ICSS INFORMATICS LIMITED

ICSS INFORMATICS LIMITED

ICSS INFORMATICS LIMITED

AS REQUIRED, A COPY OF THIS OFFER DOCUMENT HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE OFFER DOCUMENT TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) SHOULD NOT, IN ANYWAY, BE DEEMED/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. THE LEAD MANAGER, NAGARJUNA FINANCIAL SERVICES PRIVATE LIMITED 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 AN 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 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, NAGARJUNA FINANCIAL SERVICES PRIVATE LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED 31^st july 2000_, IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS 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 MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE DRAFT PROSPECTUS/LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

 

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY,

WE CONFIRM THAT

1. THE DRAFT PROSPECTUS / LETTER OF OFFER FORWARDED TO THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
2. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE BOARD, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND
3. THE DISCLOSURES MADE IN THE DRAFT PROSPECTUS / LETTER OF OFFER 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/LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID.

4.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 THE DRAFT PROSPECTUS WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT PROSPECTUS".

THE FILING OF OFFER DOCUMENT DOES NOT, HOWEVER, ABSOLVE ICSS INFORMATICS LIMITED FROM ANY LIABILITIES UNDER SECTION 63 OF THE COMPANIES ACT 1956, OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY AND 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 IRREGULARITY OR LAPSES IN THE OFFER DOCUMENT.

DISCLAIMER OF THE STOCK EXCHANGES

3. TERMS OF THE PRESENT ISSUE

The Equity shares now being offered are subject to the terms of this Prospectus, the Application Form and Memorandum and Articles of Association of the Company, the guidelines for listing of securities issued by Government of India and guidelines issued by the SEBI from time to time, the Depositories Act, 1996 and the provisions of the Companies Act 1956.

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.

Pursuant to Section 81(1A) of the Act, the present Issue of equity shares has been authorised vide a special resolution passed at the Extraordinary General Meeting held on January 17, 2000. The Board of Directors has approved the Issue by a resolution passed in their meeting on January 11, 2000.

Each equity share shall be of a face value of Rs.10/-.

TERMS OF PAYMENT AND APPROPRIATION SCHEDULE

Application should be made for a minimum of 200 equity shares and in multiples of 100 shares, thereafter. The Issue price of Rs.10/- per share is payable and will be appropriated in the following manner:

If an application is rejected in full, the whole of the application money will be refunded to the applicant(s). If an applicant is allotted lesser number of equity shares than applied for, then the excess amount paid on application shall be refunded to the applicant(s). No interest will be payable on application money except as mentioned under the heading ‘Allotment/Refund’ elsewhere in this Prospectus.

The Company agrees 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 agrees that it shall pay interest @15% per annum if the allotment has not been made and/or the allotment letter/refund orders have not been dispatched to the investors within 30 days from the date of closure of the Issue in terms of section 73 (2a) of the Act.

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) of Equity shares now being offered will be entitled to dividends, if any, which may be declared or paid on the Equity shares after the date of allotment in respect of and in proportion of the amount of capital paid-up thereon.

Equity shares and on pro-rata basis for the period during which such capital is paid up thereon. The instrument holders shall also have rights as mentioned in Section 206A of the Companies Act 1956 and any other rights under the Law.

1. Right to receive dividend, if declared.
2. Right to attend general meeting and exercise voting rights unless prohibited by law.
3. Right to vote, either personally or by proxy.
4. Right to receive offer for rights shares and be allotted bonus shares.
5. Right to receive surplus on liquidation.

Application Forms for Resident Indian Public together with Memorandum containing salient features of the Prospectus may be obtained from the Registered Office of the Company, Lead Managers to the Issue, Brokers and Bankers to the Issue named herein or from their branches as stated on the reverse of the Application Form.

Applications can be made by:

1. Indian Nationals resident in India who are majors, in single or joint names (not more than three)
2. Hindu Undivided Families in the individual name of the Karta.
3. Companies, Corporate bodies and Societies registered under the applicable law in India and authorised to invest in the shares.
4. Trusts registered under Societies Registration Act, 1860, or any other Trust law and are authorised under their constitution to hold and invest in shares.

1.Application must be :

a) made only in the prescribed application form accompanying the Memorandum.

b) completed in full in BLOCK LETTERS in English, except signatures in accordance with the instructions contained herein and in the application form and the application form. Applications not so made are liable to be rejected.

c) For a minimum of 200 equity shares or in multiples of 100 shares thereof

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

e) FIIs / NRIs / OCBs may also apply on a non-repatriation basis through Non-Resident Ordinary (NRO) accounts and use the white form meant for residents.

