DRAFT PROSPECTUS

EIDER e-COMMERCE LIMITED

(Incorporated on 13^th July, 1992 under the Companies Act, 1956 and commenced its operation on

29^th June , 1993 Formerly known as Citywide Communications And Computers (India) Limited

Registered Office :

S.C.O. 147-148 Sector 8 C, Chandigarh

Phone NO. (0172) 780 743, 783 421 Fax No. (0172) 780 457

Corporate Office :

S.C.O. 914, NAC Manimajra, Chandigarh 160018

Phone NO.(0172) 731 964, 735 443, 735 448. Fax No. (0172) 731 761

E-Mail : admin@indiasales.net

PUBLIC ISSUE OF 96,00,000 EQUITY SHARES OF RS.10/- EACH FOR CASH AT PREMIUM OF RS. 160/- PER SHARE AGGREGATING RS 163.20 CRORES.

RISK IN RELATION TO THE FIRST ISSUE

This being the first issue of the company, there has been no formal market for the securities of the company. The Issue price should not be taken to be indicative of the market price of the equity shares after the shares are listed. No assurance can be given regarding an active or sustained trading in the shares of the Company nor regarding the price at which equity shares will be traded after listing.

GENERAL RISKS

"Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer 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 offer including the risks 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 document”.

ISSUER'S ABSOLUTE RESPONSIBILITY

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

LISTING ARRANGEMENTS

Applications have been made to the Stock Exchanges at Ludhiana(The Regional Stock Exchange), Delhi, Mumbai, Ahemdabad and NSE for permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of this Prospectus.

LEAD MANAGER TO THE ISSUE ARYAMAN FINANCIAL SERVICES LIMITED SEBI REGN. NO.: MB/INM000006807 35, Atlanta, 3^rd Floor, Nariman Point, Mumbai – 400 021. Tel. : (022) 282 64 64 / 65 / 66, 288 3134. Fax : (022) 282 64 67. e-mail : aryaman@bom2.vsnl.net.in	REGISTRARS TO THE ISSUE Karvy Consultants Ltd. SEBI REGN NO – INR000000221 Jeroo Bldg., 1^st Floor, Next to Motwanes, Fort, 137, M. G. Road, Mumbai – 400023. Tel : 022-267 6278 - 6283 - 7307 Fax : 022-267 1237 E-mail : Karvy.frt@karvy.sprintrprg.ems.vsnl.net.in
ISSUE OPENS ON:	ISSUE CLOSES ON:

Earliest Closing Date:

I N D E X

Particulars	Page Nos.
Risk Factors & Management’s Perception
Highlights
Part - I
General Information
Capital structure of the Company
Terms of the Present Issue
Particulars of the Issue
Company, Management and Project
Financial Performance of the Company
Stock Market Data & Basis for Issue Price
Outstanding Litigation, Defaults, Adverse Events and Material Developments
Other Matters
Risk Factors & Management’s perception thereof
Material Development
Part – II
General Information
Financial Information
Statutory and Other Information
Main provisions of the Articles of Association of the Company
Material Contracts and Documents for Inspection
PART – III
Declaration

ABBREVIATIONS AND GLOSSARY OF THE TERM USED

SEBI	Securities and Exchange Board of India
ACT	The Companies Act, 1956
RBI	Reserve Bank of India
Articles	Articles of Association of the Company
Memorandum	Memorandum of Association of the Company
NSDL	National Securities Depositories Ltd.
CDSL	Central Depositories Services India Ltd.
ROC	The Registrar of the Companies,
“EEL”	Eider e-Commerce Limited
"EIL"	Eider Infotech Limited
RBI	Reserve Bank Of India.
PBDIT	Profit before Depreciation, Interest & Tax
PAT	Profit after Tax
USD	U S Dollars
INR	Indian Rupees
Eider Group Companies	All Eider Companies & Promoted ventures
ETL	Eider Technologies Ltd.
EDT	Electronic Data Transfer
EFT	Electronic Fund Transfer
EFSL	Eider Financial Services Limited
NSE	National Stock Exchange
DSE	Delhi Stock Exchange
LSE	Ludhiana Stock Exchange
BSE	Bombay Stock Exchange
ASE	Ahemdabad Stock Exchange

RISK FACTORS (R) AND MANAGEMENTS PERCEPTION (P) THEREOF

INTERNAL

1. ( R ) The cost of project and means of finance included in this Prospectus have not been appraised by any Financial Institution or Bank and the utilisation of the issue proceeds is at the total discretion of the management.

(P) The management of the company comprises professionals and technocrats with a proven track record and the public issue proceeds will be utilised only for the objects of the issue as mentioned in the offer document. The Company believes that it has the professional expertise to estimate the cost of project and implement the same and it is confident that the assumptions and data used for estimation of cost of project and future profitability are realistic.

2. ( R ) There are various litigation pending against the Promoting company /Directors of the and group companies details of which are given under the head Litigation/Disputes/Defaults in the offer document on page nos. 65, 66 & 67.

(P) In the opinion of the Board of Directors none of the litigations are likely to have an impact on the operations of the Company, since there are no litigations against the Company.

3. ( R ) The company has its own Infrastructure at Panchkula & New Delhi but has an Agreement with the Promoter Company/Group Companies to share its Infrastructure including buildings and offices in different Indian cities.

(P) Although the Company does not own Infrastructure other than in Delhi & Panchkula but the Company has an Agreement with its parent & Group Companies for use of its fully equipped Infrastructures All over India on excellent Terms resulting in most beneficial interest to the Company which does save lot of Capital investments on Infrastructure for the Company.

4. ( R ) Data communication facilities including internet are being used as delivery mechanism. Security issue poses a risk to the company.

(P) Company provides offshore and domestic application development services. For domestic application and products, the company has internal servers with security mechanisms like firewall, encryption, de-cryption which prevent unauthorised access to its critical and valuable information. On the other hand for offshore development only piecemeal data are transferred and that too in specially encrypted format, which again minimises security risks.

5. ( R ) Company is planning to launch an International Gateway with Satellite Connectivity at New Delhi subject to approval from Department of Telecommunication (DOT).

(P) The Application for the Licence from DOT for the Int’l Gateway is yet to be made by Eider e-Commerce Ltd but the Company finds no difficulty in obtaining the same.

6. ( R )The company has to make arrangements with bank for its project ofE-comm - payment b2b/b2c gateway & int’l gateway with direct satellite bandwidth & e-comm card project

(P) The Company is in discussion with various Banks for the purpose. The Company does not apprehend any problem for such a tie-up with any bank as the arrangement envisaged is simple & is in tune with normal presently adopted banking systems.

EXTERNAL

1. ( R ) The IT industry is subject to high technological obsolescence risk .

(P) The Company continuously upgrades its courseware, the skill sets of its employees and its infrastructure facilities to keep abreast of the latest developments in its line of business. The Company has already assimilated technologies in the areas of web based technologies.

2. ( R ) The computer industry suffers from high technological obsolescence and high turnover of trained personnel.

(P) The Company believes the continous introduction and use of newer software technology and hardwares, tools and development environments as well as providing the best compensation packages to its engineers. The Company is hopeful that it shall be able to both retain its trained personnel as well as keep their technological skills up-to-date.

3. ( R ) The company faces competition from existing companies and new entrants entering into the Software Business.

(P) The Company has inherent strengths like well established marketing channels, time tested project management skills, offshore software facilities and professionally qualified, experienced and trained manpower, which play a major role in keeping ahead of competition.

4. ( R ) Govt. Cyber Laws/Guidelines has yet not come into force. The Project schemes mentioned in this prospectus shall subject to change as per the Govt. of India laws/guidelines in this regard from time to time. Without any prior notice, to comply with the laws/guidelines of Govt. of India.

5. ( R) Niether the past EPS nor the NAV figures of the company are justifuing the issue price of Rs.170/-

6. (R) Information Technology business in which the Company is engaged is witnessing abnormally high valuation presently and possibilities can not be ruled out that the same may be not continue in future.

HIGHLIGHTS

1) Existing profit making Infotech Company for the past 8 years promoted by Leading Listed Telecom Software & I.T. major - Eider Infotech Ltd.

2) Forming On-the-ground Distribution Network for Net distribution on India Sales.net & India homeservice.net and sales network with various strategic alliances as also a Chain of Top Consultants & OE Suppliers.

3) Launching internationally acclaimed products with good potential i.e. e-Comm Payment Gateway & Int’l Gateway Satellite Bandwidth & e-Comm Card and Internet Consumer Distribution Projects through In house Technology.

4) Company is engaged in providing Communication Software & Networking, web/Internet & e-Comm solutions which are considered to be high growth areas at present.

5) Equity shares proposed to be listed on NSE, BSE, ASE, DSE & LSE.

6) Sales globalisation effort alongwith EIL with office at New Delhi for Asian Sales & international office at Toronto, Canada for Western markets Sales being set up.

7) Eider Group has promoted 02(two) Degree Level full fledged Engineering Colleges with large investments granting 04 years B.Tech. Degrees in Computer Science, Telecommunication etc. with a capacity of 1680 engineering Students. The same brings numerous Advantages synergies to the Company in the areas of Human Resource, Brain pool, Research & Developments programmes and ideas which is indeed an interest part of the I.T. Business.

NOTE :

INVESTORS MAY NOTE THAT IN THE EVENT OF OVER SUBSCRIPTION, THE EXECUTIVE DIRECTOR / MANAGING DIRECTOR OF THE LUDHIANA STOCK EXCHANGE (REGIONAL STOCK EXCHANGE) ALONG WITH THE LEAD MANAGER TO THE ISSUE AND THE REGISTRAR TO THE ISSUE SHALL BE RESPONSIBLE TO ENSURE THAT THE BASIS OF ALLOTMENT IS FINALISED IN A FAIR AND PROPER MANNER.

INVESTORS SHOULD REFER ‘BASIS FOR ISSUE PRICE’ BEFORE MAKING INVESTMENT ON PAGE NO. 65. NEITHER THE PAST EPS NOR THE NAV OF THE COMPANY IS JUSTIFYING THE ISSUE PRICE OF RS. 170/- PER SHARE.

PART - I

EIDER e-COMMERCE LIMITED

(Incorporated on 13^th July, 1992 under the Companies Act, 1956 under the name Citywide Communications And Computers (India) Limited and commenced its operation on 29^th June, 1993. The name of the company was changed to Eider e-Commerce Ltd. vide resolution passed on 3^rd February, 2000 and certificate for change of name was obtained on 10^th February 2000.)

Regd. Office : S.C.O. 147-148 Sector 8 C, Chandigarh

Phone NO. (0172) 784321 Fax No.(0172) 780457

Corporate & Head Office : S.C.O. 914, NAC Manimajra, Chandigarh 160018

Phone NO. (0172)731964,735443,735448. Fax No. (0172)731761

E-Mail : eider@glide.net.in

PUBLIC ISSUE OF 96,00,000 EQUITY SHARES OF RS.10/- EACH FOR CASH AT PREMIUM OF RS. 160/- PER SHARE

AGGREGATING RS 163.20 CRORES.

I. GENERAL INFORMATION

Eider e-commerce Limited ( hereinafter referred to as EEL or ‘the Issuer’ or ‘the Company’ ) is offering for subscription 96,00,000 Equity Shares of Rs.10/- each for cash at a Premium of Rs.160/- per Share aggregating to Rs.163.20 Crores.

GOVERNMENT APPROVALS

At present, no letter of intent / industrial license is required for the business carried on by the Company. The Company can undertake the activities presently carried out and proposed by it in view of the above and no further approvals from any Government authority is required.

DISCLAIMER CLAUSES

SEBI DISCLAIMER CLAUSE

IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF OFFER DOCUMENTS TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. THE LEAD MERCHANT BANKER, ARYAMAN FINANCIAL SERVICES LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE OFFER DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURES AND INVESTOR PROTECTION) GUIDELINES IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE OFFER DOCUMENT, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, M/S.ARYAMAN FINANCIAL SERVICES LIMITED, HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED APRIL 28, 2000 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS, 1992, WHICH READS AS FOLLOWS :-

I. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC., AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE DRAFT PROSPECTUS PERTAINING TO THE SAID ISSUE;

II. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSION WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER MATERIALS FURNISHED BY THE COMPANY,

WE CONFIRM THAT :-

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

B. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AND ALSO THE GUIDELINES, INSTRUCTIONS ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

C. THE DISCLOSURES MADE IN THE OFFER DOCUMENT ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE.

III. WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE PROSPECTUS ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID.

IV. WE HAVE SATISFIED OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS.

V. WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SECURITIES AS PART OF PROMOTERS' CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIES PROPOSED TO FORM PART OF PROMOTERS' CONTRIBUTION SUBJECT TO LOCK-IN, WILL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT PROSPECTUS WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT PROSPECTUS.

THE FILING OF OFFER DOCUMENT DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI, FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER(S) (MERCHANT BANKERS) ANY IRREGULARITIES OR LAPSES IN OFFER DOCUMENT.

GENERAL DISCLAIMER

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

FILING

A copy of this prospectus has been filed with the SEBI – Mumbai.

A copy of this prospectus having attached thereto the documents as required to be filed under Section 60 of the Companies Act, 1956, (hereinafter referred to as the "ACT") has been delivered for registration with the Registrar of Companies, Punjab, Himachal Pradesh & Union Territory of Chandigarh at Jalandhar.

A copy of the documents referred to elsewhere in the prospectus has been kept open for public inspection at the Registered Office of the Company.

LISTING

Initial listing applications have been made to the Ludhiana Stock Exchange Limited, (the Regional Stock Exchange), National Stock Exchange, The Stock Exchange, Mumbai, Delhi Stock Exchange Ltd. and The Stock Exchange, Ahmedabad for permission to deal in and for an official quotation of the equity shares now being issued in terms of this Prospectus and for the existing equity shares of the Company.

FICTITIOUS APPLICATIONS

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

“Any person who –

(a) makes in a fictitious name an application to a Company for acquiring or subscribing for any shares therein, or

(b) otherwise induces a Company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to 5 years”

MINIMUM SUBSCRIPTION

IF THE COMPNAY DOES NOT RECEIVE A MINIMUM SUBSCRIPTION OF 90% OF THE ISSUED AMOUNT ON THE DATE OF CLOSURE OF THE ISSUE, OR IF THE SUBSCRIPTION LEVEL FALLS BELOW 90% AFTER THE CLOSURE OF THE ISSUE ON ACCOUNT OF CHEQUES HAVING BEEN RETUNRED UNPAID OR WITHDRAWAL OF APPLICATIONS, THE COMPANY SHALL FORTHWITH REFUND THE ENTIRE SUBSCRIPTION AMOUNT RECEIVED. IF THERE IS A DELAY BEYOND 8 DAYS AFTER THE COMPANY BECOMES LIABLE TO PAY THE AMOUNT, THE COMPANY SHALL PAY INTEREST AS PER SECTION 73 OF THE COMPANIES ACT, 1956.

ISSUE PROGRAMME

THE SUBSCRIPTION LIST WILL OPEN AT THE COMMENCEMENT OF BANKING HOURS AND WILL CLOSE AT THE CLOSE OF BANKING HOURS ON THE DATES AS MENTIONED BELOW.

ISSUE OPENS ON :

ISSUE CLOSES ON :

EARLIEAST CLOSING DATE:

ISSUE MANAGEMENT TEAM

LEAD MANAGER TO THE ISSUE

ARYAMAN FINANCIAL SERVICES LIMITED

SEBI Regn No. - INM 000006807

35, Atlanta, 3^rd Floor,

Nariman Point, Mumbai – 400 021.

Tel. : 022-282 64 64/65/66, 288 31 34

Fax : 022-282 64 67

E-mail : aryaman@bom2.vsnl.net.in

REGISTRAR TO THE ISSUE

Karvy Consultants Ltd.

SEBI REGN NO – INR000000221

Jeroo Bldg., 1^st Floor, Next to Motwane,s Fort,

137, M.G.Road, Mumbai – 400023.

Tel : 022-267 6278 - 6283 - 7307

Fax : 022-267 1237

E-mail : Karvy.frt@karvy.sprintrprg.ems.vsnl.net.in

AUDITORS

S. Pathania & Associates

Chartered Accountants

H.L. 187, Phase – 1,

Mohali, Ropar, Punjab – 160 055

Phone: 672986

SOLICITOR & LEGAL ADVISOR

Mr. R.K. Garg

Advocate

# 1207, Sector 44-B, Chandigarh

Ph. 602714, 607316

Mobile: 98150 –12714

BANKERS TO THE COMPANY

HDFC Bank Ltd.

Sector – 11, Panchkula,

Haryana.

Tel : 0172 – 585 601/ 602/ 603/ 604

Fax. No :

The Vyasa Bank Ltd.

Sector 8-C, Chandigarh

BANKERS TO THE ISSUE

HDFC Bank Ltd.

Sector – 11, Panchkula,

Haryana.

Tel : 0172 – 585 601/ 602/ 603/ 604

Fax. No :

The Vyasa Bank Ltd.

Sector 8-C, Chandigarh

CREDIT RATING

As the issue is of equity shares, credit rating is not required.

UNDERWRITERS TO THE ISSUE

Underwriting being optional, the Company does not propose to underwrite the issue.

TRUSTEES

Since the proposed issue is of equity shares only, trustee is not required to be appointed.

COMPANY SECRETARY & COMPLIANCE OFFICER

Mr. Subhash Saini

S.C.O. 147-148 Sector 8 C,

Chandigarh

Phone NO. (0172) 784321

Fax No.(0172) 780457

(Investors may contact the compliance officer in case of any pre issue /post issue related problems)

II. CAPITAL STRUCTURE OF THE COMPANY

	PARTICULARS	NOMINAL VALUE (Rs.)	ISSUE PRICE (Rs.)
A. 3,30,00,000	AUTHORISED Equity shares of Rs. 10/- each	33,00,00,000
B. 2,20,00,000	ISSUED SUBSCRIBED & PAID UP CAPITAL Equity shares of Rs. 10/- each for cash at par	22,00,00,000
C. 1,00,00,000	PRESENT ISSUE Equity shares of Rs. 10/- each for cash at a Premium Of Rs. 160/- per share.	10,00,00,000	170,00,00,000
D. 4,00,000	OUT OF THE PRESENT ISSUE Equity shares of Rs. 10/- each for cash at a premium Of Rs. 160/- per share are reserved for firm allotment to promoters, friends & relatives.	40,00,000	6,80,00,000
E. 96,00,000	NOW OFFERED TO PUBLIC IN TERMS OF THIS PROSPECTUS Equity shares of Rs. 10/ each for cash at a premium Of Rs. 160/- per share	9,60,00,000	163,20,00,000
F. 3,20,00,000	PAID-UP CAPITAL AFTER THE OFFER Equity Shares of Rs. 10/- each	32,00,00,000
G.	SHARE PREMIUM ACCOUNT Before the issue After the issue		40,00,00,000 160,00,00,000

In view of the proportionate Basis of Allotment in the event of over-subscription, to ensure Allotment in marketable lots (in terms of SEBI RMB (DIP Series) Guidelines 2000, the Company will make such adjustments in the basis of Allotment as may be necessary in consultation with the Regional Stock Exchange / Securities and Exchange Board of India and consequently the allotment may go up by a maximum of 10% of the Net offer to the public as a result of which the post issue paid up capital after the issue would also increase by the excess amount of allotment so made. In such an event, the shares held by the promoters and subjected to lock in, shall be suitably altered, so as to ensure that 20% of the ultimate post issue capital is locked in.

NOTES :-

a. Promoters group is presently holding 100% of the share capital of the Company. The promoters group’s holding after the issue shall be 70% of the Post Issue paid up capital.

b. Details of Shares held by Promoter group and lock in period are as follows :-

Date of Allotment	Date when made fully paid	Consideration	No. of Shares	Face Value Rs.	Issue Price Rs.	%age of Post Issue Capital	Lock in Period #
13-07-92	13-07-92	Cash	70	10/-	10/-		--
29-09-95	29-09-95	Cash	1999930	10/-	10/-	6.25	3 years
16.08.96	16.08.96	Cash*	2000000	10/-	10/-	6.25	3 Years
01.01.97	01.01.97	Cash**	2000000	10/-	10/-	6.25	3 years
27.06.99	27.06.99	Other than Cash***	2800000	10/-	10/-	8.75	--
30.06.99	30.06.99	Cash****	5000000	10/-	90/-	15.62
30.06.99	30.06.99	Other than Cash *****	8200000	10/-	10/-	25.62	3 Years
TO BE ALLOTTED		Cash	400000	10/-	170/-	1.25	3 Years
TOTAL			22400000			70.00

* The company had made a right issue to the existing share holders of the company in the ratio of 1:1 vide resolution passed on 16.08.96 in the board meeting.

** The company had made a right issue to the existing share holders of the company in the ratio of 2:1 vide resolution passed on 01.01.97 in the board meeting.

*** The company had issued 28,00,000 equity shares at Rs. 10/- to EIDER FINANCIAL SERVICES LTD. in consideration of sale of 25,00,000 Equity Shares of Rs. 10/- each held by EIDER FINANCIAL SERVICES LTD of EIDER INFOTECH LTD. at a price of Rs. 11.20 vide an agreement dated 27.06.99

**** 50,00,000 shares were issued to Eider Financial Services Ltd. (EFSL) for clearing of its debts on 30.06.99. A negotiated deal was entered between EFSL and EEL on 01.01.2000 wherein EFSL was required to bring in a premium of Rs. 80/- per share in cash for the shares allotted on 30.06.99 aggregating to Rs. 40.00 crores within a period of 18 months from the date of initial allotment i.e. 30.03.99. Pursuant to the terms of Negotiated deal EFSL has made an offer to the Shareholders, Employee and Associates of all Eider Group Companies to participate in the deal by acquiring the said shares at a premium of Rs.80/- per share. As per SEBI requirement, the amount would be brought in one day before the date of opening of issue.

***** 82,00,000 shares were allotted to EIDER INFOTECH LTD. against transfer of e-commerce business (including portals) and assets (including immovable property) of EIDER INFOTECH LTD. in favour of EIDER e-COMMERCE LTD. vide an agreement dated 30.06.99.

(#) The lock-in-period for the shares proposed to be allotted in this issue commences from the date of allotment in this issue or the last date of the month in which the actual commercial production starts as declared in the offer document whichever is later.

c. Details of contribution and lock-in in respect of promoters whose name figure in the paragraph on “promoters and their background” :-

Sr. no.	Name of the promoter	Date of allotment	Date when made fully paid up	Consideration	No. of shares	Face Value	Issue price	% of post issue paid up capital	Lock in period
1	Eider Infotech Ltd.	30.06.99 01.01.2000*	30.06.99 01.01.2000	Other than cash Other than cash	8200000 3000000	10/- 10/-	10/- 10/-	35.00	Nil 3 yrs
2	Eider Financial Services Ltd.	27.06.99 30.06.99 01.01.2000*	27.06.99 30.06.99 01.01.2000	Other than cash Cash Other than Cash	2800000 5000000 2999850	10/- 10/- 10/-	10/- 90/- 10/-	33.75	3 yrs
3	Ms. Rama Sinha	01.01.2000*	01.01.200	Cash	50	10/-	10/-	0.00	3 yrs
4	Mr. Sanjay Sinha	01.01.2000*	01.01.200	Cash	40	10/-	10/-	0.00	3 yrs
	Total				2,19,99,940			68.75

* date of transfer from original allottees

d. List of top 10 Shareholders of the Company :-

		Number of Shares Held
Sr. No.	Name of the Top Ten Shareholders	Ten days prior to date of filing with SEBI	On the date of filing with SEBI
1	RAMA SINHA	50	50
2	EIDER INFOTECH LTD.	1,12,00,000	1,12,00,000
3	EIDER FINANCIAL SERVICES LTD.	1,07,99,850	1,07,99,850
4	SANJAY SINHA	40	40
5	EIDER TECHNOLOTIES LIMITED	10	10
6	SKYTEL COMMUNICATIONS LIMITED	10	10
7	MR. R. S. WALIA	10	10
8	MR. N. K. JAIN	10	10
9	SINHTRON GASKETS (P) LTD	10	10
10	FANTASY HOTELS (INDIA) LTD.	10	10
	TOTAL	2,20,00,000	2,20,00,000

e. List of top 10 Shareholders of the Company :-

Sr. No.	Name of the Top Ten Shareholders	Two years prior to filing with SEBI
1	Mr. RAVI KUMAR	2999850
2	Mr. RAJIV KUMAR	3000000
3	Ms SUSHMA	30
4	Ms RUPA	30
5	Mr. D. RAM	30
6	Mr. S. KUMAR	30
7	Sh. P. D. GUPTA	30
	TOTAL	60,00,000

f. Details of Sale / Purchase of Shares by Promoters Group / Directors of Promoter

The detail of purchase of shares of the Company during the past six months by promoters Group/Directors is as follows:

Sr. No.	Name of the purchaser	Date of original allotment		Date of transfer	No. of shares	Issue price
1.	Eider Infotech Ltd.	13.07.92 29.09.95 16.08.96 01.01.97	10 9,99,990 10,00,000 10,00,000 30,00,000	01.01.2000	30,00,000	10/-
2.	Eider Financial Services Ltd.	13.07.92 29.09.95 16.08.96 01.01.97	10 9,99,940 9,99,850 9,99,950 29,99,850	01.01.2000	29,99,850	10/-
3.	Ms. Rama Sinha	13.07.92 16.08.96 01.01.97	20 10 20 50	01.01.2000	50	10/-
4.	Mr. Sanjay Sinha	13.07.92 01.01.97	20 20 40	01.01.2000	40	10/-
5.	Skytel Communications Ltd.	13.07.92	10	01.01.2000	10	10/-
6.	Sinhtron Gaskets (P) Ltd.	16.08.96	10	01.01.2000	10	10/-
7.	Eider Technologies Ltd.	01.01.97	10	01.01.2000	10	10/-
8.	Mr. R.S.Walia	16.08.96	10	01.01.2000	10	10/-
9.	Mr. N.K.Jain	16.08.96	10	01.01.2000	10	10/-
10	Fantasy Hotels (India) Ltd	01.01.97	10	01.01.2000	10	10/-
	Total		60,00,000		60,00,000

g. Bridge Loans

There are no "Bridge loans" and no term loans from Banks. Expenses on the project are being incurred from promoters equity and Internal Accruals.

h. Commitment of Issue of Shares in Future.

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

i. In terms of SEBI clarification No VIII, a minimum of 50% of the net Issue to the Public shall be made available for Allotment to individual applicants who have applied for 1000 or less than 1000 Shares. The balance 50% of the net Issue to the public shall be made available for Allotment to investors including corporate bodies / institutions and individual applications who have applied for more than 1000 Shares. The un-subscribed portion of the net Issue to any one of the above categories shall be made available for allocations in other categories, if so required.

j. In the event of over-subscription, the process of rounding off to the nearest multiple of 100 shares during allotment may result in the actual allocation being higher than the equity shares being offered. Final allotment may therefore be increased by a maximum of 10% of the net offer to the public.

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

l. The Company has not revalued its assets since inception. However, the Company has revalued its Investments in the Equity Shares of M/s. Eider Infotech Limited at price of Rs.632/- on the basis of prevailing Market Price of its Shares.

m. As on 01.01.2000, total paid up capital is Rs.22.00 Crores. Total numbers of Shareholders are Seven.

n. Present Shareholding pattern of the Company (No. of Shares)

Particulars	No. of Shares	%age
Core Promoters	2,19,99,950	100.00
Friends, Relatives & Associates	50	-
Total	2,20,00,000	100.00

o. The minimum contribution by the promoters will be brought in before the issue opens.

p. The securities offered through this public issued shall be made fully paid up or may be forfeited within 12 months from the date of allotment of the securities.

