In this Draft Offer Document, all references to "US Dollars", "dollars", "$" and "US$" refer to US dollars and all references to "Rs." refer to Rupees, the lawful currency of India. Further the word "Lac" means " one hundred thousand" and the word "crore" means "ten million".

The investors should consider the following risk factors carefully in evaluating the Company and its business before making any investment decision. Any projections, forecasts and estimates contained herein are forward looking statements and are based on certain assumptions that the Company considers reasonable. Projections are necessarily speculative in nature and it can be expected that some or all of the assumptions underlying the projections will not materialise or will vary significantly from actual results. Accordingly, the projections are only an estimate. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth in the following risk factors or elsewhere in this Draft Offer Document. The Company, the BRLM, the Syndicate Member(s) or their respective affiliates have no obligation to update or otherwise revise any projections, including any revisions to reflect changes in economic conditions or other circumstances arising after the date hereof or to reflect the occurrence of on anticipated events, even if the underlying assumptions do not fructify. Unless the context requires otherwise, the risk factors described below apply to Sovika Infotek Limited only.

1. (R) Sovika Infotek Limited was incorporated as Nova Software Private Limited in 1992. The Company has changed its name to Sovika Infotek Pvt. Ltd. on 11th May, 1999. Then it was converted into public limited company on 10th March,2000 as Sovika Infotek Limited.

Management Perception: The Company is in the IT business since its inception. The name of the company has been changed to reflect its group identity.

2. (R) The company has been promoted by first generation entrepreneurs

Management Perception : The promoters have experience of over 8 years in the IT Industry and more than 20 years in chemical Industry. With the induction of Mr.Sahil Mehta, an MBA in International Marketing, the company has strengthened its management team.

3. (R) The registered office of the company has been taken on lease basis from the group companies in which directors or promoters are interested. The amount of deposit paid by the company seems to be higher as compared to the market conditions.

Management perception : The terms and condition of the agreement are reasonable and commensurate with the present market condition. Amount of deposit and rent is based on valuation report by government approved valuer.

4. (R) The company is yet to place orders for part of the plant and machinery and testing equipment aggregating to
Rs. 246.80 lacs and software aggregating to Rs.14.15 lacs for the proposed project.

Management Perception :The company would place orders for equipment from identified suppliers at the appropriate time.

5. (R) The company is yet to place orders for Motor Cars aggregating to Rs. 140.00 lacs for domestic and overseas and Miscellaneous Fixed Assets aggregating to Rs.80.00 lacs for the proposed project.

Management Perception :The company would place orders for Motor Cars and Miscellaneous Fixed Assets at the appropriate time.

6. (R) Loss of key executives could adversely affect SIL’s business. SIL’s success depends to a large degree on the efforts and the abilities of its senior management. The loss of the services of certain members of its senior management for any reason could have a material adverse effect on its business, operating results and financial conditions.

Management Perception : The Company seeks to instill a sense of ownership in its key employees through empowerment and international exposure . The Company hopes that it would be able to retain its key employees though no guarantee of retention can be given. The Company benchmarks its human resources practices against the best in the industry to ensure high employee retention and it has specifically laid down policy of HR management.

7. (R) The project implementation is at a preliminary stage.

Management Perception : Bank of Madura Ltd. has appraised the project recently. The majority of funds required for the project are being raised through public issue.

8. (R) The proposed project is mainly financed by the present issue of equity shares and any delay in raising funds from the public issue would adversely affect the implementation and performance of the project.

Management Perception : The Management believes that the company having focussed attention, marketing a successful product and having skilled IT professionals would receive encouraging response from the market and consequently does not foresee any problem in raising the required funds from the capital market.

9. (R) Export earning of the Company will be realized in the Foreign Exchange, to that extent income of the Company is exposed to foreign exchange rate fluctuations. The fluctuation in foreign exchange rate may affect the financials of the company

Management Perception : The Company plans to implement hedging systems to counter the foreign exchange risk.

10. (R) The Company has not appointed any monitoring agency for use of funds.

Management Perception : The Company has details and comprehensive projects plans with built-in mechanisms for monitoring and follow up. The Company has the management structure in place to successfully implement the project in time.

11. (R) The Company intends to use a portion of the proceeds of this Public Issue for potential acquisitions and strategic investments in India or overseas. The Company is in the process of finalising acquisition targets or strategic investments and thus has, presently, no commitment or agreement with respect to any material acquisition or investment. Any acquisition by the Company carries the challenge of integrating the people, the processes and the culture of the acquired company. In the event the Company plans to acquire a non-Indian company, it would require the approval from RBI and Government of India. If the Company were to encounter an attractive acquisition candidate, there can be no assurance that RBI and Gol approvals, if required, can be obtained.

As a part of its business strategy, SIL will seek to acquire assets and business relating or complimentary to its operations. Acquisitions involve certain risks, including difficulties of assimilating the operations and personnel of the other companies into its operations, maintenance of uniform standards, procedures and control, disruption of its ongoing business and activities and inability of Management to maximise its financial or strategic position by successful incorporation of acquired technology and intellectual property rights into its software service offerings.

Further, if the funds required for acquisitions are greater than the amount raised in this issue or that can come out of continuing operations, the Company may need to issue fresh equity through offer to its then existing share holders or new offers in Indian or international markets or may need to borrow. There is no assurance that such attempt at funding would be successful or timely. In the absence of specific acquisition target the requirement of funds for this purpose cannot be assessed.

Management Perception : The Company plans to actively pursues strategic and growth led acquisitions. It is in the process of finalising acquisitions with potential targets. The Company has a well defined approach to acquisitions, which includes careful evaluation of multiple factors such as strategic fit, business model, technological capabilities, client access, revenue and earning potential, integration possibilities and operating synergies. Acquisition of any company would also require obtaining the requisite approvals and suitability of market timing before proceeding with the same. The Company would also seek to ensure that the funds are used in line with the acquisition needs. The Company has at present no borrowings and could potentially leverage itself to meet any additional funding requirements.

12. (R) The company has developed one portal and in the process of development and launching of another portal. If these portals fail to generate the required revenue to the company, the operations and the profitability of the company will be affected.

Management Perception : The portal developed and that to be by the company are having unique features which caters to specific community. The company has developed technology like web casting, web streaming, and content selling which shall facilitate the company to generate the required revenue.

13. (R) The company proposes to invest Rs.375 lacs in subsidiary and overseas acquisitions. The company has projected certain revenues from investment in subsidiaries and overseas acquisitions. If this investment fails to generate the projected revenue, the profitability of the company shall be partially affected.

Management Perception : The Company estimates the revenue @10% only on investment in Overseas Subsidiary and Acquisitions. The revenue estimates from the subsidiary and acquisitions forms negligible percentage of the total revenue projected by the company. The non generation/realisation of this revenue may not affect the viability of the project of the company.

14. (R) No software developed by the company is protected under copyright Act therefore the software and its technology developed by the company may be used by the competitors.

Management Perception: The company will get its software product protected under copyright Act in due course.

15. (R) The initial term of an agreement executed between ProCRM.COM and Sovika Infotek Limited for marketing iCRM products is 7.5 years. The agreement further provides that Sovika or ProCRM may terminate the agreement at the end of the initial term or at the end of any 1-year extension thereof by written notice to the other at least 90 days prior to such termination becoming effective. Further, the terms and conditions of the agreement (which forms the part of material contracts and is available for inspection) may affect the financials of the company.

Management Perception : The Company expects that the agreement with ProCRM.com can be renewed for further such period and on such terms and conditions as is mutually acceptable to both the parties. Further, the Company has already developed and also plans to develop further skills, expertise and to gradually expand its product line, which will provide multiple revenue streams and will reduce it dependence on ProCRM.com.

16. (R) ProCRM.com, Inc is a division of Mehta Corporation. Mr. Ashwin Mehta who is brother of Mr. Sohan Mehta (one of the Promoters of Sovika Infotek Limited). Mr. Ashwin Mehta is having controlling interest in Mehta Corporation.

Management Perception : Though Mr.Ashwin Mehta is having controlling interest in Mehta Corporation and pro.CRM.com. He is not having any direct controlling interest in Sovika Infotek Limited. Moreover, Mr.Ashwin Mehta is NRI and US citizen running the separate business identity from SIL

17. (R) The Company has to pay US $ 50000 in cash towards the balance payment of iCRM global marketing rights. The fluctuation in foreign exchange rate may affect the financials of the company.

Management Perception: The company shall take appropriate steps to cover the exchange risk before the payment in foreign currency to be effected.

18. (R) The Strategic alliances agreements executed with Softcel, Inc., Simplex Solutions Occidentals L.L.C. and Thakral Software were for the period of one year and the period of the same have been expired

Management Perception : Though the period of the strategic agreements have been expired, the arrangement with the alliances have not been cancelled. The company is in the process of renewing the contracts.

19. (R) The company has not appointed any architect / contractor to make the proposed office operational.

Management Perception: The appointment of Architect/Contractor shall be done at appropriate time of execution of the necessary works as per the schedule of implementation.

20. (R) The Owner/Builder who have offered the premises for the proposed software development center in Mumbai, is not having sufficient FSI for construction of the same. The construction of the premises is expected to begin only after buying TDR (Transfer of Development Rights) from the open market and obtaining sanction for development plans from appropriate local authority. The completion of this process may require some time, which can not be estimated. This may result in delay in execution of the project. Further if the owner could not obtain the TDR and required civil authority’s permissions/sanction, the Company will be required to find out the alternative arrangement for Software development center. The cost of such alternative arrangement is not certain and the same is not assessable at this juncture.

Management Perception: In metro cities like Mumbai, the TDRs are generally bought and sold in construction industry. The company does not foresee any problem in getting the TDR and necessary permission/sanction for construction.

EXTERNAL RISK FACTORS

1. (R) The Company’s performance may be affected by a number of factors beyond its control including changes in government regulation and policies and political and economic developments both inside and outside India.

Management Perception : The Company believes that in view of the contribution of the Software industry, it is unlikely that the Government would initiate or repeal policies in immediate future that would be detrimental to the software industry.

2. (R) Competition in the market in which SIL operates is intense and involves rapidly changing customer requirements. To maintain and improve its competitive position, SIL must continue to develop new services and products that keep pace with the evolving needs of its customers.

Management Perception : The Company believes that with a well defined marketing strategy, presence of skilled IT professionals and a marketing tie-up with ProCRM.com, it will be in a position to compete in the market.

3. (R) The industry is prone to a high risk of technological obsolescence.

Management Perception : The Company proposes to continuously seek to improve the skills of its employees through superior R&D efforts and also to upgrade its infrastructure facilities to meet technological needs.

4. (R) Failure to attract, develop and retain IT professionals could increase costs or may limit growth.

Management Perception : The Company has adopted a comprehensive plan to address the strong demand for qualified IT professionals. This approach includes accelerating global recruitment and providing an offshore an state-of-the-art-training programme.

5. (R) The current valuation in the industry may not be reflective of the future valuations for the industry.

Management Perception : The Company believes that software companies having focused attention and those having successful products with a technological tie-up, well defined marketing infrastructure and skilled IT professionals would experience healthy growth and valuations from investors.

6. (R) The risk of intellectual property infringement and proprietary rights could adversely affect its business.

Management Perception : The Company relies upon a combination of non-disclosure and other contractual agreement and copyright, trade secret and trademark laws to protect its proprietary rights in technology. Ownership of software created for clients is generally retained by or assigned to the client, and the company does not retain any interest in such software. The Company currently require its IT professionals to enter into non-disclosure and assignment of rights arrangements to limit access to and distribution of its proprietary information. The Company can give no assurance that the steps taken by the Company in this regard will be adequate to determine of appropriation of proprietary information or that the Company will be able to detect unauthorised use and take appropriate to enforce its intellectual property rights.

8. (R) Potential Liability to Clients: Many of the Company’s contracts for software services and products involve projects that are critical to the operations of its clients’ business and provide benefits that may be difficult to qualify. Any failure in a client’s system could result in a claim for substantial damages against the Company, regardless of the Company’s responsibility for such failures. The Company does not maintain general liability insurance coverage, and no assurance given that sufficient amount will be available to cover one or more large claims.

Management Perception : The Company has well qualified 36 software professionals who can successfully implement the software products. Further, the Company has so far not faced any such claim from its clients. It feels that the chance of such claims in future is negligible. However, there can be no assurance that such claim would not arise in future.

9. (R) Failure of Internet as a medium: Data transmission and communication through Internet by the Company is subject to inherent risk associated with the Internet.

Management Perception : The Company proposes to take steps to minimise the risk by having suitable mechanism such as firewall server etc.

The Promoters and promoter group have not purchased or sold equity shares of the Company during the last six months.

1. Applicants are advised to refer to the paragraph on the ‘Basis for Issue Price’ mentioned in the Offer Document before making an investment decision in respect of the Issue.

2. Applicants are also advised to refer to the Notes to Accounts appearing later in the Offer Document before making an investment decision in respect of the Offer.

3. Investors may please note that in the event of oversubscription of the fixed price portion of the issue, allotment/allocation shall be made on proportionate basis in consultation with the Regional Stock Exchange namely the Stock Exchange, Mumbai, as per the details appearing later in the Draft Offer Document.

4. Cost per share to the Promoters At par

5. Book Value per share (as on August 31, 2000) for a face value of Rs. 10/- Rs.18.03

6. Change in name: The Company was incorporated on 6th November 1992 as private limited company in the name of Nova Software Private Limited. The name of the Company was changed to Sovika Infotek Private Limited vide a fresh certificate of incorporation dated May 11, 1999 under the Companies Act, 1956. The Company then converted into limited company on 10th March, 2000.

7. Interest of Promoter companies / Directors: The promoter companies and the directors of the Company are interested to the extent of the shares held by them along with their friends and relatives.

8. Transactions with group companies: There are no transactions with any group Companies.

9. Loans And Advances as on 31/08/2000: The Company has made loans and advances to following parties in which the Directors are interested:

Sr. No.	Particulars	Amount in Rs.
1	Fortune Equity Brokers (India) Limited	4,20,00,000.00

10. Deposits as on 31/08/2000: The company has made following deposits to the following companies in which Directors are interested.

Sr. No.	Particulars	Amount in Rs.
	Deposit for Office Premises
1.	Sovika Chemicals Private Limited	40,00,000
2.	Sovika Real Estate Private Limited	80,00,000

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 risk involved. The securities have not been recommended or approved by Securities and Exchange Board of India nor does Securities and Exchange Board of India guarantee the accuracy or adequacy of this Offer Document.

1) An existing profit making and dividend-paying IT Company.

2) The project includes development of in-house capabilities for software products and applications, iCRM (internet based customer relationship management), acquisition of technology Company/Firm/Enterprise/Incorporation and portal developments

3) Pre-issue stake of the Promoters and Promoters group is 29.64% showing strong commitment to the Company.

4) Cost of project and means of finance has been appraised by Bank of Madura Limited.

5) Proposed Equity Participation by E.T.A Infotech, an ETA- Ascon Group which is pre-eminent corporate entity in the Middle East (UAE).

6) The product iCRM has been successfully installed at one domestic location and another installation is under process.

7) TUV INDIA PRIVATE LIMITED has recommended the name of the Company for ISO 9001 certification to RWTUV of Germany.

8) Listing at Mumbai Stock Exchange, National Stock exchange, and Ahmedabad stock exchange.

(Originally incorporated as Nova Software Pvt. Ltd. on 6th November, 1992 under the Companies Act, 1956. On 11th May, 1999,the name of the company was changed to Sovika Infotek Pvt. Ltd., then it was converted into public Ltd. Co. on 10th March, 2000 as Sovika Infotek Ltd.) (Hereinafter referred to as "SIL" or "The Company")

Registered Office: Gurunanak Industries, 1st floor, Safed Pool, Andheri-Kurla Road, Mumbai - 400 072.

Tel.: (022) 851 6341 Fax: (022) 851 5713 e-mail: infotek@sovika.com Website:www.sovikainfotek.com

The Present Issue of Equity Shares in terms of Section 81(1A) of the Act is made pursuant to the resolution of the Board of Directors of the Company passed at its meeting held on October 27, 2000 and the special resolution passed at the Extraordinary General Meeting held on November 29, 2000.

The activities for which the funds are being raised through this Public Issue are within the purview of the objects clause of the Company’s Memorandum of Association. The Company has received registration-cum-membership certificate from Software Technology Parks of India, Pune, vide their letter no. STP/P/VIII (A) (106)/95/7727 dated 15th May, 1995.

The Company can undertake the activities proposed by it in view of the present approvals and no further approvals from any Government Authorities/RBI are required by the Company to undertake the proposed activities, save and except those approvals which may be required to be taken in the normal course of business from time to time.

The equity shares will be subject to the provisions of the Companies Act, 1956, Securities Contracts (Regulation) Act, 1956, Memorandum and Articles of Association, Terms of this Offer Document, Application form and to the extent applicable, the relevant Statutory Guideline and Regulations for allotment and listing of securities issued from time to time by the Government of India (GoI), SEBI and the Stock Exchanges concerned.

THE OFFER DOCUMENT FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

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

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.

The Book Running Lead Manager has submitted a fresh due diligence certificate dated ____ 2000, which reiterates the statements made in the above referred certificate and states that all observations made by SEBI vide their letter no _____ dated ___, 2000 have been incorporated in the Offer Document.

The Company accepts no responsibility for statements made otherwise than in the Offer Document or in the advertisements or 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.

The Company and the BRLM accept no responsibility for statements made otherwise than in the Offer Document or in the advertisements or other material issued by or at the instance of the Company and the BRLM and that anyone placing reliance on any other source of information would be doing so at his/her own risk. The BRLM accepts no responsibility, save to the limited extent as provided in terms of the Memorandum of Understanding entered into by the Company and itself and the underwriting agreement entered into by the Company, the BRLM and the Syndicate Members. The BRLM accepts no responsibility for any breach, failure or any default on the part of the Syndicate Member(s) and has been fully indemnified in that behalf.

The Company declares that the Stock Exchanges to which applications for listing and official quotation are proposed to be made, do not take any responsibility for the financial soundness of this Issue or for the issue price at which the equity shares will be issued or for the correctness of the statements made or opinions expressed in this Draft Offer Document.

The Stock Exchange, Mumbai (‘BSE’) has given, vide its letter dated ___ permission to the Company to use the name of the Exchange in this Offer Document as the Regional Stock Exchange on which this Company’s securities are proposed to be listed. BSE has scrutinised this Offer Document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. BSE does not in any manner:

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

warrant that this Company’s securities will be listed or will continue to be listed on BSE; or

take any responsibility for the financial or other soundness of this Company, promoters,

management or any scheme or project of this Company;

And it should not be, for any reason be deemed or construed that this Offer Document has been cleared or approved by BSE. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against BSE, 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 in the Offer Document or any other reason whatsoever.

As required, a copy of this Offer Document has been submitted to National Stock Exchange of India Limited (hereinafter referred to as NSE). NSE has given vide its letter dated_______ permission to the Issuer to use the Exchange’s name in this Offer Document as one of the Stock Exchanges on which this Issuer’s securities are proposed to be listed subject to the Issuer fulfilling various criteria for listing including the one related to market capitalisation (i.e. market capitalisation shall not be less than Rs.______ crores at the time of listing). The Exchange has scrutinised this Offer Document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the Offer Document has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Offer Document, nor does it warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of this Issuer, its promoters, its Management or any scheme or project of this Issuer.

Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claims against the Exchange 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 any other reason whatsoever."

The Ahmedabad Stock Exchange (ASE), has, vide their letter dated the _________ 2000, given permission to the Company to use the name of the Exchange in this Offer Document as one of the stock exchanges on which this Company’s securities are proposed to be listed. ASE does not in any manner:

Warrant, certify or endorse the correctness or completeness of any of the contents of this Offer Document; or

Warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or

take any responsibility for the financial or other soundness of this Company, its

Promoters, its management or any scheme or project of this Company;

It should not for any reason be deemed or construed that this Offer Document has been cleared or approved by ASE. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against ASE, 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 in the Offer Document or any other reason whatsoever.

This Issue is made in India to persons resident in India (including Indian nationals resident in India, who are majors, or minors through their natural/legal guardian), Hindu Undivided Families, companies, corporate bodies Trust (registered under the Indian Trust Act, 1882), Societies (registered under the Societies Registration Act, 1860 or any other applicable laws) and provided that such Trust/Society is authorised under its constitution/rules/bye-laws to hold shares in a Company, Indian Mutual Funds registered with SEBI, Indian Financial Institutions, Commercial Banks and Regional Rural Banks, NRIs, OCBs, FIIs (registered with SEBI) and Co-operative Banks (subject to RBI permission) as defined under Indian laws. This Offer Document does not, however, constitute an offer to sell or an invitation to subscribe to shares offered hereby in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this Offer Document comes is required to inform himself about and to observe any such restrictions. Any disputes arising out of this Issue will be subject to the exclusive jurisdiction of the courts of Mumbai.

A copy of the Offer Document having attached thereto the documents required to be filed under section 60 of the Companies Act, 1956 will be delivered for registration to the Registrar of Companies, Mumbai. A copy of the Offer Document has also been filed with the SEBI, A Wing, Ground Floor, Mittal Court, Nariman Point, Mumbai 400 021.

Applications will be made to The Stock Exchange, Mumbai, The National Stock Exchange of India Limited and Ahemedabad Stock Exchange for permission to deal in and for official quotation of the equity shares of the Company.

If the permissions to deal in and for an official quotation of the equity shares is not granted by any of the Stock Exchanges, the Company shall forthwith repay, without interest, all such moneys received from the applicants in pursuance of this Offer Document. If such money is not repaid within eight days after the Company becomes liable to repay it (i.e. from the date of refusal or within 70 days from the date of closing of the subscription list, whichever is earlier), then the Company will be liable to repay the money, with interest at the rate of 15%, as prescribed under Section 73 of the Companies Act.

As a matter of abundant caution, the attention of the investor or bidders as the case may be, is 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 the Company for acquiring or subscribing for any shares therein; or

(b) Otherwise induces the 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 extent to five years", as under applicable provisions of the law.

If the Company does not receive minimum subscription of 90% of the net offer to public i.e. Rs. 1620.00lacs including devolvement of underwriters within sixty days from the Issue Closing date for Fixed Price Portion, the Company shall forthwith refund the entire subscription amount received. For delay beyond 78 days, if any, in refund of such subscription, the Company shall pay interest as per section 73 of the Companies Act, 1956. If there is any delay in refund of amount collected, the Company and its directors shall be jointly and severally liable to repay the amount with interest.

The Company will despatch letters of allotment, share certificates, letters of regret, cancelled Stockinvest and refund orders, if any, in excess of Rs. 1500/-, as the case may be, by Registered Post/Speed Post at the sole/first applicant’s risk and give credit to the beneficiary account with the depository participants, within 15 days from the issue closing date for the fixed price portion. Refund orders up to Rs. 1500/- will be sent under Certificate of Posting. Further, allotment of the equity shares relating to the Book Built portion shall be made within 15 days of the Offer Closing Date for the Book Built portion and refunds will be made within 15 days of the Bid Closing Date, except for those bidders who have opted for the Spill-Over option allotment of Equity Shares offered to the public shall be made within 15 days of the Offer Closing Date for the Fixed Price Portion

The Company shall pay interest at the rate of 15% per annum (for the delayed period beyond 15 days and except to the applicants applying through Stockinvest) if the allotment and/or transfer has not been and/or the letters of allotment/refund orders have not been despatched to the investors within 15 days from the aforesaid dates. If there is a delay beyond 15 days, the Company shall be liable to repay the money along with interest @ 15% per annum.

The Company will provide adequate funds to the registrars to the issue, for the purpose of despatch of letter(s) of allotment/share certificate(s)/letter(s) of regret/cancelled Stockinvest(s)/refund order(s).

Financial Service Division,

(SEBI Regd. No.: INM 000000 669)

161/C, Mittal Court, Nariman Point,

Mumbai - 400 021.

Ph.: (022) 2825312,2843634,2825021 fax: (022) 2831021

E-mail: fsd@uwbankindia.com

***

(SEBI Regd. No.: INR 000000155)

610, Dalamal Towers,

Nariman Point,

Mumbai - 400 021

Phone: 283 4347, 283 4374

Fax: (022) 285 5759

E- Mail: rdcons@Vsnl.net

B-702, Gokul Paradise, Thakur Complex,

Kandivali (East),

Mumbai- 400 101.

Phone : (022) 851 6341

The Investors’ attention is invited 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 stockinvests, etc.

Chartered Accountants

206, Arun Chambers

Tardeo Mumbai 400 034

Phone: 4924638

Fax: (022) 4953650

Solicitors and Advocates,

Central Bank Building,

Fort, Mumbai -400 023.

Phone : (022) 265 2739, 265 2665

Andheri (East) Branch,

Mayani Manor, Sir M.V. Road,

Andheri (East),

Mumbai-400069.

Financial Services Division,

161/C, Mittal Court, Nariman Point,

Mumbai - 400 021.

Phone : (022) 2825312,2843634, 2825021

E-Mail : fsd@uwbankindia.com

Merchant Banking Division,

Central Office,

‘Karumuttu Nilayum’

758, Anna Salai,

Chennai-600 002.

Phone : (044) 852 3456, Fax : (044) 855 0321.

New Building, Kamala Mills,

Senapati Bapat Marg,

Lower Parel, Mumbai-400 013.

Phone : (022) 4988484 Fax: (022) 496 3781

****

***

Book building refers to the collection of Bids from investors, which is based on an indicative floor price, the final issue price being fixed after the Bid Closing Date, through the process of price discovery. The principal players involved in a book building process are:

1. The Company

2. A Book Running Lead Manager (BRLM), who is a Registered Merchant Banker and who, in this case, is The United Western Bank Limited. The Book Running Lead Manager is also the Lead Merchant Banker.

3. Co-Book Running Lead Manager, who in this case is ______.

4. Syndicate Members who are intermediaries registered with SEBI and who are permitted to carry on activities as underwriters. Syndicate Members are appointed by the Book Running Lead Manager and/or Co-Book Running Lead Manager.

As per SEBI DIP (Compendium) Circular No. 3 dated August 4, 2000, companies not having the track record and net worth as specified in the guidelines shall be eligible to make IPOs only through Book Building route. In such a case 60% of the issue size has to be compulsorily allocated to ‘Qualified Institutional Buyers’ (QIBs) failing which the issue shall not go through. The process of Book Building under SEBI guidelines is relatively new and investors are advised to make their own judgement about investment through this process prior to making a Bid or an application in the Issue.

In this regard, the Company has appointed The United Western Bank Limited as the Book Running Lead Manager (BRLM) and _____ as the Co-Book Running Lead Manager (CBRLM) to the Issue. The BRLM has formed a Syndicate consisting of the Book Running Lead Manager, Co-Book Running Lead Manager to the Issue and the Syndicate Members to procure subscription for the equity shares.

Financial Service Division,

(SEBI Regd. No.: INM 000000 669 )

161/C, Mittal Court,

Nariman Point,

Mumbai - 400 021.

Phone : (022) 2825312,2843634,2825021

Fax : (022) 283 1021.

e-mail: fsd@uwbankindia.com

***

This being an Issue of Equity Shares, credit rating or appointment of Debenture Trustees is not required.

After determination of the final price and prior to the filing of the Offer Document with RoC, the Company would enter into Underwriting Agreements with the BRLM, Co-BRLM and the Syndicate Members for the equity shares offered through the Book Building Portion. In terms of these Underwriting Agreements, the BRLM and the Co-BRLM shall be responsible for bringing in the amount devolved in the event the Syndicate Members do not fulfil their underwriting obligations.

The details of underwriting for book-built portion are as given below:

Note: The BRLM, Co-BRLM and the Syndicate Members shall be responsible for ensuring the payment of the amount allocated to investors procured by them. In the event of any default in payment, the respective underwriter, in addition to other obligations defined in the underwriting agreement, will also be required to procure/subscribe to the extent of the defaulted amount.

In the opinion of the Board of Directors (based on a certificate given to the Board by BRLM) and in the opinion of the BRLM on the basis of the declarations by the Syndicate Members, the resources of the above mentioned Syndicate Members are sufficient to enable them to discharge their respective underwriting obligations in full. All the above-mentioned Syndicate Members are registered with SEBI under Section 12(i) of the SEBI Act, 1992. All letters of underwriting mentioned above have been accepted by the Board of Directors of the Company at their meeting held on _________ and letters of acceptance have been issued by the Company to the Underwriters.

The equity shares proposed to be offered through the Fixed Price Portion are fully underwritten. The details of the underwriting for Fixed Price Portion are as given below:

In the opinion of the Board of Directors (based on a certificate given to the Board by BRLM and Co-BRLM) and in the opinion of the BRLM and Co-BRLM, on the basis of the declarations by the Underwriters, the resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. All the above mentioned Underwriters are registered with SEBI under Section 12(i) of the SEBI Act, 1992. All letters of underwriting mentioned above have been accepted by the Board of Directors of the Company at their meeting held on _________ and letters of acceptance have been issued by the Company to the Underwriters.

Bid opens on

Bid closes on

Issue opening date

Issue closing date for Book Built Portion

Bids and any revision in bids shall be accepted only in the bidding period between 10.a.m. and 3 p.m. at the Syndicate Members’ bidding centres mentioned in the Bid Form. On the Bid Closing date, Bids would be accepted only up to ___ a.m.

The subscription list will open at the commencement of banking hours and will close at the close of banking hours on the dates mentioned below:

Issue opening date

Issue closing date for the Fixed Price Portion

The Issuer accepts full responsibility for the accuracy of the information given in this Offer Document and confirms that to the best of their knowledge and belief, there are no other facts, the omission of which makes any statement in this Offer Document, misleading and they confirm that they have made all reasonable enquiries to ascertain such facts.

As per SEBI guidelines, a minimum of 60% of the net offer to the public out of the public issue amount is reserved for allotment to Qualified Institutional Buyers. The remaining 40% of the offer to the public is for individuals, out of which15% is reserved for the wholesale investors who are applying for more than 1000 Equity shares. The remaining 25% of the issue size is reserved for retail investors who are applying for less than 1000 Equity shares.

Unsubscribed portion in either of these categories shall be added to the other category

interchangeably except the portion reserved for QIBs.

1. Capital Build-up: Details of contribution to the equity share capital of the Company are as under:

The Existing Share holding of the Company

* From the date of allotment in the proposed public issue.

2. The Authorised Share Capital of the Company was increased from Rs.5, 00,000 divided into 50,000 Equity Shares of Rs.10/- each, to Rs.7, 50,000 divided into 75,000 Equity shares of Rs.10/- each through an amendment to the Memorandum and Articles of Association by a resolution passed at the Company’s Extra-ordinary General Meeting held on 30th March, 1995. Subsequently Authorised Share Capital of the Company has been increased to Rs.5, 07,50,000/- divided into 50,75,000 Equity Shares of Rs.10/- each through an amendment to the Memorandum & Articles of Association by a resolution passed at the company’s Extra-ordinary General Meeting held on 3rd January, 2000, and then further increased to Rs.10,00,00,000 divided into 1,00,00,000 Equity Shares of Rs.10/- each, through an amendment to the Memorandum and Articles of Association by a resolution passed at the Company’s Extra-ordinary General Meeting held on 11th March, 2000. Further the Authorised Share Capital of the Company has been increased to Rs.12,00,00,000/- divided into 1,20,00,000 Equity Shares of Rs.10/- each through an amendment to the Memorandum & Articles of Association by a resolution passed at the Company’s Extra-ordinary General Meeting held on 29th November, 2000.

3. There are no buy-back, standby arrangements or similar arrangements for the purchase of equity shares issued through this Offer Document by the Promoters, Directors or the BRLM.

4. Shareholding pattern in the Company

(shares of face value of Rs.10/- each)

Investors Other than Promoters Group

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

5. Promoters’ Contribution and Lock in provisions: The present shareholding of the Company and the lock-in status of these shares are as under:

Date of Allotment	Date when Made fully Paid up	Consideration(Cash, Bonus ,kind etc.)	No. of Shares	Face Value (Rs.)	Issue Price(Rs.)	% of Post Issue Paid Up Capital	Lock in Period
06/11/1992	06/11/92	CASH	10	10	10	**	*3 Years
10/12/1993	10/12/93	CASH	5,500	10	10	**	*3 Years
30/03/1995	30/03/95	CASH	55,000	10	10	**	*3 Years
23/03/2000	23/03/2000	CASH	17,51,000	10	10	**	*3 Years
31/03/2000	31/03/2000	CASH	1,85,090	10	10	**	*3 Years
31/08/2000	31/08/2000	CASH	2,44,200	10	10	**	*3 Years
TOTAL			22,40,800			**

* Lock in period-3 years from the date of allotment in the public issue.

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

6. The details of the shares held by the promoters, and Promoters Group to be locked in as above, are as follows :

Name of the Promoters	Date of Allotment	Date when made fully paid up	Consideration (Cash,Bonus,Kind etc)-	No of Shares	Face Value Rs.	Issue Price Rs.	% of stake		* Lock in Period
							Pre-Issue	Post-Issue
Promoters, Relatives & group
SOHAN C.MEHTA	06/11/1992	06/11/1992	CASH	10	10/-	10/-	-	**	*3Years
SOHAN C. MEHTA	10/12/1993	10/12/1993	CASH	5,500	10/-	10/-	0.07	**	*3Years
SOHAN C. MEHTA	30/03/1995	30/03/1995	CASH	10,000	10/-	10/-	0.13	**	*3Years
SOVIKA CHEMICALS P. LTD.	30/03/1995	30/03/1995	CASH	20,000	10/-	10/-	0.27	**	*3Years
HIRABEN C. MEHTA	30/03/1995	30/03/1995	CASH	10,000	10/-	10/-	0.13	**	*3Years
SHIRISH K. DESAI	30/03/1995	30/03/1995	CASH	10,000	10/-	10/-	0.13	**	*3Years
SUDHA S. MEHTA	30/03/1995	30/03/1995	CASH	5,000	10/-	10/-	0.07	**	*3Years
SAHIL S. MEHTA	23/03/2000	23/03/2000	CASH	42,500	10/-	10/-	0.56	**	*3Years
SAHIL REAL ESTATE P. LTD.	23/03/2000	23/03/2000	CASH	7,27,500	10/-	10/-	9.62	**	*3Years
SUDHA S. MEHTA	23/03/2000	23/03/2000	CASH	1,05,000	10/-	10/-	1.39	**	*3Years
HIRABEN S. MEHTA	23/03/2000	23/03/2000	CASH	22,500	10/-	10/-	0.30	**	*3Years
MANSI S. MEHTA	23/03/2000	23/03/2000	CASH	42,500	10/-	10/-	0.56	**	*3Years
MISHIKA S. MEHTA	23/03/2000	23/03/2000	CASH	10,000	10/-	10/-	0.13	**	*3Years
SOHAN C. MEHTA – HUF	23/03/2000	23/03/2000	CASH	5,000	10/-	10/-	0.07	**	*3Years
SOHAN C. MEHTA	23/03/2000	23/03/2000	CASH	66,000	10/-	10/-	0.87	**	*3Years
SOVIKA CHEMICALS P. LTD	23/03/2000	23/03/2000	CASH	4,25,000	10/-	10/-	5.62	**	*3Years
SHIRISH K. DESAI	23/03/2000	23/03/2000	CASH	61,500	10/-	10/-	0.81	**	*3Years
NEW ADONIS LEASING PVT. LTD	23/03/2000	23/03/2000	CASH	1,10,000	10/-	10/-	1.46	**	*3Years
DEEPAK B. DALVI	23/03/2000	23/03/2000	CASH	20,000	10/-	10/-	0.26	**	*3Years
SAMEER SHETH	23/03/2000	23/03/2000	CASH	23,500	10/-	10/-	0.31	**	*3Years
JIGNESH A. SHAH HUF	23/03/2000	23/03/2000	CASH	5,000	10/-	10/-	0.07	**	*3Years
PRAGNESH A. SHAH HUF	23/03/2000	23/03/2000	CASH	5,000	10/-	10/-	0.07	**	*3Years
SUMTICHAND GOUTI	23/03/2000	23/03/2000	CASH	50,000	10/-	10/-	0.66	**	*3Years
YOGENDRA GOUTI	23/03/2000	23/03/2000	CASH	30,000	10/-	10/-	0.40	**	*3Years
SOHAN C.MEHTA	31/03/2000	31/03/2000	CASH	90	10/-	10/-	0.00	**	*3Years
SOHAN C.MEHTA	31/03/2000	31/03/2000	CASH	100000	10/-	10/-	1.32	**	*3Years
SAHIL REAL ESTATE P. LTD.	31/03/2000	31/03/2000	CASH	35,000	10/-	10/-	0.46	**	*3Years
FORTUNE FINANCIAL SERVICES (INDIA) LTD.	31/03/2000	31/03/2000	CASH	50,000	10/-	10/-	0.66	**	*3Years
SOHAN C.MEHTA	31/08/2000	31/08/2000	CASH	30,000	10/-	10/-	0.40	**	*3Years
SHIRISH K. DESAI	31/08/2000	31/08/2000	CASH	14,200	10/-	10/-	0.19	**	*3Years
SOVIKA CHEMICALS P. LTD	31/08/2000	31/08/2000	CASH	2,00,000	10/-	10/-	2.65	**	*3Years
Total				22,40,800			29.64	**

*From the date of allotment in the proposed public issue.