2) A separate cheque/demand draft /stockinvest must accompany each Application Form. Applicants are requested to mention the number of application form on the reverse of the instruments, to avoid misuse of the instruments.

3) Payment should be made in cash or by cheque / demand draft / stockinvest drawn on any Bank (including a Co-operative Bank) which is situated at and is a member or sub-member of the Bankers’ Clearing House located at the place where the application is submitted. Money orders /postal orders will not be accepted. Outstation cheques/bank drafts will not be accepted and applications accompanied by such cheques/bank drafts will be rejected. Bank charges, if any, for the purchase of the instruments will have to be borne by the applicant.

4) All cheques / bank drafts accompanying the application should be crossed "A/c Payee Only" and made payable to any of the Bankers to the Issue mentioned in the Application Form and be marked as:

5) All Stock-invests should be crossed "A/c Payee only" and "Non-negotiable" and be made payable to the Issuer company "ICSS Informatics Limited". Only individuals and mutual funds are entitled to use Stock-invest.

6) Application Forms, duly completed, together with cash / cheque / bank draft / Stock-invest for the amount payable on application at the rate prescribed earlier in this Prospectus must be delivered before the closure of the subscription list to any of the Bankers to the Issue named herein or to any of their branches mentioned on the reverse of Application Form and NOT to the Company or to the Lead Manager / Registrar to the Issue.

7) Applicants residing at places where no designated branches of the Bankers to the Issue are located may submit / mail their applications at their ICSS Informatics Limited risk along with (i) demand drafts payable at Hyderabad only, payable to "ICSS INFORMATICS LIMITED – Public" or (ii) Stock-invest made payable to "ICSS Informatics Limited" to the Registrar to the Issue at their Hyderabad address, super-scribing the envelope ICSS Informatics - Equity Offering" so as to reach the Registrar on or before the closure of the Issue. The charges, if any, for purchase of demand drafts/ Stock-invests will have to be borne by the applicants.

8) No separate receipts will be issued for the application money. However, the Banker to the Issue or their approved collecting branches receiving the duly completed application form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip attached to each application form.

9)In order to avoid any misuse of the refund orders, applicants are requested to mention in the relevant columns in the application form his/her bank account number and name of the bank & branch, where he/she has an account to enable the Registrar to print the said details on the refund orders. This is mandatory and application forms not containing such details are liable to be rejected.

10)Each applicant shall submit only one application. A separate application can be made in respect of each Scheme of an Indian Mutual Fund registered with SEBI. Such applications will not be treated as multiple applications, provided that the applications made by the AMCs / Trustees / Custodians clearly indicate the Scheme concerned for which the application has been made.

11)The Company will not be in any manner responsible for the application collected by any Bank that is not a Banker to the Issue or the branches of a bank which are not designated branches as specified in the Application Form.

12) Applicants should note with regard to the provisions of Section 269SS of the Income Tax Act, 1961, payments of application money of Rs.20,000/- or more (application for 2000 and above) should not be effected in cash and must be effected only by an "Account Payee" cheque /demand draft. In case payment is effected in contravention of this provision, the application is liable to be rejected.

13) Further, for payments of application of money of Rs.50,000/- or more (applications for 5000 shares and above), the applicant, or in the case of applications in joint names, each of the applicants, should mention his/her/its 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. 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 with this information will be considered incomplete and will be liable to be rejected.

14) The Company will not be responsible for postal delays and loss in transit. The Company will not entertain any claims, damage or loss due to postal delays or loss in transit. For further instructions, please read the Application Form carefully. In case payment is effected in contravention of the conditions mentioned herein, the application money will be refunded and no interest will be paid thereon.

15) The Company shall ensure dispatch of Refund Orders of value over Rs.1500/- and share/ Debenture Certificate by Registered Post only and adequate funds for the purpose shall be made available to the Registrars to the Issue.

The applicant has the option to use Stock-invest for applying for equity shares now issued in terms of this Prospectus. Stock-invests can be obtained from any bank issuing such instruments, by making the necessary application and depositing the amount with the bank.