III. TERMS OF THE PRESENT ISSUE

TERMS OF PAYMENT

PARTICULARS	TOWARDS SHARE CAPITAL	TOWARDS PREMIUM	AMOUNT PAYABLE PER SHARE
On Application	Rs. 2.50	Rs. 40.00	Rs. 42.50
On Allotment	Rs. 7.50	Rs. 120.00	Rs. 127.50

PARTICULARS	ON APPLICATION (RS.)	ON ALLOTMENT (Rs.)
Promoters / Directors / Employees	Rs. 170.00	Nil
Indian Public	Rs. 42.50	Rs. 127.50

RIGHTS OF THE MEMBERS

1. Right to receive dividend if declared.

2. Right to attend general meeting and exercise voting rights unless prohibited by law.

3. Right to vote either personally or by proxy.

4. Right to receive offer for rights shares and be allotted bonus shares.

5. Right to receive surplus on liquidation.

6. Right to nominate

INSTRUCTIONS FOR APPLICANTS

HOW TO APPLY

A) AVAILABILITY OF PROSPECTUS & APPLICATION FORMS

Application forms along with Memorandum containing salient features of the prospectus may be obtained from the Registered office of the Company, Lead Managers, Brokers and Bankers to the Issue named herein or from their branches, as stated in the Application Form. A copy of the Prospectus may be obtained from the Lead Manager to the issue or from the Registered office of the Company.

B) WHO CAN APPLY

Applications may be made by :-

a. Indian nationals resident in India who are not minor, in single or joint names (not more than 3)

b. Hindu Undivided Families in the individual name of the Karta.

c. Companies, Corporate bodies and Societies registered under the applicable law in India and authorised to invest in the shares.

C) APPLICATION PROCEDURE

Application must be :-

1. Made only in the prescribed application form accompanying the memorandum.

2. Completed in full in block letters in English except signatures in accordance with the instructions contained herein and in the application form. Applications not so made are liable to be rejected.

3. For a minimum of 50 equity shares and in multiples of 50 thereafter.

4. In the name of Resident Indian Individuals, limited companies, statutory corporations / institutions incorporated in India, Indian Mutual Funds registered with SEBI and Banks. Applications in the name of minors, foreign nationals, Trusts not registered under the Societies Registration Act, 1860, or any other Trust laws, partnership firms or their nominees will be treated as invalid.

5. Applicants residing at places where no collection centers have been opened may submit / mail their applications at their sole risk along with application money due there unto by Demand Draft to the Registrar to the Issue, Karvy Consultants Ltd.superscribing the envelope "EIDER e-COMMERCE LIMITED - Public Issue " so as to reach the Registrar on or before the closure of the Subscription List. Such demand drafts should be payable at __________ only. The charges, if any, for purchase of the demand draft will have to be borne by the applicant.

6. All cheques / bank drafts accompanying the application should be crossed " A/c payee only" and made payable to any of the Bankers to the Issue and lodged at any of their nominated branches and should bear the words " EIDER e-COMMERCE LIMITED - Public Issue".

7. Applicants should indicate the application numbers on the reverse of the instrument through which the payment is made.

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

9. All communications should be addressed to the Registrar to the Issue.

10. The applicant should mention the Application Form number on the reverse of the instrument through which payment is made.

D) INSTRUCTIONS FOR PAYMENT

Payments should be made in cash or cheque or demand draft or Stockinvest drawn on any Bank (including a Co-operative Bank) which is situated at and is a member or a sub-member of the Bankers’ "Clearing House" located at the Centers (indicated in the Application Form) where the Application is accepted. A Separate cheque /demand draft / stockinvest should accompany each Application.

Money orders, postal orders, outstation cheques or demand drafts, cheques / draft drawn on banks not participating in the "clearing" will not be accepted and applications accompanied with such instruments may be rejected.

In case payment is effected in contravention of the conditions mentioned herein, the application money will be refunded and no interest will be paid thereon.

APPLICATION(S) WILL NOT BE ACCEPTED BY THE LEAD MANAGERS OR REGISTRAR TO THE ISSUE.

APPLICATION BY WAY OF STOCKINVEST

The applicant being an individual or Mutual Fund only has the option to use stockinvest for applying for Equity Shares now offered in terms of this Prospectus. Stockinvest can be obtained from any Bank issuing such instrument in various denominations by making the necessary applications and depositing the amounts with the respective banks. The applicant using the Stockinvest should submit the application form to any of the Bankers to the Issue before closing of the subscription list along with the Stockinvest after filling in the appropriate amount.

The applicant may approach the issuing bank for issue of Stockinvest of required denomination(s) for payment of application money.

1. The prospective investor, at the time of request for issue of Stockinvest to the issuing bank may have to :-

a. Indicate that he agrees to abide by the terms of issue and encashment of the Stockinvest.

b. Give irrevocable authority to his bank to mark a lien for the value of the Stockinvest against the balance held in his savings / current / other deposit account.

c. Agree that the issuing bank will not be liable for any damage or consequences arising out of the loss of these instruments.

2. Banker’s lien on the applicant’s deposit account will be automatically lifted when :-

a. A valid instrument is presented by the Controlling Branch of the Collecting Bank.

b. The cancelled Stock invest is surrendered by the applicant or applicant has not received the advise of allotment.

c. On execution of an indemnity bond in favour of the bank after the expiry of the validity period (i.e. 4 months) of the Stockinvest.

3. The Stockinvest should bear “Account Payee” and “Non-Negotiable” crossing and will be payable only to the account of the Issuer Company. i.e. “EIDER e-COMMERCE LIMITED” Stockinvest should be utilised by the purchaser(s) and the purchaser’s name / name of one of the purchasers should be invariably indicated as the first applicant in the application form. Thus if the signature of the purchaser on the Stockinvest and the signature of the first applicant on the application form does not tally, the application would be treated as having been accompanied by a third party Stockinvest and is liable for rejection.

4. Stockinvests are to be used by the purchaser(s) within 10 days of its issue and for this purpose the last day for use of the Stockinvest for submitting application to the Bankers to the Issue should be indicated on the face of the Stock invest with a notation “To be used before”

5. The Stockinvest will be issued to the applicant in blank format after authentication of the date of issue by the designated branch. The Stockinvest duly completed should be submitted along with the application form to the Bankers to the Issue.

6. No return will be made to those applicants using Stockinvest for payment of application money.

7. In case of non-allotment of Equity Shares, the cancelled Stockinvest instrument will be returned to the applicant, who will have to approach the issuing bank branch for lifting of lien.

8. A ceiling of Rs.50,000/- per individual per capital issue has been imposed by banks for issue of Stockinvest and these ceiling will not be applicable to Mutual Funds

Application with Stockinvest not fulfilling the above criteria are liable to be rejected.

The application using Stockinvest should submit the Application Form along with the instrument to any of the Bankers to the Issue or their branches mentioned in the Application Form. The Stockinvest instruments are payable at par at all the branches of the issuing bank and as such outstation Stockinvest instruments can be also be attached to the Application Form, if the issuing Bank has a branch at the place of submitting the application.

The applicant has to fill in the following particulars :-

1. Title of the account i.e. " EIDER e-COMMERCE LIMITED-Public Issue"

2. The number of Equity Shares applied for,

3. The amount payable on the Equity Shares applied for,

4. The name and address where the Stockinvest should be returned in case of non-allotment.

5. The application number on the reverse of the instrument.

The instrument should thereafter be signed by the applicant. Service charges, if any, for issuing Stockinvest must be borne by the applicant.

The applicant should not fill in the portion to be filed up by the Registrar to the Issue (right hand portion of the instrument). The Registrar to the Issue will fill up the right hand portion of the Stockinvest indicating the equity shares allotted to the applicant and also the amount calculated as follows :-

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

b. In case of partial allotment, the number and the amount after adjusting allotment money, if any, payable in respect of equity shares so allotted, filled up by the Registrar (on the right hand side of the instrument) will be less than or equal to the number and the amount filled up by the applicant (on the left hand side of the instrument).

c. In case the allotment in nil, the number and the amount filled up by the Registrar on the right hand side of the instrument will be nil.

THE APPLICANTS MAY APPROACH THE BANK CONCERNED FOR OBTAINING STOCKINVEST AND DETAILED INSTRUCTIONS FOR THE SAME.

THE ABOVE INFORMATION IS GIVEN FOR THE BENEFIT OF THE INVESTORS AND THE COMPANY IS NOT LIABLE FOR ANY MODIFICATION OF THE TERMS OF STOCKINVEST OR PROCEDURE THEREOF BY ISSUING BANK.

Inquiries relating to Stockinvest may be addressed only to the Registrar to the Issue and not to the issuing bank. Registrar to the Issue have been authorised by the Company vide a Board Resolution passed on ---------------- to sign on behalf of the Company for realising the proceeds of the Stockinvest of the successful allottees or to affix non-allotment advice on the instrument or to cancel the Stockinvest of the non-allottees. The cancelled instrument shall be sent back by the Registrar to the Investor directly.

DISPOSAL OF APPLICATION AND APPLICATION MONEY

No receipt will be issued for application money. However, the Bankers to the issue receiving the application will acknowledge the receipt of the application by stamping and returning the detachable acknowledgement slip appended to each application.

The sum received in respect of the issue will be kept in separate bank accounts and the Company will not have any access to the funds unless approval of the Regional Stock Exchange i.e. Ludhiana Stock Exchange is obtained for the Basis of Allotment and Listing Approval from the Stock Exchanges where listing is proposed.

The Company reserves the full unqualified and absolute right to accept or reject any application in whole or part and in either case without assigning any reason thereof.

DISPOSAL OF APPLICATION MADE BY STOCKINVEST

The procedure for disposal of applications made by cash / cheque / demand draft will apply mutatis mutandis to Stockinvest except the following:

1. In case of non-allotment, stockinvest will be cancelled by the Registrar to the Issue and returned to the applicant.

2. In case of allotment / partial allotment, the Registrar to the Issue shall fill in the amount in the stockinvest which would be less than or equal to the amount filled by the investor and present the stockinvest duly discharged on behalf of the Company for collection.

3. In case the cancelled stockinvest is not received by the investor from the Registrar, lien will be lifted by the issuing branch on expiry of four months from the date of issue against an indemnity bond from the applicant.

4. Inquiries relating to stockinvest may be addressed to the Registrar and not to the issuing bank.

5. Multiple applications under a stockinvest are liable to be rejected as each application is required to be accompanied by a separate instrument.

SHARE CERTIFICATES / ALLOTMENT LETTERS / REFUND ORDERS

The Company shall dispatch, Letter(s) of Allotment/Share Certificate(s) and/or Letters of Regret together with Refund Orders/Pay Orders, if any, within 10 weeks from the closure of the Issue to the Sole / first named applicant at his/her sole risk. In case of delay in refund of such amount beyond the stipulated period, the Company will pay interest to the applicants at the prescribed rates as per the provisions of Section 73 of the Act'.

The Company shall ensure dispatch of Refund Orders of value up-to Rs.1,500/- under Certificate of Posting and those over Rs.1,500/- and Share Certificates by registered post only and that adequate funds for the purpose will be made available to the Registrars to the Issue.

Where the permission has been applied for dealing and listing of the equity shares in the stock exchanges referred to above and if such permission has not been granted by the Stock Exchange within 78 days of closure of the Issue, then the Company shall forthwith repay with interest all monies received from applicants in pursuance of this letter of Issue and if any such money is not refunded within 8 days after the Company becomes liable to repay it (i.e. from the date of refusal or within 70 days from the closure of the subscription list, whichever is earlier), the Company and every Director of the Company who is an officer in default, shall on and from the expiry of the 8 days be jointly and severally liable to repay the money with interest @15 % p.a. If however an appeal against the decision of any recognised Stock Exchange refusing permission for the shares to be dealt in the Stock Exchange has been preferred under Section 22 of the Securities Contract Regulation Act, 1956 any Allotment made under this letter of Issue shall not be void until the appeal is dismissed.

Interest in Case of Delay in Despatch of Allotment Letters / Refund Orders

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

GENERAL

Applicants are advised that it is mandatory for them to indicate in the space provided in the application form, details regarding their Savings Bank / Current Account Numbers and the name of the branch of the bank to which they want the proceeds of refund to be credited. Applications not containing such details are liable to be rejected.

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

Having regard to Provision of Section 269SS of the Income Tax Act, 1961, the subscription against the equity shares application for an amount of Rs.20,000/- or more should not be effected in cash and must be offered only by an A/c. payee cheque / bank draft / Stockinvest. In case payment is effected in contravention of the provisions, the application is liable to be rejected and application money will be refunded without interest.

A separate cheque / stockinvest / bank draft must accompany each application form.

AS PER SEBI GUIDELINES DATED FEBRUARY 16^TH, 2000, IT HAS BEEN DECIDED THAT, TRADING IN SECURITIES OF COMPANIES MAKING AN INITIAL PUBLIC OFFER SHALL BE IN DEMATERIALISED FORM ONLY.

DEPOSITORY OPTION TO INVESTORS

As per the provisions of the Depositories Act, 1996, the shares of a body corporate can be in a dematerialised form, i.e. not in the form of physical certificates but be fungible and be represented by the statement issued through electronic mode. The Company will also opt for this method subject to investors exercising their option to hold the shares in dematerialised form, for which necessary columns have been provided in the respective Application Forms. The investor have an option either to receive the security certificate or to hold the securities with depository.

The Company has already applied to NSDL & CDSL for allotment of ISDN Number.

a. A tripartite agreement will be signed between the Company, the Registrar and the depository viz NSDL, CDSL.

b. Investors have a option to seek allotment of equity shares in electronic mode and / or physical mode.

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

d. Application for electronic and physical shares by the same first applicant will result in rejection of application for shares in the electronic mode and only the application for physical mode will be considered as a valid application.

e. Investors who wish to apply for equity shares in the electronic form need to have at least one Beneficiary Account with a Depository Participant prior to the application.

f. Allotment Advice / Refund orders will be directly sent to the investors by the Registrar.

g. If incomplete / incorrect investor account details are given in the application form, it may result in issuance of physical Equity Share Certificate.

h. Responsibility for correctness of applicant's demographic details given in the Application Form vis-à-vis those with his / her Depository Participant, would rest with the investor.

i. Shares in electronic form can be traded only in Stock Exchange having electronic connectivity with NSDL or CDSL.

j. The application form shall contain space for indicating no. of shares subscribed for in demat and physical shares or both.

k. No separate applications for demat and physical is to be made. If such applications are made, the applications for physical shares will be treated as multiple application and rejected accordingly.

l. In case of partial allotment, allotment will be done in demat and balance, if any, will be allotted in physical shares.

UNDERTAKING BY THE COMPANY

The company undertakes the following :-

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

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

c. The funds required for the despatch of refund orders/ allotment letters / certificates by registered post shall be made available to the Registrar to the issue by the company.

d. The promoter’s contribution in full, wherever required, shall be brought in advance before the issue opens for public subscription.

e. The certificates of the shares / refund orders to the non-residents Indians shall be dispatched within specified time.

f. No further issue of securities shall be made till the shares offered through this offer document are listed or till the application moneys are refunded on account of non – listing, undersubscription.

UTILISATION OF ISSUE PROCEEDS

The sum received in respect of the issue will be kept in a separate bank account and the Company will not appropriate the funds unless approval of the Regional Stock Exchange for allotment has been obtained and listing approval from all the Stock Exchanges where listing has been proposed is available.

The detail of all the monies utilised out of the issue 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.

The detail of all utilised monies out of the issue 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.

TAX BENEFITS

The company has been advised by the Auditors of the company M/s.S.Pathania & Associates, Chartered Accountants, HL 187, Phase I, Mohali vide their letter dated 08.04.2000 that under the current provisions of the Income Tax Act, 1961 and the existing laws for the time being in force, the following benefits, inter-alia, will be available to the company and the members :-

A) TO THE COMPANY

1. Under Section 35 D of the Income Tax Act, 1961, the Company will be entitled to amortise certain preliminary expenses over a period of 5 assessment years, the expenditure of the nature specified in the said section incurred by the Company.

2. The Company would be entitled to depreciation on lumpsum consideration paid in acquiring Know How likely to assist in manufacture under Section 32 of the Income Tax Act, 1961.

3. In accordance of with and subject to the provision of Section 35 AB of the Income Tax Act, 1961, the Company will be entitled to a deduction in six equal instalments in respect of the lumpsum amounts, if any, paid for acquiring technical Know-how for the use of the Company`s business.

4. In accordance with, and subject to the conditions specified in Section 80 HHC of the Income Tax Act, 1961, the Company is entitled to a deduction on the profits derived from the export of goods, subject to the provisions of the said section.

5. In accordance with and subject to the provisions of Section 35(1)(iv) of the Income Tax Act, 1961, the Company is eligible for deduction of Capital Expenditure (other than on acquisition of land) incurred in connection with the scientific research and development, related to the business carried on by the company, in the year in which such expenditure is incurred.

6. Under Section 115 JAA of the Income Tax Act, 1961, the Company will be entitled to carry forward a tax credit in respect of tax paid on deemed income under Section 115JA upto a period of the fifth assessment year immediately succeeding the assessment year in which such tax credit become allowable.

7. In accordance with and subject to the provisions of Section 80IA of the Income Tax Act, 1961, the Profits earned by the company from its manufacturing activities are exempted from Income Tax.

TO THE RESIDENT MEMBERS OF THE COMPANY

1. Dividends paid by the Company being a Company referred in Section 115O to members being scheduled banks, public financial investment corporation or companies registered under Section 25 of the Companies Act, 1956, individuals, Hindu Undivided Families etc. is exempt in the hands of the recipient as per the provision of Section 10(33) of the Income Tax Act, 1961.

2. As the dividend referred under the provisions of Section 115O is exempt under Section 10(33) of the Income Tax Act, 1961 no tax will be deducted by the company on such Dividend Payment.

3. On the long term capital gains, arising on the sale of shares/debentures held by the members for more than 12 months, arrived at in the manner provided under Section 48 of the Income Tax Act, 1961, by deducting the Indexed cost of shares during the year in which the shares are sold from the sale price, the members are entitled to concessional rate of 20% as provided for in Section 112 of the Income Tax Act, 1961. Such long term capital gains would be exempt under Section 54 EA /54F of the Income Tax Act, 1961 subject to fulfilment of certain conditions.

4. Members will not be required to pay wealth Tax in respect of the value of the equity shares debentures held in the Company in view of their exclusion from the definition of “Assets” under Section 2(ea) of the Wealth Tax Act, 1957.

5. Under Section 47(x) of the Income Tax Act, 1961 conversion of debentures into shares of the Company will not be regarded as transfer and no capital gains tax will be levied thereon.

6. All Mutual Funds set up by a Public Sector Bank or Financial Institutions or authorised by Reserve Bank of India and Mutual Funds Registered under the Securities and Exchange Board of India Act, 1992 or regulations made thereunder will be exempt from Income Tax from all of their income, including income from investment in share / debentures of the Company, under Section 10(23D) of Income Tax Act, 1961.

IV. PARTICULARS OF THE ISSUE

OBJECTS OF THE ISSUE

1) To Finance Project in the area of E-Commerce Net Distribution Network Project for commercial sales of Products and items for Domestic/Office consumption.

2) To launch E-Commerce Payment Gateway Project & an International Gateway with Direct Satellite Bandwidth Connectivity & E-Commerce Credit Card Projects.

3) To set up Global Web Portals & related eCommerce Int’l & National businesses

4) To install latest equipments for providing Software/Web Business Solutions.

5) To meet expenses of the issue & List the equity shares of the Company on the Stock Exchanges.

COST OF PROJECT & MEANS OF FINANCE

The Total Cost of the Project is Rs 240 Crores as detailed hereunder. The projects have been framed by the technical team of the Company. The cost of the total project has been estimated by financial experts of the Company in house and not appraised by any financial institution/Bank. The cost of the project and proposed means of financing are as under:

COST OF THE PROJECT

(Rs. in Crores)

PARTICULARS	TOTAL
INTERNET DISTRIBUTION ECOMMERCE PROJECT ( IN 12 CITIES ) (India home Service.net) Expandable Capacity to 100 Cities	30.00
E-COMM PAYMENT GATEWAY PROJECT	50.00
E-COMM CREDIT CARD PROJECT	135.00
PORTALS/SOLUTIONS BUSINESS DEV.	15.00
ISSUE EXPENSES	10.00
TOTAL	240.00

MEANS OF FINANCE

		(Rs. Crores)
Equity - (By Negotiated deal) Shareholders, Employees & Associates of Eider Group Companies. Share Capital (Rs. 5.00 crores already brought in) Share Premium	40.00	40.00
Equity Shares to promoters: Share Capital Share Premium	0.40 6.40	6.80
Equity – Public Share Capital Share Premium	9.60 153.60	163.20
Internal Accruals		30.00
	TOTAL	240.00

DEPLOYMENT OF FUNDS IN THE PROJECT

Details of actual expenditure incurred in the project :-

(Rs. Crores)

· Infrastructure	0.89
· Portal Development, Launching, Hosting, Management including Business Development Costs.	3.85
· Hardware & Software Development	2.92
· Miscellaneous Fixed Assets including for Distribution	1.76
· Pre-operatives including branches & operations	1.65
· Technology & Tie ups	0.38
· Advertisement & Business Development & Maktg. Costs.	0.57
· Stocks/Inventory	0.48
· Telecom Facilities including web hosting & Int’l Servers cost	0.38
· Cost on Human Resource & Training etc	2.91
· India home service – on-ground delivery support systems & Network Dev. Costs.	1.66
Total	17.45

Means of Finance

Promoters

17.45

YEAR WISE BREAK UP OF PROJECT

Since the total amount of the project is to be spent in the financial year 2000-2001, the year wise break up of the project has not been given.

BRIDGE LOANS OR STAND-BY ARRANGEMENT

The Company has not resorted to any other kinds of funding like Bridge Loans or any other Stand-by arrangements for incurring expenditure on the project which would be repaid from the proceeds of the issue.

V. COMPANY, MANAGEMENT AND PROJECT

HISTORY, MAIN OBJECTS AND PRESENT BUSINESS OF THE COMPANY

BRIEF HISTORY OF THE COMPANY

Eider e-Commerce Ltd. (EEL), earlier known as City Wide Computers & Communication (India ) Ltd., is a 8 years old Company recently acquired by Eider Infotech Ltd. (EIL) under an Agreement for a value of Rs. 6.00 Crores which was paid by Eider Infotech Ltd. & Eider Financial services Ltd by sale & transfer of Equity Shares of Eider Technologies Ltd and Eider Infotech Ltd respectively to the Original promoters of Citi Wide Computers & Communications (India) Ltd., Whereafter the name of the Company was changed to Eider eCommerce Ltd (EEL). The already existing eCommerce business including its major Global Web Portals having large Valuations alongwith some key immovable property of Eider Infotech Ltd. related to eCommerce Business was then transferred to EEL on 01.01.2000 for total consideration of Rs. 820.00 lacs, the consideration of which was settled through issue of shares of EEL in favour of EIL.

The Company has an All India Shared Infrastructure with offices at Delhi, Bombay, Calcutta, Chennai, Pune, Ahmedabad, Bangalore, Vadodara, Jalandhar, Ludhiana, Panchkula & Chandigarh. Apart from Delhi & Panchkula Building which are owned by Company all other offices are available on sharing basis with the group companies. The Company has entered into sharing agreeement with Eider Group companies namely M/s Eider Infotech Ltd., Eider Financial Services Ltd., Eider Technologies Ltd., Eider PWI Paging Ltd , Eider PWI Communications Ltd and International Institute of Telecom Technology. The present employees strength exceeds 400 numbers including that of its shared employees between its group promoted ventures on mutually sharing basis to avail maximum mileage & act as a synergy for all.

PRESENT BUSINESS

EEL’s present operations encompass

1. e-Commerce/Portal Business (National & Int’l)

2. Internet/Web Solutions expertise

3. Communication Software & Network solutions.

4. Products Sale

The details of the present activities of the company are as follows ;

1. e -COMMERCE

The Company presently operates its ecommerce business thru its 04 Four Major Global, International & National – Major Web Portals India Sales.net, Indiadmission.com, Magikweb.com & Dreamprincess.com. Details on each Portal & its business activities are placed hereas under:

· INDIASALES.NET

Eider e-Commerce Ltd has launched a major interactive Website Portal www.IndiaSales.net to provide information on Indian Market concerning Property & Product Sales/Purchase/Rent/ Discounts etc. & an International ON-LINE Product Shopping Mall for Buyers & Sellers World-Wide.

In Property matters, the Portal gives information on immovable urban properties like plots, flats & houses which are available for sale/rent in two dozen major cities which will be extended to more than 75 cities within a couple of months. The access to the Portal/Information is Absolutely Free for Both Buyers & Sellers. Not only all properties available in various cities are displayed on the city-Site Free for the benefit of Buyers but any person wishing to Sell or Rent Out property can LOGIN relevant property Particulars (maximum 40 words) ON-LINE which will be displayed Absolutely Free on Normal Web Pages. For Sellers/Rent Outs interested in Home Page/City Page or Box Advertisements, provision has been made for Paid Advertisement, for which Tariff Schedule has been provided on the site. In addition, to facilitate sale/purchase/renting negotiations, the site contains an exhaustive Property Dealers Directory (total about 6000 Dealers) for the various cities. Updated information is also available on loans for financing properties & vehicle purchases, alongwith the names, addresses & telephones details of organizations/ firms involved in the loan/financing business. As most of the cities have numerious buildings under construction by Builders, information is also available on Builders & Real Estate Developers so that the potential buyers could contact them in case of need.

In Product matters, the Portal offers a web Platform for sales/purchase of various Home Products which are normally required by urban households (such as TV, VCR, Washing Machines, Toasters & Irons, Kitchen items, Audio Products, Shoes, Cosmetics & Toiletries etc.) in above cities which will be progressively extended to 30 major cities of India. There are more than 20 Product Groups, with about 15,000 entries on the site, alongwith names & addresses of the Product Dealers in various cities. Both Buyers & Sellers have free access to the site, & like in property matters, sellers care provide information on products on the Net Absolutely Free. Information is available on Discount Sales offered in various cities on Products of common interest & a Free Platform has been provided for people who wish to sell their cars/vehicles on Second - Hand Sales Mart. A Loan Financing Avenue has been opened providing information about Loan facilities offered & available by Institutions, & a city wise list of Firms, Organizations offering credit/loans is also on the Portal. Again, the access to the site is Absolutely Free for both Buyers & Sellers.

A major highlight of the www.IndiaSales.net Portal is the launching of an International ON-LINE Home Shopping Mall, covering sale/purchase of various Home Products of common utility & use over the counter from all over the world. This is the first time that an ON-LINE International Shopping Mall has been established for sales of products in India from different countries of the world, with product prices, qualities, payment, delivery & warranties exhibited on the Net for the benefit of the Customers to see, select & place Purchase Orders ON-LINE. For sellers of Products world-wide (divided in seven Groups for convenience purposes viz North American, South American, ECM, Asian, Europian, African & Australian), Invitation has been extended for Free Display of their goods & wares on www.IndiaSales.net for a certain period & thereafter on nominal Tariff charges, with a blanket offer from Magikweb to design the Web Pages (1-4) Free for the sellers.

The Company has also hosted on the Internet a major Web Product for the global market under the Brand Name Magik Web, which has made the development & hosting of OWN web sites on the World-Wide-Web within the easy reach of every person/organization. Magikweb has offered a complete Turn-Key job, from conception of website to designing & hosting & maintenance for one year, at an exceptionally economical cost of Rs. 11,990/- or US$ 395.00. There has been a tremendous response to this Product.

· INDIADMISSION.COM

Eider e-Commerce Ltd., launched the Second Major Internet Portal www.Indiadmissions.comm covering the entire Academic world in India in respect of Admissions & matters connected thereto.

The Portal contains Comprehensive Information State-Wise with respect to all Universities, Engineering & Medical Colleges, other Technical Institutions & Public Schools in India, with a data Base of over 10,000 Academic Institutions, thus bringing on one platform, all the Academic Institutions from Nursery to University on an All-India basis. Apart from containing general Information on Address & Courses of Professional Colleges, State-Wise Eligibility Criteria , Admission Procedure, Reservations, Entrance Test procedures etc. have also been provided.

For the Public Schools, Information is available on CBSE Affiliations as well as School-wise Information on Residential/Day Boarding & Coeducational/Boys/Girls. Thus, any parent/student wishing to seek Admission in any Professional College including Engineering, Medical, Dental, Pharmacy Architecture etc., or a Public School, at the flick of a button, can obtain, the basic information on the various aspects relevant for admission.