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

7. Promoters’ contribution and lock-in in respect of promoters whose name figure in the prospectus as promoters Promoters in the paragraph on "Promoters and their Background"

Sr.No.	Name of the Promoters	Date of Allotment	Date when made fully paid up	Consideration  (Cash,Bonus,Kind etc)-	No of Shares	Face Value Rs.	Issue Price Rs.	% of Post Issue Paid-up Capital	Lock in Period
1.	Mr. Sohan C. Mehta	06/11/1992	06/11/1992	Cash	10	10/-	10/-	**	3 years*
	Mr. Sohan C. Mehta	10/12/1993	10/12/1993	Cash	5,500	10/-	10/-	**	3 years*
	Mr. Sohan C. Mehta	30/03/1995	30/03/1995	Cash	10,000	10/-	10/-	**	3 years*
	Mr. Sohan C. Mehta	23/03/2000	23/03/2000	Cash	65,000	10/-	10/-	**	3 years*
	Mr. Sohan C. Mehta	23/03/2000	23/03/2000	Cash	1,000	10/-	10/-	**	3 years*
	Mr. Sohan C. Mehta	31/03/2000	31/03/2000	Cash	1,00,000	10/-	10/-	**	3 years*
	Mr. Sohan C. Mehta	31/03/2000	31/03/2000	Cash	90	10/-	10/-	**	3 years*
	Mr. Sohan C. Mehta	31/08/2000	31/08/2000	Cash	30,000	10/-	10/-	**	3 years*
2.	Mr. Shirish Desai	30/03/1995	30/03/1995	Cash	10,000	10/-	10/-	**	3 years*
	Mr. Shirish Desai	23/03/2000	23/03/2000	Cash	61,500	10/-	10/-	**	3 years*
	Mr. Shirish Desai	31/08/2000	31/08/2000	Cash	14,200	10/-	10/-	**	3 years*
3.	Mr. Sahil S. Mehta	23/03/2000	23/03/2000	Cash	20,000	10/-	10/-	**	3 years
	Mr. Sahil S. Mehta	23/03/2000	23-03/2000	Cash	22,500	10/-	10/-	**	3 years*
	Total				3,39,800			**

* From the date of allotment in the proposed public issue

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

8. The Company has not raised any bridge loan or taken any financial assistance against the proceeds of this Public Issue.

9. In the event of the Public Issue (Fixed Price Offer) of equity shares being oversubscribed, the basis of allotment for the Fixed Price Offer will be finalised in consultation with the Stock Exchange, Mumbai (the Regional Stock Exchange). The allotment of equity shares in case of oversubscription in the Fixed Price Portion will be on a proportionate basis.

10. In the event of oversubscription, in the process of rounding off, to ensure allotment in marketable lots, the Company may make such adjustments in the basis of allotment as may be necessary in consultation with the SEBI/the Regional Stock Exchange (Mumbai), so as to allot additional equity shares up to a maximum of 10% of net public offer in respect of the fixed price offer.

11. Separate applications for dematerialised/electronic and physical Equity Shares by the same applicant shall be treated as multiple applications and are liable to be rejected.

12. The Promoters and the Directors of the Promoters have not undertaken any transactions in shares of the Company during the last six months.

13. RBI vide its letter no. ___ has accorded its approval for the Issue of Equity Shares to FIIs on a repatriable basis. FIIs can invest up to ____% of the public issue. As per RBI Notification No. of FEMA as amended vide Notification No.20 dated the 3rd May, 2000, under the general permission granted by RBI, the Company is eligible to issue shares to NRIs and OCBs under the ****% scheme. Thus, the Company can issue shares to NRIs/OCBs on a repatriation basis, provided the shareholding of NRIs/OCBs in the Company does not exceed ****% of the public issue. post-issue capital. In any case The Company has restricted foreign holdings to the extent of ****% of its post-issue paid-up capital. The sale proceeds of such investment in equity shares by NRIs/OCBs will be allowed to be repatriated along with the income thereon, subject to instructions from RBI then in force and subject to the Indian tax laws, provided that the investments are made by inward remittance from abroad through approved banking channels or out of funds held in NRE/FCNR accounts maintained with a bank in India.

Top ten Shareholders (to be updated at the time of RoC filing)

14. As on date of filing the Offer Document with the RoC (presently given as on 11th December, 2000)

Sr.No	Name of the Shareholder	No. of Shares	% of Shareholding (Post issue)
1	Sahil Real Estate Pvt Ltd	7,62,500	**
2	Sovika Chemicals Pvt. Limited	6,45,000	**
3	H.B. Stock Holdings Ltd.,	4,00,000	**
4	Shimal Trading co.,	3,00,000	**
5	Mr. Ahmed S. Salahuddin	3,00,000	**
6	Mr. Sohan C. Mehta	2,11,600	**
7	Vidyut Investments Ltd.,	2,00,000	**
8	Credit Capital Investment Trust Co. Ltd. -Libra Leap	2,00,000	**
9	Credit Capital Investment Trust Co. Ltd. - New Shares	1,50,000	**
10	Relic Finance Ltd.	1,22,500	**
	Total	32,91,600	**

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

15. 10 days prior to the date of RoC filing (presently given as on 1st December, 2000)

Sr.No	Name of the Shareholder	No. of Shares	% of Shareholding (Post issue)
1	Sahil Real Estate Pvt Ltd	7,62,500	**
2	Sovika Chemicals Pvt. Limited	6,45,000	**
3	H.B. Stock Holdings Ltd.,	4,00,000	**
4	Shimal Trading co., 3,00,000	**
5	Mr. Ahmed S. Salahauddin	3,00,000	**
6	Mr. Sohan C. Mehta	2,11,600	**
7	Vidyut Investments Ltd.,	2,00,000	**
8	Credit Capital Investment Trust Co. Ltd. -Libra Leap	2,00,000	**
9	Credit Capital Investment Trust Co. Ltd. - New Shares	1,50,000	**
10	Relic Finance Ltd.	1,22,500	**
	Total	32,91,600	**

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

16. 2 years prior to the date of RoC filing(presently given as on 11th December, 1998) :

Sr. No.	Name of the Shareholder	No. of Shares	% of Shareholding (Post issue)
1	Sohan C. Mehta	15,510	**
2	Sameer Sheth	10	**
3	Niranjan V. Sheth	10	**
4	Sovika Chemicals Pvt Ltd	20,000	**
5	Shirish K Desai	10,000	**
6	Sudha S.Mehta	5,000	**
7	Hiraben C. Mehta	10,000	**
	Total	60,530	**

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

17. The Shareholders of the Company do not hold any warrant, option or convertible loan or any debenture which would entitle them to acquire further shares of the Company.

18. The equity Shares reserved on competitive basis to Fis/ Mfs/ Banks/ Venture Capital Funds, shall not be subject to lock in period.

19. The subscription by the Promoters/Directors, their friends, relatives and associates for equity shares to be allotted under ‘D’ above shall be brought in at least one day before the opening of the Public Issue which shall be kept in an escrow account with a Schedule Commercial Bank and the said contribution / amount shall be released to the company along with the public issue proceeds. The Company would furnish a certificate from their Auditor confirming the contribution to Securities and Exchange Board of India.

20. The Equity Shares to be held by the Promoters under the lock-in period, shall not be sold/hypothecated/transferred during the lock-in period. However, inter se transfers between the promoters named as such would be permitted, provided that the requirement of the lock-in period guidelines continue to apply, to the extent initially prescribed.

21. No single applicant can make an application for number of securities which exceeds the securities offered.

22. 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.

23. Total number of members as on date of prospectus is 385 only.

24. The Promoters/Company do not have any intention to alter the capital structure during the next 6 months by splitting, Issue of further shares.

25. No payment direct or indirect in the nature of discount, commission, allowance or otherwise shall be made either by the issuer company or the promoters in any public issue to the persons who have receive firm allotment in such public issue.

26. The Shares held by the Promoters may be pledged with Banks/Financial Institutions as additional security for loans granted by such Banks /FIs, provided pledge of shares is one of the terms of sanction of such loan(s). As of now no shares are so pledged and there is no lien on any shares held by the promoters.

27. The Company has not made any public issue so far nor the Equity Shares are presently listed on any Stock Exchange. The Promoters/Directors/their relatives or associates have not directly or indirectly financed transactions in the shares of the company.

28. The denomination of the Company’s Equity Shares shall be Rs.10/-. The Company shall have Equity Shares of one denomination only, at any point of time.

29. The Company’s pre-issue and post-issue capital shall be as follows :

Particulars	Pre-issue	Post-issue
Promoters, Friends & Relatives	29.64%	**
Investors other than Promoters Group	70.36%	**
Indian Public	**
QIBs	**
Total	100.00%	100.00%

** The % of the post issue paid up capital can be determined only after the Issue Price is known after the book Building Process.

The Company undertakes that:

1. The complaints received in respect of the Issue shall be attended to expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the securities are to be listed are taken within 7 working days of finalisation of basis of allotment;

3. The Issuer shall apply in advance for the listing of equity shares;

4. The funds required for despatch of refund orders/allotment letters/certificates by registered post shall be made available to the Registrar to the Offer by the Issuer Company;

5. The promoters’ contribution in full, wherever required, shall be brought in advance before the issue opens for public subscription and the balance, if any, shall be brought in pro rata basis before the calls are made on public;

6. The certificates of the securities/refund orders to the non-resident Indians shall be despatched within specified time;

7. No further issue of securities shall be made till the securities offered through this Offer Document are listed or till the application moneys are refunded on account of non-listing, undersubscription, etc.

The Company shall ensure despatch of refund orders of value over Rs.1500/- and share certificates by Registered Post only and adequate funds for the purpose shall be made available to the Registrars by the Issuer Company.

1. The Company accepts no responsibility for statements made otherwise than in the Offer Document or in the advertisements or other material issued by or at the instance of the Company and the Lead Managers and any one placing reliance on any other source of information would be doing so at his own risk.

2. In the opinion of the Directors of the Company, there are no circumstances that have arisen since the date of the last financial statement disclosed in the Offer Document, that materially or adversely affect or are likely to affect performance or profitability of the Company, or value of its assets, or its ability to pay its liabilities within the next twelve months.

3. The Company declares that the Stock Exchanges to which application for official quotation has been made does not take any responsibility for the financial soundness of the Issue or for the price at which the instruments are issued or for the correctness of the statements made or opinion expressed in the Offer Document.

i) The sums received in respect of the Offer will be kept in a separate account with the Bankers to the Issue and the Company will not have access to such funds unless allotment of equity shares has been made in consultation with the Stock Exchange, Mumbai, and permission for listing is obtained for the equity shares from all the Stock Exchanges, where listing is proposed.

ii) The Board of Directors of the Company certifies that:

all monies received out of issue of shares to 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 Companies Act, 1956;

iii) Details of all monies utilised out of this Issue referred to in sub-item (i) shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such monies had been utilised; and

iv) Details of all unutilised monies out of this Issue, if any, referred to in sub-item (i) shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the form in which such unutilised monies have been invested.

v) The utilisation of monies received under the promoters’ contribution and from firm allotments and reservations shall be disclosed under an appropriate head in the balance sheet of the company indicating the purpose for which such monies have been utilised.

vi) The details of all unutilised monies out of the funds received under promoters’ contribution and from firm allotments and reservations shall be disclosed under a separate head in the balance sheet of the company indicating the form in which such unutilised monies have been invested.

The Company agrees that, as far as possible allotment of securities offered to the public shall be made within 15 days of the closure of the public issue. The Company further agrees that it shall pay interest @ 15% per annum if the allotment letters/refund orders have not been despatch to the applicants within 15 days from the date of the closure of the issue. However applications received after the closure of the issue in fulfilment of underwriting obligations to meet the minimum subscription requirement shall not be entitled for the said interest.

Right to receive dividend, if declared

Right to attend general meetings and exercise voting powers, unless prohibited by law

Right to vote personally or by proxy

Right to receive offers for rights shares and be allotted bonus shares

Any other rights available under the Companies Act, 1956

Note: Only the registered equity shareholders or in case of the joint holders, those shareholders, whose names appear first in the Register of equity holders shall be entitled to above mentioned rights.

(The Issue Price to be filled in before the RoC filing)

The Equity Shares, now being offered, shall rank pari passu with the existing shares of the Company in all respects including dividend, if any, which may be declared or paid on Equity Shares.

The applicant may indicate the name of the nominee in the application form, in respect of the shares that may be allocated to him or for the existing shares. As per Section 109A of the Companies Act, a holder of shares may, at any time, nominate, in the prescribed manner, a person to whom his shares in the Company shall vest, in the event of his death.

It is a condition of this issue of equity shares that non-payment of the amount due on allotment will attract interest at 18% p.a. on the allotment money due commencing from the last date appointed for payment thereof till payment. Failure to pay the amount as aforesaid shall render the allotment of equity shares liable to cancellation and 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 deem fit.

A Bid by Bidder must be for a minimum of 1100 equity shares and in multiples of 100 equity shares thereafter. A Bidder cannot make a bid for more than the number of shares offered through book building. Further a bidder cannot bid at a bid price lower than the face value of the shares of the Company or lower than the floor price announced for book building.

The bid size of the institutions and other investors shall not exceed the investment limit prescribed for them by various regulatory authorities.

The maximum amount has to accordingly be paid at the time of bidding based on the highest bidding option of the Bidder. Where payment of bid price at the time of bidding is waived at the discretion of the Syndicate Member the total Issue Price is to be paid within 3 days of communication by the BRLM of the list of Bidders who have been allocated equity shares to the Syndicate Members. Where a Bidder has been allocated lesser number of shares than he or she had bid for, the excess amount paid on bidding, if any, will be adjusted towards application money or refunded to such Bidder.

The allotment and/or transfer of securities relating to the Book Built Portion shall be made within 15 days from the Issue Closing Date for Book Built Portion. The Company shall pay interest @15% p.a., (except to Bidders applying through Stockinvest) if allotment and/or transfer is not made within 15 days from the Issue Closing Date for Book Built Portion and refunds are not made within 15 days of Bid Closing Date, for any delay beyond 15 days.

In relation to the Book Built Portion, the BRLM and other Co-BRLM, as may be designated for this purpose and the Company shall open an Escrow Account at the Escrow Collection Bank for the collection of the monies payable upon submission of the Bid Form. Each Bidder shall, with the submission of the Bid Form draw a cheque/demand draft for the maximum amount of his bid in favour of the Escrow Account of the Escrow Collection Bank i.e. ____ Bank Escrow
A/c Sovika Infotek Limited Book Building Offer and submit the same to the Syndicate Member(s). Bid forms accompanied by cash would not be accepted. All investors shall be required to indicate the price in their bids. "Cut-off Price Bidding" will not be allowed and such bids will be treated as invalid. The Syndicate Member(s) may at their discretion waive such payment at the time of the submission of the Bid Form, in which case the Issue Price shall be payable for the allocated shares within 3 days of communication of the list of such Bidders who have been allocated equity shares to the Syndicate Members by the BRLM. If the payment is not made favouring the Escrow Account within the time stipulated above, the Bid of the Bidder is liable to be cancelled.

The Syndicate Member(s) shall deposit such cheque/demand draft with the Escrow Collection Bank, which will hold the monies for the benefit of the Bidders till such time as the Issue Opening Date. On the Issue Opening Date, the Escrow Collection Bank shall transfer the funds from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account with the Bankers to the Issue.

A Bidder cannot make a bid for more than the number of shares offered through book building portion and an applicant cannot make an application for more than the number of shares offered through the fixed price portion.

Terms of payment for different categories of investors is given below:

Application must be for a minimum of 200 equity shares and in multiples of 100 equity shares thereafter. The maximum application size in the fixed price portion will be for 1000 equity shares.

The Fixed Price portion consists of only the Public Issue of shares.

The terms of payment are as follows:

In case an applicant has been allotted lesser number of shares than he or she had applied for, the application money will be adjusted towards the final payment and the balance, if any, will be refunded.

As far as possible, allotment and/or transfer of securities relating to the Fixed Price Portion shall be made within 15 days from the Issue Closing Date for Fixed Price Portion. The Company shall pay interest @15% p.a., (except to applicants applying through Stockinvest) if allotment and/or transfer is not made and refund orders are not despatched to the investors within 15 days from the Issue Closing Date for Fixed Price Portion for any delay beyond 15 days.

# Only those individuals who have not applied or have not received allocation in the book-built portion.

The Book Built Portion would be available for allocation to wholesale investors. In the institutional category the Company in consultation with the BRLM will have the discretion to allocate to any of the investors, who have Bid at or above the Issue Price.

The book built portion is made to ‘wholesale investors’, which means an application for a minimum of 1100 Equity Shares and in multiples of 100 shares thereafter, who have applied through the Syndicate Members. In respect of the institutional portion, the Company in consultation with the BRLM will have the discretion to allocate to any of the investors, who have bid at or above the Issue Price.

The Company in consultation with the BRLM and Co-BRLM reserves the right to reject any Bid procured by any or all Syndicate Members without assigning any reason thereof. The procedure for Bidding is described in below.

The present Issue also contains a Fixed Price Portion, which will be equal to 25% of the Issue. Individual investors who for any reason(s) could not participate in the Book Building Portion during the Bidding Period or did not receive an allocation or CAN from the Syndicate Member through whom they participated, can apply for equity shares out of the Fixed Price Portion. However, investors who have been successful in getting an allocation in the Book Built Portion are barred from applying for the Fixed Price Portion.

The equity shares to be offered under the Fixed Price Portion shall be made available at the Issue Price.

Investors may note that in case of over subscription in the Fixed Price Portion, allotment will be made on a proportionate basis, in consultation with the Regional Stock Exchange. The Fixed Price Portion shall be available for subscription during the Issue period and not during the Bidding Period.

Bidders shall only use the Bid Form for the purpose of making a Bid in terms of this Draft Offer Document. The Bidder shall have the option to make a maximum of three Bids in their Bid Form and such options shall not be considered as multiple applications. Upon the allocation of shares and dispatch of CAN and filing of Offer Document with the ROC, the Bid Form shall be considered as the application form and upon issue of shares shall function as an authority given to the Company by the Bidder to sign the transfer form or authority pursuant to which the shares in physical or demat form will be transferred. On filling the Bid Form, the Bidder is deemed to have authorised the Company to make the necessary changes in the Offer Document and the Bid Form as would be required for filing of Offer Document with the ROC and as would be required by the ROC after such filing, without any prior or subsequent notice of such changes to the Bidder.

Under institutional category, bids can be made by QIBs, which has been defined by SEBI as under:

Public Financial Institution as defined in section 4A of the Companies Act, 1956;

Scheduled Commercial Banks;

Mutual Funds;

Foreign Institutional Investor registered with SEBI;

Multilateral and Bilateral development financial institutions;

Venture Capital Funds registered with SEBI.

Under non-institutional category, bids can be made by:

Indian nationals resident in India who are majors, in single or joint names (not more than three)

Hindu Undivided Families in the individual name of the ‘Karta’

Non-resident Indians (NRIs), Overseas Corporate Bodies (OCBs) on repatriation basis and non-repatriation basis subject to applicable laws.

Companies, Corporate Bodies and Societies registered under the applicable laws in India and authorised to invest in these shares

Trusts registered under The Societies Registration Act, 1860, or any other Trust law and are authorised under their constitution to hold and invest in shares

Note: Book Running Lead Manager, Co-Book Running Lead Manager, Syndicate Members, any associate of the Syndicate Member (except an Asset Management Company on behalf of Mutual Fund and Indian Financial Institutions and Public Sector Banks) shall not participate in the bidding process. Further, they shall not be entitled to subscribe to the issue in any manner.

The Syndicate Members will circulate copies of the Offer Document to their clients.

Investors desirous to have copies of the Offer Document can obtain the same from the Registered Office of the Company or the BRLM/Co-BRLM or from the Syndicate Members.