The applicant using the Stock-invest should submit the application form to any of the Bankers to the Issue before closure of the subscription list along with the Stock-invest. The Stock-invest should be made payable directly to the Issuer i.e., "ICSS Informatics Limited" The Stock-invest is payable at par at all the branches of the issuing Bank and outstation Stock-invests may also be used. Only individuals and Mutual Funds have the option to use Stock-invest.

1) The prospective investor, at the time to request of Issue of stock-invest to the issuing bank may have to:

1. indicate that he/she agrees to abide by the terms of Issue and enhancement of the stock-invest.
2. give irrevocable authority to his/her bank to mark a lien for the value of the stock-invest against the balance held in his/her savings/current/other deposit account.
3. agree to lifting of the bankers lien on expiry of the currency of the stock-invest or in case of intimation of partial/non-allotment of equity shares: and
4. agree that the issuing bank will not be liable for any damages or other consequences arising out of the loss of these instruments.

2) The service charges if any, for obtaining the stock-invest must be borne by the applicant.

3) Stock-invests issued by any scheduled commercial bank including Cooperative Bank ( even where the issuing Banker is not a collection Banker) will be accepted.

4) Stock-invests are to be used by the purchaser(s) within 10 days of its purchase. The last day for the use of stock-invest for submitting share application to the bank is indicated on the face of the stock-invest with a notation "To be used on/or before _____________".

5) Stock-invest should be marked "A/c Payee" and payable only to the Issuerr i.e., "ICSS Informatics Limited." The applicant shall provide necessary details such as payees name, amount, number of shares applied for, application no. etc., in the left hand side portion of the stock-invest and his address in the box on the reverse of the stock-invest before depositing it with Bankers to the Issue.

6) In case, if a box is not provided on the reverse of the stock-invest for writing the name and address of the investor, an ALLONGE may be obtained for the purpose and attached with the stock-invest. The ALLONGE should be used to write the applicant’s name(s) and full address to enable the Registrar to return the cancelled stock-invest directly to the applicants.

7) The validity of the stock-invest shall not exceed 4 months.

8) The stock-invest will be issued to the applicant in blank format after authentication of the date of Issue by the designated branch. The stock-invest duly completed should be submitted along with the application form to the bank branch handling the Issue.

9) Stock-invest should be signed and dated by the appropriate authority of the issuing bank. Investors have to fill the following in the stock-invest.

Title of the account, i.e., "ICSS Informatics Limited".

Amount

Number of shares applied for and submit the same to the collecting banker duly signed together with the application form.

10) Separate stock-invest of suitable and appropriate denomination (wherever available) should be submitted with each application form for the shares applied for. In case of stock-invest of fixed denomination, the investor can fill an amount less than the denomination depending upon the amount required to be paid on application for the shares applied for.

11) The applicant should not hand over stock-invest taken against his or her own account to any third party. The stock-invest should be utilised by the purchaser(s) and the purchaser’s name/ name of one of the purchasers should be invariably indicated as the first applicant in the application form. Thus, if the signature of the purchaser on the stock-invest and the signature of the first applicant on the application form do not tally, the application would be treated as having been accompanied by a third party stock-invest and shall be liable to be rejected.

12) As far as possible, the applicants should use only one stock-invest along with each application for subscription to the offer.

13) A ceiling of Rs.50,000 per individual per Public Issue for issue of stock-invest by banks has been imposed. The above ceiling is not applicable to Mutual Funds.

DISPOSAL OF APPLICATION MONEY IN CASE OF STOCKINVEST

1. In case of non-allotment, the Registrar to the issue shall directly send back the cancelled stock-invest to the applicant(s) along with the relative advice. The stock-invest would bear stamps such as "CANCELLED" and "NOT ALLOTTED" across the face of the instrument. The issuing bank will lift the lien on the account on surrender of the same by the investor.

 

2. On allotment/partial allotment, the Registrar to the issue shall fill in the amount ( which will be less than or equal to the amount filled by the investor) before presenting the stock-invest to the respective issuing Banker for payment to the extent of allotment. The Bank will lift the lien on the balance amount, if any, of the deposit.

 

3. Enquiries relating to stock-invest may be addressed only to the Registrar to the Issue and not to the issuing bank.

 

4. The above information is given for the benefit of investors and the Issuer is not liable for any modification of terms of stock-invest or procedure thereof by issuing banks.