Indiadmissions.com provides numerous Innovative Pages/Links to make the Portal Interactive & participative including:

1. Admission Updates - Concerning Admission Notices/Updates for Universities, Colleges & Schools separately, updated fortnightly

2. Admission Deadlines - For Principals/Heads of Institutions to inform the Deadlines, updated Fortnightly

3. Entrance Test - Coverning Information on Entrance Test Notices updated Fortnightly

4. Achievement Page - where Meritorious students from Schools, Colleges & Universities, can find their photographs placed on this Page on a fortnightly basis.

5. Campus News - Separate Pages for Universities Colleges & Schools on a fortnightly basis.

6. Academic News - mentioning Important Academic news from All over the world updated fortnightly.

7. On-Line Polling - providing a Question of national Academic importance for ON-Line Voting on a fortnightly basis.

8. A Directory of Foreign Universities of the World with hyperlinks to their websites

9. A Directory of Indian Publishers of Books for Schools & Colleges

In addition, the Portal provides a comprehensive Forum for the Get Together of

a) Old students by providing an ALUMNI Service & Data Bank covering all Academic Institutions of stature in India &

b) Current students by providing a Dedicated Chat Channel restricted to Students only.

As per the policy of the Company, the entire Information, Facility & Service is FREE with Free Access, Free Log-In & Free Ads (40 words).

It will be pertinent to recall that Eider e-Commerce/ launched a major Internet Portal www.indiasales.net which for the first time concentrated on Home Shopping. Indiasales.net brought together Information on Home Property in 75 cities -wise & Home Products in 27 Product Groups on one single platform. The Data Bank already contains more than 30,000 Entries and More than Twenty Cities are already fully operational.

In addition, it has launched an On-Line International Home Shopping Mall for Home Products for Buying & Selling World-Wide in a Path breaking idea, bringing the concept of global e-commerce in India accessible to common people in India & Abroad.

As usual, Access, Login & Ads (40 words) are Absolutely Free on Indiasales.net.

· MAGIKWEB.COM

Magik Web - The Total Web Solution Product

Magik web	- The Product Magik Web is a bundled web solution product brought to you by Eider e-Commerce Ltd, the pioneers & Leaders in web development and solutions. Magik Web is an instant Web site that puts you on the World Wide Web and enables you to do business the way the world is doing it. Magik Web has been the result of intensive Research at EIL’s R&D Centres & offers latest Int’l technologies & standards. Magik Web has been structured to be the most Economical way to the web which has been made possible playing on bulk & large volumes & owned US Servers. Magik Web provides the cost effective professional grade website & yet meeting Int’l Quality Standards. With Magik Web you can be assured of · A well designed site with an Independent domain name hosted on high performance US servers. · Best value for your money. · International Quality Standards with high quality design. · Better visitor hits, as your site would be registered with top search engines. · Incredibly low cost as compared to other solution providers. · No hidden costs. We deliver what we say.	ü ‘Value for Money’ ü International & Quality Web Site Design ü Hosting on High Performance Servers ü No Hidden Costs ü Promoted by a reputed I.T. Corporate ensures ‘Deliverance’ ü Effective and Efficient Service ü Money back Guarantee* ‘ No questions Asked’.
Magik web	- The Price Magik Web comes to you at an incredible low price of Rs. 11,990/- only thus giving you one of the most economical promotional media option available having an international reach. The most economical & professional way to web & thus e-commerce.

* Except Domain name Registration charges

magik web	- The Bundle The Magik Web product offers a complete web presence for you and your company. The bundle includes: · A web site not exceeding 5 pages or 5 MB (which ever is higher) (1 home Page & 4 Additional Pages) designed according to international standards and hosted for one year on high performance servers. · 5 MB of web space to accommodate the web site. · Unique Domain Name Registration and setup.FTP Access to the website to enable you to upload web pages to the site. · A Hit Counter that lets you know the number of people who have visited the site. · Feedback Form · Registration of the web site with top ten search engines. · POP-3 email ID’s. · Free minor updations for the first three months. · Maintenance of Website for 12 calendar months from the day of hosting. · Free Consultancy on Web Development.		INDEPENDENT DOMAIN NAME + 5 MB SPACE (ON ADVANCED US SERVER) + PROFESSIONAL DESIGNING (INT’L QUALITY) + HOSTING & MANAGING SITE FOR 1 YEAR + FREE CONSULTANCY ON WEB + OTHER BENEFITS & SERVICES
magik web	- The Benefits. · Magik Web increases the ease of access to your Company and company information for your customers and prospects, wherever they are in the world. Your company is accessible 24 hours a day and 365 days a year to the world at large. · Magik Web increases savings through cost cutting, better and more timely customer service resulting in better customer retention. · Magik Web helps in projecting a good image of you and your Company to your customers, prospects and the outside world. · Magik Web helps you learn more about your customers and prospects owing to the interactivity of the web sites. · Magik Web is cost effective as it comes to you at an affordable price of Rs. 11,990/- · Magik Web helps your company avail of the commerce possibility on the WWW. · Magik Web is offered by Eider Infotech Ltd., one of the pioneers of Web solutions in India & thus product quality & service guarantee.
E-magik web	- Large Interactive Websites & e-comm sites EEL specializes in large web & e-comm sites & solutions for which EEL offers special prices & dedicated Team support. For larger case to case Projects on Web/e-comm sites and solutions extra R& D effort is also provided right from inception of the Project till completion with total consultancy back up – Absolutely Free.
· DREAMPRINCESS.COM

After launching two major Internet Portals - Indiasales.net & Indiadmissions.com Eider e-Commerce launched the third major website Portal www. Dreamprincess.Com in April 2000 as a humble salute to Love & Beauty - world wide.

The Portal provides to women world-wide a comprehensive forum for Pen-Friendships, Engagement/Banns Notices, Wedding Greetings, amateur Love-Poetry & Jokes , Honeymoon Packages & a Fashion Show - (all on fortnightly updating basis) - on the one hand, and transmission of an edited version of Kamasutra the ancient Indian Art of Love-making conceived by Vatsyayan, which has universal validity & application. A Photo Gallery has been added to provide opportunity to beautiful girls world-wide to appear on the Web for a fortnight, If so selected by Dreamprincess.

The Central attraction of the Portal is the institution of Internet-Based & Annual Global Beauty Contests-termed expressively as Miss E-World Dream Princess Global Beauty Contests - wherein the selection of Miss E-World Dreamprincess & Fifteen Princesses of Her Royal Court (representing Global Regions) will be conducted by ON-LINE Polling on the Internet in a Three -Stage Selection Process, with a Multi-National JURY representing all Global Regions deciding the Final Title Winners at a live Function. This Internet Global Contest is open for ON-LINE Participation to all women between 16-25 years world-wide. The formal Announcement of Miss E-World 2001 Dream Princess Global Beauty Contest will be made in due course.

Keeping in view the Indian emphasis on matrimony, a Matrimonial Gallery has been provided with useful information on Brides & Grooms duly classified as per age, height community etc.

The Portal also provides for an “I Love You” Chat Channel, with a number of Private Rooms, catering to different language, age & marital status groups world-wide. As usual, the Portal Provides for FREE ACCESS, LOGIN & ADS.

The portals have been a source of Large Trading Sales & Revenues for the Company. The clients are mostly individuals & small & medium companies & transactions are mostly B2B & B2C. A massive & sustained Advertisement Campaign has been launched & is being further strengthened to being more ecomm business for the portals & consolidate its position in the eCommerce segment. The Company expects phenomenal valuation for these portals already in operations in India & Internationally.

2. INTERNET/WEB SOLUTIONS

The company specialises in interactive web site development, internet & intranet web based applications & has been developing & providing solutions for a wide variety of clients & varied class of businesses houses including small & medium Traders, Businessmen, Professionals, Businesses, Schools, Petrol Stations, Cinema Houses, Shops, Colleges, Computer Institutes, Polytechnics, Nursing Homes, Hospitals etc. and for small & medium segment of business houses & Corporates & professionals Including doctors, lawyers, CA, Financial consultants etc. The Company is currently working on various companies portals & web solutions including that of Blues Wear, Steelage Man Co., Falcon India Pvt. Ltd, K & K Health Products Pvt. Ltd., Japsin Products, United Trading Corporation, Meena Automation Ltd., Parswa Nath, Magna, Joint Tech. Pvt. Ltd, Manali Resorts, Sharad Advertising, Shere – E – Punjab, Bedi Inter National, Banjara, Amrit International, Lanar Global Exports, Advance Electronic Systems, Asm International, S.S. Lan Firm, Pooja Electronics

The Company has many Channel Partner/Dealers to execute variety of web services all over India including Avant Garde, Apex Peripherals, Markers, Er Net Solutions

3. COMMUNICATION SOFTWARE & NETWORKING

This includes Customised Communication Software Development & Solutions. The company has developed Customised Software Solutions for various Telecom Co’s like Hindustan Paging Ltd, Skytel Communications Ltd, Tantalum Communications Ltd, Eider Infotech Ltd & has executed various sub contracted Govt Telecom Software & Networking Projects including that of MSEB Maharashtra, PHED Jodhpur & Engineering Colleges like IITT College of Engineering, Kala Amb (HP), IITT College of Engineering, Pojewal (Punjab) etc. The Company has various Distributors including Infotech Solutions, Saran Communications, Net Access etc.

4. ASSEMBLING AND SALE OF HARDWARE

The company was & is partly carrying on the activities of assembling and trading in Computer Systems, Telecom & consumer Electronics Products such as DTMF Telephones , Security Systems, Key Telephone Systems (Atlantis Model) & various Switches & Encoder products of Eider Technologies Ltd. EEL has long business association (even long before its takeover by EIL) with ETL, EFSL & EIL & has been distributing their products as also has been associated with them in their various development programmes.

KEY STRATEGIES

· Pursue World Class Operating Model. Management believes that one of the most critical factors to the Company’s success has been its commitment to pursue the highest quality standards in all aspects of its business. In its services and operations, the Company achieves quality through rigorous adherence to highly evolved processes.

· Invest Heavily in Human Resources. The Company invests heavily in its personnel by adopting progressive employee-oriented practices, fostering a collegial atmosphere and informal culture, offering challenging assignments and ongoing training and providing stock option plans adopted by the company.

· Focus on Managed Web Solutions. The Company is dedicated to providing web solutions, many of which are offered on a fixed price, fixed-time frame basis. By taking full project management responsibility on every project, the Company enables its clients to receive high quality, cost-effective solutions with lower risk. Such services offer the Company the opportunity to build client confidence with the potential benefit of enhanced margins.

· Capitalize on Well-Established Offshore Development Model . The Company has made significant investments in its infrastructure and has developed the advanced processes and expertise necessary to manage and successfully execute projects in multiple locations

· Maintain Disciplined Focus on Business and Client Mix. EEL provides a wide range of IT Services and maintains a disciplined focus on its business mix in an effort to avoid service or client concentration.

· Pursue Growth Opportunities. As part of its growth strategy, the Company intends to: (i) broaden its service offerings by continuously evaluating emerging technologies, particularly in the areas of e-commerce and Internet/Intranet services; (ii) increase business with existing clients by both increasing the volume and scope of its projects and expanding the breadth of its service offerings; (iii) develop new clients; (iv) increase revenue per IT professional by building expertise in vertical markets and refining its software/web development tools and methodologies; and (v) expand and diversify its base of IT professionals by building new facilities near large pools of talent and expanding its recruiting from other disciplines.

MAIN OBJECTS OF THE COMPANY

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

1. To manufacture, buy, sell, exchange, alter, improve, prepare for Market, Import and deal in Communication electronics, Digital electronics, Automatic electronics, Industrial Electronics, Medical and other kinds, whether used (presently or at later date) by Civil and/or Defence Establishment.

2. To carry on the business of Manufacturers, assemblers, Fabricators, Designers, Producers, Exporters and Importers of all Equipments and instruments of all descriptions of electronic including without limiting the generality of the foregoing Electronic Communication equipment. Radio Paging Systems, Electronics Control Instrument and Basic Components such as Valves, Transistors, Condensors, Coils, Magnetic Materials, Microwave components, Radiographs, Phonographs, Dictaphones, Television Sets and all parts.

3. To manufacture, import, export, assemble, develop and invent and otherwise deal in Computer Software, Floppy diskettes, Printer Ribbons, Paper, Magnetic Tapers, Cassettes, Peripherals, Accessories and Components.

4. To establish, provide, perform system Engineering Services, related technical and Consultancy services, imports, technical know how in the field of Computers, develop technology, technical know how in the field of Computer.

5. To carry on all types of business in India or outside India whether in joint venture or independently in the field of Electronics Commerce (e-Commerce)/Internet and Information Technology including import and export of goods, software products through e-Commerce and manufacturing, dealing and trading all types of software, equipments and hardware for the above purpose.”

To widen the scope of activities to be carried on by the company, the main object clause was amended to include clause 5 as stated above by passing a special resolution in the EGM held on 3^rd, February 2000.

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 for the present issue and also the activities which the company has been carrying out till date.

The Lead Manager confirms that all the formalities prescribed by the companies act with regard to the change in the main objects are complied with. The Company Law Board / ROC formalities are also complied with by the company.

SUBSIDIARY COMPANY

The Company does not have any subsidiaries.

PROMOTERS/DIRECTORS AND THEIR BACKGROUND

Presently the promoters of the Company are M/s.EIDER INFOTECH LTD., Eider Financial Services Ltd. Ms. Rama Sinha & Mr. Sanjay Sinha.

EIDER INFOTECH LTD

Introduction

Eider Infotech Ltd (EIL) earlier known as Eider Telecom Ltd. established in the year 1990 is a 9 years old Public Listed Infotech Corporate. EIL’s present business focus includes Tele-Communication Softwares/Solutions, I.T. Education including Interactive education programmes, Software Development & Products including Customized Turnkey Software Solutions and Web Solutions including Portal development. EIL has been promoted by Eider India Group & Ms. Rama Sinha ME,FIETE, an Int’l Renowned Telecom Engineer & Mr. Sanjay Sinha a known Industrialist. EIL controls major subsidiaries into e-Commerce & Telecom Services & has also promoted prestigious (02) Two AICTE-Govt of India Approved, Degree Level Engineering Colleges specializing into Computer Science & Telecom 04 year Degree Course in the States of H.P. & Punjab. EIL including its promoted ventures also has an enviable All-India Network- Infrastructure with approx. 500,000 sqft covered area, covering all major cities of India including Delhi, Mumbai, Calcutta, Chennai, Pune, Vadodara, Ahmedabad, Bangalore, Chandigarh, Ludhiana, Jullundhar etc.

EIL presently is a Zero Debt Company with Strong Financials & Reserves & its 1999-2000 sales till 31^st December 1999 exceeds 61.86 crores with a net profit expected of Rs. 16.40 crores. EIL Presently has an equity base of Rs. 20.00 Crores with about 70% holding with the core promoters & balance with high value Public Investors & NRI’s. EIL has wide clientele which includes Defence, Police, Para Military, Govt & Semi Govt, Corporates & Commercial Organizations, Institutes & Individuals. EIL has also entered into Joint Venture & has various Strategic collaborations with various MNC Market Leaders & has developed a strong channel sales network through out India.

EIL is currently pursuing Accquisition of a US based Company into Web/Software Business towards meeting its sales globalization objectives. The Company is also actively pursuing on its plans for NASDAQ Listing for which the expected target is end of year 2000.

M/s Eider Financial Services Limited

M/s. Eider Financial Services Limited is a Public Limited Company in the financial services sector. It was incorporated on 10.04.1989 and date of commencement of business was 20.04.1989. It is the RBI approved NBFC and the financial services arm of Eider Group Companies. The Company has syndicated loans to various Govt. and Corporate Bodies.

Smt. Rama Sinha, aged 51 years, is B.E. (Electrical) from Roorkee University & M.E. (Telecommunication) from Punjab University. Smt. Rama Sinha is a Telecom Engineer and a Fellow of Indian Institute of Electronics and Telecom Engineers. She is the Chairperson of EIDER GROUP and Managing Director of Eider Technologies Industries Limited. She has earlier worked till 1982 with Punjab State Electronics & Production Development Corporation Ltd. For 5 years as Project Manager, She has promoted Eider Technologies Limited, which is in the field of manufacture of Radio Communication Systems and Wireless Networks with world multinationals, and also Eider Infotech Ltd.

Shri Sanjay Sinha, aged 32 years, a known Industrialist, has varied experience in handling financial and marketing matters of the existing group companies. He is engaged in organising marketing set up for M/s. Eider Technologies Ltd. He is actively involved in the overall management of the group companies. He has also promoted a Finance Company, Eider Financial Services Limited.

MANAGEMENT AND MANAGERIAL COMPETENCE

The management of the Company is vested with the Board of Directors & Mrs. Rama Sinha who is the Chairperson & Managing Director. The day to day affairs of the Company would be looked after by her and would be assisted by the other directors and key managerial personnel.

BOARD OF DIRECTORS

SR. NO.	NAME, DESCRIPTION, ADDRESS & OCCUPATION	AGE (YEARS)	EDUCATIONAL QUALIFICATION	OTHER DIRECTORSHIPS / VENTURES
1	Mrs Rama Sinha (W/o. Dr. A.K. Sinha) Chairperson & Managing Director 667,Sector-6 Panchkula Business	51	M.E. (Telecom)	Eider Technologies Ltd Sinhtron Gaskets (P) Ltd. Fantasy Hotels (I) Ltd. Eider Financial Services Limited Eider PWI Paging Ltd. Eider PWI Communication Ltd. Eider Infotech Ltd.
2	Mr. Sanjay Sinha (S/o Dr. A.K. Sinha) Managing Director 667, Sector-6 Panchkula Business	32	MBA	Eider Technologies Inds. Ltd Sinhtron Gaskets (P) Ltd. Fantasy Hotels (I) Ltd. Eider Financial Services Limited Eider PWI Paging Ltd. Eider PWI Communication Ltd. Eider Infotech Limited
3	Wg. Cmdr. M.M. Dhasmana (S/o. Dr. Vidyadhar Dhasmana Director 285-Mahesh Nagar Ambala Cantt. Haryana Ex-IAF Officer	63	B.A.(Hons.) M.A., Ph. D.	Eider Technologies Ltd Eider PWI Paging Ltd. Eider PWI Communication Ltd. Eider Infotech Ltd.

BIODATA OF DIRECTOR WHOSE NAMES IS NOT INCLUDED IN THE PROMOTERS LIST

Wg. Cdr. Manmohan Dhasmana aged 63 years, has done his B.A. (Hons, M.A., P.h.D. He has retired as Wing Commander of IAF. He has been associated with the Group since long and has to his credit a distinguished service in Indian Air Force.

The directors do not hold any directorship in any other company other than what has been mentioned above.

KEY MANAGEMENT PERSONNEL

Details of the Key Management Personnel is as under :-

Name & Qualification	Designation	Date of Joining				Experience (Years)		Detail of previous employment
Dr. Arun Kumar	Corporate Advisor					35		Ex IAS, Secy. To Govt.
Mr. R.S. Walia B.Com, ACS	Advisor	25.03.2000				15		Company Secretary Eider Infotech Ltd
Mr. N.K. Jain FCA	Vice President Corporate Finance & Accounts	01.03.2000				14		Vice President Corporate Finance Eider Finance Ltd.
Col. R.S. Jham M.Tech.	Vice President Operations & Technology	27.04.1998				30		Retd Colonel Army
Col P.S. Bhatia M.Tech, MBA	Vice President Education & Research	27.04.1998				30		Retd Colonel Army
Mr. Pankaj Srivastava MBA	Vice President Sales	01.01.2000				15		Regional Sales Mngr. In Next Generation Business Power Sys.
Mr. P.D. Gupta CA IIB	Chief Auditor	01.01.2000				30		Retd. As Addl. Director Foods Accts. In Food & Supplies Dept., Haryana
Dr. P.D.S. Verma B.Sc. Ph.D. (Int’lly Acclaimed)	Research & Development Coordinator	01.01.2000				32		Principal Engineering College
Dr. C.B. Kukreja Ph.D.FIE (Int’lly Acclaimed)	Research & Development Coordinator	01.01.2000				42		Retd. As Dean R&D , Thapar Institute of Engg. & Tech., Patiala
Mr. R.K. Prashar BE. Mech.	Director Corporate Training Academyl	04.08.1998				38		Retd. As Jt. Dir. Tech. Education , Raj.
Mr. Satish Kansal M.E.	Researcher	16.08.1999				-		Fresher
Mr. A.S. Sandhu M.E.	Researcher	30.08.1999						Lecturer PEC, Chandigarh
Mr. Satish Sharma M.A.(Math)	Researcher	28.11.1997				1		Fresher
Mr. Manjeet Singh B.E.	Researcher	16.08.1999				1		Fresher
Mr. Lalit Kumar B.E.	Researcher	27.08.1999				1		Fresher
Mr. Digvijay Rana B.E.	Researcher	22.11.1999				1		Fresher
Mr. Rakesh Khanna B.E.	Researcher	27.01.2000				1		Fresher
Mr. Harinder Pal Singh M.E.	Researcher	27.01.2000				1		Fresher
Mr. Dinesh Jain B.E.	Researcher	27.01.2000				1		Fresher
Mr. Munish Vashisth M.E.	Researcher	27.01.2000				1		Fresher
Mr. Anudeep Garg B.E. (Mech)	Researcher	24.05.1999				1		Fresher
Mr. Amitabh Sharma B.E. (Comp.)	Researcher	11.09.1998				1		Fresher
Mrs. Suman Lata MA (Math)	Researcher	15.11.1999				1		Fresher
Mr. Nitin Sharma BE (Comp)	Researcher	27.01.2000				1		Fresher
Mrs. Richa Sankhyan MSc (Chemistry)	Researcher	04.09.1999				1		Fresher
Mr. Anuj Kansal MSc.(Physics)	Researcher	05.05.1999				1		Fresher
Mr. Gunjan Mehta LLB	Asstt. V. P. t Legal & Corporate Affairs	01.01.2000				15		Practising Lawyer
Mr. Gurinder Singh Cheema B.E.Electronics & Comm	Web Team Leader	01.01.2000				15		Project Consultant
Mr. Dara Singh Diploma in Computer Engg.,One year Diploma in Software	Manager System & Network	01.01.2000				5		Customer Support Service Engineer of PC & Peripheral
Mr.SanjeevHasija B.Tech. (Comp. Sc.)	Centre Head (R &D)	01.01.2000				12		Senior Software Engg. In Indo Dutch Sys. India Ltd., Chandigarh
Mr. Vijay Malhotra B.E.	Sales Manager Bombay	01.01.2000				10		Dip. Engg. Trainee in Singer India Ltd., Jammu
Mr.JyotiRam Diploma in Electronics & Communication Ex-IAF	Astt. Vice-President –Technical	20.02.1997				45		Senior Engg. In Punwire Wireless Sys. Ltd.
Mr. Subhash Saini ACS	Company Secretary	08.04.2000				3		Practising Company Secretary
Mr. Neeraj	Centre Manager (R&D), Kala Amb	25.02.2000				16		Programmer/Analyst in CCE, Punjab Engg. College, Chandigarh
Ms. Annu Karwal B.A. PGDCA, Dip. In Office Mgt & Secretarial Practice	Public Relation Officer	22.12.1999				5		Executive Secretary(PRO) M/s. Kay Comm. Pvt. Ltd. N.Delhi
Mr. Sagar Mittal B.Com, NMIMS	Business Manager	05.04.2000				6		Manager Marketing S.M. Infotech (P) Ltd.
Mr. Sooraj B.A., Dip. In Multimedia	Web Portal Head	01.01.2000				2		Full Time Faculty at Arena Multimedia
Mr. Ajay Joshi PGDBM, BSc(NM)	Sr. Web Manager			2.02.2000		3		Web Designer Hartron-Govt.Haryana
Mr. Arun Joshi MBA	All India Business Manager e-Commerce		02.02.2000		10		Manager Steel Rolling Mills
Mr. Jasbir S. Sandhu B.E. Computer Science	Astt. V.P. Portal Buss.Devp.		01.01.2000		12		Owner & Manager of IMS
Mr. Dhanwant S. Pahwa B.Tech. Computer Sc. & Engg.	Team Leader-Software Solutions		01.01.2000		14		Web Designer/ Developer Anocialia Infotech, Ahmedabad
Mr. Anish Kumar Goyal MBA, BE Electronics	Sales Manager Channels		01.01.2000		5		Marketing Engineer – Next Generarion business Power System
Mr. Atul Rastogi BE, MCCD	Web Leader		01.01.2000		7		Web Designer, Advance Technology Ltd., Chennai
Mr. Akhil Nagpal BE	Web Leader		01.02.2000		-		Web Designer
Mr. Shriti Jain B.Com ADMC	Web Manager		07.02.2000		-		-
Mrs. Anvita Anand B.Com, WMPGD	Web Manager		07.02.2000		2		Web Masters Course – New Delhi
Mr. Sudhanshu Sharma B.Sc (Math) MBA	Marketing Executive		02.02.2000		4		Project Officer UNDP
Mr. Ashok Kumar Pandey Diploma in Elect. & Communication	Sales Manager		22.02.2000		7		Asstt. Manager Omega Chip Electronics Pvt. Ltd, New Delhi
Mr.Manmohan Singh B.A. M.B.A. ADSS	Web Administrator & Product Manager		01.01.2000		8		Web Administrator ‘Delhi Net Web Service Pvt.Ltd.
Mr. Sanjeev K. Pande B.A., ANC(NIIT)	Marketing Executive		02.02.2000		3		Marketing Executive Satyam Infoway Ltd.
Mr. Vinod Sharma B.A. (Hons) DCHN	Marketing Executive		02.02.2000		-		Marketing Executive M/s. Panation Institute System
Mr. R. S. Walia Ex-Govt. Officer	Administrative Officer		01.01.2000		42		Supdt. Administrator Punjab Govt.
Mr. H. K. Srivastava B.A.LLB	HRD Manager		01.01.2000		30		Manager (P&A) in RS Krit Fab(I) Ltd.
Mr. Anjan Hazara B.A., Dip. In Hardware	Data Entry Head – Portals		22.12.1999		2		Assembling, Trouble Shooting and installing of Personal Computers & Engg

CHANGES IN THE KEY MANAGERIAL PERSONNEL DURING THE LAST 12 MONTHS

There have been no changes in the key managerial personnel in last one year except for appointment as given above.

RATIONALE OF THE PROPOSED PROJECT

The Company is focussing on two major e-commerce integrated business streams viz with Eider e-Comm Card & Payment Gateway and Net Consumer Distribution Projects (www.indiasales.net/india home service.net) initially for 12 major cities of India, specializing & focussing on branded merchandise Home/Daily products. In addition, 03 Portal Web Sites & businesses have already been launched.

PROJECT STRATEGIES

The above objectives would be achieved by the Company based on the following strategies :-

i) Company foresee the era of Electronic Data Transfer (EDT) and Electronic Fund Transfer (EFT). For this Company already has tie up with IITT Education Group for imparting e-com training to its work force & also has technical support from EIL for supporting its secure technology requirements .

ii) To expand on the development of the in house Technology for e-commerce portals development & e-commerce payment gateway & EIDER e-comm card. Also set up the Int’l Gateway using the expertise & skills of Eider Technologies Ltd, a 11 years old Tele Communications & Wireless Company.

iii) The Company has tied up with promoter viz. EIL for use of its commercial & other areas including its manpower & offices & building in major cities of the country including. Delhi, Mumbai, Chennai, Calcutta, Chandigarh, Pune, Ahmedabad, Banglore, Vadodara, Jalandhar, Ludhiana, Panchkula & , Kala Amb.

iv) Create a Franchise Network for Inter Net Distribution & eCom-Card in over 100 cities in the next 2 years.