The Company and the BRLM shall declare the Bid Opening Date and Bid Closing Date and publish the same in three widely circulated newspapers (one each in English, Hindi and regional language). This advertisement shall contain the salient features of the Offer Document as specified under Form 2A, the method and process of bidding and the names and addresses of the Syndicate Members. The Syndicate Members shall start accepting Bids from the investors from the Bid Opening Date.

Investors who are interested in subscribing to the Company’s equity shares should approach any of the Syndicate Members or their authorised agent(s) to register their Bid.

The Syndicate Member has the right to take the requisite Bid details (as required to be filled into the book building software) from Bidders based abroad without receiving the Bid Form, subject to the condition that their Bid Form will be collected by the Syndicate Member prior to the last date of the Pay-in-period, in case the payment has been waived by the Syndicate Member. Such receipt of Bid details by the Syndicate Member will be construed to be equivalent to submission of the Bid Form for the purpose of Bidding.

The bids should be compulsorily submitted in the prescribed bid form only.

The Syndicate Member will register the Bids using the on-line facilities of NSE/BSE. There will be at least one NSE/BSE on-line connectivity to each of the bidding centres.

NSE/BSE will issue a screen-based facility for registering Bids for the Issue. This facility will be available on the terminals of Syndicate Members and their authorised agents during the Bidding Period. Syndicate Members can also set up facilities for off-line electronic registration of bids subject to the condition that they will subsequently download the off-line data file into the on-line facilities for book building.

At the time of registering the Bid, the Syndicate Member shall enter the following details of the investor in the on-line system:

Name of the investor

The investor category: Individual/Corporate/NRI/OCB/FII registered with SEBI/Public

Financial Institution as defined in section 4A of the Companies Act/Multilateral and

Bilateral development financial institutions/MF/Scheduled Commercial Banks/Venture

Capital Funds registered with SEBI etc.

Number of shares

Bid price (See the following para)

Bid Form number

Whether payment made upon submission of Bid Form

After the above data is entered, the system will generate a Unique Transaction Identification Code (UTIC), which will indicate the Syndicate Member’s identity and the investor’s registration with him. A system generated Transaction Registration Slip (TRS) (or the Order Confirmation Note) will be given to the investor as a proof of the registration of each Bid option. The registration of the Bid by the Syndicate Member does not guarantee that the shares shall be allocated either by the Syndicate Member or the Company or the BRLM. Amount of margin charged from an investor shall be entered and printed in the TRS.

Such TRS by itself will not create any obligation of any kind.

Bids shall not be rejected except on technical grounds. No bid shall be rejected if accompanied by the margin, except on technical grounds.

An indicative floor price will be advertised prior to the Bid Opening Date for reference purpose of the Bidders. Such floor price will only be indicative, and the Company and the BRLM reserve the right to finalise the issue price at any level above the floor price without prior approval of or intimation of the Bidders.

Bidders will have an option to place their bids at a price , which may be above the indicative floor price. The Bidders cannot bid below the face value of the equity shares of the Company.

All investors are required to indicate the price in their bids. Bidding at cut-off price shall not be allowed and such bids shall be treated as invalid.

The Company, BRLM and the Co-BRLM who may be designated for this purpose shall open Escrow Accounts with one or more Escrow Collection Banks in whose favour the Bidder shall make out the cheque or demand draft in respect of his or her Bid and/or revision. The Escrow Collection Banks will act in terms of this Offer Document and an Escrow Agreement to be entered into between the BRLM, Co-BRLM, the Company, the Escrow Collection Bank and the Registrars to the Issue. The Escrow Collection Bank for and on behalf of the Bidders shall maintain the monies in the Escrow Account. The Escrow Collection Bank shall not exercise any lien over the monies deposited therein, and shall hold the monies therein in trust for the investors, and on the Issue Opening Date transfer the monies to the Public Issue account with the Bankers to the Issue in terms of the Escrow Agreement. The Bidders are informed that the Escrow Mechanism is not prescribed by SEBI and the same has been established as an arrangement between the Escrow Collection Bank(s), the Company, and the Registrars to the Issue and the BRLM, to facilitate collections from the Bidders.

Each Bid Form will give the Bidder the choice to bid for up to three optional price and demand (i.e. number of shares bid for) levels. The price and demand options submitted by the Bidder in the Bid Form will be treated as optional demands from the Bidder and will not be cumulated. After discovery of the Issue Price, only one bid i.e. the maximum number of shares bid for by a Bidder at or above the Issue Price will be considered for allocation as his Bid and rest of the bids irrespective of the bid price will become automatically invalid.

The Bidder cannot bid on another Bid Form after his bids on one Bid Form have been submitted to any Syndicate Member. Submission of a second Bid Form to either the same or to another Syndicate Member will be treated as multiple bidding and is liable to be rejected either before entering the bid into the NSE/BSE bidding system, or at any point of time prior to the allotment/allocation and/or transfer of shares in the Offer.

Along with the Bid Form, all Bidders will submit a cheque or draft payable to the Escrow Account or Stockinvest (subject to applicable laws/guidelines) favouring the Company. The amount of such payment will be the highest value of the optional bids submitted in the Bid Form. The Syndicate Member can waive this requirement of payment to the Escrow Account for any Bidder as per his discretion. However, if such payment is not waived by the Syndicate Member, the full amount of payment has to be made and partial payment will not be accepted by the Syndicate Member. In case, requirement of payment during the Bidding period is waived for such bidders, for payment into the Escrow Account, shall be within three days of communication of the allocation list to the syndicate Member by BRLM.

Margins collected from a bidder shall be credited to the escrow banker. No part of the margin shall be held by the Syndicate Member or realised to his credit. The Syndicate Member shall deposit the margins latest by the next day to the date of receipt of bid along with the margin.

The Syndicate Member will enter each option into the NSE/BSE bidding system as a separate bid and generate a TRS for each option and give the same to the Bidder. Therefore, a Bidder can receive up to three TRS’ for each Bid Form.

Bids registered by various Bidders through their Syndicate Member(s) shall be electronically transmitted to the NSE/BSE mainframe on an on-line basis.

The book gets built up at various price levels. This information will be available to the BRLM on an on-line basis.

During the Bidding Period, any Bidder who has registered his or her interest in the equity shares at a particular price level is free to revise his or her Bid using the printed Revision Form.

The revision can be made in both the desired quantities of shares and the Bid Price by using the Revision Form. The Bidder must fill his or her Bid Form number, details of all the options in his or her Bid Form or earlier Revision Form and revisions for all the options as per his Bid Form or earlier Revision Form. For e.g. if a Bidder has bid in three options in the Bid Form and he is changing only one of the options in the Revision Form, he must still fill the details of the other two options in the Revision Form as unchanged. Incomplete or inaccurate Revision Forms will not be executed by the Syndicate Member.

The Bidder can make this revision any number of times during the Bidding Period. However, for any revision(s) in the earlier Bid, the investor will have to use the services of the same Syndicate Member through whom he has placed the original Bid, otherwise the revised bid is liable for rejection.

Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft or Stockinvest for the full amount of the revised Bid and the same shall be adjusted against the payment made at the time of the original Bid or the previously revised bid. The Syndicate Member may at his sole discretion waive the payment requirement at the time of one or more revisions.

When a Bidder revises his or her bid, he or she shall surrender the earlier TRS and get a revised TRS from the Syndicate Member. It is the responsibility of the Bidder to request for and get the revised TRS, which will act as proof of his or her having revised the previous Bid.

In case of discrepancy of data between NSE/BSE and the Syndicate Member, the decision of the BRLM based on the records of NSE/BSE is final and binding on all the parties concerned.

After the Bid Closing Date, the BRLM shall analyse the demand generated by the Syndicate at various price levels and discuss the pricing strategy with the Company.

The Company in consultation with the BRLM will finalise the "Issue Price", the number of shares to be issued and transferred and the allocation to successful Bidders. The Company in consultation with the BRLM will have the discretion to allocate to any of the investors, who have Bid at or above the Issue Price. The allocation would be decided based on investor quality, price aggression, early submission of bids, prior commitment etc.

The BRLM shall intimate the Syndicate Members of the Issue Price and allocations to their Bidders.

The BRLM/Co-BRLM have entered into an underwriting agreement with the Company on being intimated about the Issue Price and allocation(s) to their Bidders. The Syndicate Member(s) have, in turn, entered into an underwriting agreement with the BRLM and the Co-BRLM Lead Managers.

The Offer Document would be finalised and filed with the ROC soon after signing of the Underwriting agreements. On filling the Bid Form, the Bidder is deemed to have authorised the Company to make necessary changes in the Offer Document and the Bid Form as would be required for filing the Offer Document with ROC and as would be required by ROC after such filing without any prior or subsequent notice of such changes to the Bidder.

After the Issue Price is determined by the Company in consultation with the BRLM, the statutory advertisement will be issued by the Company either prior to or after the filing of the Final Offer Document with the RoC. This advertisement shall, in addition to the information that has to be set out in the statutory advertisement, indicate the price of the securities along with a table showing the number of securities and the amount payable by an investor.

The BRLM/Co-BRLM shall send to the Syndicate Members a list of their Bidders who have been allocated shares in the Book Built Portion.

The receipt of the list of allocation for their Bidders by the Syndicate Members shall constitute acceptance of the Bids set out in the said lists for the Issue and the same shall be deemed to be a valid and binding contract. The Bidders shall be deemed to have knowledge of such acceptance immediately upon the receipt by the Syndicate Members of the list of allocation for their Bidders. The Syndicate Member is, for this limited purpose, deemed to be the agent of the Bidders.

The Syndicate Members would then send the CAN to their Bidders who have been allocated shares in the Book Built Portion and who have not paid into the Escrow Account at the time of bidding. Bidders who have been allocated shares and who have already paid into the Escrow Account at the time of bidding shall directly receive the CAN from the Registrars to the Issue subject, however, to realisation of their cheques or demand drafts paid into the Escrow Account. In case of allocation of shares any excess amount paid on application of shares, shall be adjusted towards the amount due on allocation and the balance amount if any will be refunded by the Company to the applicants. In case the Issue price is higher than the highest value of the indicative price band used for Book Building, the Bidder who has paid lesser than the full value of their allocated shares at the Issue Price will be required to pay such shortfall as per the instructions given in the CAN.

Allotment of Equity shares relating to the Book Building portion shall be made within 15 days from the Issue closing date for Book Building Portion. The Company shall thereafter shall pay interest @ 15% p.a. (except to the applicants applying through Stockinvest) if allotment is not made and refund orders are not despatched to the investors within 15 days from the Issue closing date for Book Building Portion for any delay beyond 15 days.

If the bidder does not pay the required amount within the prescribed time, the bid, if any allocation is made, shall be cancelled and the Syndicate Member shall bring in the funds under his underwriting obligation.

What the bidder is expected to do when the issue opens:

Bidders can obtain Bid Forms and/or Revision Forms from the Syndicate Members

Bids and revisions to Bids must be:

i Made only in the prescribed Bid Form or Revision Form, as applicable, completed in full, in BLOCK LETTERS in ENGLISH in accordance with the instructions contained herein and in the Bid Form and are liable to be rejected by the Syndicate Member(s) if not so made.

ii For a minimum of 1100 shares and in multiples of 100 shares thereafter.

iii In single name or in joint names (nor more than three).

iv Thumb impressions and signatures other than in the languages specified in the Eighth Schedule in the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under his or her official seal.

The prescribed colour of the Bid Form for various categories, is follows

Bidder’s Bank Details: The name of the first or sole Bidder’s bank, branch, type of account and account number must be filled in the Bid Form. This is required for the Bidder’s own safety so that these details can be printed on the refund orders. Bids without these details are liable to be rejected.

Bidders Depository Account Details: The Allotment under the Book Building Portion shall be compulsorily in dematerialised form. The Bidders have to necessarily mention their Depository Participant’s name, DP-ID and Beneficiary Account Number in the Bid Form. Bid Forms without the depository account details will be rejected. In case of joint names, it must be ensured that the Depository Account is also held in the same joint names and which are in the same sequence in which they appear in the Bid Form.

Bids under Power of Attorney: In case of Bids made under Power of Attorney or by limited companies, corporate bodies, registered societies, etc. a certified copy of the Power of Attorney or the relevant resolution or authority, as the case may be or a duly certified copy thereof along with a certified copy of the Memorandum & Article of Association and/or Bye Laws must be lodged with the Syndicate Member along with the Bid form at the time of bidding.

Bids should bear the stamp of the Syndicate Member, failing which the same would be rejected.

Bids by NRIs, OCBs or FIIs on a repatriation basis:

i Cash payment will not be accepted by the Syndicate Members for the Book Built Portion. Payment may be made by way of cheque or Stockinvest (subject to applicable laws/guidelines) or demand draft 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 Bid Form or Revision Form is submitted. Outstation cheques or bank drafts, or cheques or bank drafts drawn on banks not participating in the clearing process will not be accepted. Bidders based in cities other than the bidding centres can give demand drafts payable at the location of the bidding centre where the Bid Form or Revision Form is submitted. Such Bidders based in cities other than the bidding centres can submit their Bid Forms or Revision Forms only by hand delivery to the Syndicate Members. Bids sent by post will not be registered by the Syndicate Members.

ii All cheques or drafts must be made payable to the Escrow Collection Bank or Banks and favouring "Name of the Bank Escrow A/c SIL Book Building Offer" and crossed "A/C PAYEE ONLY". In case of payment by cheque or bank draft or Stockinvest (subject to applicable laws/guidelines), a separate cheque or bank draft or Stockinvest must accompany each Bid Form and Revision Form. Bidders are advised to mention the serial number of the Bid Form on the reverse of the instruments to avoid misuse of instruments submitted along with the Bids for equity shares.

iii Where the maximum Bid for equity shares by a Bidder is for the total value of Rs.50,000 or more, i.e. the actual number of securities bid for multiplied by the bid price, is Rs.50,000 or more the Bidder or in the case of a Bid in joint names, each of the Bidders should mention his or 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. In case, neither the PAN nor the GIR number has been allotted, the Bidder must mention "Not allotted" in the appropriate place. Bid Forms without this information will be considered incomplete and are liable to be rejected.

iv All Bid Forms or Revision Forms duly completed and accompanied by Account Payee cheques or drafts or Stockinvest shall be submitted to the Syndicate Member at the time of submitting the Bid. The Syndicate Member may at his discretion waive the requirement of payment at the time of submission of the Bid Form and Revision Form.

v No separate receipts shall be offered for the money payable on submission of Bid Form or Revision Form. However, the collection centre of the Syndicate Member will acknowledge the receipt of the Bid Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid Form for the records of the Bidder, apart from the TRS.

Syndicate Members shall compulsorily take the bid form in writing from the prospective investors in India or abroad.

For further instructions, please read the Bid Form and/or the Revision Form carefully.

i Bid Forms or Revision Forms from Non Residents, duly completed along with cheque or bank drafts or Stockinvest, for the amount payable for Bidding or revisions remitted through normal banking channels or out of funds held in Non Resident External (NRE) Accounts or Foreign Currency Non Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance must be delivered to the Syndicate Member at the time of submission of the Bid Form or Revision Form. Payment will not be accepted out of Non Resident Ordinary (NRO) Account of Non Resident Bidders. Payment by drafts should be accompanied by Bank Certificate confirming that the draft has been issued by debiting to NRE or FCNR Account.

ii All cheques or Bank Drafts accompanying the Bid Form or Revision Form should be crossed "A/c. Payee Only" and made payable to the Escrow Account of the Escrow Collection Bank and marked "Name of the Bank Escrow A/c. SIL Book Building -NR". A separate cheque or bank draft must accompany each Bid Form or Revision Form. Under no circumstances should the Bid Form or Revision Form with remittance be sent to the Company or to the Registrars to the Offer or the Book Running Lead Managers.

The Bidder who is an individual or a Mutual Fund has the option to use the instrument Stockinvest in lieu of cash or cheques or bank drafts for payment of application money, subject to applicable laws/guidelines. The Bidder using Stockinvest should submit the Bid Form or Revision Form along with the instrument to the collection centre of the Syndicate Member mentioned in the Bid Form. Stockinvest instruments are payable at par at all the branches of the issuing bank and as such; outstation Stockinvest instruments can be attached to the Bid Form or Revision Form.

The Bidder may approach the banks concerned for obtaining Stockinvest and detailed instructions for the same. The Bidder has to fill in the following particulars:

Title of the Account as mentioned in the Bid Form

Maximum number of Shares bid for

The maximum amount payable as per the options in the Bid Form or Revision Form

The Bidder should thereafter sign the instrument. It should also bear the stamp of the bank issuing the instrument and should be crossed "A/c Payee Only" and made payable only to "Name of Escrow Bank A/c SIL-Book Building Issue." The Bidder will bear all Service charges for issuing the Stockinvest.

The Bidder should not fill in the portion to be filled up by the Registrars to the Issue (Right hand portion of the instrument). The Registrars to the Issue will fill up the Right-hand side of the Stockinvest indicating the Shares allotted to the Bidders, calculated as follows:

In case of full allotment, the Registrars will enter the number of shares on the right hand side equal to that on the left hand side of the instrument.

b. In case of partial allotment, Registrars will enter a number on the right hand side of the instrument, which will be less than the number filled up by the applicant on the left-hand side.

In case the allotment is nil, Registrars will enter ‘nil’ on the right hand side of the instrument.

The Purchaser should use Stockinvest, and the name of the Purchaser or one of the Purchasers should be indicated as the first Bidder in the Bid Form or Revision Form. Thus, if the signature of the Purchaser on the Stockinvest and the signature of the first Bidder in the Bid Form or Revision Form do not tally, the Bid would be treated as having been accompanied by a third party Stockinvest and is liable to be rejected.

The Purchaser should use the Stockinvest instrument within 10 days from the date of issue of the instrument, failing which, such Bids are liable to be rejected. For the purpose of calculating the 10 days, the last date for use of the Stockinvest for submitting the Bid Form to the Syndicate Member is indicated on the face of the Stockinvest with a notation "to be used before _____________".

The Registrars will not issue a refund order to the Bidders using Stockinvest for payment of money due under the Bid Form or Revision Form. In case allotment of shares is not made, the Registrars will return the cancelled Stockinvest instruments to the Bidders within 15 days of the Issue Closing Date for Book Built Portion, by Registered Post. The Bidder will have to approach the issuing bank branch for lifting the lien.

The Company through Resolution of the Board of Directors passed on the July 13, 2000 has authorised the Registrars to the Issue to sign on behalf of the Company to realise the proceeds of the Stockinvest from the issuing bank or to affix non-allotment advice on the instrument, or to cancel the Stockinvest(s) of the non-allottee. The Registrars shall directly send back such cancelled Stockinvest(s) to the Bidders.

Reserve Bank of India vide its circular no. DBOD No.FSC.BC.100/24.47.001/94 dated September 2, 1994 has restricted the use of Stockinvest(s) to individual investors and Mutual Funds only. Stockbrokers, Corporate Bodies, Banks and Financial Institutions are not allowed to apply through Stockinvest(s). A ceiling of Rs.50,000/- per individual per Stockinvest has been imposed. The above ceiling is not applicable to Mutual Funds. The Stockinvests shall be realised through ______ Bank.