 

5. Registrar to the Issue have been authorised by the Board vide ICSS Informatics Limited resolution passed on to sign on behalf of the Issuer for realising the proceeds of the stock-invest of the successful applicants or to fix non allotment advice on the stock-invest or to cancel the stock-invest of the unsuccessful applicants or partially successful applicants with more than one stock-invest. The cancelled instrument shall be sent back by the Registrar to the applicants directly by registered post with in 10 weeks of the closure of subscription list.

 

6. All conditions mentioned earlier for making an application through cheques / demand drafts will also apply to applications made with stock-invest.

 

7. For further instructions, please read the application form carefully.

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 and at his/her address as stated in the Application Form.

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 ICSS Informatics Limited 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.

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 ICSS Informatics Limited resolution or Authority, as the case may be, to make the Application or a duly certified copy thereof along with the certified copy of the Memorandum and Articles of Association and / or Bye-laws must be lodged separately at the office of the Registrars to the Issue simultaneously with the submission of the Application form quoting the serial number of Application Form and the Bank Branch where the application has been submitted, failing which the Application is liable to be rejected.

Thumb impressions or signature in languages other than English, Hindi and Telugu or any other language specified in the 8^th Schedule of the Constitution of India must be attested by a Magistrate or a Notary Public or a special Executive Magistrate under his official seal.

Applicants are advised that it is mandatory for them to indicate in the space provided in the application form details regarding their savings/ current bank account numbers and the name of the branch of the bank to which they want to the proceeds of the refund to be credited. Application not containing such details are liable to be rejected.

No applicant can make an application for a number of shares which exceeds the total number of shares offered to the public.

To prevent fraudulent encashment of refund orders by third party, the applicants are advised that it is mandatory for them to indicate in the space provided in the application form details regarding their Savings/ Current Bank Account Numbers and the name of their bank branch to which they want the proceeds of the refund to be credited. 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 payees 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.

Allotment letters/share certificate together with refund order of value over Rs.1500/- if any, to allottees and letters of regret together with refund orders of value over Rs.1500/- to non allottees will be despatched by registered post. Refund orders and cancelled stock invest whose value is upto Rs.1500/- will be dispatched by ordinary post under certificate of posting by the Registrars to the issue within the ten weeks from the closure of subscription list.

a. as far as possible, allotment of securities offered to the public shall be made within 30 days of closure of the public issue.

b. It shall pay interest at the rate of 15% p.a if the allotment has not been made and refund orders are not being dispatched to the investors withing 30 days from the date of closure of the issue.

An application has been made to Central Depository Services Ltd (CDSL) and National Securities Depository Limited (NSDL) for offering depository option to the investors.

1. A tripartite agreement would be signed by and amongst ICSS Informatics Limited,______________ and National Securities Depository Limited (NSDL) / Central Depository Services Ltd (CDSL) for offering the depository option to the investors.

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

 

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

 

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

 

4. Investors who wish to apply equity shares in electronic form need to have at least one beneficiary account with a depository participant prior to the allotment.

 

5. Allotment advice / refund order will be directly sent to the investors by the Registrars.

 

6. If incomplete / incorrect investor depository account details are given in the application form, physical equity shares will be allotted to the investors.

 

7. Responsibility for correctness of applicant’s demographic details given in the share application form vis-à-vis his / her depository participant would rest with the investor.

 

8. Shares in electronic form can be traded only on the Stock exchanges having electronic connectivity with any of the depositories.

 

9. 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.

The Directors of the Company have been advised by the Company’s Auditors, Sankar & Raja Chartered Accountants vide their letter dated 14-05-2000 at according to the provisions of the Income Tax Act, 1961 and the existing laws for the time being in force, the tax benefits and deductions that will, interalia, be available to the Company and to the members of the Company are as follows :

1. The Company in accordance with and subject to the conditions and to the extent specified in section 80 HHE of the Act would be entitled to deduction of 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.

 

2. The company will be entitled under Section 35D of the Income tax Act, 1961 to amortise certain specified preliminary expenses (including expenses incurred for the issue of shares) over a period of 10 successive years beginning with the previous year in which the company commences business, subject to compliance with the conditions specified in the Section.

 

3. In terms of and subject to the provisions of Section 35 of the Income Tax Act, 1961 the company will be entitled to a deduction of an amount equal to 100% in respect of expenditure (other than acquisition of land) incurred in connection with the scientific research related to the business carried on by the company in the year which such expenditure is incurred.