PROJECT DETAILS

i) E-COMMERCE INTERNET DISTRIBUTION PROJECT FOR SALES OF PRODUCTS AND ITEMS FOR DOMESTIC/OFFICE CONSUMPTION

The project, which is already at advance stage of Implementation, is a Inter Net Consumer Distribution Network Model (www.indiasales.net/ Indiahomeservice.net) initially for 12 major cities of India for commercial sales transactions of products & Merchandise that are generally required & utilized by Middle class households in urban centres/cities. The project will be specialising and focussing on branded merchandise Home/Daily products only - a concept model quite similar to Amazon.Com famous world wide & especially in US. The customer, motivated by assurance of prompt supply of standard quality products at competitive prices will place Purchase order for products & items required on the Eider e-Commerce Internet Portal site supported by EIDER e-Comm Card for On-Line payments. The product Range is being developed keeping in view the Region wise habits & tastes etc. with set standards, effective quality & economy pricing keeping in view the geographical spread & accordingly connected variables.

There will be three Categories of Products & Items covered under this Proposal:

a) Products of domestic household Consumption which are required on monthly basis (toiletries & groceries) and are packaged & properly branded for quality. Highly Perishable goods of daily consumption or non-packaged non-standardized products are EXCLUDED.

b) Products of domestic household utility (generally labelled as white goods) which are occasionally required & are of standardized Quality & which carry proper customer Protection warranties.

c) Products of utility & use of offices & commercial establishments required generally on periodical basis.

The Customer, through his home/office any Computer/Cyber café or Eider eCentre, will place Purchase Order for delivery of the products & Items of his/her choice on Eider E-Comm on the basis of Displayed Prices, on the Net, indicating whether payment will be made cash or by credit card. Delivery of the products will be arranged by Eider Sales/Delivery Team at home/Office within 36 hours of placement of Purchase Order by payment against delivery. Customer complaints on delivery/quality if any, will be handled by Eider Customer Care Centres/eCentres.

In the first phase, domestic household monthly consumption products will be introduced on the Net. In the second phase, after a period of 5-6 months, white goods will be brought within the purview in which there will be show-room delivery after customer checking, in order to avoid customer dissatisfaction. The payment terms and supply of white goods will be different and be arranged through established dealers on payment of Eider service charges. As per informal survey and market research, the customer spread in the proposed 12 cities (Delhi, Mumbai, Chandigarh, Ahmedabad, Chennai, Hyderabad, Calcutta, Pune, Bangalore, Ludhiana, Jalandhar & Vadodara) will be 1,56,000, 3,30,000 and 4,30,000 in Ist, 2^nd and 3^rd year of operations respectively. In the second year 16 more cities will be added. & about 100 more cities later thru franchising.

The total cost for this project is Rs. 30.00 crores. The detailed break up of the cost is as under:

(Rs. Crores)

(Rs. Crores)

·

Hardware & Tele Communication (including Leased lines & Band width) at 12 locations/ cities

- Metro Cities 04x Rs.50 lacs per city=2.00 Cr.

- Non Metros cities 08xRs.25 lacs per city = 2.00 Cr.

(High-end PIII Servers & Desktops with LAN & WAN Networking), Including main server IBM RS/6000 44 P Model 170 Base Server Configuration 7044-170 A for

· RS/6000 7044 Model 170

· 333 MHz POWER 3-II Processor

4.00

· 256 MB SDRAM Memory

· 9.1 GB Ultra SCSI Disk

· 1.44 3.5-in Diskette Drive

· 32X Speed CD-ROM Drive

· Integrated Ultra SCSI Adapter

· Integrated Ethernet Adapter

· Integrated External Utlra2 SCSI Controller

· AIX4.3, AIX Bonus Pack

Metro Cities @ Rs. 22.00 lacs per city

Non Metro Cities @ Rs. 9.00 lacs per city

·

Dedicated & Customized Softwares & Solutions at 12 cities.

Metro Cities 04xRs.55 lacs per city = 2.20 Cr.

Non Metro Cities 08xRs.225 lacs per city = 1.80 Cr.

4.00

Portal/ Business Development Expenses

	Particular	Metro Cities	Non Metro Cities
(I).	Infrastructure	1.00	0.75
(II).	Copy Right Expenses	0.50	0.35
(III).	Specilised Personnel	0.80	0.80
(IV).	Collection of Data Base/Material	0.40	0.56
(V).	Portal Development Consultants/ Consultation Exp.	0.50	0.34
	Total	3.20	2.80

6.00

·

Stocks-in-Trade for Distribution

(I).	Consumer Durables includings Readymade Garments etc.	0.80	1.00
(II).	Electronics /Electricals & Telecom Items	1.20	1.80
(III).	Glossary & Toiletry	0.40	0.60
(IV).	Jewellary, Cosmatics & Arts & Decorative	0.60	0.00
(V).	Other Goods Articles	0.50	0.60
(VI).	Books & Stationery	0.30	0.50
(VII).	Others	0.20	0.50
	Total	4.00	6.00

10.00

·

Office MFA including vehicles & other Distribution Equipments and Pre-operatives

Other MFA

(I).	Furniture & Fixture	0.50	0.60
(II).	A.C.’s	0.40	0.40
(III).	Institutional Vehicles	0.30	0.40
(IV).	Other Vehicles	0.20	0.20
	Total	1.40	1.60

3.00

·

Launching Expenses

(I).	T.V. Adds	1.00
(II).	Hoardings	0.50
(III).	Press Advts.	0.60
(IV).	Banners, Phemphlets	0.20
(V).	Brochure & Other Publicity Material	0.20
(VI).	Inauguration Expenses	0.50
	Total	3.00

3.00

30.00

ii) E-COMM - PAYMENT B2B/B2C GATEWAY & INT’L GATEWAY WITH DIRECT SATELLITE BANDWIDTH & E-COMM CARD PROJECT

The Project envisages an arrangement with a Bank which is yet to be made. The Company is in discussion with various Banks for the purpose. The Company does not apprehend any problem for such a Tie-Up with any Bank as its pure business for any bank & the bank only gains in the process & has nothing to lose. The arrangement envisaged is rather simple & is in tune with normal presently adopted baning systems. EEL would provide the Web Technology & the Resources to provide e-Comm Payment Gateway Services & Secure Payment Gateway Technology with the Support of Eider Infotech Ltd. & set up the Payment Gateway. EEL proposes to establish this by Secure Servers alongwith Dedicated & Specialized Secure Softwares for conducting centralized e-comm B2B/B2C payment gateway operations thereby providing the existing Bank Account holder access to e-comm payments on an Internal circuit or on an Intranet WAN network or simply through the Internet by coded secure access. In addition to the banks subscribers & customers, the customers of various portals web sites of consumer distribution channels including that of EEL promoted www.IndiaSales.Net will also be interfaced with this e-comm payment gateway services. In the attraction & convenience of using this e-comm payment gateway facility/service many companies, customers & businessmen & infact all e-comm users will automatically get associated with the proposed e-comm payment gateway service network to take the various e-comm payment gateway advantages.

EEL is also setting its own backbone network with the Launch of the International Gateway with Direct Satellite Bandwidth & Connectivity. This Bandwidth will be used in house by EEL for its various projects including web hosting farmhouse & also the Bandwidth would be leased to may companies & ISP’s etc.

The total cost for this project is Rs. 50.00 crores. The detailed break up of the cost is as under:

i)

Hardware including Int’l Gateway & Satellite Band width and Leased Lines

16.00

1.

Network Equipment

2.67

2.

a) Gateway Equipment Promina 800

4.0

b) VSAT

0.70

c) Radio Link (2Mbps)

0.25

d) Multi Plexer

0.72

e) Switch (Meridian)

0.72

6.39

3.

Servers

0.96

4.

Softwares

0.34

5.

Other Capex

0.26

Total

10.62

6.

Cost of 2 Mbps International Bandwidth per annum

4.32

7.

Leased Line & others

1.06

ii)

Custom Built Dedicated Payment Gateway Equipment

(I).	Net Work Equipment	1.25
(II).	Secured High Value Customised Servers	1.50
(III).	Gateway Equipment	1.00
(IV).	Others	0.25
	Total	4.00

4.00

iii)

Custom Built server Software

(I).	Payment Software Solutions for B2B, B2C & Bank		2.50
(II).	System & Dedicated Software	1.00
(III).	Customised Dedicated Software	1.50
(IV).	Secured Server etc.		1.50
(V).	Total		4.00

4.00

iv)

Corpus funds for Payment Gateway

20.00

v)

Pre-operatives & Marketing expenses

6.00

50.00

iii) E-COMM CREDIT CARD PROJECT :

In addition to the simplicity of e-comm payment gateway, EEL proposes to introduce Eider ecomm credit card to facilitate & act as a catalyst for convenience of e-comm B2B & C2B payments. This will give the required edge in facilitating e-comm A/c’s operations & effective usage. In order to move in a systematic manner, in the first phase, only the Top branches in Top Cities would be linked to the Central e-comm system, which would interalia provide interface between the existing Account holders Accounts & the new e-comm A/c proposed to be opened & its operations thru the WAN network via Internet/Intranet. The scheme also envisages to mobilize Rs. 120.00 Crores in first phase for the eComm Card Launch. The card can also be operated by a security code known to the user at his option anytime, anywhere. It is imperative to note that there would be an explosion of e-comm payment gateway Accounts as otherwise e-comm business cannot be undertaken either by the seller, the buyer or the channel distributor etc. The front runners who enter the arena of e-comm payment gateway business are going to eventually lead ahead keeping in view the initial shift of e-comm accounts which will multiply & thus explosion of new e-comm Accounts on the same network for facilitating faster e-comm business to business & business to consumer & vice a verse transactions.

Thus there would be an evidently clear Advantage for entering first in the sphere of e-comm payment gateway. e-Commerce operations will automatically open e-comm Accounts in order to facilitate their e-comm trade & eventually more & more linked businesses will join in order to facilitate e-comm transactions. In any case the facility of e-comm card will help thousands of Individuals to facilitate their e-comm online transactions & with supporting credit facilities.

The Scheme is proposed to be executed in association with a Bank. The Company is in touch with various banks & would close on the best banking arrangement.

The total cost for this project is Rs. 135.00 crores. The detailed break up of the cost is as under :

Expenses on additional office Infrastructure & Credit Card Market Development & Marketing expenses
Phase I Phase II	7.00 3.00
Credit Card Debtors (This amount is required for extending credit to members/customers, who will do the e-comm payment/credit transactions. The company will allow to its members/customers credit facility for fifteen days or one month according to the credit worthiness of the party. This fund is required to meet out the gap.
Phase I	125.00	135.00

IV) PORTAL WEB SITE

The Company is in Portal Business and is developing & launching various Portal Web Sites as under:-

	Portal Web Site	Area of Operation	Status
1.	globalquiz.Net	Global Site Interactive Portal	Under Development
2.	indiadmissions.Com	All India Informative/ Interactive portal	Launched
3.	magikweb.Com	Global Product Development site	Launched
4.	wondershow.Com	Global Wonder Site	Under Launch
5.	dreamprincess.com	Global Participative Portal	Launched
6.	indiasales.net	Int’l Home Shopping Mall	Launched
7.	India home service.net	Internet distribution & delivery Transaction mall.	Under Launch
8.	a2z medico.com	Int’l Medical Specialities/Interactive site	Under Development
9.	American placements.com	Global Placement Services interactive Site	Under Development
10.	equityplacements.net	Global Information & Interactive Trading Site	Under Development

The total cost for the new web portal Projects Rs. 15.00 crores. The detailed break up of the cost is as under:

Portal/Solution Business Development			(Rs. Crores)
	Additional Hardware & Tele Communication (including Band width) at 12 locations/ cities
	PIII Servers & Desktops with LAN & WAN Networking Including:- RS/6000 7044 Model 170 333 MHz POWER 3-II Processor 256 MB SDRAM Memory 9.1 GB Ultra SCSI Disk 1.44 3.5-in Diskette Drive 32X Speed CD-ROM Drive Integrated Ultra SCSI Adapter Integrated Ethernet Adapter Integrated External Utlra2 SCSI Controller AIX4.3, AIX Bonus Pack Metro Cities @ Rs. 22.00 lacs per city Non Metro Cities @ Rs. 9.00 lacs per city	3.00
	Customised Software/Solution Development Expenses
	Additional Customized Secured & Dedicated Servers Intetrated Software Solutions Customized Softwares Software Development Expenses	4.00 2.00 1.00 1.00	8.00
	Expenses on setting up Int’l offices		4.00
	Total		15.00

Note: The Portal Development is Inhouse & thus the Project cost is very less viz a viz the magnitude of Portals involved

The Group Company EIL has also developed In-house Secure technology for eComm Banking -Payment Gateway which is expected to be launched shortly.

BUILDING & OFFICES

The company presently has its Registered Office at Sector 8-C, Chandigarh. The combined offices is admeasuring around 5000 sq.ft. and has all the necessary infrastructure facilities. The Corporate office of the Company alongwith EIL is located Manimajra, Chandigarh on a Approximate 10,000 sq.ft. Covered Area.

The Company has fully furnished Branch Offices, Factory/Development Centres and Regional Sales offices with all the necessary infrastructure under its use in the cities of Delhi, Bombay, Chennai, Calcutta, Chandigarh, Pune, Ahmedabad, Bangalore, Vadodara, Jalandhar, Ludhiana, Panchkula, Kala Amb & Pojewal.

The Registered Office, Corporate Office, Branch Offices and Regional Sales Office are on cost sharing basis with Eider group companies. The agreement for this has been entered into on 01.01.2000 between M/s Eider Infotech Limited & M/s Eider e-Commerce Ltd wherein the company will posses and enjoy the properties as mentioned above on mutually agreed cost sharing basis which will be decided on the expiry of the financial year or other mutually agreed terms. Both the parties have agreed to share the cost of renovation done, maintenance expenses, common charges, furnishing to its choice. The cost sharing basis would be in the ratio of 25:75 with 25% with EEL & 75% with EIL and the company EIL will also pay 2 % of its annual profits to EIL.

ISSUE EXPENSES

The Company has made a provision of Rs. 10.00 Crores towards expenses for raising capital from the market and other pre-operative expenses which includes fees payable to lead managers, registrars to the issue, printing, advertisement, brokerage payable and expenses incurred for marketing of the issue.

TECHNICAL ARRANGEMENT / AGREEMENTS

The Company does not propose to enter into any technical arrangement with any outside agency. The company has entered into a Technical Support Agreement with EIL on 01.01.2000 by virtue of which EIL has agreed to provide its technical and technological support, internet services, payments gateway, internet banking technology and e-commerce activities through secured servers and all related business including web portals on no profit basis for a net consideration of earn and pay/ share basis, the amount of which is to be decided mutually at the end of each financial year. EEL will have to share 2% of its Annual profits to support the Technology Support Royalty to EIL.

INSTALLED CAPACITY / CAPACITY BUILD UP

The activity being information technology related, details as such installed capacity / capacity build up are not applicable.

RAW MATERIALS

RAW MATERIAL FOR PROPOSED BUSINESS

UTILITIES

Power

The Company requires normal three phase Power Connections which are readily available.

Water

Water is required only for drinking and sanitary purposes.

Effluent Disposal

The Company’s operations do not generate any effluents / pollution. The Company is exempted from seeking a clearance from the Pollution Control Board as it is classified under non-polluting industry.

HUMAN RESOURCE

The Company is focussing its recruiting efforts on the top 20% of students from engineering departments of Indian Schools and relies on a rigorous selection process involving a series of tests and interviews to identify the best applicants are selected on the basis of their ability to learn as well as their academic achievement, conceptual knowledge and their temperament for, and fit with, the Company’s culture.

The Company seeks to attract and motivate IT professionals by offering: an entreprenurial environment that empowers IT professionals; programs that recognize and reward performance; challenging assignments; a continuous updating of skills; and a culture that emphasizes openness, integrity and respect for the employee. IT professionals receive competitive salaries and benefits and are eligible to participate in the Company’s stock option plans. In addition, the Company spends significant resources on training and continuing education. To conduct training, the Company employees faculty, including with doctorate or master’s degrees. The faculty conducts training sessions for new recruits and a variety of continuing education courses in technology and management skills.

INTELLECTUAL PROPERTY

Ownership of software and associated deliverables created for clients is generally retained by or assigned to the client, and the Company does retain an interest in such software or deliverables. The Company also develops software products and software web/communication tools which are licensed to clients and remain the property of the Company. The company relies upon a combination of non-disclosure and other contractual arrangements and copyright, trade secret and trademark laws to protect its proprietary rights in technology. The Company currently requires its IT professionals to enter into non-disclosure and assignment of rights agreements to limit use of, access to and distribution of its proprietary information. The source code for the Company’s proprietary software is generally protected as trade secrets and as unpublished copyrighted works. The Company generally applies for trademarks and service marks to identify its various service and product offerings.

EMPLOYEE STOCK OPTION PLAN

The Company will be launching Employee Stock Option Plan (ESOP) and has appointed an advisory committee to lay down the terms and conditions of the scheme in accordance with the provision of the SEBI Guidelines and Regulations in this regard. For implementing the Employee Stock Option Scheme the company will create a trust, which will hold the shares for and on behalf of the eligible employees and will offer the same to eligible employees, subject to the terms and conditions of the scheme.”

MANPOWER

The Company EEL presently has about 400 shared & permanent employees which includes its shared employees with other Eider Group Companies all over India. The company has entered into a Manpower sharing agreement with M/S Eider Infotech Ltd. on 01-01-2000.

Statement of existing Manpower

DESIGNATIONS	NO. OF PERSONS
Chief Executive Officer	1
Chief Operating Officer	1
Vice Presidents	4
Asstt. Vice Presidents	3
Company Secretary	1
City Sales Managers	6
Sr. Hardware Engineers	6
Asstt. Engineers (including branches)	10
Web Team Leaders	6
Web Designers & Developers	26
Project Leaders	6
Programmers & Developers including consultants	21
Channel Distributions Head	2
Sales Manager Portal Business Dev.	2
Marketing Executives All India & including Representatives	42
Analysts & Research Personnel	16
Internet Marketing Representatives	6
Chief Auditor	1
Accounts Treasury/Audit/Secretarial/ Taxation Personnel (including branches)	32
Finance Personnel	16
Software Development & Solutions Centre Head	4
HRD, Admn & Law Stores Personnel	12
Data Entry Operators including on Daily Wages/Sub Contracted Workers	22
Office staff, Secretaries, Assistants, Peons, Drivers etc.(including all branches)	66
Education Group
Principal & Research Coordinator	2
Vice Principal & Director Training Academy	2
HOD/Asstt. Professors	4
Instructors	14
Engineers	12
Researchers & Consultants including on Specific Project Contracts	47
Lab Asstts	8
Total	401

The estimated requirement of Additional Manpower All over India & Globally for meeting the requirements of the projects over a period of time is as under :-

DESIGNATIONS	NO. OF PERSONS
Addl. Managing Director	2
Vice Presidents	8
Astt. Vice Presidents	10
Dy. Company Secretaries	2
City Sales Managers	26
Sales Manager	10
Sr. Hard Ware Engineers	12
Astt Hard Ware Engineers	12
Web Leaders	6
Web Designers & Developers	30
Project Leaders	5
Programmers & Developers	20
Channel Distributions Heads	4
International Sales Manager	3
Marketing/Delivery Executives	200
Analysts & Research Personnel	20
Internet Marketing Representatives	30
Web & Marketing Consultant	20
Accounts & Treasury Personnel	40
Finance Personnel	8
Sr. Software Development & Solutions Professionals	20
Software Solution Head	10
Customer Care Personnel	60
H.R.D. Personnel	15
Data Entry Operators	40
Communication Professionals	30
Other Distribution Personnel	350
Secretaries, Assistants, Peons, Drivers etc.	163
TOTAL	800

The Additional Manpower is required for managing the New Projects into Net Consumer Distribution Payment Gateway Operation & Management & Marketing of International Gateway Bandwidth. The aforesaid Team shall be sufficient for managing the new projects as also the e Commerce Portal Business Development. The Company proposes to Recruit through professional counselling/placement services firms, Direct Advertisement in Press & Campus Interviews as also look for inhouse students from the Group promoted (02) IITT Engineering Colleges & Software Engineering institute (iiit).

SCHEDULE OF IMPLEMENTATION

The project implementation schedule is as detailed below :-

PARTICULARS	COMMENCEMENT	COMPLETION
Setting Up Offices	Started & Already Completed partially	June 2000
Hardware ( Including Leased Lines & International Gateway Bandwidths & payment gateway)	May 2000	September 2000
Dedicated Software & Solutions	June 2000	August 2000
Portal Development & Business	Already Commenced	May 2000
Stock In trade for distribution	July 2000	September 2000
Vehicles & Distribution Equipments	July 2000	August 2000
Launching Process for India home service.net launching process for payment Gateway & International Gateway Internet Distribution	September 2000	September 2000
Corpus Fund for e-Comm Credit Card	September 2000	October 2000
e-Comm Credit Card Launching	November 2000	November 2000

The Company is in process of implementing the project as per schedule of implementation and is hopeful that the implementation will be completed within estimated time frame. Presently there is no delay in the implementation.

MARKET & MARKETING ARRAGEMENTS

Internet Distribution Projects

India is the largest Democracy in the world & one of the Largest populated countries with an upcoming dynamic economy & is fast emerging as one of the biggest markets in the world for consumer products. All major companies world wide are already in India to reap the benefits of this burgeoning Mega Markets.

EEL proposes to launch its various home consumer products in 12 cities to start with & then gradually to 100 Indian cities with the help of franchising in about 70 plus cities. The products to be offered are branded with already existing customer bases & strong emphasis on economy pricing viz a viz availability of the same product in retail markets, even at the cost of thin margins for the Company.

The customer can put an order from his home/office Internet Computer or call/contact any of the e-customer centres & place the order. On the Internet he would have a choice to evaluate variety of similar Branded products & make his own choice. It is expected that an average family will place a monthly order for its monthly Toiletries, Groceries & essentials at Rs. 2000 conservatively. Infact in the Project this figure has been taken extremely conservative of Rs.600/- P.M.

The Launch of the India home service.net will be supported by a sustained All India - Advertisement Campaign with Rolling schemes to attract new clients. Special discounts will also be made to increase the customer base. The availability of credit on India home service.net & also the guarantee to give the finest quality product or Full Replacement Guarantee will add & attract customers in bulk. EEL proposes to appoint e-centres/dealers or have its own customer care centres in specific areas for facilitating & monitoring the business. Also India home service.net is setting up its own Distribution network for the On-the-ground-delivery, quality & procurement support. It does involve large number of human Resource but EEL strongly feels that the success of the Internet Distribution Project lies here & hence would not compromise on the Infrastructure required in the Ground Delivery Support System & areas.

Payment Gateway-Ecomm Credit Card

eCommerce is taking flight in India & the world over. Gradually most of the business transactions are expected to shift over to Internet & thus eCommerce. There is infact a large virgin market into eCommerce specially in India. The payment gateway supported by eComm credit & vice a versa is indeed an unmatchable synergy & is a total combination which will provide the required edge.

The Payment Gateway combined with the strength of eComm card is proposed to be launched in 26 Indian cities initially in arrangement with a Bank. The Payment Gateway on the other point shall also be supported by the Inhouse Int’l Gateway Bandwidth which will also bring Int’l business on secure Gateway & Servers. The launch will be backed by sustained All India Advertisement Campaign with attractive schemes & discounts. The payment gateway services shall be available for all major portals individually with some backed by ecomm credit Card. The eComm credit card will have its own Individual Customers market in addition to the related Payment Gateway Customers. Customer Care centres & e-Dealers will also facilitate the required sales & extend support to the business operations.

To start with the inter synergy generated between the various inhouse portals including India Sales.net & India house service.net & the Payment gateway -eComm card will contribute enough business for the company inhouse itself supporting each other to earn substantial profits.

Market Strategy

1. Create a Niche Market for e-comm Banking-payment gateway & Internet Consumer Distribution, all over India with strong on the ground delivery network.

2. Establish Leadership in Web Solutions in India - Volume Business-Brand Name consolidate.

3. EEL envisages to establish Int’l Sales Offices & target fortune 500 Companies in the areas of eCommerce

4. Expand web portals Business globally.

5. Develop & Lease out Int’l Bandwidth & web hosting farmhouse facilities.

6. Implement, Sales & Service 24 hours HOTLINES for effective Customer Care 365 days a year - All India (Major Cities) for all Eider Products.

7. Expand channel Sales Network in National & Int'l markets

8. Aggressive Market Campaign & PR Work for popularity amongst masses

9. Expansion including Larger Telecom/Web Engineering related Infotech Projects.

10. Franchising for over 100 cities after 1 year of operation consolidating india home service.net & Payment Gateway/ecom Card Sales.

Growth Strategy

Broaden Service Offerings. In order to meet all of its clients’ IT needs, the Company strives to offer a comprehensive range of services by continuously evaluating new and emerging technologies. As a full-service provider, the Company believes that it can increase its revenues from existing clients as well as attract new clients. Towards this end, the Company has opportunistically expanded its services beyond its core development, maintenance and engineering services. For example, the Company recently has begun to develop practices focused on, e-commerce and Internet/Intranet services. Management believes that these services will increasingly become a significant part of the Company’s portfolio of services.

Increase Business with Existing Clients. A key objective of the Company’s growth strategy is to expand the nature and scope of its engagements with existing clients by both increasing the volume of its projects and expanding the breadth of services offered. Establishing broad, long-term relationships potentially increases the quality and efficiency of the Company’s service to a particular client since each project performed for a client increases the Company’s understanding of the client’s systems, requirements and business practices. For the same reason, establishing broad, long-term relationships with a client also reduces the Company’s marketing costs, increases the client’s reliance on the Company and creates barriers to entry for competitors. The company seeks to foster such relationships by delivering high quality services on time and on budget and, over the course of a relationship, by increasing the integration of its services with the client’s internal IT operations.

Develop New Clients. The Company pursues several new client development strategies. First, the Company offers a broad array of managed software solutions which provide an initial entry into a new client. For example, the Company has used its intranet-related services to establish relationships with 22 new clients recently. Second EEL believes that it can leverage the industry-specific expertise it has developed in key vertical markets to further develop its portfolio of clients. This vertical market orientation continues to help EEL design and develop re-usable software/web tools and processes which have specific applications to clients in these markets and which can improve the Company’s efficiency and productivity. Finally, the Company intends to expand its global sales and marketing infrastructure by hiring new sales and marketing personnel, opening additional regional sales offices and increasing its marketing expenditures.

Increase Revenue per IT Professional. In order to increase its revenue per IT professional, the Company continually focuses on building expertise in vertical markets, refining its software/web development tools and methodologies, and storing and disseminating institutional knowledge in order to improve efficiency and productivity. Additionally, to enhance productivity per IT professional, EEL continually monitors client accounts for profitability and seeks to select new clients and maintain relationships with existing clients that maximize the Company’s long-term profit margins. The Company’s policy is to decline or discontinue projects that do not offer the potential to meet the Company’s profit margin targets. Finally, the Company is seeking to increase the proportion of projects that are undertaken on a fixed-price, fixed time frame rather than a time and materials basis. Management believes that effectively structured fixed-price, fixed time frame projects benefit the client by reducing the client’s risk, while offering the Company the potential benefit of enhanced margins for projects that are performed efficiently.

Expand and Diversify Base of IT Professionals. Management believes that a critical element of the Company’s growth strategy is its ability to increase its base of IT professionals. To address this issue, the Company plans to build new facilities in locations where it can access local pools of talent as well as increase the number of professionals employed at its existing locations. In addition, the Company is looking to other fields of expertise, such as business school graduates for recruiting. Accordingly, the Company has approved plans to expand its Development facilities in Bangalore, Chennai, Pune and elsewhere. The company is also contemplating the addition of facilities in the United States, Europe and Asia. The approved expansions, which are currently scheduled to be completed in the next two to three years, are expected to add approximately 200,000 square feet of office space to provide for approximately 2000 employees in India.

Pursue Selective Strategic Acquisitions. The Company believes that pursuing selective acquisitions of IT services and software applications firms could potentially expand the Company’s technical expertise, facilitate expansion into new vertical markets and increase the penetration of new clients. Although no acquisitions are currently being contemplated, the Company anticipates that it will seek to identify and acquire companies that have well-developed applications in vertical markets, extensive client bases or proprietary technical expertise and would otherwise complement the Company’s business.

INDUSTRY SCENARIO

Global e-business Scenerio

Though just five years old, e-commerce is perceived by many to be a prime driver of global business in the foreseeable future. A prime example of this phenomenon is the fact that global hardware giant IBM claims that by 2004 AD, 75% of its sales will come from e-commerce.

