company regarding no disputes/prosecutions/non violations of provisions of the Companies Act and regarding issuers absolute responsibility.

10. Declaration by Promoters in Form 24AA regarding the interests of the promoters/directors and that there is no prosecutions/litigations outstanding against them in their personal capacities in the company and in the group company.

11. Copy of Project appraisal report by Canara Bank with covering letter No CCW/IAD/0096/MSR/2000 Dated February 1, 2000.

12. Letter from the Company /Board regarding the availability of sufficient power /electricity load to different offices of the Company.

13. Letter from the company confirming current marketing orders on hand separately for exports and Domestic.

14. Certified list of 10 Largest Shareholders of the Company as on date, 10 days prior and 2 years prior to date of filing of Prospectus with ROC.

15. Certified list of confirmed employees of the Company.

16. List of Key Personnel of the company with details of the Resignations/Changes. 

17. Certified list of changes in Directors.

18. Copies of quotations received for the construction of Building and the facilities available.

19. Copy of Power of Attorney executed by the Directors in favour of Mr.V.Krishnan to present and make correction in the offer Document.

20. Letter of Consents from the Directors, Auditors, Lead Managers, Registrar to Issue, Bankers to the Issue, Bankers to the Company, Compliance Officer and Company Secretary to act in their respective capacities.

21. Consents from the Clients whose name has been disclosed in the offer document.

22. Certificate by the company for having not paid any fees/commission or discounts to firm allottees for their subscription

23. Certificate for Y2K compliance. 

24. Copies of Annual reports for the last 5 accounting years.

35. Copy of ISO 9002 certificate 

25. Upto date list of Shareholders of the company

26. The copies of the quotations for purchase of equipment and miscellaneous fixed assets on the basis of which the value of plant and machinery have been made.

27. Copies of all lease/rent agreements of branch offices 

28. Copies of all the government approvals mentioned in part I.

29. Copy of SEBI observation letter __________dt. _________.

30.Copy of Reply furnished by Canara Bank, Merchant Banking Division to SEBI.

31. Consents received from customers and bankers for mention of their names in the prospectus.

32. Appreciation letters received from customers.

33. Purchase orders and delivery details of supply to major Government Customers.

34. Intel Server Platform Validation Certificate.

35. Channel partner Certificate from TVS Electronics Ltd.

36. Certificate from Onward Novell Software (I) Ltd., for authorised reseller.

37. Oracle Partner Program certificate and agreement.

38. Letter to RBI No. CITL/COM/RBI/001 dt. 14.02.2000 seeking permission to set up overseas office at the U.S.A.

39. Purchase order from AnyTech.Inc. for software development dt 17.2.2000 for US $5,00,000 (Indian Rs.217.50 lakhs)

40. Microsoft OEM System Builder Program Member Certificate.

41. Dept. of Electronics - STOC test reports.

42. Chip Magazine on Performance of Cerebra Servers.

PART-III

DECLARATION

The Board declares that all the relevant provisions of the Companies Act, 1956 and guidelines issued by the Government have been complied with and no statement made in this offer document is contrary to the provisions of the Companies Act, 1956 and rules thereunder.

SIGNATORIES TO THE PROSPECTUS

Mr. V Ranganathan *

Mr. V Krishnan 

Mr. P.E.Krishnan * 

Mr. Shridhar Hegde * 

Mr. Gururaja K Upadhya * 

Mr. P Vishwamurthy* 

Mr.T.S.Suresh Kumar*

Mrs.Mythili Kannan*

Mrs.Medha Hegde*

Mrs.Chitra Vishwamurthy*

Mr.S.Gopalakrishnan*

Place : Bangalore

Dated: 

*Signed by the constituted Power of Attorney Sri. V Krishnan