1. Under Section 10(33) of the Act, the dividend received by the shareholders of the Company is totally exempt.
2. By virtue of provisions relating to taxes on capital gains the shares will be treated as long term asset if held for a period exceeding 12 months

 

 

3. Long term capital gains in respect of listed shares will be chargeable under section 112 of the Act, at a concessional rate of 20% ( with a surcharge of 10% or 15% as applicable) computed after taking into account cost of acquisition as adjusted by Cost inflation Index notified by the Central Government or @10% of the Capital gains(with a surcharge of 10% or 15% as applicable) without such adjustment.

 

4. In case of a shareholder being an individual or Hindu Undivided Family in accordance with and subject to the conditions and to the extent specified in 54F of the Act, the share holders would be entitled to exemption from long term capital gains.

 

 

5. In terms of Sec.10(23D) of the Income Tax Act, Income of a mutual fund registered under the Securities Exchange Board of India Act and such other Mutual Fund set up by a public sector bank or a public financial institution of authorised by the Reserve Bank of India will be exempt from Income Tax including income from investment in shares of Company.

Total exemption from Wealth Tax would be available on investment in shares of the Company.

Effective from 1st October , 1998, no gift tax shall be levied on gift of shares of the Company.

3. PARTICULARS OF THE ISSUE

1. To provide funds for Software Development and ISP operations
2. facilitate the expansion of education and training activities.
3. To list the shares of the Company on the Stock Exchanges at Hyderabad.

The Cost of the project and Means of finance has been appraised by Global Trust Bank vide their letter dated March 7, 2000. The scope of the appraisal is to examine the feasibility of the revised project comprising ISP business, Gateway provision, E-commerce and Software Development towards the limited objective of ensuring repayment of the term loan. The purpose of the appraisal is to consider the extent of sanction of financial assistance for the revised project.

(figures in Rs. lakh)

(figures in Rs. lakh)

The sanctioned credit facilities are subject to the terms and conditions mentioned below.

Facility Term Loan

Amount Rs.150 Lakhs (Rupees One Hundred Fifty Lakhs only)

Rate of Interest PLR-C+1%+Tax(Presently 16.32%)

Purpose To Part Finance the expansion project

Repayment Principal to be repaid in 10 Quarterly installments of Rs15 Lacs

Each after an initial moratorium of 6 months. Interest to be

Serviced as and when debited

Processing Charges Rs.1lakh to be paid upfront

Security Charge over current and fixed assets of the company, existing,

Proposed and all future acquisitions

Personal guarantee of all the directors of the company

A detailed schedule of sources and deployment of funds upto June 13, 2000 as per the report of Sankar & Raja, Chartered Accountants, Secunderabad is given below:

(figures in Rs. lakh)

The table below gives the schedule of year-wise capital expenditure yet to be incurred on the project:

(figures in Rs. lakhs)

The promoters started a partnership firm called Institute of Computer Software Sciences popularly known as ICSS in 1990. The first branch of this firm was established in Secunderabad and soon earned a name for quality computer education at affordable prices. The firm expanded the branch network to a strength of 22 numbers by 1996. It was then felt that to tap the substantial growth opportunities in IT education and training, the business would need significant infusion of resources and talents and therefore the partners of the firm incorporated ICSS as a private limited company .

ICSS Informatics Limited was incorporated on 18^th April 1996 as a Private Limited Company and subsequently converted in to public limited company on 11th January 2000. The Company is headquartered at Secunderabad Andhra Pradesh

The company was formed to carry on the business of computer education and training, software devlopment,IT consultancy and related activities. The major strategic advantage that accrued to the company by taking over the running business of ICSS was that the company was able to capitalise on the goodwill of ICSS in addition to gaining access to a ready student community.

Since its inception in 1996 the company has primarily focused on building a strong base in computer education and training. As at the end of 1999 the company has a network of 26 branches and 42 franchisees spread across the state of Andhra Pradesh. The company has adopted a business model of a mix of own and franchisee centers in order to expand its branch network and reach out to the student community in both the urban and semi – urban areas. Both accessability in terms of the ready availability of a training institute as well as affordability in the context of student fees have been the twin pillars of the company,s business. The company has laid a strong focus on the management of quality in the preparation of course materials, selection and training of faculty, innovative and project oriented curriculum to deliver value to its customers. Ina recent survey conducted by the MBA students of Osmania University, the market awareness of ICSS was estimated to be 68%. ICSS has successfully trained over 76,000 students with more than 15,000 on rolls presently.