These startling predictions are not without basis. The rapid growth of e-commerce is best demonstrated by the performance of this sector, as qualified by leading international business research consultancies.

e-Commerce Turnovers are expected to be:
	1997	2001	2004
Total e-commerce
B2B (Business to Business)	$ 10 bn	$ 220 bn	$ 1 tru
B2C (Business to Consumers)	$ 2.7 bn	$ 27 bn	$ 200 bn
Total Internet population	22 mn	123 mn	800-1600 mn

Clearly the new order demands business have to remain e-competitive!

More than 67,000 new internet users are added every day. There would be 350 million internet users by 2002. Around 10,000 new websites are launched every week and there would be half a billion mobile phone users by 2000.

Competition

There are currently more than a thousand companies in India which are involved both in software export as well as in the domestic software market. However, major players in the industry have approximate 40% share of the market. The following table provides data about few major players in the Industry.

Rank	Group	Revenue 1998-99	Growth %	Revenue 1997-98	Growth %	Revenue 1996-97
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.	Tatas HCL Wipro IBM Godrej Compaq Hewlett-Packard Pentafour Infosys Redington Aptech Satyam	2551.47 1981.25 1443.17 894.47 728.85 681.00 674.00 595.85 508.89 426.27 385.53 378.13	35.30 -13.27 37.62 34.65 64.97 56.55 2.81 109.40 95.43 48.37 26.82 111.85	1885.83 2284.36 1048.70 664.30 441.80 435.00 655.60 284.55 260.40 287.31 304.00 178.49	12.80 33.98 7.95 15.13 98.73 20.86 10.00 65.89 81.08 67.95 31.77 -	1671.82 1705.00 971.50 577.00 222.31 359.93 596.00 171.53 143.80 171.07 230.71 -

More than 626 companies in India are engaged in the business of software exports. There are also another 200 companies in this segment, but their combined revenue is not more than Rs. 500 million.

(Source: Nasscom and other publishing sources)

Internet and E-Commerce

During 1998-99, an interesting survey revealed that out of the top 25 E-Commerce companies in India, 18 were already making profits, besides growing annually by more than 500 percent. Many of them have been funded by angel investors - venture capitalists and many of them are determined to go in for international IPOs over the next 3 years. There has been a steady inflow of international venture capitalists eager to invest in the innovative ideas being conceived by young software entrepreneurs in India.

Industry experts believe that the Internet, although is just about 1.4 million users strong today in India, has the potential to explode to 37 million by the year 2003, once internet connections are available on cable-spreads across India, and will position India as a global hub for content development and e-Commerce.

In the year 1999-2000, internet and e-Commerce related software and services exports from India are expected constitute US$ 340 million out of estimated US$ 3.9 billion of software exports from India. This is expected to surge to at least US$ 1 billion of total software and services exports from India in 2002.

Industry Overview

In today’s increasingly competitive business environment, companies have become dependent on IT not only to maintain day-to-day operations, but also as a strategic tool to enable them to re-engineer business processes, restructure organizations and react quickly to competitive, regulatory and technological charges. For these reasons, IT Capabilities are particularly critical in certain vertical markets, such as financial services, utilities and telecommunications, that are undergoing rapid deregulation and globalization. As corporations have become increasingly reliant on their IT systems, the technological challenge of managing such systems has also increased. IT departments must not only implement new technologies such as client/server systems and advanced databases, but also maintain and update legacy systems to work with the latest software and hardware, to expand functionality, to recognize and process dates that begin in the year 2000 and to handle other developments, such as the conversion to Eurocurrency.

As businesses have become more dependent on IT, corporate budgets for IT services have grown dramatically. Dataquest has estimated that the worldwide market for IT Consulting, development, integration and outsourcing will increase to $29 billion by 2001 from $ 177 billion in 1998, as businesses concentrate on their core competencies and attempt to minimize fixed costs and control the size of their internal IT departments. The need to outsource is particularly acute for companies whose IT staffs lack the requisite skill set and project management abilities to implement new technologies, yet are reluctant to work solely with outdated technology. As a result, such companies seek third-party IT service providers to implement new technology and support existing legacy systems. Additionally, in many cases, businesses are being forced to outsource IT projects due to the difficulty and expense of recruiting and training sufficient IT staff in a resource-constrained environment. Outsourcing enables businesses to minimize the risks and reduce the time-to-completion of large IT projects by shifting some or all of their IT responsibilities to capable service organizations. In addition to this trend towards outsourcing, the IT services industry has also benefited recently from the significant demand for Year 2000 conversion services.

Simultaneously with this significant increase in demand for IT services, the supply of qualified IT professionals has decreased in most developed countries, particularly the United States, Western Europe and Japan. According to the United States Department of Education, from 1986 to 1995, the number of bachelor degrees in computer science awarded annually at U.S. universities fell by 41.7% from 41,889 to 24,404. One result of this downward trend is a growing shortage of IT professionals in the United States; the Information Technology Association of America reports that at U.S. companies with more than 100 employees the number of unfilled positions for IT professionals was 346,000 in January 1998. Furthermore, the United States Department of Commerce has estimated that between 1994 and 2005, U.S. Companies will require more than one million new IT professionals to fill newly created positions and replace workers who are retiring or are otherwise leaving the IT sector.

This shortage of IT professionals, along with recent advances in telecommunications and the growing acceptance of telecommuting has led to the globalization of the Market for IT services. It is now well accepted that effective project management techniques combined with satellite links, video conferencing, the Internet,e-mail and other communications capabilities can enable efficient coordination of ways to manage IT projects between domestic and overseas facilities. By outshorcing software development and maintenance projects to offshore IT service providers, establishing overseas facilities or joint venturing with foreign partners, companies have been able to access skilled IT professionals, often in lower cost environments with a large population of English-speaking technical talent.

India : A source for Software Services

According to a survey of U.S. software service vendors conducted by the World Bank, India is the leading offshore destination for companies seeking to outsource software development or IT projects. NASSCOM estimates that India’s export revenue from software, including software services, was approximately $1.8 billion in fiscal 1998 and will reach $4.0 billion by fiscal 2000, contributing to total Indian software industry revenues of approximately $5.9 billion by fiscal 2000.

There are three key factors contributing to this rapid growth of India’s software market. First, India has a large, highly skilled labor pool that is available at a relatively low labor cost. With over four million engineers, India ranks second only to the United States as the country with the largest population of English-speaking technical personnel. According to NASSCOM, the number of software professionals employed by the Indian software industry has grown from approximately 56,000 in fiscal 1990 to approximately 200,000 in fiscal 1998. In addition, India has more than 1,800 engineering colleges and technical institutes that train approximately 68,000 graduates annually in IT. This sizable pool of IT talent in India i available to companies worldwide at relatively low labour costs. According to Software Productivity Research, the average annual wage for software professionals in India is approximately 15% of the average U.S. rate. Although wages in India are rising faster than in the United States, the labour rate differential is anticipated to remain a competitive advantage for Indian companies into the foreseeable future.

A second key factor driving the Indian software market is the capability of Indian IT firms to deliver a product that satisfies the requirements of clients who expect high quality standards. A NASSCOM analysis of international quality standards of the top 300 Indian software companies showed that 109 had already acquired ISO 9000 or SEI certification, with an additional 76 anticipated to acquire such certification by December 1999. These capabilities have led to a recognition of India’s IT talent by companies worldwide. T take advantage of India’s high quality IT services at attractive prices, companies worldwide have outsourced their software services needs to India unrestrained by distances or transportation limitations that often handicap Indian manufacturing firms. Infact, the approximate 10 to 12 hour time difference between India and its largest market, the United States, allows work to be carried on by Indian teams on a 24 hour basis, shortening cycle times and improving productivity and service quality.

A final factor driving the Indian software market is the recognition by recent Indian governments of the importance of the IT sector to the Indian economy. In 1991, the Government of India introduced a number of measures to address the economic and financial difficulties that India had been facing. The package contained policies to stimulate investment in infrastructure industries and included favourable incentives designed to foster the growing Indian software industry. This commitment to the software sector has been and continues to be pursued by each successive government since 1991. For example, the current Government of India established the National Task Force on Information Technology with a mandate to make recommendations that detail policies designed to increase India’s IT exports. In addition, software firms benefit from a variety of incentives, such as relief from import duties on hardware, a ta deduction for income derived from software exports, and tax holidays and infrastructure support for companies operating in Software Technology Parks. See “Risk Factors - Risks Related to Investments in Indian Securities” and “Management’s Discussion and Analysis of Financial Condition - Income Tax Matters.”

India’s Software Scenario

The ever increasing role of India in the World Software and IT Sector can be gauged by the fact that Microsoft Chairman Bill Gates Picked Indian city of Hyderabad to house his Company’s first ever development centre outside the U.S.A. with vast human, industrial and technological resources at its command, Indian Software Industry, has zoomed from a mere US$ 150 Million ten years ago to a whopping US$ 3.9 billion in 1998-99. India is rapidly emerging as a leader in Global Software & IT sector. As per a recent analysis by Mckinsey & Co., India is best positioned to offer competitive cross border IT Services and enterprise IT solutions scoring high on multiple parameters of vendor sophistication as well as people sophistication. According to International experts, “Indian Software Companies have a unique distinction of providing efficient software solutions with cost and quality as an advantage by using state of the art technologies, a very strong capacity to handle large projects, and above all, the ability to execute them on time.”

The Compounded Annual Growth Rate (C.A.G.R.) for the Indian Software Industry revenues in the last five years has been 56.3% and for the software Export industry has been 60.71% while that for the domestic Industry has been 46.05%. Despite these high growth rates, India’s Share in the world software product market is still very low, but India still enjoys an advantage over many other nations in software development services and exports, primarily due to the fact that it possesses the world’s second largest pool of scientific manpower with high quality service at a relatively low cost, which provides India a very good opportunity in the world market.

The total Software Industry in India is worth Rs. 190 billion as compared to a mere Rs. 200 Million ten years back.

The domestic Software Market has shown a Compounded Annual Growth Rate (CAGR) of 46.05% which has been steadily improving in the last few years. The domestic software industry has been estimated at Rs. 4.50 billion (US$ 1.25 billion) and this does not include the inhouse development of Software by end-users. The domestic Software Market is expected to gross Rs. 73.0 billion in 1999-2000. With the rigorous enforcement of copyright laws, increased government spending on IT, it is expected that in the coming years, the domestic Market for Software can even register more than 50% annual growth rate. The decision of the government to implement Zero import duty on Software is expected to have a bought effect on the market. It is expected that by the year 2008, revenues of Indian domestic software market would equal revenues from India’s Software and Services exports, touching US$ 35 billion by the year 2008.

DOMESTIC SOFTWARE MARKET

Software Export Industry

The Software Industry in India exported software and Services worth Rs. 0.30 billion in 1985 as compared to a whooping Export of Rs. 109.4 billion (US$ 2650 Million) in 1998-99. It is expected that during 1999-2000, software exports will be worth Rs. 167 billion.

The Indian Software Industry expects to reach an export level of US$ 6.3 billion by year 2000-01 and US$ 9.5 billion by the year 2001-02. The national IT task Force has set a target of US$ 50 billion of annual software and services exports by 2008.

Forcast : Indian Software Industry

As per India’s National Association of Software and Service Companies (NASSCOM) Study, India’s Software Industry’s handsome performance would continue unabated in 1999-2000. As per NASSCOM’s study the Industry would be able to grow by more than 50% and could register revenues of Rs. 24,500 Crores during 1999-2000. This would include Rs. 17,200 Crore by Software and Services export and Rs. 7300 Crore of domestic Market revenues.

Forecast- Domestic Software Industry

Forecast - Software Export Industry

The NASSCOM’s Study reveals that due to increased government spending towards IT in the domestic market, as well as increase in sale of Pcs, the domestic software market will fetch a record revenue of almost Rs. 11,000 crore in 2000-01. Exports will also continue to grow in 2000-01 with focus on E-Commerce, IT enabled service, Euro and ERP. As per NASSCOM forecast during the next financial year exports would continue to grow by almost 50%.

It is projected that during the year 2001-02, software Industry in India would be Rs. 55,500 crore (US$ 13 billion).

The six countries, USA, Japan, Germany, U.K., Italy and France together have almost 71% of the Market share of the worldwide software market. India’s exports to these countries is almost 79% of its total Software exports. During 1998-99, India exported about 61% of its total software exports to USA. Export to Europe was at 23% and more Market Opportunities in Japan, South Africa, Canada, France and Middle East were discovered.

India’s IT Industry

Inforation Technology Scenario

The Information Technology (IT) revolution in India has its roots in the year 1986 when Country’s Railway passenger reservation system was completely computerised, which infact, brought computers closer to Masses. Since then, there has been a gradual shift towards usage of IT in Government, Public Sector, Private Sector as well as public services and education. The thrust of IT Phenomenon has increased dramatically in the last two years primarily due to power of Internet, E-Commerce and Government of India’s thrust which is bringing IT in daily life of a common man in India.

The mere Rs. 63,450 Million (US$ 2041 Million) Indian IT Industry of 1994-95 has grown to a whooping Rs. 2,47,815 Million (US$ 6052 Million) Industry in the year 1998-99. Poineering work done by Indian software companies using the high speed datacom links brought in new paradigm of offshore software development with software as the driving engine, since early 90’s, the Indian IT Industry has been growing at a Phenomenal growth rate. Undoubtedly, India’s software industry is torch bearer for not only India’s IT Industry but even Indian economy’s global ambitions. The current IT revolution in India is all set to lead IT in governance, IT in Industry and IT for every citizen.

IT Industry in India (1994-99)

	1994-95		1995-96		1996-97		1997-98		1998-99
	Rs. m	US$ m	Rs. m	US$ m	Rs. m	US$ m	Rs. m	US$ m	Rs. m	US$ m
Software
Domestic	10,700	350	16,700	490	24,100	670	35,100	950	49,500	1,250
Exports	15,350	485	25,200	734	39,000	1,083	65,300	1,750	109,400	2,650
Total	26,050	835	41,900	1,224	63,100	1,753	100,400	2,700	158,900	3,900
Hardware
Domestic	18,300	590	35,600	1,037	37,800	1,050	44,970	1,205	42,350	1,026
Exports	5,500	177	1,200	35	10,300	286	7,430	201	155	4
Total	23,800	767	36,800	1,072	48,100	1,336	52,400	1,406	42,505	1,030
Peripherals
Domestic	4,590	148	6,720	196	6,530	181	8,330	229	13,600	329
Exports	180	6	210	6	520	14	680	19	730	18
Total	4,770	154	6,930	202	7,050	195	9,010	248	14,330	347
Training	3,310	107	4,970	145	6,600	183	9,420	263	12,500	302
Maintenance	4,400	142	5,920	172	6,560	182	8,240	221	9,780	236
Networking & Others	1,120	36	2,40 0	710	5,590	156	7,150	193	9,800	237
Grand Total	63,450	2041	98,920	2886	137,000	3805	186,620	5,031	247,815	6052

During the last five years the Indian IT Industry has recorded a compounded Annual Growth Rate (CAGR) of more than 40.50%, which is almost double the growth rate of the IT Industry in many of the developed countries. Inspite of slow growth in Indian economy during the year 1998-99, the Indian IT Industry has neted revenues of about Rs. 24,781 Crores (US$ 6.1 billion) as compared to Rs. 18,662/- crores in the year 1997-98, recording a growth of 32.79%. Government has conventionally been recognised a key driver of domestic IT demand in India, in the year 1998-99 Government spending constituted more than 28% of total IT spending. The major sectors which are witnessing a special thrust on adoption of IT are Central/State Administrations, Insurance, Banks, Energy, Financial Institutions, Defence, Public Tax System, Ports, Customs, Telecom, Education and small office Home Office (SOHO)/Individuals. The IT manufacturing sector is growing at an average rate of 28% 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.

The domestic IT Industry in India earned revenues of Rs. 13,568 crore and grew by 20.37% in the year 1998-99 over the revenues in 1997-98 of Rs. 11,272 crore. In the current year, IT Idustry is expected to receive a stronger thrust on the back of government as well as Industrial purchases. Y2K bug or year 2000 solutions emerged as an important driver of domestic IT market during 1998-99. Government Sector received a thrust for Y2K compliance through setting up of sub-ministry Y2K Action Forces Chaired by Senior secretary level functionries in respective Ministries and Departments with the Task Forces being made strongly accountabe for Y2K compliance of their respective sectors, this led to greater appreciation of problem on hand and thus reflecting upon stronger demand

for new systems, software and services.

The growth in demand for personal computers alongwith the rising popularity of the Internet are two major forces driving the growth of the domestic IT Industry. PC (including PC Servers) Sales in the country in the year 1998-99 were more than 8,20,000 units aggregating revenue of over Rs, 3,100 crore. The installed base of PCs in the country was 3.2 Million as on 31st March, 1999.

The next wave of domestic spending will be spearheaded by landmark recommendations of National IT Task Force and drive in the private Sector to establish enterprise Compling and electronic commerce systems. It is expected that in the year 1999-2000, the IT Industry of India would further improve its performance and may gross revenues of Rs. 361 billion (US$ 8.39 billion) with software and service industry continuing to have more than 60% share in Indian IT Industry’s revenues.

E-COMMERCE:

E-commerce is of two types:

BUSINESS TO BUSINESS: which includes:

(1) Customer relationship Management

(2) Supply Chain management

(3) Business intelligence through data Warehousing

(4) Virtual Enterprises

CONSUMER TO BUSINESS (RETAIL) : where customers can study, order, pay

through the Inter-net

E-commerce USA in 1998-99 reached a high of US$ 5000 Million.

E-commerce in India is at infancy but fast picking up .

I.T. ENABLED SERVICES:

A large variety of IT enabled services are being carried out in India using Indian staff, infrastructure and satellite communication systems on behalf of their overseas

customers or associates .This has become a major revenue earning Business segment.

India is attractive to them due to following factors:

· Low cost of operations in India (Employee costs, infrastructure costs)

· Highly educated & knowledgeable manpower of India

· State-of Art technology

· Round the clock services due to 24 hour clock + different time zones.

GOVERNMENT SUPPORT :

The Government of India has announced I.T. as a thrust area. Accordingly, it provides for more liberal policy framework for the sector. The following are some of the important policy notifications. They have been classified into following categories :

· Customs (Import Duty) relaxation

· Income Tax concession

· Exim Policy – removing restriction on import of capital goods

· Reserve Bank of India – Liberalization for overseas investment.

· Excise rates concession

(SOURCE -WWW.NASSCOM.ORG)

STOCK MARKET DATA

As the Shares of the Company are yet to be listed on any Stock Exchanges, no quotation for the market price of its shares is available.

FINANCIAL HIGHLIGHTS OF THE COMPANY FOR THE PAST THREE YEARS

Statement of Profits & Losses :

PARTICULARS	31.03.97	31.03.98	31.03.99
Income :
Sales software/solutions	948.34	1792.34	2580.98
Income from Solutions & Engineering Services	24.74	35.13	39.35
Total	973.08	1827.47	2620.33
Expenditure :
Cost of Software	641.99	1152.32	1682.63
Software Development Exp.	73.98	175.23	223.42
Administrative Expenses & Selling Expenses	151.73	322.62	412.96
Financial Expenses	4.97	5.26	6.01
Depreciation	37.45	67.80	81.60
Misc. expenditure written off	0.02	0.01	0.01
Total	910.15	1723.26	2406.64

Profit before Tax	62.91	104.20	213.68
Provision for Tax	2.13	1.54	2.38
Profit after Tax	60.79	102.67	211.30
Proposed Dividend (Subject to Tax)	---	---	---
Provision for Dividend Tax	---	---	---
Balance brought down	69.92	130.71	233.38
Balance Carried to Balance Sheet	130.71	233.38	444.68

PARTICULARS	31.03.97	31.03.98	31.03.99
EPS (Rs.)	1.01	1.71	2.40
Return on Net Worth (%)	8.32	12.31	15.95
Net Assets value per Share (Rs.)	12.17	13.89	15.05

MANAGEMENT DISCUSSIONS AND ANALYSIS OF RESULTS OF THE COMPANY FOR THE LAST THREE YEARS

FINANCIAL DATA FOR LAST THREE YEARS

Particulars	1996-97	1997-98	1998-99
Total Income (A)	973.00	1827.47	2620.33
% Change		87.82%	43.39%
Total Expenditure (B)	910.15	1723.26	2406.64
% Change		89.33%	39.66%
Profit after Tax	60.78	102.66	211.29
% Change		68.90%	105.81%
EPS	1.01	1.71	2.40
% Change		69.31%	40.35%

Analysis of Financial results :-

The company has achieved significant growth over the last five years. Its sales turnover has risen to Rs 2620.33 Lacs from Rs. 74.27 Lacs between 1994-95 and 1998-99, showing a healthy growth rate of 3428%.The growth in turnover has primarily been due to the well defined marketing strategy and the focus on providing total integrated solutions to customers.

Net profits have risen sharply to Rs. 233.78 Lacs for 1998-99 from Rs. 15.32 Lacs for 1996-97. showing a growth rate of 1426%. During the year 1998-99, the company’s focus on software development and provision of web solutions resulted in higher net profits. The company investments for development of new & innovative software products will enable higher returns in the future.

The EPS is continuosly moving towards upwards during 1996-97 to 1998-99 showing a healthy growth of company’s working

The return on net worth for the year 1998-99 is 15.95% and the development of new & innovative products will certainly show positive result in the coming years.

In the opinion of the Board of Directors there have no circumstances arisen since the date of last financial statements as disclosed in the prospectus any of which materially and adversely affect or is likely to affect the trading or profitability, or the value of its assets, or its liability to pay its liabilities within the next twelve months

Unusual or infrequent events or transactions

There are no unusual or infrequent events or transactions since incorporation.

Significant Economic Changes that materially affected or are likely to affect income from continuing operations.

The Government of India has identified Software Industry as a thrust area and incentives are being provided to encourage the Industry. Hence, the Company does not foresee any adverse policy changes that could be detrimental to the growth of this Industry.

Known Trends or uncertainties that have had or expected to have a material adverse impact on sales, revenue or income from continuing operations.

The Software Industry is prone to high level of technological obsolescence and rapid technological changes. The Company has planned to provide regular upgradation programme equipments and training programme for its software manpower resources to keep pace with these changes.

Future changes in relationship between costs and revenues in case events such as labour or material costs or prices that will cause a material change are known

Software contracts are evaluated on the basis of the estimated man-hour requirements as also the complexity of the job. Any variation in the principle head of cost, manpower, is factored in while evaluating the price.

The extent to which material increase on net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.

The incremental growth in the projected sales and revenues of the Company is based on the assumption that the Company will enjoy the benefits of increased productivity, expansion of business and the repeat business anticipated from its clients for the quality of services that would be rendered to them.

Total turnover of each major industry segment in which the Company operates

The Company operates in the Software Industry, which has compounded annual growth rate of 56.3%. NASSCOM estimates that the sales of the Indian software services are expected to reach Rs. 560 billion by 2002.

Status of any publicly announced new products or business segment

Not applicable.

The extent to which business is seasonal

Software industry is non-seasonal in nature and business volumes are only dependent on the marketing efforts of the Company.

Any significant dependence on a single or few suppliers or customers

Not applicable.

Competitive conditions

The activities in which the company is proposing to expand is highly competitive but the company proposes to face the competition by maintaining high quality standards and continuous process of improvement, constantly and proactively upgrading technology and infrastructure.

FINANCIALS OF GROUP COMPANIES

M/S EIDER INFOTECH LIMITED

The Company was incorporated on 04.06.1990 under the name ‘Eider Telecom Limited ‘and is now changed to ‘Eider Infotech Ltd.’ with effect from 26.11.99. The date of commencement of business was 25.06.1990. The Company provides wide range of services in software and telecom sectors. It provides custom built/customized softwares with on site and offshore services and also renders following software development and solutions:-

- Telecom Software Solutions

- Web Solutions

- Customized Software/E-Comm Solutions

- I.T. Education

The Company has two subsidiaries namely Eider E-Commerce Limited and Eider PWI Communication Limited & has also promoted Two (02) AICTE Approved Degree Level Engineering Colleges & an Software Engineering Institute ‘International Institute of Information Technology”.

THE FINANCIAL HIGHLIGHTS OF M/S. EIDER INFOTECH LIMITED IS AS FOLLOWS:-

Rs. in lacs

Particulars	31.03.97	31.03.98	31.03.99
Share Capital including share application money	1999.90	1999.90	1999.90
Reserves & Surplus	761.04	1398.59	2870.67
Sales	1437.68	3624.17	5662.45
Profit after Tax	32.32*	637.55	1472.08
E.P.S. (Rs.)	0.16	3.19	7.36
Net Asset Value	13.00	16.27	23.70

• Depreciation for previous year deducted

M/S EIDER TECHNOLOGIES LIMITED

The Company was incorporated on 10.04.1989 under the name M/s Eider Electronics Industries Limited and its name changed to ‘Eider Technologies Ltd.’ with effect from 15.03.2000. The date of commencement of business was 20.04.1989. The Company is listed at 5 Stock Exchanges including Bombay Stock Exchange, Ludhiana Stock Exchange, Ahmedabad Stock Exchange, Delhi Stock Exchange & Calcutta Stock Exchange.The Company is in the business of manufacturing of wireless sets/equipments, trading of electronics and electrical goods and now has expanded its business to provide software solutions for wireless networking.

(Rs. in lacs)

Particulars	31.03.97	31.03.98	31.03.99
Share Capital including advance against share application money	712.15	1208.19	1208.19
Reserves & Surplus	1411.27	1417.01	1426.13
Sales	2592.19	2244.23	2661.35
Profit after Tax	107.44*	5.74*	9.12
E.P.S. (Rs.)	2.07	0.06	0.09
Net Asset Value	39.79	25.34	25.48

* Depreciation provision due to change of method from SLM to WDV.

M/S EIDER FINANCIAL SERVICES LIMITED

M/s. Eider Financial Services Limited is a Public Limited Company in the financial services sector. Its date of incorporation was 10.04.1989 and date of commencement of business was 20.04.1989. It is the RBI approved NBFC and the financial services arm of Eider Group Companies. The Company has syndicated loans to various Govt. and Corporate Bodies.

FINANCIAL HIGHLIGHTS OF M/S. EIDER FINANCIAL SERVICES LIMITED ARE AS FOLLOWS:

Rs. in lacs

Particulars	31.03.97	31.03.98	31.03.99
Share Capital Including Share Application Money	798.88	798.88	798.88
Reserve & Surplus	108.39	108.42	108.75
Income from financial Services	218.48	12.37	33.78
Profit after Tax (Prov. For Depr.)	0.15	0.03	0.33
E.P.S. (Rs.)	0.01	0.002	0.02
Net Asset Value	57.60	57.61	57.64

M/S SKYTEL COMMUNICATIONS LIMITED

The Company was incorporated on 13.07.1992 and its date of commencement of business was 29.06.1993. The Company is in the business providing mobile, radio, trunking Products & Services in India.

THE FINANCIAL HIGHLIGHTS OF M/S. SKYTEL COMMUNICATION LIMITED IS AS FOLLOWS:-

Rs. in lacs

Particulars	31.03.97	31.03.98	31.03.99
Share Capital including advance against equity	1060.59	1360.59	1360.59
Reserves & Surplus	3.57	5.59	5.69
Sales	235.56	494.86	930.34
Profit after Tax	-0.52	2.02	0.10
E.P.S. (Rs.)	--	0.019	--
Net Asset Value	10.03	12.88	12.88

IITT SOCIETY

It is an academic Institution of IITT Society and is managed by IITT Trust.