In the interest of the investors, to avoid rejection of applications on technical grounds, it is suggested that the applicant should ensure that:

the date of issue of the Stockinvest by the issuing bank is clearly mentioned on the instrument

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

any correction/alteration in the date of issue, amount, the name of the Issuer, etc., should be attested by an authorised officer of the issuing bank the applicant has clearly written the name of the Issuer, the amount and signed the instrument. The signature on the instrument should tally with the specimen signature of the first named applicant as appearing on the application form

in case the Stockinvest is purchased in joint account, the names of both the account holders should be mentioned in the Stockinvest instrument at the place mentioned for writing the name of the investor the amount written in the application form to be deposited and the amount of the instrument should be the same.

In case of non-allotment, the Registrars to the Issue shall directly send back the cancelled Stockinvest to the Bidders along with the relative advice. The Stockinvest 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 Bidder.

On allotment or partial allotment, the Registrars to the Issue shall fill in the amount (which will be less than or equal to the amount filled by the Bidder) before presenting the Stockinvest 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.

Inquiries relating to Stockinvest may be addressed only to the Registrars to the Issue and not to the issuing bank. The above information is given for the benefit of Bidder and the Company is not liable for any modification of terms of Stockinvest or procedure thereof by issuing banks.

The Registrars shall send back the cancelled instrument to the Bidders directly by registered post within 15 days of closure of the bidding. All conditions mentioned earlier for making a Bid through cheques or demand drafts will also apply to Bids made with Stockinvest.

For further instructions, please read the Bid Form carefully.

After the Company have received the entire Issue proceeds for the Book Built Portion, it will proceed to complete the allotment formalities for the Book Built Portion. The allotment under the Book Built portion will be compulsorily in dematerialised from. The Bidder may at his/her discretion rematerialise the shares afterwards. After allotment all Bidders will receive credit for these shares directly in their depository accounts.

Investors may please note that the Issuer reserves the right to cancel the issue after the bidding.

Only individual investors, including NRIs, can apply in the Fixed Price portion. Applications by HUFs (to be made in the name of ‘karta’) would be treated under ‘individual’ category.

Minors, Foreign Nationals and Persons who have got an allocation in the book built portion

Availability of Offer Document and Application Forms: Application forms for the Fixed Price Portion along with the copies of the Offer Document and/or Abridged Offer Document may be obtained from the Registered Office of the Company, from BRLM, Co-BRLM, Lead Managers and at the collection centres of the Bankers to the Issue.

Applications must be:

Made only in the prescribed Application Form, as applicable, completed in full, in BLOCK LETTERS in ENGLISH in accordance with the instructions contained herein and in the Application Form and are liable to be rejected if not so made.

For a minimum of ___ shares and in multiples of ____ shares thereafter.

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

Thumb impressions and signatures other than in the languages specified in the Eighth Schedule in the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under his or her official seal.

Bank Account Details of Applicant: The name of the applicant’s Bank, type of account and account number must be filled in the Application Form. This is required for applicants’ own safety and these details will be printed on the refund orders, if any. Applications without these details would be treated as incomplete and are liable to be rejected. Applicant’s

Depository Account Details: The investor has an option to get his shares using the Depository mode. Investors desirous of availing of this facility should mention their Depository Participant’s name, DP-ID and Beneficiary Account Number in the Application Form. In case an applicant seeks allotment of certain number of shares in dematerialised form and the remaining in physical form, these would be clubbed for the purpose of arriving at the basis of allotment. Further it may be noted that the allotment of shares would be first done in the electronic form and then in the physical form. However, if the same applicant submits two applications one for physical shares and the other for shares in dematerialised form, such applications will be treated as multiple applications and are liable to be rejected. In case of Applications submitted in joint names, it must be ensured that the Depository Account is also held in the same joint names and which are in the same sequence in which they appear in the Application Form

In the case of applications made under Power of Attorney or by Limited Companies, corporate bodies, trusts, etc., a certified copy of the Power of Attorney or the relevant authority to make an application, as the case may be and the Memorandum and Articles of Association and/or bye-laws must be lodged separately, along with a photocopy of the Application form, at the office of the Registrars to the Issue simultaneously with the submission of the Application Form (or later but so as to reach the Registrar within 7 days from the Issue Closing Date for Fixed Price Portion), indicating the name of the applicant along with the address, application serial number, date of submission of the Application Form, name of bank and branch where it was deposited, cheque/draft was drawn. Failing this, the Company reserves the right to accept or reject any application in whole or in part, in either case, without assigning any reason thereof.

PAN/GIR Number: Where an application is for a total value of Rs. 50,000 or more, i.e. _____ shares or more, the applicant or in case of applications in joint names, each of the applicants should mention his/her/their Permanent Account number (PAN) allotted under Income Tax Act, 1961 or where the same has not been allotted, the GIR Number and the IT Circle/Ward/District. In case where neither the PAN nor the GIR Number has been allotted, or the applicant is not assessed to Income Tax, the appropriate box provided for the purpose in the application form must be ticked. Applications without this will be considered incomplete and are liable to be rejected.

Joint Applications in the case of individuals: Application can be in single or joint names (nor more than three). In the case of joint application, all payments will be made out in favour of the first applicant. All communications will be addressed to the first named applicant whose name appears in the Application form at the address mentioned therein.

Multiple Applications: An applicant should submit only one application form (and not more than one) for the total number of equity shares applied for. Two or more applications in single or joint names will be deemed to be multiple applications if the sole and/or first applicant is one and the same.

Separate applications for electronic and physical equity shares by the same applicant shall be considered as multiple applications. The Company reserves the right to accept or reject, in its absolute discretion, any or all multiple applications.

A separate single cheque/draft/Stockinvest must accompany each application form.

Note: Applicants are requested to write their names and application serial number on the reverse of the instruments by which the payments are being made to avoid misuse of instruments submitted along with the applications for equity shares.

Applications by NRIs on non-repatriation basis can be made using the Form meant for Public (white in colour) out of the funds held in Non-Resident (Ordinary) Account (NRO). The relevant bank certificate must accompany such forms. Such applications will be treated on par with the applications made by the public.

Payment may be made by way of cash or cheque/demand draft/Stockinvest (money/postal orders will not be accepted) 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 place where the application form is submitted, i.e. at designated collection centres.

Outstation cheques/demand drafts drawn on Banks not participating in the clearing process will not be accepted.

All cheques/demand drafts accompanying the Application Form should be marked as follows: Cheque/bank draft must be made payable to the bankers to the issue and marked "A/c SIL - Public Issue" and crossed "A/C payee only". For e.g. "Name of the Bank- A/c SIL - Public Issue"

All Stockinvests should be made payable to "Name of the Bank A/c SIL - Public Issue." and crossed "A/C PAYEE ONLY".

The applications shall be made only by way of cash/cheque/demand draft/Stockinvest. However, if the amount payable on application is Rs. 20,000 or more, such payment must be effected only by way of an account payee cheque/Stockinvest or Bank draft in terms of section 269SS of the Income-tax Act, 1961. Otherwise the applications may be rejected and application money refunded without any interest.

Application Forms from Non Residents, duly completed along with cheque or bank drafts or Stockinvest, for the amount payable remitted through normal banking channels or out of funds held in Non Resident External (NRE) Accounts or Foreign Currency Non Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance must be delivered to the designated branches of the Bankers to the Offer. Payment by drafts should be accompanied by Bank Certificate confirming that the draft has been issued by debiting to NRE or FCNR Account.

All cheques or Bank Drafts accompanying the Application Form should be crossed "A/c. Payee Only" and made payable to the Escrow Account of the Escrow Collection Bank and marked "Name of the Bank Escrow A/c. SIL Public Issue-NR". A separate cheque or bank draft must accompany each Application Form. Under no circumstances should the Application Form with remittance be sent to the Company or to the Registrars to the Offer.

Refunds, dividends and other distributions, if any, will be payable in Indian Rupee only and net of bank charges and/or commission. In case of Applicants who remit money payable upon submission of the Application Form through Indian Rupee Drafts from abroad, such payments in Indian Rupees will be converted into US Dollars or any other freely convertible currency as may be permitted by RBI at the rate of exchange prevailing at the time of remittance and will be despatched by Registered Post or if the applicants so desire, will be credited to their NRE Accounts, details of which should be furnished in the space provided for this purpose in the Application Form. The Company will not be responsible for loss, if any, incurred by the Applicant on account of conversion of Foreign Currency into Indian Rupees and vice-versa.

Applicants, being Individuals and Mutual Funds only, have the option of using the "Stockinvest" instrument for payment of application money in lieu of cash/cheque/demand draft. Applicants using Stockinvests should submit them along with the application form to any of the collecting centres/Bankers to the Issue mentioned in the application form. Stockinvests should be payable at par at all the branches of the issuing Bank and as such outstation Stockinvests can be attached to the application forms. Applicants can approach the Banks concerned for obtaining Stockinvest and detailed instructions for the same.

The applicant has to fill in the following particulars:

Title of the Account as mentioned in the Application Form.

Number of equity shares applied for.

The amount payable on the equity shares applied for:

The instrument should thereafter be signed by the applicant. It should also bear the stamp of the Bank issuing the instrument and should be crossed "A/C Payee Only" and made payable only to "Name of the Bank A/c SIL - Public Issue". Service charges, if any, for issuing the Stockinvest must be borne by the applicant. The applicant should not fill in the portion to be filled up by the Registrars to the Issue (right-hand portion of the instrument). The Registrars to the Issue will fill up the right-hand side of the Stockinvest indicating the equity shares allotted to the applicants, calculated as follows:

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

In case of partial allotment, the number filled up by the Registrars to the Issue on the right-hand side of the instrument will be less than the number filled up by the applicant on the left-hand side;

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.

The Stockinvest should be used by the Purchaser and the name of the Purchaser/one of the Purchasers should be indicated as the first applicant in the Application Form. Thus, if the signature of the purchaser on the Stockinvest and the signature of the first applicant in the application form do not tally, the application would be treated as having been accompanied by a third party Stockinvest and is liable to be rejected.

The Stockinvest instrument 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. For the purpose of calculating the 10 days, the last date for use of the Stockinvest for submitting the Application Form to the Bankers to the Issue is indicated on the face of the Stockinvest with a notation "to be used before ——————".

No refund order will be issued to the applicants using Stockinvest for payment of application money. In case of non-allotment of equity shares, the cancelled Stockinvest instruments will be returned to the applicant, within 15 days of closure of subscription list by Registered Post/Speed Post. The applicant will have to approach the issuing Bank branch for lifting the lien.

Registrars to the Issue have been authorised by the Company (through Resolution of the Board of Directors passed at its meeting held on the August 16, 2000 to sign the Stockinvests on behalf of the Company, to realise the proceeds of the Stockinvest from the issuing Bank, or to affix non-allotment advice on the instrument, or to cancel the Stockinvest(s) of the non-allottee. Such cancelled Stockinvest(s)shall be sent back by the Registrars directly to the investors. The currency of the Stockinvest is four months.

Reserve Bank of India; vide its circular DBOD No. FSC.BC.100/24.47.001/94 dated September 2, 1994 has restricted the use of Stockinvest(s) to individual investors and Mutual Funds only. Brokers, Corporate Bodies, Banks and Financial Institutions are not allowed to invest through Stockinvest(s). A ceiling of Rs. 50,000/- per individual per Stockinvest by Banks has been imposed. The above ceiling is not applicable to Mutual Funds.

In the interest of the investors, to avoid rejection of applications on technical grounds, it is suggested that the applicant should ensure that:

The date of issue of the Stockinvest by the issuing bank is clearly mentioned on the instrument

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

The instrument bears the code number and the address of the issuing bank branch

Any correction/alteration in the date of issue, amount, the name of the Issuer (i.e. Sovika Infotek Limited), etc. should be attested by an authorised officer of the issuing bank

The applicant has clearly written the name of the Issuer, the amount and signed the instrument

Amount written in the application form to be deposited and the amount of the instrument accompanying the application form should be the same

Note: The above information is given for the benefit of investors and the Company is not liable for any modification in the terms of the Stockinvest or procedure thereof by the issuing bank.

All applications duly completed and accompanied by cash/cheques/demand drafts/Stockinvests shall be submitted at the branches of the Bankers to the Issue (listed in the Application Form) before the closure of the Issue. Application Forms along with Bank Drafts payable at Mumbai can also be sent by registered post with acknowledgement due to the Registrars so that the same can be received before the closure of the subscription list. Applications should NOT be sent to the Office of the Company or to the BRLM & Co-BRLM to the Issue.

No separate receipts will be issued for the application money. However, the Bankers 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 at the bottom of each application form.

Applications shall be deemed to have been received by the Company only when submitted to the Bankers to the Issue at their designated branches or on receipt by the Registrars as detailed above and not otherwise.

For further instructions, please read the application form carefully.

The Company reserves the right to accept or reject, any application, in whole or in part, without assigning any reason thereof. If the application is rejected in full, the whole of the application money received will be refunded by Registered Post to the applicant. If the application is accepted in part, the excess application money after adjusting for the amount payable on allotment, if any, will be refunded to the applicant. Such refund, if any, will carry interest @ 15% p.a. after 15 days from the closure of the Issue for the period of delay beyond 15 days.

The equity shares of the Company have been admitted for dematerialisation by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) vide a tripartite agreement dated _____2000, signed between the Company, NSDL and the Registrar. A similar agreement dated ______2000 has been signed between the Company, CDSL and the Registrar, to enable all shareholders of the Company to have their shareholding in electronic form.

An applicant has the option of seeking allotment of Equity Shares in electronic or in physical mode. However, for investors applying in 60% institutional and 15% non-institutional category, allotment will be in compulsory dematerialised form.

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

The applicant seeking allotment of shares in the electronic form must necessarily fill in the details (including the beneficiary account number and Depository Participant’s ID number) appearing under the head ‘Request for shares in electronic form’. An applicant who wishes to apply for shares in electronic form must have at least one beneficiary account with any of the Depository Participants (DPs) of NSDL or CDSL, registered with SEBI, prior to making the application. Shares allotted to an applicant in the electronic account will be credited directly to the respective beneficiary account.

For subscription in electronic form, names in the share application form should be identical to those appearing in the account details in the depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the depository.

Non-transferable allotment letters/refund orders will be directly sent to the applicant by the Registrar to this Issue.

Investors, in their own interest should verify that correct details of DP and beneficiary account are given in the bid form/application form. In case the information is incorrect or insufficient, the Issuer would not be liable for losses, if any. In case of the fixed price portion, incorrect or insufficient, the application form will be assumed as an application for shareholding in physical form.

Investors, while making the application in joint names in the dematerialised form should have the dematerialised account in the same sequence as mentioned in the application form.

The applicant is responsible for the correctness of the applicant’s demographic details given in the application form
vis-a-vis those with his/her DP.

In case of partial allotment, allotment will be done in dematerialised mode for the shares sought in dematerialised form and balance, if any will be allotted in physical form.

Trading in the shares shall be in dematerialised form only.

It may be noted that the electronic shares can be traded only on the Stock Exchanges having electronic connectivity with NSDL and CDSL.

Investors who have indicated their preference for holding shares in a dematerialised form will have to follow the steps mentioned below:

The Bidder or applicant will fill up the Depository Instruction Section in the Bid Form or Application Form that will authorise the Company to allot shares to him in the electronic form

The Bidder or applicants may apply for a part of shares in dematerialised form and the balance in physical form. This should be indicated under the heading "Request for shares in Electronic Form" in the Bid/Application Form.

The Company has been advised by the Auditors, M/s.P.C. Ghadiali & Co., Chartered Accountants, vide their letter dated 5th October, 2000 that under the current provisions of the Income-tax Act, 1961 and other applicable Direct Tax Laws for the time being in force the following benefits and deductions are available to the Company and its members:

The auditors of the Company have given their consent to include the opinion, referred below, regarding the tax benefits available to the Company and its shareholders in the Prospectus.

As per provisions of Section 32 of the Act, the Company is entitled to claim depreciation on tangible and specified intangible assets as explained in the said section.

Under Section 10 B of the Income Tax Act, 1961 any profits and gain derived by the Company from a hundred percent export oriented undertaking would not be included in the total income. in accordance with and subject to the conditions specified in that section.

Under Section 10(33) of the Act, dividend referred to in Section 115-O of the Act received by the Company will be exempt from income tax

As per the provisions of section 10(33)of the Act, any dividend received from the domestic company is exempt from tax provided the domestic company has discharged its liability of tax on distributed profits in accordance with section
115-O of the Act.

Gains arising from sale of shares held for a period of more than 12 months preceding the date of transfer will be treated as long term capital gain and will be subject to taxation as set out in succeeding paragraphs.

In accordance with and subject to fulfilling the conditions specified in the section 54EC of the Act, the shareholders will be entirely/proportionately exempt from long term capital gains arising on sale of shares of the company provided the long term capital gains are wholly/partly invested in any long term specified assets within six months from the date of transfer of shares.

In accordance with and subject to fulfilling the conditions specified in Section 54F of the Act, the shareholders, being individuals or Hindu Undivided Families (HUF) will be entirely/proportionately exempt from long term capital gains arising on sale of shares of the Company provided the net consideration is wholly/partly invested within the specified time limits in the purchase/construction of a residential house.

Under Section 48 of the Act, long-term capital gains arising out of the sale of shares shall be computed after indexing the cost of acquisition/improvement. The long term capital gains shall be taxed under Section 112 at rate of 20% (plus surcharge as applicable), provided that where the tax payable thereon exceeds 10% (plus surcharge as applicable) of the amount of capital gains computed without indexing the cost of acquisition/improvement, then such excess shall be ignored.

A. In all cases:

Under Section 48 of the Act, the capital gains arising out of transfer of equity shares shall be computed by converting the cost of acquisition, expenditure incurred wholly and exclusively in connection with such transfer and full value of consideration received or accruing as a result of the transfer of shares, into the same foreign currency as was initially utilised in the purchase of shares. The capital gain computed in such foreign currency would be reconverted into Indian currency. However, in such a case the non-resident will not be entitled to the benefit of Indexation. The above method of computation will be applicable to the original investment so also the subsequent reinvestment.

The long-term capital gains arising on sale of shares shall be taxed under Section 112 at the rate of 10% (plus surcharge as applicable). At present, however no surcharge is leviable on a foreign company.

In case of a Non Resident Indian Shareholders (NRI’s) :

The NRI has an option to be governed by the provisions of Chapter XII - A of the Act, which entitles them to the following benefits in respect of income from shares of company acquired in convertible foreign exchange:

Under section 115E of the Act, 1961, any income by way of long term capital gains arising on transfer of shares shall be charged to income tax at the rate of 10 % (plus surcharge as applicable).

Under section 115 F the Act, 1961, any long term capital gains arising from transfer of shares acquired / subscribed in convertible foreign exchange shall be exempted from income tax entirely/ proportionately, provided that the net consideration is invested wholly or in part in specified assets, or in any saving certificates referred to in clause (4B) of section 10 of the Act, 1961, within six months of the date of transfer of shares. However, the amount so exempted shall be chargeable to tax if the specified new asset so acquired is transferred or converted into money within three years from the date of acquision.