ICSS conducts both short terms certification courses and long term career courses typically running for between 4 to 12 months and more. The enrolled student strength at the end of 1999 was close to 25,000 including those enrolled at franchisee centers.

The company is promoted by Mr. C. P. Rajender and Mr. N. Sudhakar Rao first generation entrepreneurs with a strong background in business studies and computer application. The promoters have experience in various fields including hardware and software businesses.

ICSS Informatics Limited (the company) was organized in 1996 to engage in IT education & Software development. Prior to the formation if ICSS Informatics Ltd., the promoters of the company were carrying on the same business under a partnership firm since 1990 which was subsequently acquired by the company.

ICSS has built a valuable brand name for quality IT education and affordability which has resulted in over 75,000 students being trained at its centers over the last decade. The company experienced significant growth in revenues from 1997-98 when the turnover increased from Rs.175 lacs in March 1998 to Rs.422 lacs in March, 1999 and further to Rs.316 lacs for 8 months period ended November, 1999. The company has developed a network of 26 branches and 40 franchisees in Andhra Pradesh with a staff strength of over 350 employees. The funds for the expansion have been substantially raised from the promoters and accruals from operations.

Having established itself in IT training the company sees a synergy between training and software devlopment and IT consultancy. The company has therefore proposed to venture into software devlopment where the value addition and profitability are higher as compared to training. Further looking at the potential of internet business, it is also planned to become an internet service provider and expand operations to cover Andhra Pradesh in a phased manner. The IT training division is proposed to be further strengthened with setting up of new centers and expansion of the franchisee base to extend its reach. The company,s network offers it an excellent entry to the fast expanding area of e-business as channel partners. The company also proposes to engage in areas of IT consultancy and HR services.

The companys,s strategy of reaching IT education and training takes into account the specific needs of the student and end user community. Accordingly the company has developed the following business models around which the course curriculum is structured to deliver the need content of the trainees.

1) The professional training model concentrating on the imparting of pure IT skills ssuch as C++, VB, Java Oracle DBA, ASP etc., with new technologies being incorporated into the curriculum as and when these are introduced. As technology upgrades the company upgrades the course content to reflect changes and practices. The company runs career and certification courses ranging from 4 months to 12 months or more. These courses are structured around programming skills and application and systems development.

The professional training model is also being restructured to teach a pre-defined set of courses to students at assessed study centers with examination being conducted by a neutral monitoring organization. Certification courses leading to Microsoft Certified Professional and Lotus Certified Professional would be integrated with the existing career and short term courses. This training model obviously reaches out to students with specific IT programming requirements and is aimed at developing trained software engineers for the industry. Currently ICSS offers a range of short term and long term courses such as Post Graduate Diploma in Software Engineering where apart from training the students in core technical skills, education is also offered in management and personality devlopment. Further the company also conducts programmes wherein meritorious students selected through entrance examinations are offered exclusive IT training called Vignan over a period of 2 years availing of fee concessions of upto 70% . The group of Vignan students are exclusively trained at the Companys training center located in its corporate office. The company proposes to introduce extreme focus courses that train students in specific areas with application and systems development orientation.

ii) The end user training model where the company seeks to impart skill to use generic software packages to students as an aid to perform other main line activities. For instance chartered accountants or engineers are trained to work on financial accounting packages or CAD-CAM packages. These training programmes are of short durations of between 15 days to 2 months.

In the end user model the company is targeting professional groups and associations to identify their IT training requirements. Similarly the company is also offering training to institutional clients like APSRTC, Modi Xerox, various departments of the government of Andhra Pradesh. It expects to generate revenues of Rs.5 crores from this segment of IT training.

1. To establish, maintain and conduct in India or abroad, training schools, Institutes, courses and programmes and to impart training in computer software, Hardware and Electronic Data Processing.

 

2. To Carry on the business in India or elsewhere for developing, improving, designing, marketing and licensing computer software and programme, products of any and all descriptions

 

3. To provide consultancy services related to the preparation and maintenance of accounting, statistical, scientific or mathematical information and reports, data processing, programming, collecting, storing, processing and transmitting information and data of every kind of description, system analysis and matching services for solving and achieving commercial, industrial ,scientific and research problems and for all other related business.