It was incorporated during 1997-98 (1^st Session)

THE FINANCIAL HIGHLIGHTS OF M/S. International Institute of Telecom Technology (IITT SOCIETY) ARE AS FOLLOWS:-

(Rs. in lacs)

Particulars	31.03.97	31.03.98	31.03.99
Grants and Donations	---	258.97	647.32
Capital Fund	---	117.47	169.56
Investment in IITT College of Engg. Kala Amb Investment in IITT College of Engg. Pojewal	----	385.47 ---	421.32 375.00
E.P.S. (Rs.)	--	--
Net Asset Value	--	--

IITT COLLEGE OF ENGINEERINGS KALA AMB

IITT College of Engineering, Kala Amb (HP) is an Engineering College of Repute and is Approved by AICTE, Govt. of India & is Affiliated to H.P. University for grant of 04 –years B.Tech Degrees into Computer Science / I.T.Engineering, Electronics & Telecommunication Engineering & Electrical Engineering. The College has an Annual Intake Capacity of 220 students aggregating to a 4 year capacity of 880 students including 10% LEET Seats. The IITT College of Engineering has large investments into its Infrastructure including Residential Campuses etc. This is the only Private Aided College of Engineering in the State of H.P.

THE FINANCIAL HIGHLIGHTS OF M/S. IITT COLLEGE OF ENGG. KALA AMB ARE AS FOLLOWS:-

(Rs. in lacs)

Particulars	31.03.97	31.03.98	31.03.99
Grants and Donations	---	85.00	85.00
Investment by Promoter/Society/Eider Group etc.	---	447.71	989.89
Income	----	167.70	241.57
Expenditure	---	100.03	219.49
E.P.S. (Rs.)	--	--
Net Asset Value	--	--

IITT COLLEGE OF ENGINEERINGS, POJEWAL

IITT College of Engineering, Pojewal, Punjab is a Reputed Engineering College with large Infrastructure & is Approved by AICTE Govt. of India & is Affiliated to Punjab Technical University Jallandhar. The College has an Annual Intake Capacity of 240 students aggregating to a total 04 year Capacity of 960 students. The College operates 4 year B.Tech Degree Courses into Computer Science Engineering, Electronics & Telecommunications Engineering, Electronics & Instrumentation Engineering & Chemical Engineering.

THE FINANCIAL HIGHLIGHTS OF M/S. IITT COLLEGE OF ENGG. POJEWAL ARE AS FOLLOWS:-

(Rs. in lacs)

Particulars	31.03.97	31.03.98	31.03.99
Grants and Donations	---	--	15.64
Investment by Promoter/Society/Eider Group etc.	---	---	315.00
Income	----	---	115.81
Expenditure	--	--	85.81
Net Asset Value	--	--

The details of listed Companies under the same management within the meaning of Section 370 (1B) of the companies Act, 1956 or otherwise are given below.

M/S EIDER PWI COMMUNICATION LIMITED

The Company was incorporated on 09.05.1996 and its date of commencement of business was 19.06.1996. It is the subsidiary of Eider Telecom Ltd., which is now known as Eider Infotech Limited. Eider PWI Communication Limited is yet to commence operation of radio paging service licenses in DOT all licensed 8 cities i.e. Bangalore, Chennai, Ahmedabad, Chandigarh, Pune, Baroda, Jaipur, Ernakulam. The Company has been promoted in joint venture with Philippines Wireless Inc(PWI) of Philippines which hold 25% of the Capital & the Balance 75% is held by Eider.

THE FINANCIAL HIGHLIGHTS OF M/S. EIDER PWI COMMUNICATION LIMITED IS AS FOLLOWS:-

Rs. in lacs

Particulars	31.03.97	31.03.98	31.03.99
Share Capital including advance against equity	1223.49	2047.06	2047.06
Reserves & Surplus	--	--	--
Sales	--	--	--
Profit after Tax	-0.73	--	--
E.P.S. (Rs.)	--	--	--
Net Asset Value	5.97	9.99	9.99

The Companies EPCL & EPPL have filed cases against DOT for grant of valued licences for the RP Services. The Company has also given its constent for Revenue Sharing policy of DOT where after the Company expects for launch its services.

M/S EIDER PWI PAGING LIMITED

The Company was incorporated on 09.05.1996 and date of commencement of business was 19.06.1996. The Company has been incorporated with the object of dealing with the business of radio paging services under licenses from department of telecommunication of India. The project is under implementation and yet to commence operation in three metropolitan cities namely Delhi, Calcutta and Mumbai. The Company has been promoted in joint venture with Philippines Wireless Inc(PWI) of Philippines which hold 25% of the Capital & the Balance 75% is held by Eider.

THE FINANCIAL HIGHLIGHTS OF M/S. EIDER PWI PAGING LIMITED IS AS FOLLOWS:-

Rs. in lacs

Particulars	31.03.97	31.03.98	31.03.99
Share Capital	1519.02 *	2047.06	2047.06
Reserves & Surplus	--	--	--
Sales	--	--	--
Profit after Tax	-0.73	--	--
E.P.S. (Rs.)	--	--	--
Net Asset Value	7.41	9.99	9.99

M/S SINHTRON GASKETS (P) LIMITED

Sinhtron Gaskets (P) Ltd., was incorporated on 08.09.1986 as a Private Limited Company. The Company is in automotive sector and presently engaged in the manufacturing and marketing of Automotive Gaskets and Sheet Metal Components as an OE Manufacturers to TELCO, HMT, Defence, ASTRU’s, Maruti, Swaraj Mazda, Birla Yamaha, Shriram Honda, PTL etc.

THE FINANCIAL HIGHLIGHTS OF M/S. SINHTRON GASKETS PVT. LTD. IS AS FOLLOWS:-

Rs. in lacs

Particulars	31.03.97	31.03.98	31.03.99
Share Capital including share application money	15.79	15.79	15.79
Reserve & Surplus	7.16	7.22	7.23
Sales	33.91	21.87	20.04
Profit after Tax	0.17	0.055	0.007
E.P.S. (Rs.)	4.24	1.37	0.17
Net Asset Value	573.75	575.25	575.50

Note:- The Nominal value of Share is Rs. 100/-

DETAILS OF BUSINESS TRANSACTIONS WITHIN THE GROUP

To take Advantage of various expertise available within the group Companies, there are business transaction within the group which are defined at various places in the said prospectus.

DETAILS OF ISSUES DURING THE LAST THREE YEARS BY THE COMPANY AND OTHER COMPANIES UNDER THE SAME MANAGEMENT

Eider Infotech Limited (Previously known as Eider Telecom Limited.) came out with a public issue of 1,14,53,300 equity shares of Rs. 10/- each for cash at par aggregating to Rs.1145.33 lacs in March, 1996.

·	Name of the Company	:	Eider Infotech Limited
·	Year of Issue	:	1996
·	Type of Issue	:	Public Issue of Equity shares
·	Amount of Issue	:	Rs. 1145.33 lacs
·	Date of Opening of issue	:	11^th March 1996.
·	Date of Closing of Issue	:	21^st March 1996
·	Date of Completion of delivery of Share certificates:-	:
	For Resident Indians	:	27.05.96
	For Non Resident Indians	:	Approval date of RBI was 01/08/98 and date of despatch of share certificates was 26/08/1998
·	Date of Completion of project where object of the issue was financing the project	:	1st April, 1996
·	Date of Dividend paid	:	Nil

Promise Vis-a-Vis. Performance

EIDER INFOTECH LIMITED previously known as EIDER TELECOM LIMITED, a Promoter/Group Company approached the capital market with its public issue in March, 1996.

Following object of the issue were achieved as per the schedule of implementation planned:

SCHEDULE OF IMPLEMENTATION

Sl. No.	Particulars	Completion	Actual
1)	Acquisition of land (Yet to be registered in companies name)	Already acquired (Yet to be registered in companies name)	Registered
2)	Building and Civil Work	60% Completed	100% Completed
3)	Plant & Machinery: Placement of order Delivery at site	November, 1995 February, 1996	As per Schedule
4)	Erection and Installation	February, 1996	As per Schedle
5)	Commercial Production	1^st April, 1996	As per Schedule

FUTURE PROSPECTS

The financial projections of the projections of the project as appraised by MPCON vide their appraisal report Ref. No. BMA/1848/95 dated 11^th March, 1995.

Rs. In lacs

Particulars	1995-96		1996-97		1997-98
	Projected	Actual	Projected	Actual	Projected		Actual
Capacity Utilisation	50%	60%	70%	30%	75%	55%
Sales Turnover Including Other Income	469.35	950.63	4444.59	*1964.10	4876.82	3701.63
Manufacturing Exp’s	342.13	943.10	3310.76	1866.58	3627.38	2980.73
Gross Profit	114.84	7.53	1096.29	97.52	1223.90	720.90
Interest	30.19	--	205.35	20.64	222.40	24.02
Depreciation	24.38	2.06	97.54	40.62	97.54	55.60
PBT (Rs. In Lacs)	42.88	5.47	599.70	36.26	686.69	641.28
PAT (Rs. In Lacs)	34.83	5.46	567.48	32.32	654.48	637.55
Equity Share Capital	1986.17	1197.71	---	1999.90	---	1999.90
Reserves & Surplus	---	5.46	567.48	37.79	1122.01	675.33
EPS (Rs./Share)	*0.70	0.05	2.84	0.16	3.27	3.27
Book Value (Rs. /Share)	10.00	10.00	10.87	13.81	12.51	17.00
Dividend (%)	---	--	5%	--	10%	--

STOCK MARKET DATA DURING THE PRECEDING SIX MONTHS

M/S EIDER INFOTECH LIMITED

PARTICULARS	HIGHEST Rs.	LOWEST Rs.
Market price of the shares during the preceding six months	773.40	28.00
Market Value on the date of filing of offer document with ROC

M/S EIDER TECHNOLOGIES LIMITED

PARTICULARS	HIGHEST Rs.	LOWEST Rs.
Market price of the shares during the preceding six months	49.00	1.00
Market Value on the date of filing of offer document with ROC

FUTURE PROJECTIONS

The future projections as certified for arithmetical accuracy by the auditors of the company for the year September 2000- September 2001 are as under :-

SALES	2000-01
Existing Operations	25.00
E-Comm Banking - Payment Gateway	100.00
E-Comm Internet Distribution Network	156.00
Other – Portals/Business	35.00
Total	316.00
Cost of Sales	175.00
Software Development Exp.	60.00
Administrative Expenses	35.00
Financial Expenses	2.00
Depreciation	15.00
Total	287.00
Profit	29.00
Provision for Tax	2.00
Profit after Tax	27.00
Reserves	34.00
Revaluation Reserves**	155.00
Total Reserves	189.00
Capital	37.00
Net Worth	226.00
Book Value	61.08
E.P.S.	7.30

Profit forecast is based on the business plan for the year 2000-2001 as approved by the Board at their meeting held on 03.02.2000 is after considering the assumption and notes made by the company

BASIS FOR ISSUE PRICE

Qualitative Factors:

• 8 Years old Infotech Company promoted by Strong 10 years old Listed Leading Telecom Software & I.T. major - Eider Infotech Ltd, (a Rs. 1200 Crore I.T. Corporate).
• Company has large (03) Three Major Global Web Portals & related businesses which accounts for major valuation in the Int’l markets for such quality portals.
• Forming the largest All India -On-the-ground Distribution Network for Net distribution on indiasales.net/India homeservice.net.
• Launching international acclaimed successful products with potential of Large Sales & Profits i.e. e-Comm Payment Gateway & e-Comm Card and Internet Consumer Distribution Projects.
• Existing profitable business operations into the area of Communication Software & Networkings, web/Internet & e-Comm solutions.
• Technology tie up with Eider Infotech Ltd with State-of-the-Art R&D Centres in Chandigarh, Delhi, Kala Amb (H.P.) & All India Infrastructure under common.
• Sales globalization effort alongwith EIL with international offices at New Delhi for Asian Sales & International office at Toronto, Canada for Western markets Sales to be established shortly.
• In house Technology for e-comm portals development & e-comm payment gateway & EIDER e-comm card.

Quantitative Factors :

1. Adjusted EPS

		EPS (RS.)	WEIGHT USED
a.	31.03.98	1.71	1
b.	31.03.99	2.40	2
c.	31.12.99	1.22*	3
	Weighted Average for last 3 years (Rs.)	1.70

* Annualised

2. Price Earning Ratio P/E Ratio in relation to offer price of Rs.170/- per share based on Rs. 1.22 EPS

*Industry P/E Ratio :-

i. Highest 243.20

ii. Lowest 2.80

iii. Composite Average 47.30

*Based on Capital Market issue dated January 9, 2000.

3. Return on Net worth

		RETURN ON NET WORTH	WEIGHT USED
a.	31.03.97	8.32	1
b.	31.03.98	12.31	2
c.	31.03.99	15.95	3
	Weighted Average for last 3 years 65.98%	13.47

4. Minimum return on total net worth after issue needed to maintain EPS at Rs.1.22 is 2.02%

5. Net Asset Value (NAV)

a. As on 31.03.99 Rs. 15.05

b. After issue Rs. 60.48

c. Issue Price Rs. 170.00

LITIGATION / DISPUTES / DEFAULTS

There is no pending litigation in which the company /the promoters of the Company/ the group companies are involved except as otherwise stated below.

Against the Promoter Company viz. Eider Infotech Ltd.:

A winding up petition has been filed by the Shroff’s Carpets, ex-dealer of the Company for his security amounting to Rs.2.23 lacs which was withheld by the Company for not acquiring the target/ promised sale. The litigation is pending in the Punjab & Haryana High Court at Chandigarh.

Two complaints have been filed by the registrar of companies in the Court of Chief Judicial

Megistrate, Chandigarh, for alleged violation of section 73 and 113 of the Companies Act 1956 and

the same are pending.

The Company has filed an application to the department of company affairs, law and justice, department of company affairs for withdrawal of the above cases. The share were issued in time, hence the company has not violated any provisions of section 73 and 113 of the Companies Act 1956.

A civill case as well as criminal complaint has been filed by the Mr. Sudhir Jhalani at Ahmadnagar alleging non issue of promoters quota shares by the company.

Civil case have been filed by Mr. Sudhir Jhalani and Ms. Sunita Manti Kamble at Ahmadnagar.

The Shares were issued to the complainants in time, however the company has again issued the duplicate share certificates to the complainants.

Four Consumer cases are pending in different forums filed by the Mamta Singhal, S.D. Verma, Mukhtar Singh and U.G. Parate against the company alleging non-issue of shares by the company.

The proceedings of frivolous criminal complaint filed in the year 1997 against the directors were got stayed outrightly by the High Court Ranchi wherein the allegation were levelled of physically assaulting Mr. Krishan Kumar Dhar of Dhar Electronics (ex-dealer)

Frivolous complaint has been filed in the State Legal Authority for the payment of wages by a person who was never an employee of the company & moreover claiming salary against no notice period given for resignation.

Against the Group Companies

State Bank of India Panchkula branch has initiated the recovery proceedings for Rs.61.03 lacs against the EEIL before Debt Recovery Tribunal, Jaipur and the same is pending.

The landlord of the premises occupied by the ETL has initiated eviction proceedings against the company before Rent Controller Chandigarh and the same is pending.

Motor General Finance Limited has initiated reference proceedings before Arbitrator at Delhi for the recovery of the alleged act & pending instalments amounting to Rs. 2.94 lacs.

State of Himachal Pradesh DM’s Court Nahan has issued notice u/s 118(2) of the Himachal Pradesh Tenancy and Land Reforms Act for land occupied by ETL at Kala Amb, Distt Sirmour State of H.P.

Two dealers of ETL namely Hans Publicity and Arvind Projects have file winding up petition for Rs.94800/- & Rs.6.47 lacs respectively in Shimla High Court and is pending.

Printo Services has filed a suit for recovery for Rs.5.64 lacs against ETL and the same is pending up at Delhi.

A worker of a Group Company Sinhtron Gaskets Pvt. Ltd. has filed a suit against the company for not dispossessing him from the Company’s flat after termination of his services. The suit is pending before Sub-Judge-Panchkula.

Regional Provident Fund Commissioner initiated enquiry proceedings against two of its constituent companies under 7-A of the Provident Fund and Misc. Provisions Act. The Appeal is pending before Provident Fund Appeallate Tribunal at Delhi for Rs.15.30 lacs.

Six Workmen/Ex-employees of the different companies have filed separate references before various forums /labour courts under different related & labour laws.

Execution of decree proceedings for Rs.40000/-(Approx.) are pending before Civil Judge Jr. Division passed in money suit filed by the landlord of the premises occupied by the Eider Financial Services Limited at Karnal long back for which Appeal has been filed

Mr.Hardeep Mokha , Mr. Mohit Saini & M.S.Walia filed complaints in the Consumer’s forum at Delhi , Chd. & Panchkula respectively for the refund of the Tution/Fee amounting to Rs. 5lacs (approx.) deposited by them in the IITT College of Engineering run by a Education Society managed by the Directors of the Company.

A recovery suit of Rs.63800/- filed by the Bina Metals, Calcutta is pending. The dispute relates to the terms of contract.

The Company had filed a criminal case of cheating against Mr. Anil Shah/Smridhi Investments and thereafter a frivolous counter case u/s 138 of the N.I.Act was filed by Sh. Anil Shah/Smridhi Investments Bombay which was stayed by the Hon’ble High Court and thereafter the matter is pending in the Supreme Court..

A disputed Sales Tax demand was raised against Eider Technologies Ltd. for the year 1994-95 amounting to Rs. 1.76 Crores which was stayed by the Delhi High Court after a pre-condition imposed by ACST, Delhi.

A disputed Sales Tax demand was raised against Eider Technologies Ltd. for the year 1995-96 creating an liability of Rs. 4.35 Crores. ACST has imposed a pre-condition for the deposit of Rs. 20.00 Lacs for the admission of the appeal which is to be challenged in the Delhi High Court.

A disputed Sales Tax demand was raised against Eider Technologies Ltd. for the year 1996-97 creating an liability of Rs. 2.34 Crores (Approx.). An appeal is being filled in the court of ACST, Delhi.

A disputed Income Tax demand was raised against Eider Technologies Ltd. for the year 1994-95 creating an liability of Rs. 4.82 Lacs. An appeal is being filled in the Income Tax Tribunal, Chandigarh.

An appeal has been filed by the JCIT which is pending in the ITAT against Eider Technologies Limited pertaining to the year 1995-96. The said assessment was quashed by the CIT(A).

An appeal is pending before ITAT, Chandigarh against the ex-parte order of the CIT(Appeals) Patiala whereby the ex-parte assessment made by the JCIT(SR) Simla was up held in respect of Eider Technologies Limited for the Assessment year 1996-97 creating an illegal liability of Rs. 3.29 Crores.

An appeal is pending before the CIT(Appeals) Shimla, challenging the ex-parte assessment made by the JCIT(SR) Shimla in respect of Skytel Communications Ltd. for the Assessment year 1997-98 creating an disputed tax liability of Rs.1.14 Crores.

An appeal is pending before the CIT(Appeals) Shimla, challenging the ex-parte assessment made by the JCIT(SR) Shimla in respect of Eider Technologies Ltd. for the Assessment year 1997-98 creating an disputed tax liability of Rs. 3.12 Crores.

Eider Electronics has defaulted in payment of Rs. 2.90 Crore Term Loans plus disputed amount of Interest towards dues of IFCI, IDBI & ICICI. IFCI has already given its acceptance in writing to an OTS for approx. Rs.112.00 lacs. ICICI has already made an OTS for Rs.93.12 lacs plus interest on delays in three Installments, out of which two Installments for Rs. 59.27 lacs has been paid & balance is pending. IDBI is yet to give its consent for an OTS. The Company has advised the IFCI to give the OTS consent of IDBI also whereof it shall conclude the OTS for all AFI’s enabling the Company to receive back its mortgages & security documents etc.

The SEBI had suspended category II registration certificate of Eider Financial Services Ltd. on account of non payment of annual Merchant Banking Registration Fees which was paid by cheque although but was not accepted by SEBI. The EFSL has vide its earlier correspondence & also its latest letter dated 10^th April 2000 communicated to SEBI its desire of payment of all the pending registration fees and subsequent renewal of the registration certificate. Complaints had been filed against M/S EFSL by Pashupati Fabrics Ltd., BSM KnitFab. Ltd. and Amagin Agro Exports Ltd. for non fulfillment of under writing obligations. The above companies had committed certain infirmities in violation of Statutory obligations and responsibilities pursuant to under writing agreement, absolving and discharging the company of all obligations under the under writing agreement.

EFSL is having dispute with erstwhile Anagram Finance Limited regarding the terms of payment of car loan amounting to Rs. 30.00 lacs only. Substantial Amount out of Rs.30.00 lacs has already been paid and rest of the payment has been offered through the court to avoid unjustified penalities etc. Anagram has also lodged complaints u/s 138 of the negotiable instruments act for Rs. Approx. 5.00 lacs post dated cheques issued for the aforesaid Loan against which the Company had already advised M/s Anagram Finance to collect the DD made (against the post dated cheques) directly or thru the Court.

The Foreign Collaborators ‘Phillipines Wireless Inc. holding 25% stake in Eider PWI Paging Ltd & Eider PWI Communications Ltd (the RPS JVCo’s) had taken over the Management Control of the JVCo’s w.e.f. 06.03.1999 but have not further contributed in the operations of the Joint Venture Companies. Accordingly, complying with the Companies act requirements and as a majority shareholder ETL & EIL have been managing /caretaking the tempraroy operations. PWI has also expressed its desire to offload its 25% Equity which Eider has shown interest to purchase & the same is under evaluation. Their have been differences of opinion between Eider & PWI on various issues including management investments etc.

None of the cases pertaining to the Company or the Group Company is likely to effect the operations of the Company in any manner.

DEFAULTS:

Affiliate of Promoters, namely Eider Electronics Industries Ltd. (EEIL) now Eider Technologies Ltd. (ETL) has defaulted in repayment obligation to financial institutions amounting to about Rs. 290.00 of Term Loan lacs plus disputed interest.

Management Perception : This was due to adverse phase in the Telecommunication which Industry is going through all over the country and the same could not be settled largely because of disputed Interest & penalties imposed unilaterally by the Financial Institutions.. ETL has made an offer for one time settlement to the financial institutions which has been accepted by Two of the Financial Institutions & the ETL is organizing to repay them. Infact one AFI has been repaid two of the three OTS instalments but the last instalment and its interest is due. However, Eider e-Commerce Ltd. performance is not dependent on its group company (ETL) and it will have no adverse impact on the business of the Company

Except the above mentioned cases :-

There are no pending litigation’s except as otherwise mentioned above against the Promoters/ Directors in their personal capacities and also involving violation of statutory regulations or criminal offences.

There are no over dues, defaults to the Financial Institutions/Banks, reschedulement of loans to Banks/FI’s except as otherwise mentioned in this prospectus. There are no pending offences of non-payment of statutory dues by the promoters of the Company as otherwise mentioned in this prospectus.

There are no cases of litigations pending except as otherwise mentioned above against the Company/Group Companies whose outcome could have a materially adverse effect on the position of the Company.

There are no pending litigation’s except as otherwise mentioned above against the Promoters/ Directors in their personal capacities and also involving violation of statutory regulations or criminal offences except as mentioned in this prospectus.

There are no pending proceedings initiated for economic offences except as otherwise stated in prospectus against the Directors, Promoters, Companies and Firms promoted by the promoters.

There are no outstanding litigation’s, disputes pertaining to the matters likely to affect the operations and Financials of the Company including disputed tax liability, prosecution under any enactment in respect of Schedule XIII of the Companies Act, 1956.

There are no litigation’s outstanding except as otherwise stated in the prospectus against the Promoters / Directors in their personal capacity. The Company, its promoters and other Companies with which promoters are associated have neither suspended by SEBI nor any disciplinary action has been taken by SEBI. There is no prosecution launched by Income Tax Authorities and no liability compounded by the Promoters / Company / Ventures with which the Promoters are associated is subsisting.

There are no cases of pending litigation/defaults in respect of the firms / Companies with which the Promoters are associated in the past but are no longer associated.

INVESTOR GREIVANCES AND REDRESSAL SYSTEM

Investor’s grievances pertaining to this issue will be handled by the Registrar to the Issue namely M/s.Karvy Consultants Ltd. A fortnightly status report of the complaints received and redressed by them would be forwarded to the Company. The Company would also be co-ordinating with the Registrars to the issue in attending to the grievances of the investors. The Company assures that the following schedules shall be adhered to by the Board of Directors in respect of the complaints, if any, to be received.

S. NO	NATURE OF COMPLAINT	TIME TAKEN
1	Non receipt of the refund warrants or Share Certificate	Within 7 days of receipt of complaint, subject to production of satisfactory evidence
2	Change of address notification	Within 7 days of receipt of information
3	Any other complaint in relation to Public Issue	Within 7 days of receipt of complaint and other relevant details.

The Company has appointed Mr. Subhash Saini, Company Secretary of the Company as Compliance Officer who would directly deal with SEBI officer with respect to implementation of various laws, rules, regulations and other directives issued by SEBI and matters related to investor complaints. The investors may contact the compliance officer in case of any pre issue/post issue related problems. The Compliance officer will be available at the registered office of the Company.

MATERIAL DEVELOPMENTS

There are no material developments after the date of the latest audited balance sheet as on 31^st March, 1999 which may materially affect the performance or prospectus of the company.

In the opinion of the board, there has been no circumstances which have arisen since the date of last Financial Statements disclosed in the Prospectus, that materially and adversely affects or is likely to affect the trading or profitability of the Company or the value of its assets or its ability to pay its liabilities within next 12 months.

RISK FACTORS (R) AND MANAGEMENTS PERCEPTION (P) THEREOF

INTERNAL

1. ( R ) The cost of project and means of finance included in this Prospectus have not been appraised by any Financial Institution or Bank and the utilisation of the issue proceeds is at the total discretion of the management.

(P) The management of the company comprises professionals and technocrats with a proven track record and the public issue proceeds will be utilised only for the objects of the issue as mentioned in the offer document. The Company believes that it has the professional expertise to estimate the cost of project and implement the same and it is confident that the assumptions and data used for estimation of cost of project and future profitability are realistic.

2. ( R ) There are various litigation pending against the Promoting company /Directors of the and group companies details of which are given under the head Litigation/Disputes/Defaults in the offer document on page no. ----

(P) In the opinion of the Board of Directors none of the litigations are likely to have an impact on the operations of the Company, since there are no litigations against the Company.

3. ( R ) The company has its own Infrastructure at Panchkula & New Delhi but has an Agreement with the Promoter Company/Group Companies to share its Infrastructure including buildings and offices in different Indian cities.

(P) Although the Company does not own Infrastructure other than in Delhi & Panchkula but the Company has an Agreement with its parent & Group Companies for use of its fully equipped Infrastructures All over India on excellent Terms resulting in most beneficial interest to the Company which does save lot of Capital investments on Infrastructure for the Company.

4. ( R ) Data communication facilities including internet are being used as delivery mechanism. Security issue poses a risk to the company.

(P) Company provides offshore and domestic application development services. For domestic application and products, the company has internal servers with security mechanisms like firewall, encryption, de-cryption which prevent unauthorised access to its critical and valuable information. On the other hand for offshore development only piecemeal data are transferred and that too in specially encrypted format, which again minimises security risks.

5. ( R ) Company is planning to launch an International Gateway with Satellite Connectivity at New Delhi subject to approval from Department of Telecommunication (DOT).

(P) The Application for the Licence from DOT for the Int’l Gateway is yet to be made by Eider e-Commerce Ltd but the Company finds no difficulty in obtaining the same.

6. ( R )The company has to make arrangements with bank for its project ofE-comm - payment b2b/b2c gateway & int’l gateway with direct satellite bandwidth & e-comm card project

(P) The Company is in discussion with various Banks for the purpose. The Company does not apprehend any problem for such a tie-up with any bank as the arrangement envisaged is simple & is in tune with normal presently adopted banking systems.

EXTERNAL

1. ( R ) The IT industry is subject to high technological obsolescence risk .

(P) The Company continuously upgrades its courseware, the skill sets of its employees and its infrastructure facilities to keep abreast of the latest developments in its line of business. The Company has already assimilated technologies in the areas of web based technologies.

2. ( R ) The computer industry suffers from high technological obsolescence and high turnover of trained personnel.

(P) The Company believes the continous introduction and use of newer software technology and hardwares, tools and development environments as well as providing the best compensation packages to its engineers. The Company is hopeful that it shall be able to both retain its trained personnel as well as keep their technological skills up-to-date.

3. ( R ) The company faces competition from existing companies and new entrants entering into the Software Business.