Under section 115 G of the Act, 1961, the NRI is not obliged to file a Return of Income under section 139 (1), if his total income consists only of income from investments and/or long term capital gains earned on transfer of such investments and tax at source has been deducted from such income as required under the provisions of the Act.

Under section 115 H, the NRI has an option to avail of the special provisions of sections 115 E, 115 F and 115 G even when he becomes a resident in any subsequent year. For this purpose, a declaration has to be furnished along with the return in the previous year in which he first becomes a resident, and if he does so, the special provisions of sections 115 E to 115 G will be applicable in respect of the specified income until transfer or conversion into money of the shares.

Under section 115 I of the Act, the NRI has the option of not being governed by the provisions of Chapter XII - A for any assessment year, pursuant to which his total income for that assessment year (including income arising from investment in the shares of the company) will be computed in accordance with other provisions of the Act.

Under section 115- AD of the Act, Foreign Institutional Investors will be charged to tax at 20 % (plus surcharge as applicable, if not a company) on income (other than income by way of dividends referred to in section 115- O) from securities (other than units referred to in section 115 AB), at 10 % (plus surcharge as applicable, if not a company) on long term capital gains arising from transfer of securities and at 30 % (plus surcharge as applicable, if not a company) on short term capital gains arising from transfer of such securities. Such income and capital gains will be computed in the manner set out in the said section.

However, the FII will not be entitled to the benefit of indextion and method of reconversion in foreign currency available to non- residents for the purpose of computing capital gains.

Under the provisions of section 10 (23D) of the Act, any income (including dividends from shares), earned by a mutual fund registered under The Securities and Exchange Board of India Act, 1992, or set up by a public sector bank or a public financial institution, or authorised by the Reserve Bank of India will be exempt from income-tax, subject to such conditions as the Central Government may by notification in the Official Gazette specify in this behalf.

There is no liability under the Wealth Tax Act, 1957 in respect of the investment in the shares of the company.

No liability for gift tax will arise in respect of any gift made on or after 1st October, 1998. Therefore, any gift of shares made will not attract gift tax.

The present offer of equity shares is being made to -

1. To set up software development centre at Mumbai.

2. To acquire office premises for Branches at Delhi, Hyderabad, Banglore, Pune and Baroda.

3. To invest in overseas subsidiary Company at U.S.

4. To acquire technology companies.

5. To acquire iCRM rights from ProCRM.

6. To meet expenses of portal development.

7. To Meet the requirement for working capital.

8. To Meet the expenses of the issue.

9. To list the equity shares of the company on The Stock Exchange, Mumbai The National Stock Exchange, and Ahemedabad Stock Exchange.

The Main object clause of the Memorandum of Association of the Company enables the Company to undertake the activities for which the funds are being raised in the present Issue. The activities, which the Company is carrying on until now, are in accordance with the object clause of the Memorandum of Association of the Company.

The fund requirements and use of proceeds have been appraised by the Bank of Madura Limited vide appraisal letter No. Co./MBD/544/2000-01 dated23/11/2000. Details of the fund requirements for various activities, as estimated by the Company and appraised by Bank of Madura are as under:

As SIL has plans to expand its operations, by strengthening the software research and development, providing
e-commerce solutions, Voice Navigation, increasing off-shore software development and development of products. For attaining the above objectives, it proposes to expand its software development center in Mumbai with state-of-the-art high speed data communication links, set-up overseas office in USA and upgrade the existing hardware, software and infrastructure facilities and also to set up hardware, software and infrastructure facilities to match the business growth projected.

The company has also plans to open centers in major cities and metros, in India.

The Company proposes to acquire property located at Safedpool, Andheri Kurla Road, Mumbai 400 072, about 10000 Sq.ft. The Company also proposes to acquire office premises at Delhi, Hyderabad, Bangalore, Pune & Baroda. The total cost, including stamp and registration is estimated at 357.50 lakhs.

After acquiring the Office premises, the work relating to interiors and furnishings will be taken up. The cost is estimated at Rs.70.00 lakhs for Mumbai, Rs.24.00 lakhs for Overseas Offices, and Rs.15.00 lakhs for 5 local branches.

The company proposes to acquire the requisite hardware and software, which is estimated at Rs.246.80 lakhs and Rs.14.15 lakhs respectively in addition to the existing.

The company proposes to acquire the requisite Airconditioners, UPS, gensets and other assets, including vehicles for domestic and overseas office, worth Rs.140.00 lakhs.

Contingencies in respect of acquisition of fixed assets have been estimated at 8.50 %.

The company has already entered into an agreement with ProCRM.COM., USA, in this respect. As per the agreement, the cost of such right is US$ 7,50,000 (Indian Rs.330.00 lakhs).

The cost of developing two portals is estimated at Rs.440.00 lakhs.

Pre-operative expenses towards salary and other establishment expenses are capitalized under this head and apportioned over Building and plant & machinery. This includes deferred revenue expenses relating to Portal development, which is estimated @ 20 %.

The total expenses towards statutory and marketing costs for the issue are estimated at approximately Rs.210lacs, which will be borne out of the proceeds of this issue. The issue expenses consist of underwriting fees payable to BRLM, selling commission, fees to Escrow bankers, fees to Registrar to the Issue, printing and stationery expenses, advertising expenses and marketing expenses and all other expenses for listing of equity shares in Stock Exchanges.

Deposits include the rental deposit for existing office premises, overseas office premises, telephone deposits, Electricity, Water and other deposits. The total deposits esimated by the company and as appraised by the appraisee Bank are Rs.204.00lacs.

Presently the company is not availing of any working capital facilities from banks. The Company’s working capital requirement is limited to expenses of general nature, salaries and wages and debtors. The Companies working capital requirement is limited to expenses of general nature, debtors and prepared license fees. A sum of Rs. 287.24 lacs is provided in the cost of project, which will sufficient to meet these requirements. The Company does not propose to avail of any bank finance for working capital. The estimate of long term working capital requirement is as under. The working capital requirement would be met through proceeds of the Issue and through internal accruals. The estimate of long-term working capital requirement is as under

(Rs.in lacs)

Salaries and wages expenses provision for two months to be converted in to WIP

Administrative Expenses assumed at two months

Book Debts has been calculated on two month’s sales

Current Liabilities includes Provision for Taxes, Dividend Payment and Dividend tax.

Investment in subsidiary company at U.S. is esimated to be Rs. 105.00 lacs. The company proposes to acquire IT companies. The cost of such acquisition estimated to be Rs.270.00 lacs.

The project implementation schedule is as detailed below:

The year wise break-up of funds requirement is given below (Rs. in lacs):

The fund requirement of the projects, as detailed above, is proposed to be financed as follows:

The appraiser, Bank of Madura Limited has sanctioned Term Loan of Rs.316.00 lacs to part finance the project vide its letter no.1087/00/01 dated 9/12/2000. The terms of the sanction letter are as under.

Facilities Sanctioned : Term Loan

Limit : Rs.316.00 lacs (Rupees Three Crore Sixteen Lakhs Only)

Interest : 15.50%

Margin : 65.00%

Period : Repayable in 16 quarterly instalments after holiday period of one year from date of availment. Interest is to be serviced as and when debited even during the holiday period.

Purpose : For purchase of land and building at a total cost of Rs.357.50 lacs and Furniture & Fixtures, Motor Cars, Computer Hardwares and other fixed assets for a total cost of Rs.548.74 lacs.

Security - Primary :

Equitable Mortgage of land and building of office premises at Safedpool, Andheri Kurla Road, Mumbai – 72 of about 10,000 sq.fts. valued Rs.282.50 lacs (approx.) and proposed branch office properties at Delhi, Hyderabad, Bangalore, Pune and Baroda at a total cost of Rs.75 lacs. Total Value of above properties is Rs.357.50 lacs. Both the above subject to obtention of Legal Opinion / Valuation from our Panel Lawyer / Valuer, latest tax receipt and upto date Nil EC.

Hypothecation of the following assets to be purchased at a total cost of Rs.548.74 lacs as detailed below :

Computer Hardware : Rs.246.80 Lacs

Furniture & Fixture : Rs. 92.58 Lacs

Motor Cars : Rs.135.95 Lacs

Misc. Fixed Assets : Rs. 73.41 Lacs

Collateral : NIL

Shri. Sahil S Mehta (Promoter)

Shri. Sohan C Mehta (Promoter)

Shri. Shirish K Desai (Promoter)

Legal Opinion, Fresh Valuation Report, upto date Nil EC and latest Tax receipt for the property to be mortgaged to be submitted before the release of the limit.

Assets Hypothecated to us less site value should be insured for its full value with bank clause.

The Promoter Directors should give an undertaking letter not to dilute/encumber their stake during the currency of our loan from the existing level i.e. Post Public Issue Level.Loan will be released and kept in Non-operative current account till public issue is completed. Only upon allotment branch will release the loan for the stated purpose. Please note that if the Company is not acceptable to current account, the proceeds of the loan can be kept in FD account.Utilisation of the loan proceeds to be allowed only after funds from the following sources has been invested in the business and Auditors Certificate is submitted to this effect confirming the end use :

Promoters Share : Rs. 556.00 lacs

MFs and Other Institutions : Rs. 200.00 lacs

Public Issue : Rs. 240.00 lacs

Share Premium : Rs.2049.92 lacs .

Branch will release the loan amount directly to the dealers on collection of margin money from the Company.

Loan will be released in stages as per the requirement of the Company

Original invoices / receipts to be submitted to the bank.

Interest to be serviced as and when debited during the holiday period.

The limit will get automatically cancelled if not availed within two months from the date of this communication.

Processing charges are to be paid by you as prescribed by the bank.

The Bank however, reserves its right to recall advance(s) at any time if deemed necessary and to review and change the terms and conditions of the credit facility, including the interest rate at anytime at its discretion.

The Bank of Madura retains the right to nominate a Director on the Board of the Borrower Company and/or appoint a part-time or full-time Concurrent Auditor at its discretion if there is a default in interest or principal payment for two quarters. The remuneration and expenses for such appointments should be borne by the borrower Company.

The Borrower shall not entertain any proposal involving merger or take over or amalgamation or reconstitution or any other similar process affecting their networth or composition of assets and liabilities or management control, without our consent.

The Promoters should not divest their stake in business in the form of equity shares / convertible preference shares / convertible debentures / warrants without our consent.

The borrower should not dispose-off any unit or division without our consent.

The borrower should not extend guarantee for repayment of debt obligations of their group entities or any other entity without our consent.

Please confirm that all Computerised Systems / Equipments used by you are Year 2000 (Y2K) compliant as per the definition of British Standards Institute Technical Committee which reads as under:

Y2K conformity shall mean that neither performance nor functionality is affected by dates prior to, during and after Year 2000.

The Auditors of the Company has certified the total expenses incurred on the project as on 31/08/2000:

SOVIKA INFOTEK LIMITTED (SIL) formerly known as NOVA SOFTWARE PRIVATE LIMITED Company was originally incorporated on 6th November 1992 under Companies Act 1956 as NOVA SOFTWARE PRIVATE LIMITED. Subsequently name is changed to SOVIKA INFOTEK PRIVATE LIMITED on 11th May 1999 and converted on 10th March 2000 as limited Company to SOVIKA INFOTEK LIMITED. The Company is part of the Sovika Group of companies, which has diversified interests in Chemicals, Aviation related services, Real Estate, and Information Technology. SIL is registered as a 100 % EOU with the Software Technologies Park, Pune. The Company is engaged in multi businesses involving the information Technology Industry, including software development and exports, software product development, software product marketing networking solutions.

SIL has a 100% subsidiary in the US mainly to cater to the needs of the US market with respect to on site consulting and placement activities. The US subsidiary mainly acts as the marketing arm for the Indian outfit for outsourcing projects to India.

: Off shore software development & exports

: Marketing of iCRM products

: Software Product Marketing

: AHS services

: Portal Development & e-Commerce

: Research & Development on wireless & WAP

: Research & Development in Voice Navigation. Application Services

The Company has been executing projects for clients in India and abroad, so far. Its client base and the companies for which it has done off- shore projects include Fortune 500 Companies such as Computer Associates Inc., other companies such as Vikor. Inc., Simplex Solutions Occidentals LLC, Softcel inc., in the US and Indian corporates such as Kores India Ltd., Ushdev International Ltd., Fortune Financial Services (India) Ltd.

The Company is one of the web based Customer Relationship Management (CRM) solution’s providers. The Company has also diversified into portal development and has launched a community based; first bilingual portal calledWWW.maniben.com which is a very unique concept on the World Wide Web. The portal of the company has hosted some spiritual events such as virtual Ganesh Pooja, live Ganesh Darshan in Ganpati Festival. During the Navratri the company has hosted the virtual Ambe Maa Pooja and selected clip events of one of the famous dandiya of Mumbai.

SIL has a 100% subsidiary in the US mainly to cater to the needs of the US market with respect to on site consulting and placement activities. The US subsidiary mainly acts as the marketing arm for the Indian outfit for outsourcing projects to India.

SIL has a state of the art development centre in Mumbai with all the latest equipment and infrastructure to undertake any project or development work. The Company has a development team of 36 people (which is rapidly expanding) including a dedicated Quality Assurance (QA) team. It also has in-house engineers and support managers to handle any hardware trouble shooting. SIL today boasts of core skills such as :

Advanced Java

C, C++

VBC++

Database People ( Oracle, Access, Ingress)

Networking People (NT, Novell, Unix)

Web Developers

E-Commerce

Omnis

Corba

Internet & Intranet

Sovika Infotek Ltd. has been recommended for ISO9001certification by TUV India Private Ltd. The process for getting SEM-CMM level certification will begin shortly and the company hopes to complete this process as well by the end of the March,2001.

The core strength of the company as far as technology is concerned has always been the internet arena. The company has always been extremely strong both on Microsoft as well as Sun platforms for development in the internet domains. The company has also been certified for both MCSP by Microsoft & also Sun developer Connection programme by Sun Microsystems.

The company without disturbing its core strengths has also started actively focussing & doing aggressive R&D on the wireless & WAP models. The Company is one of the pioneers in the country to start development in the cutting edge technologies such as voice navigation applications. This will help the existing many portals to voice enable their sites. It will also help chip makers to come out with voice enabled chips which can be used by mobile phone manufacturers, computer manufacturers etc. Embedded system is another area where the company is trying to establish a niche for itself. The company has also started doing R&D on GPRS4 applications.

Besides the above the company is in the first phase of setting up its own data center to host its products for the ERP, CRM & KMS applications. The company’s CRM products are already well accepted both in the Indian as well as US markets. In India Tata Special Steels Limited through Thakral Computers is the first customer to implement company’s entirely web based CRM solutions. Besides Tata Special Steels Limited, the second implementation is in process at Bridge Information Systems. The company is at advanced stages of negotiations with many other corporate to implement this solution. The company’s knowledge management solution has already been implemented at large business group called Neterwala Group of companies. The advanced features of this KMS is document management & intelligent search functions. By launching these solutions on an ASP model the company hopes to tap the number of SMEs (Small and Medium Enterprises) who require these sort of solutions to increase their sales to retain customers.

Since inception Sovika is involved in Software Development & Exports. The company has list of customers, which it serves on a regular basis for their requirements of off shore software development. Sovika ( through Strategic Associates) has done projects for some of Fortune 500 companies like Computer Associates, Sun Microsystems, Allmerica Financial Services, Inc, Astea International, etc. All the projects done for the above mentioned companies involved strict deadlines, extremely tight quality testing and so forth. Sovika was able to overcome all of the above and in all the cases has received repeated projects from most of its overseas customers.

SIL has diversified into portal development and has launched its own portal called www.maniben.com. Which is a very unique concept on the World Wide Web. It is the first Bilingual portal in the world to provide content in both, English and Gujarati. The Dynamic font technology employed in this portal will enable users to access and download Gujarati language content without the need of special font software on their PC’s.

The portal of the company provides Content, Services and Business Opportunities to Gujarati members. It will make an effort towards building, and bringing together the entire Gujarati people by elaborating on their roots, and the fact that though dispersed all over the world and nor restricted to their native region in India.

The website of the Company aims at providing social and financial Services. There will also be efforts to provide Personal Services. This service will take special care to address the needs of Gujarati NRI population. For instance, it would provide a facility to teach children how to read and write Gujarati, using the contents of the site as a Course Material.

The Gujarati people, especially members residing abroad, have expressed the needs for access to news from Gujarat, at the district level. www.maniben.com will use its spread to obtain and disseminate district-level news to the people.

www.maniben.com currently consists of twenty-two different Sections, which include about 10,000 pages. It will concentrate on providing the Gujarati people with Information and Services in these broad areas:

Additionally, SIL has also started offering e-commerce services to its clients specializing in B2B & B2C scenarios.

The Company is also in process of process of launching one more bilingual portal in punjabi on the similar line as "maniben.com". The name of the proposed portal is "virji.com". The main features of the portal shall be the same on the line of existing portal of the company.

The portal will have the shopping mall where the portal will receive commission or flat rate for tie-ups with other malls. Portal is also developing its own mall where it will sell goods at a profit. The Company also proposes to start their real estate selling where the Portal will play the role of an estate agent and will be selling property from Gujarat to the NRI’s.

The Company sells space for advertisements. There are two options viz. one to give an ad banner and the other to sponsor the whole section. There are also other ways to advertise on maniben for e.g. write-ups.

Maniben has already been negotiating with a couple of dot coms and other organisations for content selling. Here maniben will part with its content for considerations. Maniben can also play a part as a content provider for websites who wish to enter the dot coms.

Maniben can cash in on its database that it has built up with all the registered users that the Portal has.

Maniben also plans to enter another market, which is a very niche market. The company also plans to sell customise content related to specific areas only. In this people will send in their request for content required to related issues e.g. Jainism or Educational etc. and the company will charge them for the service rendered to them.

Sovika has been involved in Software Product development since 1996, when its first product SATISFY hit the stands in the US. This product was developed for one of its customers in the US. It is based on the Survey Automation Tool for Customers concept.

The other product that Sovika developed, again for the same customer was iCOSM - Internet based Contract Service Management, used mainly within large organisations for their project management activities.

The current product that Sovika is involved in since the last year and a half is based on the latest requirement CRM (Customer Relationship Management). The company has developed a world class web based product called iCRM (Internet based Customer Relationship Management) on this concept for the U.S. based client PROCRM. The company has also been appointed as exclusive distributors for this product worldwide and non-exclusive for U S & Canada. The marketing partners for this product in US & Canada are Computer Associates.

Sovika has launched this product in India at the end of year 1999 and has already achieved major success by capturing 2 (Two) orders. One from the largest Industrial houses in the country - The Tata Group through Thakral Computers. The product is already implemented at Tata Special Steels Ltd. for their entire Indian operations and second order from the M/s. Bridge Information Systems who are leading in the business of providing informations on commercial basis. Negotiation with some more parties are at developed stage & orders are likely to finalise very soon.

The CRM industry worldwide as per Gartner Group was valued at over $500m and is expected to touch more than $11bn by the year 2003. The company has plans to develop this market in India and the rest of Asia where it is still picking up.