 

4. To carry on the business in India or elsewhere through its registered office of through all their respective branches or through agents or sub agents as wholesalers, distributors, retailers, stockists, traders, agents, brokers, clearing and forwarding agents, exporters and importers of computer stationery, peripherals and other computer consumable

ICSS Informatics Limited is promoted by Mr. C. P. Rajender an Mr. N. Sudhakar Rao, first generation entrepreneurs with a strong background in business studies and computer applications.

Mr. C. P. Rajender aged about 38 years is a post graduate in commerce and was employed at Shrameek Vidyapeeth under Ministry of Human Resouces Development at Hyderabad Central University before teaming up with the other promoter MR. N. Suhdakar Rao.

Mr. N. Sudhakar Rao, aged about 36 years( ), Masters in computer applications, is from a family of academicians and has been with ICSS since its inception

-None-

None of the Promoters / Directors have violated the provisions of the Companies Act, 1956 or been suspended by SEBI or have had any disciplinary action initiated by SEBI.

There are no group companies of ICSS Informatics Limited or the promoters of ICSS Informatics Limited, which are listed on the Stock Exchanges.

None of the Promoters / Directors of the Company have resigned from any company or partnership firm or other ventures within a period of one year.

The Directors of the Company are signatories to the Memorandum of Association of the following companies :

No cases have been filed nor any prosecution launched or pending against the Company, the Promoters or Directors under the I.T Act. None of the Promoters / Directors have compounded taxes in the past.

The overall management of the Company is vested with the Board of Directors of the Company and the activities are carried out under the guidance and supervision of the Board of Directors. They are assisted by the following persons, who constitute the key management team of the Company.

Details of the market are provided under the head "Market for the Company’s products & services".

Overall software market

There are currently over a thousand companies in India, which are involved both in software exports as well as in the domestic software market. However, the major players in the industry have almost a 40% share of the market. More than 626 companies in India are engaged in the business of software exports. There are another 200 companies in this segment, but their combined revenue is not more than Rs. 500 million.

In the year 1997-98, 13 software companies have exported more than Rs. 100 crore of software. During the same period, more than 41 companies have exported more than Rs. 50 crore of software. More than 73 companies have exported than Rs. 10 crore worth of software and more than 257 companies exported software worth more than Rs. 1 crore. This indicates a high level of proliferation in the industry.

ISP operations market

The Inernet access market has been growing at about 193 % CAGR since its inception and is expected to race ahead at about 150% CAGR till March 2002. By 2001 it is projected that the inernet subscriber base would be 1.90 million subscriber strong and be about 3.75 Million strong be 2002. The access market placed at 102 crores in 1999 is expected to be worth Rs. 1500 Crores by 2002.

The number of licences issued on an all India Basis till December 1999 were 175 of which 26, 50 and 90 licences are in categories A, B, and C respectively.

Details of managerial competence in outlined in the sections on "Promoters and their background", "Management of the Company" and "Key Managerial personnel".

The project involves the following components:

The company’s operations are carried on at its Registered Office, i.e., 51, Sarvasukhi Colony West Marredpally Secunderabad. ICSS INFORMATICS LIMITED has entered into a lease agreement with Sri. M. Sidhanti on 10, 1999, for lease of the said premises. The Company has renewed the lease, valid for a period of 11 months on November 9, 1999 for a further period of 11 months. The company also intends to move to its own building to constructed in the next one year. In this connection the company has entered into agreement to purchase land at Begumpet a prime locality in the twin city.

Area

Cost

The company has entered into an agreement of sale of the land admeasuring 1,000 sq. yards bearing survey no 194/10 at 1-8-506, Begumpet, Hyderabad - 500 017. The property has not been registered in the name of the Company.

The Company is negotiating with Kakatiya Co-operative Housing Society Ltd for construction of Office at 1-8-506, Begumpet, Hyderabad - 500 017.

The company has planned a cost outlay of Rs. 165.92 lakh for Office furniture & Interiors at the 26 locations in Andhra Pradesh where it proposes to have training centres. The details are as follows :

Note: Purchase Orders have been placed with M/s.K.P. Interiors,Vijayawada for some of the items of Furniture and Fixtures and some of the orders are yet to be placed with other suppliers.The orders will be placed at the appropriate time as per the requirement before the end of October’2000.

Interiors

Equipment for which orders are already placed :

COMPUTER HARDWARE AND SOFTWARE

Computer Hardware & Software

SOFTWARE DEVELOPMENT & ISP EQUIPMENT

Equipment for which orders are yet to be placed :