(P) The Company has inherent strengths like well established marketing channels, time tested project management skills, offshore software facilities and professionally qualified, experienced and trained manpower, which play a major role in keeping ahead of competition.

4. ( R ) Govt. Cyber Laws/Guidelines has yet not come into force. The Project schemes mentioned in this prospectus shall subject to change as per the Govt. of India laws/guidelines in this regard from time to time. Without any prior notice, to comply with the laws/guidelines of Govt. of India.

5. ( R) Niether the past EPS nor the NAV figures of the company are justifuing the issue price of Rs.170/-

6. (R) Information Technology business in which the Company is engaged is witnessing abnormally high valuation presently and possibilities can not be ruled out that the same may be not continue in future.

PART - II

A) GENERAL INFORMATION

CONSENTS

Consents in writing of the Directors, Lead Manager to the Issue, Auditors, Bankers to the Company, Bankers to the Issue, Registrar to the Issue and Brokers to the Issue to act in their respective capacities have been obtained and filed with the Registrar of Companies along with a copy of this Prospectus, as required under Section 60 of the Companies Act 1956, and none of them have withdrawn the said consents upto the time of filing of this Prospectus for registration with the said Registrar of Companies.

M/s. S. Pathania & Associates, Chartered Accountants, the Auditors of the Company, have also given their consent for the inclusion of their Report as appearing herein in the form and context in which it appears in this Prospectus and also of the tax benefits accruing to the Company and to the members of the Company and such consent and reports have not been withdrawn upto the time of delivery of this prospectus for registration with the Registrar of Companies.

EXPERT OPINION

Save and except as mentioned elsewhere in the prospectus, the company has not obtained any expert opinion.

CHANGES IN DIRECTORS DURING THE LAST THREE YEARS

Name of the Directors	Date of Joining	Date of Retirement	Reason
Ravi Kumar	Since Incorporation	01.01.2000	Resigned
Sushma Devi	Since Incorporation	01.01.2000	Resigned
Rajiv Kumar	Since Incorporation	01.01.2000	Resigned
Rama Sinha	01.01.2000	--	Appointed as additional director
Sanjay Sinha	01.01.2000	--	Appointed as additional director
B.L. Khurana	01.01.2000	--	Appointed as additional director
M.M. Dhasmana	01.01.2000	--	Appointed as additional director

CHANGES IN AUDITORS DURING THE LAST THREE YEARS

There has been no change in the auditors during the period of last three years.

AUTHORITY FOR THE PRESENT ISSUE

Pursuant to Section 81 (1A) of the Act the present issue has been authorised by a special resolution passed by the shareholders of the company at the Extra Ordinary General Meeting held on 3^rd February 2000.

DISPOSAL OF APPLICATION AND APPLICATION MONEY

No receipt will be issued for application money. However, the Bankers to the issue receiving the application will acknowledge the receipt of the application by stamping and returning the detachable acknowledgement slip appended to each application.

The sum received in respect of the issue will be kept in separate bank accounts and the Company will not have any access to the funds unless approval of the Regional Stock Exchange i.e. Ludhiana Stock Exchange is obtained for the Basis of Allotment and Listing Approval from the Stock Exchanges where listing is proposed.

The Company reserves the full unqualified and absolute right to accept or reject any application in

whole or part and in either case without assigning any reason thereof.

ALLOTMENT LETTERS & SHARE CERTIFICATES & REFUND ORDERS

Letters of Allotment/Share Certificates as the case may be will be dispatched by Registered Post to the sole/first applicant within ten weeks from the date of closure of the Issue. The Company shall pay interest @ 15% per annum on the entire amount if the allotment of the Equity Shares has not been made within 30 days from the date of closure of the Issue. This interest will be paid from the 31^st day from the closure of the Issue until the actual date of allotment. Alternatively, in case of any delay in the dispatch of refund orders beyond 30 days from the closure of the Issue, interest @ 15% per annum, except to applicants applying through Stockinvests, will be paid on the refund amount from the 31^st day from the closure of the Issue until the date of dispatch of the refund orders.

The Company shall ensure despatch of refund orders of value upto Rs.1,500/-under certificate of posting and Share Certificate / Allotment advice and/or regret letters together with refund orders over Rs.1,500/- by Registered Post only.

The Company has undertaken to make available necessary funds to the Registrar for the purpose of despatch of Allotment Letters / Share Certificates / Refund Orders as stated above.

BASIS OF ALLOTMENT

In the event of the public Issue being oversubscribed, the allotment will be on a proportionate basis subject to market lots as explained below :-

a. A minimum 50% of the net Issue to the Indian public will be made available for allotment in favour of those individual applicants who have applied for 1000 Equity Shares or Less. This percentage may be increased in consultation with the Regional Stock Exchanges depending on the extent of response to the Issue from investors in this category. In case allotments are made to a lesser from investors in this category. In case allotments are made to a lesser extent than 50% because of lower subscription in the above category, the balance Equity Shares would be added to the higher category and allotment made on a proportionate basis as per relevant SEBI Guidelines.

b. The balance of Net Issue to Indian Public shall be made available to investors including corporate bodies/institutions and individual applicants who have applied for allotment of more than 20 marketable lots.

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

d. Applicants will be categorised according to the number of equity shares applied for.

e. The total number of equity shares to be allotted to each category as a whole shall be arrived at on a proportionate basis i.e. the total number of shares applied for in that category (number of applications in the category multiplied by the number of equity shares applied for) multiplied by the inverse of the over subscription ratio.

f. Number of equity shares to be allotted to the successful allottees will be arrived at on a proportionate basis i.e. total number of equity shares applied for by each applicant in that category multiplied by the inverse of the over subscription ratio.

g. In all the applications where the proportionate allotment works out to less than 50 equity shares per applicant in the allotment shall be made as follows :-

i. Each successful applicant shall be allotted a minimum of 50 equity shares, and

ii. The successful applicants out of the total applicants of that category shall be determined by drawal of lots in such a manner that the total number of equity shares allotted in that category is equal to the number of equity shares worked out as per (b) above.

h. If the proportionate allotment to an applicant works out to a number that is more than 50 but is not a multiple of 100 (which is the marketable lot) the number in excess of the multiple of 100 would be rounded off to the higher multiple of 10 if that number is 50 or higher. If that number is lower than 50, it would be rounded off to the lower multiple of 100. All applicants in such categories would be allotted equity shares arrived at after such rounding off.

If the equity shares allocated on a proportionate basis to any category is more than the equity shares allotted to the applicants in the category, the balance available equity shares for allotment shall be first adjusted against any other category where the allotted equity shares are not sufficient for proportionate allotment to the successful applicants in that category. The balance equity shares if any, remaining after such adjustment will be added to the category comprising of applicants applying for minimum number of equity shares.

As the basis of allotment is on proportionate basis, in the process of rounding off to the nearest multiple of 50, the issue size may increase by a maximum of 10% of the net offer to Indian Public.

In the event of over subscription, the Executive Director / Managing Director of the Ludhiana Stock Exchange (Regional Stock Exchange) along with the Lead Manager to the issue and the Registrar to the issue shall be responsible to ensure that the basis of allotment is finalized in a fair and proper manner.

INTEREST IN CASE OF DELAY ON ALLOTMENT & DESPATCH

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

b. The issuers shall pay interest @ 15% per annum for the period of delay beyond 30 days if the allotment has not been made and / or refund orders have not been dispatched to the investors within 30 days from the date of closure of the offer (except to applicants applying through stockinvest).

ISSUE OF SHARE CERTIFICATES

The Share certificates will be dispatched within three months from the date of allotment as per the provisions of section 113 and other relevant provisions of the Companies Act, 1956, in exchange of allotment letters, issued if any.

INTEREST ON EXCESS APPLICATION MONEY

Payment of interest at the rate of 15% per annum on the excess application money will be made to the applicants for the delayed period, if any, beyond 30 days from the date of closure of the subscription list, in terms of the provisions of the Companies Act, 1956 and the guidelines issued by the Ministry of Finance vide Letter No. F/8/6/SE/79 dated 21.7.83 and as amended by Letter No.F/14/2/SE/85 dated 27.9.1985 addressed to Stock Exchanges and as further modified by SEBI’s circular dated May 15, 1996. No interest will be paid on Stock invest.

Application of Section 269SS of the Income Tax Act, 1961.

In respect of the provisions of Section 269SS of the Income Tax Act, 1961, the subscription against the equity shares should be effected only by an account payee cheque or an account payee draft / stock invest, if the amount payable is Rs.20,000/- or more. In case the payment is made in contravention of this provision, the application money will be refunded and no interest will be paid.

DENOMINATION OF SHARE CERTIFICATES

The Equity Shares Certificates will be issued in marketable lots of 50 Equity Shares of face value of Rs.10/- each.

COMPANY INFORMATION AND PUBLIC ISSUE MANAGEMENT TEAM

REGISTERED OFFICE

EIDER e-COMMERCE LIMITED

S.C.O. 147-148, Sector 8C,

Chandigarh – 160 018

Phone: 784321, 780743, 780740. Fax: 0172 - 780457

E-mail : eider@glide.net

LEAD MANAGERS TO THE ISSUE

ARYAMAN FINANCIAL SERVICES LIMITED

SEBI REGN. NO.: MB/INM000006807

35, ATLANTA, 3RD FLOOR,

NARIMAN POINT,

MUMBAI - 400 021.

Tel.No. : 282 6464 / 65 / 66.

Fax No. : (022) 282 6467.

E-mail address : aryaman@bom2.vsnl.net.in

REGISTRAR TO THE ISSUE

Karvy Consultants Ltd.

SEBI REGN NO – INR000000221

Jeroo Bldg., 1^st Floor, Next to Motwane,s Fort,

137, M.G.Road, Mumbai – 400023.

Tel : 022-267 6278 - 6283 - 7307

Fax : 022-267 1237

E-mail address : Karvy.frt@karvy.sprintrprg.ems.vsnl.net.in

STATUTORY AUDITORS

S. Pathania & Associates

Chartered Accountants

H.L. 187, Phase – 1,

Mohali, Ropar,

Punjab – 160 055

Tel : 0172 - 672 986

SOLICITOR AND LEGAL ADVISIOR

Mr. R.K Garg

Advocate

# 1207, Sector 44

Chandigarh.

Ph. 602714 607316

COMPANY SECRETARY & COMPLIANCE OFFICER

Mr. Subhash Saini –

S.C.O. 147-148 Sector 8 C,

Chandigarh

Phone NO. (0172) 784321

Fax No.(0172) 780457

(Investors may contact the compliance officer in case of any pre issue /post issue related problems)

BANKERS TO THE COMPANY

HDFC Bank Ltd.

Sector – 11, Panchkula,

Haryana.

Tel : 0172 – 585 601/ 602/ 603/ 604

Fax. No :

The Vyasa Bank Ltd

Sector 8-C, Madhya Marg

Chandigarh

BANKERS TO THE ISSUE

HDFC Bank Ltd.

Sector – 11, Panchkula,

Haryana.

Tel : 0172 – 585 601/ 602/ 603/ 604

Fax. No :

The Vyasa Bank Ltd

Sector 8-C, Madhya Marg

Chandigarh

BROKERS TO THE ISSUE

Brokers who are members of the recognised Stock Exchanges can act as brokers to the issue.

B. FINANCIAL INFORMATION

S. PATHANIA & ASSOCIATES CHARTERED ACCOUNTANTS

H.L. 187, PHASE 1, MOHALI, ROPAR PUNJAB - 160 055 PHONE : 672986

AUDITOR'S REPORT

The Board of Directors

Eider e-Commerce Limited.

S.C.O. 147-148, Sector – 8 C,

Chandigarh – 160 018.

Dear Sirs,

We have examined the books of accounts of M/s. Eider E-Commerce Limited for preceding five financial years, ended 31^st March, 1999 being the last date upto which the accounts have been made and audited by us, as approved by the members of the Company and we have also examined the accounts of the company for the period from 1^st April, 1999 to 31^st December, 1999 for the purpose of this report.

In accordance with the provision of Clause – B(1) and (2) of Part II of Schedule II of the Companies Act, 1956, we report as follows :-

I. PROFIT AND LOSS ACCOUNT

(Rs. In lacs)

PARTICULARS	31.03.95	31.03.96	31.03.97	31.03.98	31.03.99	31.12.99
Income :
Sales software/solutions	65.25*	615.80*	948.34	1792.34	2580.98	2266.11
Income from Solutions & Engineering Services	9.02	25.24	24.74	35.13	39.35	28.14
	74.27	641.04	973.08	1827.47	2620.33	2294.25
Expenditure :
Cost of Software	31.84	468.09	641.99	1152.32	1682.63	1362.88
Software Development Exp.	8.91	42.02	73.98	175.23	223.42	340.32
Administrative Expenses & Selling Expenses	12.39	67.75	151.73	322.62	412.96	298.45
Financial Expenses	3.54	4.18	4.97	5.26	6.01	8.16
Depreciation	1.58	2.78	37.45	67.80	81.60	79.54
Misc. expenditure written off	0.02	0.02	0.02	0.01	0.01	0.01
	58.29	584.84	910.15	1723.26	2406.64	2089.36
Profit before Tax	15.97	56.17	62.91	104.20	213.68	204.88
Provision for Tax	0.69	5.29	2.13	1.54	2.38	3.41
Profit after Tax	15.29	50.88	60.79	102.67	211.30	201.47
Proposed Dividend (Subject to Tax)	---	---	---	---	---	---
Provision for Dividend Tax	---	---	---	---	---	---
Balance brought down	3.75	19.04	69.92	130.71	233.38	444.68
Balance Carried to Balance Sheet	19.04	69.92	130.71	233.38	444.68	646.15

• Sales/Software/Hardware

II. ASSETS AND LIABILITIES

PARTICULARS		31.03.95	31.03.96	31.03.97	31.03.98	31.03.99	31.12.99
	A. Fixed Assets;
	- Gross Block	217.59	458.26	705.23	794.29	959.13	2603.20
	- Less Depreciation	2.75	5.56	43.02	110.82	156.69	236.24
	- Net Block	214.84	452.70	662.20	683.46	803.21	2366.96
	Net Block after adjustment for Revaluation Reserve	214.84	452.70	662.20	683.46	803.21	2366.96
	B. Investments	--	--	--	--	377.50	15897.50
	C. Current Assets, Loans & Advances Inventories
	- Sundry Debtors	12.16	93.49	123.74	127.68	46.32	71.91
	- Closing Stock	5.45	7.25	6.75	18.25	120.84	85.00
	- Cash & Bank Balance	1.63	3.08	7.75	20.85	12.19	13.31
	- Loans & Advances	4.62	13.76	9.94	15.52	16.09	19.87
	- Other Current Assets	0.18	0.16	0.15	0.13	0.12	0.10
		24.04	117.74	148.34	182.43	195.56	190.19
	D. Liabilities and Provisions: Secured Loans	7.52	87.28	71.55	25.74	47.50	88.32
	- Unsecured Loans	12.32	13.21	8.23	6.73	4.04	0.14
	- Current Liabilities and Provisions
	E. Networth	219.04	469.96	730.75	833.43	1324.73	18366.19
	F. Represented by
	1. Share Capital	200.00	400.00	600.00	600.00	880.00	2200.00
	2. Reserves	19.04	69.96	130.75	233.42	444.72	16166.19
	Reserves (Net of Revaluation Reserves)	19.04	69.96	130.75	233.42	444.72	646.19

PARTICULARS	31.03.95	31.03.96	31.03.97	31.03.98	31.03.99	31.12.99
EPS (Rs.)	0.76	1.27	1.01	1.71	2.40	1.22*
Return on Net Worth (%)	6.98	10.82	8.32	12.31	15.95	9.43*
Net Assets value per Share (Rs.)	10.95	11.74	12.17	13.89	15.05	12.93

* Annualised

III. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting: Financial Statements are prepared under the historical cost basis. The company has accounted for the income & expenditure for the year on accrual basis in accordance with the requirements of companies Act 1956. However certain income & expenditures, which are indeterminable in some cases have been accounted for as and when settled/final determined. Similarly Public issue expenses are accounted for on cash basis.

2. Revenue Recognition : Sales are accounted for on the basis of dispatch of goods to customers and are net of discount and sales returns.

3. Fixed Assets : Fixed Assets are stated at the original cost including duties, taxes, freight, insurance and installation and all incidental expenses related to acquisition and for bring the assets to its working condition. Depreciation on fixed assets have been charge on W.D.V. method with retrospective effect and in accordance with the rates prescribed under schedule XIV of the Companies Act,1956.

3. Retirement Benefit : Liabilities for gratuity is accounted for on the basis of actual payment .

4. No personal expenses have been charged to revenue accounts other than those payable under contractual obligation.

5. Confirmation of balance whether in DebIt or Credit from parties, loans and advances have not been taken. As such their effect in Profit and Loss Account can not be reflected.

6. Bank Account is pending for reconciliation due to non receipt of complete information from bank. The Company is taking necessary steps for its reconciliation.

7. No provision for gratuity has been made as the same shall be provided on payment basis.

8. There are certain business done by the company, which are covered in the " OTHER OBJECTS " of Memorandum and Articles of Association.

9. Assessment of Income Tax and Sales Tax cases of the company have not yet been completed. The liability if any, will be provided for in the year of assessment.

10. The Ten employees of the Company, who are employed through out the year was in receipt of remuneration not less than Rs. 3,00,000/- in aggregate and if employed for the part of the year was in receipt of remuneration not less that Rs. 25,000/- P.M are as per Annexure attached to the Director Report.

11. There are certain old balances (Debit/Credit) brought forward from previous years which are yet to be adjusted for the want of relevant vouchers/supports, therefore their impacts in the financial statement has not been taken.

12. Amount paid to Auditors

	Particulars	Current Period	Previous Year
a)	Audit Fee	30000	50000

14. Information required to be furnished pursuant to para III,IV of Schedule VI of the Companies Act, 1956 are as follows:

A. Trading Activities

Quantitative Statement of Purchase & Sales “As per Annexure A”.

15. Previous year figures have regrouped wherever necessary.

16. In certain cases realization of sale proceeds of the goods sold have been adjusted/set off against the purchase consideration from the same parties.

17. Some of the Incomes have been earned from companies in which directors are interested.

18. Some Incomes have not been realized in Cash but in kind from Group Companies. The company has acquired some of the Fixed Assets from its Group Companies in lieu of Sales made to the Group Companies.

19. The statement of Significant Accounting policies and practices and Notes numbering 1-18 above form an integral part of accounts for the Nine Months ended Dec,, 31st,1999.

IV. NOTES TO ACCOUNTS

(Referred to in paragraph 1 of our report of even date on the accounts for the Nine Months ended 31st Dec., 1999 of City Wide Communications & Computers (India) Limited.)

INTERNAL CONTROL

1. In our opinion and according to the information and explanations given to us, having regard to the explanations the certain items purchased are of a special nature in respect of which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of compurter software and hardware, plant and machinery, equipment and other assets and for the sale of goods.

2. In our opinion and according to the information and explanations given to us, in respect of the service activities, the Company, commensurate with the size and the nature of its business, has a reasonable system of:

· recording receipts, issues and consumption of materials and allocating materials consumed to each project;

· allocating man-hours utilised to each project; and

· authorisation and control over the allocation of labour costs to each project.

· In our opinion the company has a internal audit system, commensurate with its size and the nature of its business.

INVESTMENTS

3. The investment have been physically verified by the management.

4. On the basis of our examination of investments records, we are of the opinion that the valuation of investment in M/S Eider Infotech Ltd. shares is fair and proper in accordance with the normally accepted accounting principles.

5. The Company has maintained proper records of the transactions and contract. The investments have been held by the company in its own name as explained to us.

FIXED ASSETS

6. The fixed assets have been physically verified by the management during the year as informed to us. and no material discrepancies have been noticed by the management on such verification.

7. None of the fixed assets have been re-valued during the year.

INVENTORIES

8. Inventory of finished goods have been physically verified by the Management.

9. No Material discrepancy have been notices upon the physical verification and the Book records as reported by the Management.

10. All the Inventory has been fairly valued upon by the management and the figures shown under the schedule are fair and true.

11 The company has a regular procedure for the determination of obsolete or unserviceable traded software.

12. In our opinion and according to the information and explanations given to us, the activities of the company are such that no realisabe by-products or scrap is generated.

13. We are informed by Management thta the Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Comanies Act, 1956, for any of the products of the company.

LOANS AND ADVANCES

14. The Company has taken loans, secured or unsecured from companies, firms or other parties listed in the register maintained under section 301 of Companies Act, 1956. and to the Companies under the same management as defined under sub section (1B) of Section 370 or the Companies Act,1956. which are not prima-facie prejudicial to the interests of the Company.

15. The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 or Companies Act, 1956 and to the Companies under the same management as defined under sub section (1B) or Section 370 or the Companies Act, 1956, which are prima-facie prejudicial to the interests of the Company.

16 The Company has not given any loans and advances in the nature of loans.

17. The Company has not granted loans and advances on the basis of security by way of pledge of shares debentures and other securities.

FIXED DEPOSIT

18. The Company has not accepted any deposit from Public.

STAFF WELFARE

29. According to the information and explanation given to us, the provision of Employees Provident Fund Act are not applicable to the company for year under review.

20. On the basis of the examination of the books of account carried out by us in accordance with generally accepted auditing practices and according to the information and explanations given to us, no personal expenses of employees or directors have been charged to the profit and loss account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

TAXATION

21. According to the information and explanations given to us, no undisputed amounts payable in respect of Income tax, Wealth-tax, Custom duty and Excise duty were outstanding as at 31st Dec.1999 for a period of more than six months from the date they become payable.

OTHERS

22. The company is not Sick Industrial Company within the meaning of Section 3(1) (0) if the sick Industrial Companies (special Provisions) Act,1985.

23. To the best of our knowledge and belief and according to he information and explanation given to us other clauses of said order are not applicable to the company for the year under audit.

For S. PATHANIA & ASSOCIATES

Chartered Accountants

Sd/-

Place: Chandigarh SUNIL PATHANIA

Date : 08-04-2000 Proprietor

S. PATHANIA & ASSOCIATES CHARTERED ACCOUNTANTS

H.L. 187, PHASE 1, MOHALI, ROPAR PUNJAB - 160 055 PHONE : 672986

STATEMENT OF ASSETS & LIABILITIES (EXCLUDING REVALUATION RESERVES)

PARTICULARS 31.12.99
A. Fixed Assets;
- Gross Block	2603.20
- Less Depreciation	236.24
- Net Block	2366.96
Net Block after adjustment for Revaluation Reserve	2366.96
B. Investments	377.50
C. Current Assets, Loans & Advances Inventories
- Sundry Debtors	71.91
- Closing Stock	85.00
- Cash & Bank Balance	13.31
- Loans & Advances	19.87
- Other Current Assets	0.10
	190.19
D. Liabilities and Provisions: Secured Loans
- Unsecured Loans	0.14
- Current Liabilities and Provisions	88.32
E. Networth	2846.19
F. Represented by
1. Share Capital	2200.00
2. Reserves	646.19
Reserves (Net of Revaluation Reserves)	646.19

Note : None of the Fixed Assets have been revalued since inception.

For S. PATHANIA & ASSOCIATES

Chartered Accountants

Sd/-

Place: Chandigarh SUNIL PATHANIA

Date : 08-04-2000 Proprietor

CAPITALISATION STATEMENT

(Rs. in lacs)

PARTICULARS	PRE-ISSUE AS ON 31.03.99	POST ISSUE AS ON
Short Term Debt	0.14	---
Long Term Debt	---
Shareholder’s Funds	1324.72	19366.19
Share Capital	880.00	3200.00
Share Application Monies	--	---
Reserves	444.72	16166.19
Total Shareholders Fund	1324.72	19366.19
Short Term Debt / Equity	--	---
Long Term Debt / Equity	---	---

TAX SHELTER STATEMENT

YEAR ENDED MARCH 31^st

(Rs. in Lacs)

	1995	1996	1997	1998	1999	31.12.99
Tax at Notional Rate	2.7	25.27	28.31	46.90	74.79	71.70
Adjustment for Manufacturing Profits	(4.47)	(44.40)	(58.18)	(100.80)	(206.88)	(195.11)
Net Adjustment	(4.47)	(44.40)	(58.18)	(100.80)	(206.88)	(195.11)
Tax Saving thereon	(2.01)	(19.98)	(26.18)	(45.36)	(72.41)	(68.29)
Total Taxation	0.69	5.29	2.13	1.54	2.38	3.41
Tax on Profit	0.69	5.29	2.13	1.54	2.38	3.41

C. STATUTORY AND OTHER INFORMATION

MINIMUM SUBSCRIPTION

IF THE COMPNAY DOES NOT RECEIVE A MINIMUM SUBSCRIPTION OF 90% OF THE ISSUED AMOUNT ON THE DATE OF CLOSURE OF THE ISSUE, OR IF THE SUBSCRIPTION LEVEL FALLS BELOW 90% AFTER THE CLOSURE OF THE ISSUE ON ACCOUNT OF CHEQUES HAVING BEEN RETUNRED UNPAID OR WITHDRAWAL OF APPLICATIONS, THE COMPANY SHALL FORTHWITH REFUND THE ENTIRE SUBSCRIPTION AMOUNT RECEIVED. IF THERE IS A DELAY BEYOND 8 DAYS AFTER THE COMPANY BECOMES LIABLE TO PAY THE AMOUNT, THE COMPANY SHALL PAY INTEREST AS PER SECTION 73 OF THE COMPANIES ACT, 1956.

EXPENSES OF THE PRESENT ISSUE

The total expenses of the Present Issue including underwriting commission, brokerage, fees to the lead Managers, Registrars to Issue, Stamp Duty, Legal Charges, Auditor's Fees, expenses for printing, distribution of issue material and other miscellaneous and preliminary expenses are estimated at Rs. 10 Crores which will be met out of the proceeds of the issue.

FEES TO THE LEAD MANAGERS

The fees payable to the Lead Manager to the issue as per the terms and conditions specified in the MOU, copy of which is kept open for inspection.

FEES TO THE REGISTRARS

The Registrars to the issue will be paid fees as per the terms and conditions specified in their offer letter, copy of which has been kept open at the registered office of the Company.

UNDERWRITING COMMISSION AND BROKERAGE

There is no provision for Underwriting Commission as this Issue is not proposed to be Underwritten.

Brokerage will be paid by the Company at the rate of 1.5% of the issue price of the Equity Shares on the basis of allotment made against applications bearing the stamp of a member of any recognised stock exchange in India in the broker's column. No brokerage will be paid in respect of equity shares offered on preferential basis to and subscribed for by the promoters, directors, their relatives and friends. However, brokerage will also be payable to the Bankers to the issue in respect of allotments made against applications procured by them, provided the relevant forms of application bear their respective stamp in the brokers column.

PREVIOUS ISSUE FOR CASH

Save and except as stated in this prospectus the Company has not issued any shares to the public for cash since the date of its incorporation.

PREVIOUS PUBLIC OR RIGHTS ISSUE

Save and except as stated in this prospectus the Company has not issued any public or rights issue previously since the date of its incorporation.

COMMISSION AND BROKERAGE ON PREVIOUS ISSUE

Save for brokerage payable in terms of this prospectus, no sums have been paid or are payable as Commission or Brokerage for subscribing to or procuring or agreeing to procure subscription for any shares or debentures of the Company.

DEBENTURES AND REDEEMABLE PREFERENCE SHARES AND OTHER INSTRUMENTS ISSUED BY THE COMPANY

PRESENT AUTHORISED SHARE CAPITAL / CLASS OF SHARES

The present Authorised Share Capital of the Company is Rs. 3.70 crores and it has only one class of shares viz. Equity Shares of nominal value of Rs. 10/- each.

ISSUE OF SHARES OTHERWISE THAN FOR CASH

No shares of the Company, have been issued except otherwise stated elsewhere in this prospectus or agreed to be issued since the date of incorporation of the Company for consideration other than for cash.

ISSUE OF SHARES AT PREMIUM OR DISCOUNT

The Company has not issued any shares at premium or discount.

DEBENTURES AND REDEEMABLE PREFERENCE SHARES AND OTHER INSTRUMENTS ISSUED BY THE COMPANY

The Company has not issued any debentures or redeemable preference shares or such other instruments since the date of its incorporation.