The other product that the company is marketing is also based on the CRM concept but is suitable for small to medium scale industries. The product called marketrievePLUS has been well proven in US market since the last 11 years and has an installation base of almost 7000 customers. This is product of Mehta Corporation, USA. The Company is sole distributor for this product for Asia. Sovika launched this product in the Indian market in June last year and since then has an installation base of more than 20 locations in Mumbai alone and already has a set up a dealer network in cities like Delhi, Bombay, Goa, Baroda & Pune. The company has received a order from Kores India LTD for implementing marketrievePLUS for their entire Indian operations.

SIL is going to start a unique concept of AHS services in India for its CRM solutions. The concept is widely used by customers in Europe & US but in India it is yet to take-off. The company will be one of its kinds in India to offer these services to its clients. The service is expected to be launched in first quarter of 2001.

The company has appointed channel partners in Australia, Singapore & Dubai besides various partners in India and this process is still continuing and eventually company intend to open its own branches at 5 (Five) Locations in India & 8 (Eight) International Locations. The proposed locations are Baroda, Banglore, Delhi, Hyderabad and pune in India. At overseas the company proposes to open branch offices at following locations.

Dubai

Frankfurt

London

Los Angels

Nairobi

Paris

Singapore

Tokyo

ProCRM.com is a Boston, MA based corporation specializing in CRM solutions. ProCRM.com is a division of Mehta Corporation. Mr. Ashwin Mehta who is brother of Mr. Sohan Mehta (one of the Promoter of Sovika Infotek Limited) and is having controlling interest in Mehta Corporation ProCRM has tied up with Computer Associates, Inc to market their web based solution iCRM in the US. The entire enterprise application solution has been developed at Sovika facilities in Bombay with technical guidance and specifications from ProCRM. Sovika has entered into an agreement with ProCRM to develop and enhance this product to suit the needs and requirement of their direct clients as well customers of Computer Associates, Inc. This is an ongoing agreement, which requires Sovika engineers to deliver their expertise to ProCRM.

Sovika has been appointed as exclusive distributors for this product as well as other range of products from the ProCRM for the entire world except for US & Canada. Sovika was also involved in developing offshore software projects for ProCRM.com where the end known clients were, such as Computer Associates, Inc, Stratus Computers, Inc, Astea International, Inc and Allmerica Financial, Inc. to name a few. The agreement is dated Dec 15th, 1999 for the initial term of this agreement is for 7.5 years and executed through the subsidiary of SIL.

Vikor, Inc. is also a Boston, MA based software consulting and services company. Sovika is the recruitment arm for Vikor in India. Sovika provides Vikor with the technical assistance for its software projects and onsite consulting business in India. Sovika has also assisted Vikor in a few offshore projects where the end clients were corporations like Bay Networks, EMC, Inc, Bank Boston etc. The arrangement is dated April 26th, 1999 is also and ongoing agreement between Vikor & SIL.

Softcel, Inc is Westford, MA based software-consulting firm, which specializes in onsite project implementation and offshore development. Sovika has tied up with Softcel to implement a few offshore projects for Sun Microsystems, which requires Sovika engineers to be present onsite as well, do the development work in India. The agreement is dated November 9th, 1999. The period of the agreement is for one year. The process of renewing the agreement is going on.

Simplex Solutions is a Michigan based software-consulting firm, which like Softcel specializes in onsite project implementation, as well as offshore development. Sovika has worked jointly with Simplex staff in India as well as US to develop software projects for Simplex clients. Simplex has offices in Japan & Europe and also has an offshore development center in Banglore in India. The agreement is dated July 23rd, 1999. The period of the agreement is for one year. The process of renewing the agreement is going on.

Thakral Software is part of Thakral Computers LTD. (Singapore group company) which specializes in software product marketing and implementation. Sovika has tied up with Thakral to market iCRM product to large corporations in India as well as Asia. Both companies are also working closely on a couple of big portal orders as well as a few corporate cases for CRM implementation. The agreement is dated June 9th, 1999. The period of the agreement is for one year. The process of renewing the agreement is going on.

SSI Technologies Ltd. is a well known IT Company based in Chennai with interests in Education, Software Development and with global operations. SIL has been appointed as channel partner for Distribution of Products Licenses, Software Support and Maintenance and Marketing SSI’s software for the Bombay region. The agreement is dated
January 15th, 2000.

Multitech Resources is based in Sydney, Australia specializing in software products and development of software projects for Australian companies. SIL has appointed Multitech as their exclusive partner for Australia & New Zealand to market and support its CRM range of solutions in those territories. Multitech entered into an agreement with SIL on February 15th, 2000 to act as the exclusive representative and distributor for Australia & New Zealand regions.

E.T.A. Infotech is a group concern of ETA-Ascon Group, established in 1973 as a joint venture between the Al Ghurair Group of the United Arab Emirates and Amana Investments Limited of Hong Kong. The Headquarter of the group is at Dubai with network of 23 branches and associate offices all over the globe. The Group’s consolidated sales for the year ending December 31, 1999 was of Dirhams1954.00 million.

The business activities of the group are as diverse as its worldwide locations, and include:

The group has international representations and collaborations.

The company has entered into strategic alliance with the ETA Infotech on 14th November, 2000. The scope of the alliance is to:

Use Sovika as a strategic tecnology partner in soliciting software business with clients worldwide.

Technology skills and resource pool will be based and available at Sovika, facilities in India, which can be deployed for projects of both companies internationally.

Sovika will be a preferred vendor for ETA Infotech for their outsourcing requirements in software related areas.

ETA Infotech has nominated Mr. Ahmed Salahuddin as Director on the Board of Sovika.

ETA Infotech intends to invest about Rs.150 lakhs in Sovika in the form of Equity.

Sovika Infotek Inc. USA was incorporated in USA in December, 1999, subsequent to approval of the Reserve Bank of India vide their approval letter No.EC.CO.OID.692/19.19.990176/S-268/99-2000 dated 14th August, 1999.

The Company has , so far invested US$ 21000. The subsidiary’s first financial year will end on 31st December, 2000. The subsidiary has achieved a turn-over of US$ 54642/-.

The provisional financial results made upto 31st August, 2000 are as follows :

The main objects of the Company, as set out, in the Memorandum of Association, are as under: -

To develop all aspects of data processing, data processing system, computer system, application and system software, process control system and all the branches of computer sciences in India and abroad & to act as consultants thereof

To export software development & act as agent for Indian & international Companies for providing services in the areas computer sciences, software and system development.

The Main object clause of the Memorandum of Association of the Company enables the Company to undertake the activities for which the funds are being raised in the present Issue. The activities, which the Company is carrying on until now, are in accordance with the object clause of the Memorandum of Association of the Company.

Main Promoters of the Company are Mr. Sohan C. Mehta, Mr. Sahil S. Mehta and Mr. Shirish K.Desai.

Mr. Sohan C. Mehta is a Diploma holder in Automobile Engineering. He has been highly instrumental in the growth and diversification of Sovika Group. Mr. Sohan C. Mehta started his career with TELCO in 1974. In 1979 he started his own Chemical business. Since then the group has been touching great heights under his leadership. The group diversified into IT in the year 1992 and further diversified into aviation related services in 1994.

Mr. Sahil S. Mehta is an MBA in International Marketing from University of Hertfordshire, UK. He has been actively involved in interaction with overseas clients and developing new markets since 1998. He is Instrumental in creating the prestigious bilingual portal ‘maniben.com’. In the ever evolving IT field, he has outlined a very clear and focussed vision and objective for the Company’s core competency and its future success.

Mr. Shirish K. Desai is a Chartered Accountant. He is in practice since 1980. He is associated with the SOVIKA Group since 1984. He is a Management Consultant and Advisor to the Sovika Group of Companies for their finance and marketing operations.

Mr. Ahmed S. Salahuddin, is Bachelor of Science in business management with a concentration in Management Information Systems at the Case Western Reserve University in Cleveland Ohio. He is currently working with Emirates Trading Agency in the Trading and Shipping Division, and is setting up a Cement Grinding Factory in Dhaka, Bangladesh. He is also spearheading a major B2B construction portal based in Dubai, UAE. He is nominee of E.T.A. Infotech on the board of SIL.

Mr. Ajay M. Khatlawala is a Bachelor of Science and LLB from Bombay University. He is a solicitor by profession and senior partner of M/s. Little & Co., Mumbai. He is a legal practitioner for more than 20 years.

Mr. Nimish C. Shah is a B. Com, MBA (USA). He is key controlling person in Fortune Financial Services (India) Limited and Fortune Equity Brokers (India) Limited, a group in financial and share broking activities. He has got more than twelve years experience in the field of finance and broking activities.

Mr. Sahil Mehta, Managing Director, carries out the day-to-day operations under the supervision of the Board of Directors. The details about the Board of Directors is as follows:

The directors do not hold directorship in any company other than what has been mentioned against their respective names.

There are no litigations, disputes pending against the directors. No proceedings for economic offences have been initiated against them.

The other ventures of the promoter group are as given below:

Sovika Chemicals Private Limited was incorporated on 12th September 1980 with the main object to manufacture, formulate, process, and deal in chemicals both organic and inorganic. The Company’s day to day affairs are looked after by Mr. Sohan C. Mehta. The Company’s Authorised Share Capital is Rs.25 Lacs divided into 25000 equity Shares of RS.100/- each. The Issued, subscribed and Paid-up Share Capital is Rs. 20.00 Lacs. The Audited Financial position of the Company for the last three years is as under:

(Rs. In lacs )

Aircrew Technical Services Private Limited was incorporated on 9th December, 1994 with the main object to provide technical services to various airlines operators including to provide technically trained staff such as pilots, cabin attendants, Captains, Navigators and to impart training and establish technical education Institute. The Company’s day to day affairs are looked after by Mr. Sohan C. Mehta. The Company’s Authorised Share Capital is Rs.5 Lacs divided into 50000 equity Shares of RS.10/- each. The Issued, subscribed and Paid-up Share Capital is Rs.1.14 Lacs. The Audited Financial position of the Company for the last three years is as under :

(Rs. In lacs )

Sahil Real Estate Private Limited was incorporated on 29th December, 1994 with the main object to deal, develop land, properties, dwelling houses, industrial estates etc. The Company’s day to day affairs are looked after by Mr. Sohan C. Mehta. The Company’s Authorised Share Capital is Rs.10 Lacs divided into 100000 equity Shares of RS.10/- each. The Issued, subscribed and Paid-up Share Capital is Rs.0.03 Lacs The Audited Financial position of the Company for the last three years is as under :

Financial Highlights (Rs. In lacs )

Nova Aviations Services Private Limited was incorporated on 15/09/1995 under the Indian Companies Act, 1956, with the Main Object to provide technical services to various airline operators including to provide technically trained staff such as pilots, Cabin attendants, Captains, Navigators to provide for ground technicians and other staff required by airlines. Also to impart training technical know-how, guidance and establish technical educational institute. Mr. Shirish K. Desai, Mr. Sahil S. Mehta and Mr. Sameer Sheth were the promoters of this Company.The day to day affairs of the company were looked after by Mr. Sameer Sheth. Considering the future growth, prospects of IT Industry, and the need for focussing on Sovika Infotek Limited, Mr. Sahil S. Mehta resigned from the board with effect from 3rd May, 1997 and Mr. Shirish K. Desai resigned from the board with effect from March 10, 2000, and presently they are not controlling the affairs and operations of the company. Mr. Sohan C. Mehta who was inducted as director resigned from the board with effect from March 10, 2000,

The Company’s Authorised Share Capital is Rs.10 Lacs divided into 100000 equity Shares of RS.10/- each. The Issued, subscribed and Paid-up Share Capital is Rs.0.07 Lacs. The actual financial results of the Company for the last three years are as under :

Financial Highlights (Rs. In lacs )

Formerly Known as MN Infotech Private Limited. Incorporated on 10/04/1996 under Indian Companies Act, 1956.the company is engaged in software development and upgradation. Mr. Sahil Mehta was one of the subscribers to the Memorandum of Association and named as one of the First Directors. Since the Sovika group focussed and concentrated its development in Sovika Infotek Limited, he resigned from the company with effect from 24th June, 2000 and not holding any share of the said Company. In view of this the financial highlights of the company are not produced here.

The other ventures of the Promoters do not have business interest in the Company. None of the above companies have made a public or rights issue in the past three years.

The day-to-day operations of the Company are managed by Mr.Sahil Mehta, Managing Director with the assistance of professionals and technical persons in the diverse areas of management. The Company is led by professionally qualified people with rich experience. The Company has a talented pool of software personnel with strong technology background. SIL has 49 employees and is actively recruiting several people. All members of the development and marketing teams undergo training. SIL targets to have about 234 employees by March 2001, on its rolls. The key functionaries of the Company are as follows:

For details please refer page no. 47 promoter Director

Mr. Dinesh Prabhu is M.Tech. (Computer Science) from IIT, Mumbai. He is having rich experience of 21 years in IT industry. He started his career as Trainee software Engineer with Tata Burroughs Ltd. During his career in IT industry he has served various organisations such as Intime Computer Systems Pvt.Ltd., Rolta India Ltd., Mahindra-British telecom Ltd., Mastek Ltd., and Tandon Information Solutions Pvt. Ltd. Before joining to Sovika Infotek Limited, he was working with Tandon Information Solutions Pvt. Ltd. as Vice President- Technology. He joined SIL on December 01, 2000.

Mr. Amrendra Kumar is MCA(Master of Computer Applications) by qualification with over 9 years of experience for marketing software projects, IT products and solutions marketing for Indian and Overseas assignment. Has worked with several IT organisations to spearhead the marketing services. Having strong technical and marketing experience in IT fields proves him as start-up Specialist.

Mr. Jaydeep Shah is a BE in Electronics and Computer Science with over 3years of experience in IT Industry. He joined SIL as Software Engineer in May 2000. He had worked with United Software Engineer Services Limited.

Mrs. Kavita Desai is a Chartered Accountant having six years of experience in the field of Finance, Accounts, Income Tax & Company Law with first hand experience of working capital management, Finalization of accounts, MIS reporting Liaisoning with Banks and Financial Institutions as well as Government Authorities.

Mr. Mohammed is B.Com. having 3 years in the field of marketing. He was working with Indo European Computer Institute. He is working with Sovika since last 1.5years and reporting to V.P.-Sales.

Mr. Sengupta is an electronics and communication engineer from Shivaji University. He is Solution Architect and posses sound knowledge of Software development, Design & implementation and has experience of over 8 years in the IT industry. His expertise’s are in Object Oriented Development Methodology, designing of framework for projects and well conversant with all new technologies like WAP, Datamining, MS Technologies.

Niranjan Nandodkar is working with SIL since November,1997. A Diploma holder in Computer Engineering was previously working with Karox Technologies.

Mr. Sampat is Computer Science Engineer from University of Mumbai. His responsibility includes Management of software engineers and support staff onsite and offshore, including staff development/training, and client communications. Evaluate the range of existing technologies and protocols and considers implications for long range planning, recommend new technologies and techniques to the management.

Mrs. Parvinder Kaur is a graduate in Commerce from Mumbai University and Diploma in HRMS. Six years of hands-on exposure as Manager - HR involved in organization setting up process, formulation and implementation of HR policies, team development, in-house recruitment and on-site deployment.

Mr. Sandeep Umralkar is a diploma holder in Mechanical Engineering and also in computer maintenance. He is working with the SIL since last 2.5 years.

A PhD in Biochemistry and Post Graduate Diploma holder in computer applications has worked as Senior Scientific Officer with Haffkine Institute for 7 years. Her responsibilities in the organization are to ensure smooth administration and to ensure a clean, Positive and disciplined working environment. She is also responsible in co-ordination of training programs. She has been appointed as Management Representative for ISO certification.

Mr. Umesh Deshpande is B.Sc. and PGDCA by Qualification with over 8 years in IT industry in analysis, design, development, testing and implementation. His expertises are ERP Development and Implementation, System integration and Third party product integration. Handled and completed Domestic and International projects successfully. Well conversant with OOAD, UML, Internet technology. He has sound knowledge of Business systems.

There have been no material changes (otherwise than by way of retirement) in the key management personnel for the past 12 months.

The Company plans to expand its operations, by strengthening the on-site software development, providing e-commerce solutions, increasing off-shore software development, and development of products. For attaining the above objectives, it proposes to expand its Software Development Centre in Mumbai with state-of-the-art high speed data communication links, set up overseas offices in USA and upgrade the existing hard ware, Software and infrastructure facilities and also to set up hardware, software and infrastructure facilities to match the business growth projected.

Company has full fledge software development centre admeasuring about 2873 sq. feet Gurunanak Industries, Safed pool, Andheri-E, Mumbai -72, on long term lease basis. The present software development centre is fully furnished.

Further Company Proposes to acquire premises of approximately 10,000 Sq. feet for the expansion of its software development activity. The Premises identified by the company is at Guru Nanak Industries, Safed Pool, Saki Naka, Andheri, Mumbai and entered in to memorandum of understanding on 14/11/2000 with the Owner/Builder, Guru Nanak Industries.

The total cost of premises as per MOU is 250.00 lacs (excluding stamp duty and registration charges). The company has estimated the total cost to be Rs.282.50lacs including stamp duty and registration charges.

Company also proposes to acquire premises for its branch offices at Bangalore, Pune , Hyderabad, Delhi , & Baroda. The total cost of the premises of the branch offices is estimated to be 75.00 lacs.

Software Development Center is full equipped with Windows NT, NOVELL NETWARE, Windows 95, INTERNET, LANs, WANs, ISDN LINE, LEASE LINE, TELEPHONE CONNECTIONS, various computers & printers for the requirement of current operations. Additional machineries and facilities will be procured as per the project implementation for proposed software development center.

The details of requirement of Plant and Machinery is as under:

The firms supplying the Plant and Machinery are in no way connected to the Promoters/Directors of the Company. The Company, its Promoters and its Directors are not in any way interested in those firms that are supplying the Plant and Machinery. All the Plant and Machinery that are being procured by the Company will be new.

Raw material: The Company operates in the technology oriented service industry and as such does not require any raw materials. The main consumable items required are Floppy Disks, Magnetic Tapes, Other Data Storage Media, Printer Cartridges, and Computer Stationery, all of which are easily available.

Power: The power requirement for such projects is expected to meet by the State Electricity Board through the Builder/Developer of the building in which the Company proposes to acquire the office premises/Works station. In case of the present office premises/work station, the company enjoys electricity supply from Bombay Suburban Electric Supply Limited

Water: The requirement of water is only for human consumption, which will be met through local supply.

Effluent Disposal: The operations of the Company do not generate any effluents/pollution. The Company is exempted from seeking a clearance from the Pollution Control Board as it belongs to a classified non-polluting industry.

Human Resource Development (HRD): In order to have effective HRD management, SIL proposes to have a systematic recruitment procedure with the following steps.

Requirement

Assessment/Interview

Offer

Appointment

SIL has already developed systems and procedures for its Human Resources strategy. These are be benchmarked to international best practices. The Company is also taking various initiatives to build a continuous learning organisation.

The Company is proposing to set up a Software Development Centre with 50 workstations, which requires some software professionals. Mumbai is a major centre where training is imparted to software professionals and hence, SIL does not foresee any problem in recruiting the required Software Professionals. The company shall recruit the additional software professionals as & when required.

The requirement of the manpower has been estimated by the company as under:

Software Development Methodology : Software methodology is the framework for the tasks that are required to build high quality software. It is the technological discipline concerned with systematic production and maintenance of software products that are developed and modified on line, with the cost estimates. This is essential to avoid delayed delivery, cost overruns, inefficiency and lack of reliability of software.

Quality Control: The Company has developed Total Quality System based on ISO 9001 guidelines. Technical Audit for SEI-CMM level 2 is over via ISO 9001 and recommended for certification by TUV India Private Ltd. The company is hopeful in achieving this certification in near future. By utilising quality management techniques, the software team can solve problems, improve and manage process, resolve out of control condition and take steps for constant improvements more effectively.

Research And Development: the company is aiming to work on continuous up-gradation of methods and tools used in software project management and software project management, keeping pace with the rapid changes taking place in this area.

Business outlook and operating environment

The demand for software is derived primarily on account of its ability to provide connectivity, reworking ability and improved presentation. Connectivity is required in applications where real time information is needed to make decision or put through a transaction. Software finds use in entertainment, education and business sectors on account of its ability to offer options and variety in presentation.

The Software Industry in India is worth Rs.26.05 billion (US $ 835 million) and if in-house development is also added that takes place at many large commercial / corporate end-users, then the total software industry is close to Rs.32 billion or US $ 1billion. Ten years back the software industry in India was not more than Rs.300 million or US $ 10 million. Domestic Industry of which has come out trumps, considering the circumstances and growth around 22%, as per the report published in Data Quest July 1999.

Nevertheless this phenomenal growth of the industry has not been achieved overnight. The C.A.G.R. for the Indian software industry in the last five years has been 42%. Here the C.A.G.R for the software export industry has been comparatively low at 38.16%, although there has been much healthy growth in the domestic industry in recent years.

Despite these high growth rates, India’s share in the world software market is very low, but still enjoys an advantage over some of the other nations, which are trying to promote software exports. This is due to the fact that India possesses the world’s second largest pool of scientific manpower, with English knowledge, coupled with the fact that the quality of Indian software is good and manpower cost is relatively low. It provides India a very good opportunity in the world market.

The software industry in India employees more than 125,000 people and continues to be amongst the fastest growing sectors in the Indian economy.

This is the precise reason for identifying software as the major thrust area by Government of India both for exports as well as in the domestic sector. After showing impressive growth in the export market, the recent trend in the industry is to give increased focus to domestic market so that all possible resources may be enhanced for an ultimate quantum jump in the international market.

The bulk of the Indian Software exports have been in the form of professional services. The largest segment i.e. the professional support services accounted for 69% of this market while the remaining was made up by the global packaged software programming and systems integration. Products and packages can be classified into systems software and applications software. These segments have been growing at about 20% and 15% respectively in the past.

The Indian software industry, which is larger than the domestic hardware industry has grown at a CAGR of 57.1% during the five-year period 1994-95 to 1998-99. The industry turnover increased by 58% from Rs.100.4 bn in 1997-98 to Rs.158.9 bn. During 1998-99.

There is a visible shift towards offshore project development, which also includes offshore package development. With the formation of Software Technology Parks, liberalization of both, economic policy by the Government of India and visa restrictions by U.S. and some Western European countries, this component is expected to increase further.

Exports comprise about 69% of the turnover and have grown at a CAGR of 63.3% over the last five years while the domestic software market recorded a lower growth rate of 46.7% over the same period. USA is the largest market for Indian exports and comprised 61% of exports during 1998-99, followed by 23% from Europe. Although the industry is fragmented with over 750 players, the top 25 companies account for nearly 60% of the total exports.

The largest segments in Indian exports are the projects and services, which together accounted for more than 80% of total software revenues. While products & packages are still at a small segment at Rs.8.7 million, revenues from training were negligible at Rs.1.9 million. Support & maintenance and IT enabled services were the other segments together accounting for about 10% of IT exports.

India’s export competitiveness stems from the unique position of high skill levels at low cost. For instance, the annual salary for computer programmers in USA ranges between $36,000 and $10,000. Hence average salary levels in USA is around 6-8 times that in India. Such cost efficiencies are one of the prime reasons for software export growth.

The importance of moving up the value chain may be gauged from the fact that although some Indian companies were incorporated in the mid-seventies or even earlier, as against Microsoft’s incorporation in 1976, the latter has touched a turnover of about $ 10 billion as against turnover $ 40-50million for the large Indian companies.

During 1994-95, India exported about 58% of its total software exports to USA followed by Europe with 20%. The market opportunities were also identified in the countries like Japan and South Africa.

The countries like USA, Japan, U.K. Germany, France and Italy together have 7.5% of the market share of the world-wise offshore market. About 81% of the total Indian Software Exports are being exported to these countries. It is expected that over the next two years, software exports to other Asian countries and Australia will increase.

Even though USA is still India’s primary export market, with new markets being identified in the countries like Korea, Latin America and some countries in Asia-Pacific, the projected turnover of the Indian software exports, by 1999-2000 is expected to be around US $ 2.5 billion.

The Indian software industry is well poised for not only an exponential, but also almost a vertical growth in the global software chart.

The present aim of the software companies is to consolidate its leadership in overseas market and create more opinion, so that by the turn of the century, more and more companies around the World would have to align with Indian software companies to either retain or earn their competitive edge.

The continuing demand from the main export markets in the areas of re-engineering, migration and maintenance services coupled with the cost advantages and quality perception would ensure that the Indian Software export growth is limited only by the constraints faced by the Indian exporters with regard to availability of skilled manpower. Manpower engaged in exports is expected to increase at a CAGR of about 25% in the medium term. On the domestic market, the growth in the PC base would determine the growth of the domestic software segment, with PC sales in the domestic market estimated to grow at about 30%

The domestic software industry is expected to grow at around 40% over the medium term, while software exports are likely to exhibit a higher CAGR of about 45% over the same horizon. The disparity in turnover between the export and domestic markets, contrary to earlier expectations, is expected to widen.

Over the years the Government of India ("GOI") has realized the high potential of employment, modernization and contribution to the economy by the software industry.

In May 1998 the Government of India put software on the National Agenda and created a National Task Force under the order of the office of the Prime Minister of India. The Government has provided a nurturing and supportive environment though the establishment of the Export Processing Zone (EPZ’S) 100% Export Oriented units scheme (EOUS), STP and Electronics Hardware Technology parks (EHTP) to promote exports. There are several policy incentives and facilities that attract local Indian Software firms and foreign collaborations in these zones. Software companies benefit from various incentives such as relief from import duties on hardware and software imports, tax holidays and infrastructure support for companies operating in Software Technology Parks of India (STPI).

Government of India has identified software sector as thrust area for economic development of the nation. In order to provide a conducive environment to the software exports organization, government has mooted Software Technology Park scheme. STP scheme is a 100% export oriented scheme for undertaking software development for export purpose. The attraction of the scheme is to provide single point contact services for all Government regulatory agencies. Further STP also provides infrastructure support like high-speed data communication through F3-IBS earth station.

To facilitate software companies in their export activity, the Department of Electronics has established number of STPS, throughout India. The major objectives of these STPS are:

To establish and mange infrastructure resources and provide service to users for the development and export of software.

To undertake export promotion activities.

To train professionals in the field of software technology.

To improve design and development of software within the STPS.

In order to build a strong electronics industry in the country with focus on enhancing its export potential and developing an efficient electronics component industry in the country, the Government of India has also recently announced the EHTP Scheme.

The Government is also contributing to the growth through Copyright amendments and import duty reductions.

Thus, there is an enormous scope for the growth of Software industry in the country keeping in view the huge global market potential and resources that the country is enjoying.

Software industry requires excellent communication network, India perhaps is one of the few developing countries with extensive network.

India has a fibre optic backbone of 75000 kilometres. The Government is targeting an annual growth rate of 30% in this area. This would provide a very strong and reliable network.

The Government is also in the process of setting - up VSATS of aggregate capacity of over 300 Megabit Per Second. This coupled with Satellite Transponders of aggregate capacity of more than 3000 Megahertz makes the government a world class communication net work for data transfer. The policy of government allowing ISPS in private sector has increased width and reach of the network. The government ISP policy coupled with aggressive Internet drive has virtually eliminated all infrastructure bottlenecks.

India has large population of computer professionals. All the educational institutions are geared up to meet the requirements of the market. The Indian software engineers are now operating on Brand equity established by their sheer performance and intelligence. The government approach towards IT education has further enhanced the stature of the country as a potential software giant.

The availability of hardware is the major point for the successful growth of Indian industry. The Hardware policy has provided the required fillip to the industry. The availability of world class infrastructure has opened up new opportunities like facility management etc.

A strategic review of the Indian Software industry in 1996 by NASSCOM through a SWOT Analysis depicts.

(Rs.in lacs)

Growth in revenues are largely attributable to growth in markets for existing products, additions of new marketing alliances and introduction of new products.

During the year 1998-99, the revenue of the company registered a growth of 70% over the previous year.

During the year 1999-2000, the revenue of the company registered a growth of 152% over the previous year.

During the year 1999-2000, the company has started its domestic operations, which contributed Rs.26.12 lacs to the revenue of the company.

The percentages of the total expenses to the revenue for last three years are:

1997-1998   93.50%

1998-1999   83.00%

1999-2000   75.00%

Thus the % of expenses to the revenue are reducing.

During the year 1999-2000, the expenses on salary and benefits increased by 283% over the previous year.

During the year 1999-2000, the expenses on Travelling and Conveyance increased by 310% over the previous year.

There are no unusual or infrequent events or transactions.

There are no Significant economic changes that have materially affected or are likely to effect income from continuing operations.

The Company has adopted the latest technologies available globally and sources these technologies on a regular and continuous basis. As such considering the trends uncertainties may not effect much of the operations of the Company and the resultant revenues.

Future variable cost as a percentage of Sales are not likely to register and adverse trend. However depreciation in the value of Rupee could to some extent affect the relationship between costs and revenues.

There is no organised data on the total turn over of the industry across all the segments in which the Company operates.

The Company has introduced various products since inception. The Company would continue to add new products incorporating the latest technology in these segments.

The business of the Company is not seasonal.

The Company is not dependent on single / few customers.

The Company is well established to face competition from existing and new entrants in the industry.

Software industry can be segregated into services and products. Services include manpower services, data processing, programming services, consulting services, etc. where revenue is generated on the basis of time spent or on the basis of negotiated contract price.

Up to 1995, most of India’s software exports were in the form of body-shopping or on-site services. However, over the past five years there has been a major shift to offshore software services i.e. software developed within India. With the growth of Software Technology Parks (STPs), high speed data communication services provided by Videsh Sanchar Nigam Limited (VSNL) and liberalised economic policy, the share of offshore development is expected to increase further.

The global software services and products market is projected to grow at a CAGR of about 14% to touch USD 560 billion by the end of year 2000. Compared to this India’s total software market is worth USD 5.7 billion as of 1999-2000 end. In 1998-99, more than 203 out of the Fortune 1000 corporates, nearly one in five, outsourced their software requirements from India. US accounted for about 61% of India’s software exports and Europe for another 23%.

In 1998-99, according to a NASSCOM study over 122 new software products were launched by domestic software companies and over 158 by foreign companies in the Indian market. There was a 37% growth in CAD / CAM market, 31% growth in RDBMS (relational database management systems) sales, 46% increase in sale of ERP (enterprise resource planning) packages and 35% increase in financial packages in domestic markets. Software purchases by small office home office (SOHO) market witnessed an all time high growth rate of 61% in India.

The survey has revealed that the total volume of E-Commerce transactions in India were estimated at Rs. 450 crore in the year 1999-2000. Out of this volume, about Rs. 50 crore were contributed by retail internet or Business-to-Consumer transactions, and about Rs. 400 crore were contributed by Business-to-Business transactions. As per the survey, Nasscom expects e-Business transactions in India to exceed Rs. 3500 crore during 2000-01. Out of this, about Rs. 300 crore could comprise of retail transactions and 3200 crore of B2B transactions.

Nasscom’s study indicates that India can expect to earn at least US $ 1 billion from software solutions and services exports in e-Business / e-Commerce applications in the year 2002. With corporates planning to revive IT spending after Y2K problem, e-Commerce solutions have emerged as a major technological and business opportunity for Indian software houses.

Manpower, especially trained and talented personnel is a crucial factor. The key to earnings is therefore the ability to attract, train and retain quality manpower, more so at senior management levels. Infrastructure most importantly dedicated communication links, enable companies to take on more offshore assignments, where margins are higher.

Credibility: The credibility as regards project execution skills and the rapport established with clients is also important. This not only generates repeat and referred business, but also builds up entry barriers for competition.

Depending on the required capabilities and the risk-return profile the software industry can be segmented as under :

Revenues of about USD 90 billion and market capitalization of USD 225 billion

Over 10 large Indian MNCs with revenues of over USD 2 billion each

Number of listed companies running into hundreds

Software & related services contributing over 7.5% of overall GDP growth

The largest exporting sector, accounting for 35% of India’s total exports

Creation of 2.2 million jobs in this sector alone

Source : NASSCOM

India’s projections for I.T. and software industry

IT Industry has recorded a C.A.G.R. (Compounded Annual Growth Rate) of more than 40.5% which is almost double the growth rate of the IT Industry in many of the developed countries.

In India, IT spending as a percentage to GDP is currently less than 1 percent. In USA, however, IT spending as a percentage to GDP is more than 3.5 percent. However, with Government of India’s resolve to increase I.T. spending - it is predicted that by 2003, India’s I.T. spending could be 2.5% of its GDP.The IT manufacturing sector is growing at an average rate of 28-30% annually over the past decade. The industry has over 135 major hardware players supported by over 800 ancillary units and small time vendors engaged in subassemblies and equipment manufacturing.

Software continues to contribute a major portion of Indian IT Industry’s revenues. During the year 1998-99, the Indian software industry’s revenues constituted almost 65% of Indian IT industry’s revenues.Software industry in India grew by 59% in 1998-99 with revenues of Rs. 15,890 crore, over the revenues of Rs. 10,040 crore during 1997-98.

More than 203 of Fortune 1000 companies outsourced their software requirements to Indian software houses in 1998-99. R&D spending by Indian software houses reached about 3.2% of total revenues in 1998-99. This signifies ploughing of increasing resources in creating IPR and developing practices and domain knowledge for moving up the value chain.

1) An existing profit making and dividend-paying IT Company.

2) The project includes development of in-house capabilities for software products and applications, iCRM (internet based customer relationship management), acquisition of technology Company/Firm/Enterprise/Incorporation and portal developments.

3) Pre-issue stake of the Promoters and Promoters group is 25.75% showing strong commitment to the Company.

4) Cost of project and means of finance has been appraised by Bank of Madura Limited.

5) Proposed Equity Participation by E.T.A Infotech, a ETA- Ascon Group which is pre-eminent corporate entity in the Middle East (UAE).

6) The product iCRM has been successfully installed at one domestic location and installation is under process.

7) TUV INDIA PRIVATE LIMITED has recommended the name of the Company for ISO 9001 certification to RWTUV of Germany.

8) Listing at Mumbai Stock Exchange, National Stock exchange, and Ahmedabad stock exchange.

The following financial ratios have been audited by the statutory Auditor of the Company vide their certificate dated September 29,2000.

1. Basic earnings per share represents earnings per share calculated on the basis of profit after tax (profit after tax divided by equity shares at the end of each financial year).

2. The calculation of "minimum return on increased net worth require to maintain pre-issue earnings per share" and "net asset value per share after issue and its comparison with the issue price" will be computed on conclusion of the book building process.

The calculation of Minimum Return on increased Net Worth required to maintain pre-issue

Earnings Per Share and Net Asset Value per share after the issue and its comparison with the

Issue Price will be computed on conclusion of the Book Building process.

This being the Company’s maiden Public offer, its shares are not listed on any Stock Exchange.

The following companies are under the same Management within the meaning of section 370 (1B) of the Companies Act, 1956:

Sovika Chemicals Private Limited

Aircrew Technical Services Private Limited

Sahil Real Estate Private Limited

Sovika Infotek Inc. USA was incorporated in USA in December 1999, subsequent to approval of the Reserve Bank of India vide their approval letter No.EC.CO.OID.692/19.19.990176/S-268/99-2000 dated 14th August 1999.

The Company has, so far invested US$ 21000. The subsidiary’s first financial year will end on 31st December 2000. The subsidiary has achieved a turnover of US$ 54642/-.

The provisional financial results made upto 31st August, 2000 are as follows:

There are no listed companies in India within the meaning of Section 370 (1B) of the Companies Act, 1956. There are no listed companies under the same Management which came out with capital issues in the last three years.

There are no listed companies promoted by the Promoters.

There are no outstanding litigation pertaining to matters likely to affect the operations and the finances of the Company, including disputed tax-liabilities of any nature. No proceedings have been launched against the Company for any of the offences under any enactment, civil or economic, irrespective of whether specified in Paragraph 1 of Part I of Schedule XIII to the Act. No such litigation or disputes are pending as on today and there are no defaults or outstanding statutory dues.

No disciplinary action has ever been taken by the Securities and Exchange Board of India/ Stock exchanges against the Company and no penalty has been imposed by any authority.

The Company has not defaulted in meeting statutory dues, institutional and bank dues and has made all payments/refunds on debentures/fixed deposits and has paid all arrears on cumulative preference shares. It has not defaulted on dues to holders of other debt Instruments and preference shareholders.

There are no outstanding litigations, disputes, penalties, including tax liabilities, economic offences, criminal or civil prosecution for any offence, irrespective of whether specified under any enactment in paragraph 1 of part I of schedule XIII of the Companies Act, 1956 or any liability except as under:

There has been no default in meeting statutory dues, institutional dues and other dues. There are no litigations involving violation of statutory regulations. No disciplinary action has ever been taken by the Securities and Exchange Board of India or Stock Exchanges and no penalty has been imposed by any authority and there is no suit pending in any civil or criminal court.

There are no outstanding litigations, disputes or penalties against the Directors of the Company, including tax liabilities, economic offences, criminal or civil prosecution for any offence, irrespective of whether specified under any enactment in Paragraph 1 of Part I of Schedule XIII, of the Companies Act, 1956 or any other liability in either personal capacity or as Director/ Partner/ Sole Proprietor in the Company or any other company/firm.

There are no litigations against the Directors involving violation of statutory regulations or criminal offences. No disciplinary action has ever been taken by the Securities and Exchange Board of India or Stock Exchanges and no penalty has been imposed by any authority. There is no suit pending against the Directors in capacity as director or partner or sole proprietor in any other company/firm.

There are no outstanding litigations, disputes or penalties, including disputed tax-liabilities, economic offences, criminal or civil prosecution for any offence, irrespective of whether specified under any enactment in paragraph 1 of part I of Schedule XIII of the Companies Act, 1956 or any other liability. There are no suits pending in any civil or criminal court. No disciplinary action has ever been taken by the Securities and Exchange Board of India/ Stock exchanges against the companies and no penalty has been imposed by any authority except as given against:

However, one of the group companies viz. Sovika Chemicals Private Limited has filed suits against persons mentioned below under section of relative act mentioned against :