OPTION TO SUBSCRIBE

Save as otherwise stated in this prospectus the Company has not entered into any contract over arrangement or does it at present propose to enter into any contract for arrangement where by any option or preferential right of any kind has been or is proposed to be given to any person to subscribe for any shares in the Company. The investor shall have an option either to receive the security certificates or to hold the securities with a depository.

PURCHASE OF PROPERTY

Save as otherwise stated in this Prospectus and in respect of the property purchased or proposed to be purchased or acquired under the contracts referred to under the heading "Material Contracts" there is no property which the Company has acquired or purchased or proposes to acquire or purchase which is paid for wholly or partly out of the proceeds of the present issue or the purchase or acquisitions of which has not been completed on the date of the issue of this prospectus other than property.

a) The contracts for the purchase or acquisition thereof were entered into the ordinary course of the business of Company such contracts not being made in contemplation of issue nor have any direct or indirect interest or in respect of any payment made thereof.

b) In respect of which the amount of the purchase money is not material. Except as stated elsewhere in this prospectus, the Company has not purchased any property in which any of its directors had or have any direct or indirect interest or in respect of payments made thereof.

APPOINTMENT OF MANAGING DIRECTOR

EXTRACT FROM THE MINUTES OF THE EXTRA ORDINARY GENERAL MEETING OF THE MEMBERS OF EIDER e-COMMERCE LIMITED DULY CONVENED AND HELD ON SATURDAY, 3^rd February, 2000 AT THE REGISTERED OFFICE OF THE COMPANY WHEN PROPER QUORUM WAS PRESENT.

“RESOLVED THAT pursuant to the provisions of sections 198, 268,269,310 and other applicable provisions, if any, of the Companies Act, 1956, and subject to such other approval as may be required, approval of the members of the Company be and is hereby accorded to appoint Mrs. Rama Sinha (B.E., M.E., FIETE) as Chairperson & Managing Director of the Company for the period of 5 years with effect from 3^rd February, 2000 on the following terms & conditions :-

SALARY :

Rs. 60,000/- p.m. (Rupees Sixty Thousand per month)

COMMISSION :

1% (ONE PERCENT) of the net profit of the Company, subject to a ceiling of fifty percent of the salary.

(A) PERQUISITES :

In addition to the above, the Managing Director shall be entitled to the following perquisites, provided that the value thereof will be restricted to an amount equal to the annual salary for Rs. 7,20,000/-

Housing I

The expenditure by the Company on hiring unfurnished accommodation for the Managing Director will be subject to a ceiling of sixty percent of the salary, over and above ten-percent payable by the Managing Director.

Housing II

In case the accommodation is owned by the Company, ten percent of the salary of the Managing Director shall be deducted by the Company.

Housing III

In case no accommodation is provided by the Company, the Managng Director shall be entitled to house rent allowance subject to the ceiling laid down in Housing I

Explanation :

The expenses incurred by the Company on gas, electricity water and furnishings shall be valued as per the provisions of Income Tax Act, 1962.

ii) Medical reimbursement

The expenses incurred for the Managing Director and his family shall be subject to a ceiling of one month’s salary in a year or three month’s salary over a period of three years.

iii) Leave Travel Concession :

For the Managing Director and his family once in a year in accordance with the rules specified by the Company.

iv) Club Fees :

As per the rules of the Company.

(B) The following perquisites shall also be paid to the Managing Director and they shall not be included in the computation of the ceiling on perquisites as mentioned above.

i) Provident Fund and Superannuation Funds :

Company’s contribution to provident fund and superannuation fund to the extent these either singly or put together are not taxable under the Income Tax Act, 1962.

ii) Gratuity :

As per the rules of the Company.

(C) CAR

provision of car for use on company’s business. The use of car for private purpose shall be billed by the Company to the Managing Director.

(D) TELEPHONE

Provision of telephone at the residence of the Managing Director of the Company at the Company’s cost personal long distance calls shall be billed by the Company to the Managing Director.

(E) REIMBURSEMENT OF ENTERTAINMEND EXPENSES

Reimbursement of all expenses including Entertainment and travelling incurred in the course of the business of the Company.

(F) SITTING FEES

No sitting fees will be paid for attending the meeting of the Board of Directors or Committee(s) thereof.

RESOLVED FURTHER THAT when in any financial year the Company has no profits or its profits are inadequate, the remuneration by way of salary, perquisites and other allowances shall be restricted in accordance with the limits prescribed under Schedule XIII of the Companies Act, 1956.

RESOLVED FURTHER THAT the Board of Directors (hereinafter referred to as the “Board”) be and is hereby authorised to alter and vary the terms and conditions of the said appointment (including authority from time to time, to determine the amount of salary and commission ) as also the type and the amount of perquisites and other benefits payable to Mrs. Rama Sinha, in such manner as may be agreed to between the Board and Mrs. Rama Sinha , provided however that the remuneration payable to Mrs. Ram Sinha shall not exceed the limits specified in the Schedule XIII of the Companies Act, 1956, including any amendment, modification, variation or re-enactment thereof.”

RESOLVED FURTHER THAT in view of loss or inadequacy of profits, the remuneration shall be paid in pursuant to limits specified in Schedule XIII of the Companies Act, 1956.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds and things and execute al such documents, instruments and writing as may be required to give effect to the aforesaid resolution.”

INTEREST OF DIRECTORS / PROMOTERS

All the Directors are interested to the extent of the equity shares, if any, held by them in the Company at present and / or the equity shares and / or the debentures that may be subscribed for and allotted to them or their relative or to any firm, association or Company in which they or their relatives are partners, trustees, directors, beneficiaries or members as the case may be and to the extent of dividend or interest or other distributions payable in respect of the equity shares and the debentures if any, held by them in the Company, for the time being.

All the directors may also be deemed to be interested in the fees and remuneration paid / payable to them for the services rendered by them.

PAYMENT OR BENEFIT TO PROMOTERS AND OFFICERS OF THE COMPANY

Save as stated elsewhere in this prospectus no amount or benefit has been paid or given since the incorporation of the Company nor is intended to be paid or given to any Promoter, Director, or Officer of the Company except in respect of normal remuneration or benefits or reimbursement of expenses incurred on behalf of the company.

CAPITALISATION OF RESERVES OR PROFITS

There has been no capitalisation of Reserves or Profits of the Company since its incorporation.

BONUS ISSUE & REVALUATION OF ASSETS

There has not been any Revaluation of Assets since Incorporation.

THE MAIN PROVISION OF ARTICLES OF ASSOCIATION OF THE COMPANY

SHARE CAPITAL AND VARIATION OF RIGHTS

5. The Authorised Share Capital of the Company is Rs. 22,00,00,000/- (Twenty Two crores) divided into 2,20,00,000 Equity Shares of Rs. 10/- each with the power to sub-divide, consolidate, increase and decrease and with any subject to any perferential qualified or special rights, privileges and conditions as may be thought fit. These shares shall be under the control of the Board of Directors and they can allot or otherwise off the same to such persons on such terms as they think fit.

6. Subject to the provisions of section 80 any preference shares may with the sanction of an ordinary resolution, be issued on the terms that they are, or the opinion of the company, are liable to be redeemed on such terms and in such manner as the company before the issue of the share may by special resolution determine.

7. It at any time the share capital is divided in different classes of share the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may subject to the provision of section 106 and 107 and whether or not the company is being wound up, be varied with the consent in writing of the holders of three fourth of the issued shares of the class, or with the sanction of special resolution passed at a separate meeting of holders of the shares of that class. To every such separate meeting, the provisions of these regulations relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be two persons at least holding or representing by the proxy one third of the issued shares of the class in question.

8. The rights conferred upon the holders of the shares of any class issued with preferential or other rights shall not, unless otherwise expressly provided by the terms of issue of shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

9. Except as required by law, no person shall be recognised by the company as holding any share upon any trust, and the company shall not be bound by, or be complied in any way to recognise (Even when having notice thereof (any equitable contingent, future or partial interest in any share or any interest in any fractional part of a share, of (except only as by these regulations or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirely thereof in the registered holder.

10. Every person whose name is entered as member in the Register shall be entitled to receive within three months after allotment or within two months after the application for the registration of the transfer or within such other period as the conditions of issue shall provide.

a) One certificate for all his shares without payment or

b) Several certificates, each for one or more of his shares upon payment of one rupee for every certificate after the first. Every certificate shall be under the seal and shall specify the shares to which it relates and the amount paid up thereon.

11. In respect of any share or shares held jointly by several persons, the company shall not be bound to issue more than one certificate and delivery of a certificate for the share or shares so held to one of several delivery to all such holders.

12. If a share certificate is defaced, lost or destroyed or if there is no further space on the back thereof for endorsement of transfer it may be renewed on payment of such fee. If any, not exceeding two, Rupees and on such terms, if any as to evidence and indemnity and the payment of out of pocket expenses incurred by the company in investigating evidence, as the Board thinks fit.

13. On the application of any member holding a share certificate for more than one share and surrender of such certificate the Board shall be at liberty to cancel such certificate and issue several certificates each for one or more of the shares upon payment of such fee, if any, not exceeding Rupee one per certificate.

FOREITURE

22. If any member fails to pay any call or instalment by the day appointed for the payment thereof, the Board may at any time thereafter during such time as the call or instalment remains unpaid, serve a notice on such member requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued.

23. The notice aforesaid shall name a further day (not being earlier than the expiry of fourteen days from the date of service of the notice) on or before which the payment required by the notice is to be made; and state that in the event of non payment on or before the day so named, the share in respect of which the call was made will be liable to be forfeited.

24. If the requisitions of any such notice as aforesaid are not complied with any share in respect of which such notice has been given may at any time thereafter, before payment of all calls or instalments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.

25. Any share so forfeited shall be deemed to be the property of the company and the board may sell, reallot or otherwise dispose of the same on such terms and in such manner as it thinks fit, subject to the same restrictions and conditions as for transfer of shares provided by these articles.

26. Board may at any time before any share so forfeited shall have been sold, re-allotted or otherwise disposed of, cancel the forfeiture thereof upon such conditions as it thinks fit.

27. (a) A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall not withstanding the forfeiture, remain liable to pay to the company all moneys which at the date of forfeiture, were presently payable by him to the company in respect of the shares.

(b) The liability of such person shall cease if and when the company shall have received payment in full of all such money in respect of the shares.

(c) A duly verified declaration in writing that the declarant is a director, the manager or the secretary of the company and that a share in the company has been duly forfeited on a date satated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share.

28. A duly verified declaration in writing that the declarant is a director, the manager or the secretary of the company and that a share in the company has been duly forfeited on a data stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share.

29. The company may receive the consideration if any, given for the share on any sale or disposal thereof from any person, the Board may appoint and nominate and execute a transfer of the share in favour of the person to whom the share is sold or disposed of. The transfree shall there upon be registered as holder of the share.

30. The transferee shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

31. Where any member whose shares have been forfeited has failed to deliver to the company the relative certificate or certificates within fourteen days from the date of being called upon to do so, the Board may cause such certificate or certificates to be cancelled and issue a new certificate or certificates for the shares comprised therein distinguishing it or them in such manner as the Board may think in from the certificate or certificates not so delivered and cancelled.

32. The provisions of these regulations as forfeiture shall apply in the case of non payment of any sum, which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the shares or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

LIEN

33. The Company shall have a first and paramount lien upon all the shares registered in the name of each member and upon the proceeds of sale thereof for his debts, liabilities and engagements solely or jointly with any other person to or with the company whether the period for the payment, fulfilment or discharge thereof shall have actually arrived or not and no equitable interest in any share shall be created except upon the looting and condition that section 153 is to have full effect. Such lien shall extend to all dividends from time to time declared in respect of such shares and payable thereon. Unless otherwise agreed, registration of transfer of share shall operate as a waiver of the company’s lien, if any on such shares.

34. The Company may shell, in such manner as the Board thinks fit, any shares on which the company has lien; provided that no sales shall be made:

a) unless a sum in respect of which the lien exists is presently payable; or

b) until the expiration of fourteen days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share or the person entitled thereto by reason of his death of insolvency.

35. The provisions contained in these articles shall mutatis mutandis apply to sale of shares in enforcement of the Company’s lien as herein before provided.

TRANSFER/TRANSMISSION OF SHARES

36. The Company shall keep a book to be called the ‘Register of Transfers’ and therin shall be fairly and distinctly entered the particulars of every transfer or transmission of any share.

37. The Company shall keep a book to be called the ‘Register of Renewed and Duplicate Certificates and therein shall be fairly and distinctly entered the particulars of the issue of renewed and duplicate certificates in exchange for those which are sub-divided off consolidated of in replacement of those which are defaced, torn or old, decrepit, worn out of rendered useless.

38. The Instrument of transfer of any share shall be in writing and all the provisions of section 108 of the act and of any statutory modification thereof for the time being shall be duly complied with in respect of transfers of shares and the registration thereof.

39.

(1) An application for the registration of a transfer of the shares in the company may be made either by transferor or the transferee.

(2) Where the application is made by the transferor and relates to partly paid shares, the transfer shall not be registered unless the company gives notice of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the receipt of the notice.

(3) For the purpose of clause (2) above notice to the transferee shall be deemed to have been duly given if it is despatched by prepaid registered post to the transferee at the address given in the instrument of transfer and shall be deemed to have been duly delivered at the time at which it would have been delivered in the ordinary course of post.

40. Every such instruments of transfer shall be signed by the transferor and the transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Registrar of Members in respect thereof.

41. The Company shall not register a transfer of shares in the company unless a proper instrument of shares in the company unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the Company within the prescribed period alongwith the certificate relating to the shares, or if no such share certificate is in existence alongwith the letter of allotment of the shares. Provided, that where on an application in writing made to the company by the transferee and bearing the stamps required for an instrument of transfer, it is provided to the satisfaction of the Board of Directors that the instrument of transfer signed by or on behalf of the transferee has been lost the company may register the transfer on such terms as to indemnity as the Board may think fit. Provided further that nothing in this Article shall prejudice any power of the Company to register as shareholder any person to whom the right to any shareholder any person to whom the right to any shares in the Company has been transmitted by operation of law.

42. A transfer of a share in the Company, of a deceased member thereof made by his legal representative shall, although the legal representative is not himself a member be as valid us if he had been a member at the time of the execution of the instrument of transfer.

43. The instrument of transfer shall after registration be retained by the Company and shall remain in its custody. All instruments of transfer which the Directors may decline to register shall on demand be returned to the person depositing the same. The Directors may cause to be destroyed all transfer deeds lying with the Company for a period of ten years of more.

44. (i) On the death of member, the survivor or survivors where the member was a joint holder, and his legal representative where he was sole holder, shall be the only persons recognised by the company.

(ii) Nothing in clause (I) shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons.

(iii) Any person becoming entitled to a share in consequence of death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as thereafter provided, elect, either.

(a) To be registered himself as a holder of the share;

(b) To make such transfer of the shares as the deceased or insolvent member could have made.

(iv) The Board shall. In other case, have the same right to decline or suspend registration as it would have bad, if the deceased of insolvent member had transferred the share before his death or insolvency.

(v) If the person so becoming entitled shall elect to be registered holder of the share himself, he shall deliver or send to the company a notice in writing by him stating that he so elects.

(vi) If the person aforesaid shall elect to transfer the share, he shall testify his election by executing a transfer of the share.

(vii) All the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfer of shares shall be applicable to any such notice to transfer as aforesaid as if the death or insolvency of the member had not occurred and the notice of transfer were a transfer signed by that member.

(viii) A person becoming entitled to a share by reason of death of insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the shares, be entitled in relation to the meetings of the company.

Provided that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.

44A NOMINATION

Every Shareholder or debentureholder of the Company, may at any time nominate, in the prescribed manner, a person to whom his shares in, or debenture of the Company shall vest in the event of his death.

Where the shares in or debenture of the Company are held by more than one person jointly, the joint-holders may together nominate, in the prescribed manner, a person to whom all the rights in the shares or debentures of the Company as the case may be, shall vest in the event of death of all the joint holders.

Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such shares in or debentures of the Company, where a nomination made in the prescribed manner purports to confer on any person the rights to vest the shares in or debentures of the company, the nominee shall, on the death of the shareholder or debentureholder or, as the case may be, on the death of the joint-holders, become entitled to all the rights in such shares or debentures or as the case may be, all the joint holders in relation to such shares or debentures, to the exclusion of all other persons unless the nomination is varied, cancelled in the prescribed manner.

Where the nominee is a minor, it shall be lawful for the holder of the shares or debentures, to make the nomination to appoint, in the prescribed manner, any person to become entitled to the shares in or debentures of the Company, in the event of his death, during the minority.

44B TRANSMISSION IN CASE OF NOMINATION

A nominee upon production of such evidence as may be required by the Board and subject as hereinafter provided, elect, either-

i) to be registered himself as the holder of share or debenture, as the case may be; or

ii) to make such transfer of share or debenture, as the case may be, as the deceased shareholder or debentureholder, could have made;

iii) if the nominee elects to be registered as holder of the share or debenture, himself, as the case may be, he shall deliver or send to the Company, a notice in writing signed by him stating that he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder or debenture holder as the case may be;

iv) a nominee shall be entitled to the same dividends and other advantages to which he would be entitled to, if he were the registered holder of the share or debenture except that he shall not, before being registered as a member in respect of his share or debenture, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company.

Provided further that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share or debenture, and if the notice is not complied within ninety days, the Board may thereafter withhold payments of all dividends, bonuses or other moneys payable or rights accruing in respect of the share or debenture, until the requirements of the notice have been complied with.

44C. DEMATERIALIZATION OF SECURITIES

No withstanding anything contained in these Articles, the Company shall be entitled to dematerialise its securities in a DEMATERIALIZED form pursuant to the Depositories Act, 1996.

Options for Investors

Every person subscribing to securities offered by the Company shall have the option to receive security certificates or to hold the securities with a depository. Such a person who is the beneficial owner of the securities can at any time opt out of a depository. If permitted by the law, in respect of any security in the manner provided by the Depositories Act, and the Company shall, in the manner and within the time prescribed, issue to the beneficial owner the required Certificates of Securities.

If a person opts to hold his security with a depository, the Company shall intimate such depository the details of allotment of the security and on receipt of the information the depository shall enter in its record the name of the allottee as the beneficial owner of the security.

Securities in depositories to be in fungible form

All securities held by a depository shall be DEMATERIALIZED and be in fungible form. Nothing contained in Sections 153, 153A, 153B, 187C and 372A of the Act shall apply to a depository in respect of the securities held by it on behalf of the beneficial owners.

Transfer of Securities

Nothing contained in Section 108 of the Act or these Articles shall apply to a transfer of securities effected by a transferor and transferee both of whom are entered as beneficial owners in the records of a depository.

Register and Index of beneficial owners

The Register and Index of beneficial owners maintained by a depository under Depositories Act, 1996, shall be deemed to be the Register and Index of Members and Security holders for the purposes of these Articles.

BORROWING POWERS

47. Subject to the provisions of section 292 of the Companies Act, the Board may from time to time at its discretion raise or borrow any sum or sums of money for the purpose of the company.

48. The Board may secure the repayment of any sum of sums of money to be raised or borrowed as aforesaid or due by the company in such manner and upon such terms and conditions in all respects as it may think fit, and in particular by the issue of bonds, perpetual or redeemable debentures or any mortgage, charge, hypothecation or other security on the undertaking of the whole or any part of the properties of the company both present and future including its uncalled capital for the time being Debentures, bonds, or other securities may be issued at a discount, Debentures, bonds, or other securities may be issued at a discount, premium or otherwise and with any special privilege as to redemption, surrender, drawing, allotment of shares, attending at general meeting of the company, appointment of directors and otherwise.

49. Debentures, debenture stock, bonds or other securities may be assignable from any equity between the company and the person to whom the same may be issued.

50. Subject to the provisions of section 108 no transfer of registered debentures shall be registered unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee has been delivered to the company together with the certificate or certificates, of the debentures.

51. If the Board refuse to register the transfer of any debentures, the company shall within two months from the date on which the instrument of transfer was lodged with the company, send to the transferee and transferor notice of the refusal.

52. If any uncalled capital of the company be included in or charged by any mortgage or other security, the Board may by instrument under the Company’s seal, authorise the person in whose favour such mortgage or security is executed of any other person in trust for him, to make calls on the members in respect of such uncalled capital, and the provisions here in before contained in regard to calls shall mutatis mutandis apply to calls made under such authority, and such authority may be made exercisable either conditionally or unconditionally and either presently or contingently and either to the exclusion of the Board’s power or otherwise and shall be assignable if expressed to be.

BOARD OF DIRECTORS

66. (I) Unless otherwise determinated by a General Meeting the number of Directors of the company shall be less than three and more than ten.

(ii) The first Director’s of the Company shall be.

1. Ravi Kumar

2. Ms. Sushma

3. Rajiv Kumar

(iii) In the events of company borrowing any money from any Financial Corporation, institution, Government, Collaborator, Bank of any other sources, while any money remains due to them or any of them the lender concerned may have and may exercise the rights and power to appoint any person or persons to be Director of Directors of the company and the Director so appointed shall not be liable to retire by rotation, subject however, to the limits prescribed by the Companies Act, 1956.

(iv) The Board shall have power at any time and from time to time appoint any other qualified person either to fill a casual vacancy or as an addition to the Board but so that the total number of Directors shall not at any time exceed the maximum number fixed. Any director so appointed shall hold office only until the next following annual general meeting of the company and shall then be eligible for re-election.

(v) Unless otherwise determined by the company in General Meeting the qualification of a Director shall be the holding in his own name of 50 Equity shares of the company, fully paid up. A director shall acquire his qualification shares within two Months of his being appointed a Director.

(vi) Each director or alternate director shall receive out of the funds of the company a fee upto a maximum of Rs.250/- for each meeting of the Board attended by him. He will also be entitled to travelling, hotel and out of pocket expenses.

(vii) The Board may appoint any person to act as Alternate Director for a Director during his absence for a period of not less than 3 months from the state in which meetings of the Board are ordinarily held and the Alternate Director so appointed shall not hold office as such for a longer period than that permissible to the original Director in whose place he has been appointed shall not hold office as such for a longer period than that permissible to the original Director in whose place he has been appointed and shall vacate the office if and when the original Director returns to the state. The alternate director shall be entitled to notice of the meeting of the Board and to attend and vote thereat accordingly but he shall not be required to hold any qualification share.

(viii) If any director, being willing, shall be called upon to perform extra service ( which expressions shall include work done by a Director as a member of any committee formed by the directors) or to make any special exertions in going or residing out of normal place of living or otherwise for any of the purposes of the company, the company shall remunerate the director so doing either by a fixed sum or by a percentage of profits, or otherwise as may be determined by the directors, in addition to fee for attending Board’s meeting as mentioned above.

(ix) The continuing directors may act notwithstanding any vacancy in their body; but so that if the number falls below the minimum above fixed, the directors shall not, except for the purpose of filling up vacancies, act so long as the number is below the minimum.

(x) All cheques promissory notes, drafts, hundies, bills of exchange and other negotiable instruments and all receipts for money paid to the company, shall be signed, drawn, accepted,, endorsed or otherwise executed as the case may be, any director or by such other persons and in such manner as the Board shall from time to time by resolution determine.

(xi) Every director present at any meeting of the Board or of a committee thereof shall sign his name in a book to be kept for the purpose.

(xii) The office of a director shall be vacated, if by notice in writing to the company he resigns his office, subject to the acceptance of Registration by Board of Directors. The same will take effect from the date of acceptance by the Board of Directors or the time fixed by the Board. Save as aforesaid the provisions of section 283 of the Act so far as applicable to this company shall apply.

MANAGING AND WHOLE-TIME DIRECTORS

70. (i) Subject to the provisions of the Act the Board may from time to time appoint one or more of the directors to be managing directors or whole time directors to the company for such period and on such terms as the Board may think fit and may vest in such managing director or managing directors or whole time director or whole time directors such of the powers hereby vested in the Board, generally as the Board may think fit and such powers may be exerciseable for such periods upon such conditions and subject to such restrictions and otherwise as the Board may determine. Subject to the provisions of the Act the remuneration of a managing director or whole-time director may be by way of salary or commission or participation in profits or any or all of these methods.

(ii) A managing director or whole time director while he or they continue to hold that office shall not be subject to retirement by rotation and he or they shall not be taken into account in determining the rotation or retirement of directors but he or they shall subject to the provisions of any contract made between him or them and the company be subject to the same provisions as to resignation and remuneration as the other directors of the company and if he or any of them shall cease to hold the office of a director he or any of them shall ipso facto vacate and immediately cease to be managing director or whole-time director of the Company.

INDEMNITY

81. Every officer of agent for the time being of the company shall be Indemnified out of the assets of the company against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgement is given in his favour or in which he is acquitted or in connection with any application under section 633 in which relief is granted to him by the court.

MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS

The following contracts mentioned in paragraph "A" below (not being contracts entered into in the ordinary course of business carried on by the Company or entered into by the Company more than two years before the date of this prospectus) which are or may be deemed to be material have been entered into by the Company. The contracts together with the documents referred to in paragraph "B" below, copies of which have been delivered to the Registrars of Companies for registration and may be inspected at the registered office of the Company between 10.00 a.m. and 1.00 p.m. on any working day from the date of prospectus until the closure of the subscription list.

A. MATERIAL CONTRACTS

1. Copy of MOU dated 13^th March, 2000 between the Company and Aryaman Financial Services Limited offering to act as Lead Manager to the Issue and Company's acceptance thereof.

2. Letter from Karvy Consultants Ltd., offering their services to act as Registrars to the issue and company’s acceptance thereof.

B. DOCUMENTS FOR INSPECTION

1. Memorandum & Articles of Association.

2. Certificate of Incorporation dated 13.07.1992 and fresh Certificate of Incorporation consequent upon the change of name dated 10.02.2000.

3. Copy of resolution U/s. 293(1)(A) and 293(1)(D) of the Act passed in the 08.02.2000 General Meeting held on and section 81(1A) on 08.02.2000.

4. Auditors' Certificate of Tax Benefits dated 08.04.2000 referred to in the prospectus.

5. Auditors' Report dated 08.04.2000 and consent to include the same in the Draft Prospectus.

6. Consents of Auditors, Lead Manager, Bankers to the Company, Bankers to the Issue, Registrars to the issue, Directors, Company Secretary & Compliance Officer as referred to in the prospectus to act in their respected capacities.

7. Copies of Balance Sheets for the period ending 31.03.95, 31.03.96, 31.03.97, 31.03.98, 31.03.99 & 31.12.99.

8. Letter of Appointment of the Managing Director dated 1^st January, 2000.

9. Copies of Resolution passed at the Chairperson & Extra-Ordinary General Meeting held on 08.02.2000 appointing Ms.Rama Sinha as the Managing Director of the Company.

10. Power of Attorney dated 25/04/2000 executed by the Directors for signing and correction in the prospectus.

11. Copies of Initial Listing Application for listing made to Ludhiana Stock Exchange Limited, (the Regional Stock Exchange), National Stock Exchange, The Stock Exchange, Mumbai, Delhi Stock Exchange Ltd. and The Stock Exchange, Ahmedabad .

12. Acknowledgement Card No. ___________________ dated ________ received from SEBI.

13. Board resolution regarding authorization of Registrar to the issue for realization of stock invest

14. Certificate for the arithmetical accuracy of estimated profits dated …….. for the financial year ending 31.03.2001

15. Copy of Due Dilligence Certificate given by the Lead Manager M/s Aryaman Financial services Limited given to SEBI

16. Auditors’ letter Dated ……..for Deployment of Funds

PART - III

DECLARATION

We the Directors declare that all the relevant provisions of the Companies Act, 1956, and the guidelines issued from time to time by the Government of India / Securities and Exchange Board of India have been complied with and no statement made in this Prospectus is contrary to the provisions of the Companies Act and the rules made thereunder and the SEBI guidelines.

SIGNED BY DIRECTORS

Mrs Rama Sinha

Mr. Sanjay Sinha

Wg. Cmdr. M.M. Dhasmana

Place : Chandigarh

Date :