Coeficientes de corrección del límite de fatiga

The expenses of this Issue include, among others, underwriting and management fees, printing and distribution expenses, legal fees, advertisement expenses and listing fees. The estimated Issue expenses are as follows:

The break-up of the total expenses towards the IPO are as under: Sl. No. Particulars Amount (` in lakhs) % of total estimated issue expenditure % of issue size

1. Fees of the Lead Manager, underwriting,

brokerage and selling commission

[•] [•] [•]

2. Advertising & Marketing expenses, printing & stationery, distribution, postage etc.

[•] [•] [•]

3. Registrar to the Issue [•] [•] [•]

4. Other expenses (Legal Advisors, Auditors, Grading Agency, other Advisors, Bankers to the Issue, Fees of SEBI, Stock Exchange etc.)

[•] [•] [•]

5. [•] [•] [•]

35 Working capital requirement

The Net Proceeds of this Issue will not be used to meet our working capital requirements as we expect sufficient internal accruals and availability of working capital facilities to meet our working capital requirements. However, in the event that there is surplus of funds after deployment from the Net Proceeds of the Issue, the funds may be utilized towards reducing our reliance on working capital facilities.

Schedule of Implementation

Activity Schedule

Placement of orders for Hardware / Softwares June 2011

Installation of equipments July - August 2011

Recruitment of various professionals / outsourcing etc. August - October 2011

Acquisition of premises September – October 2011

Training of employees October – December 2011

Development and Testing of applications (In-house & Outsourced) October 2011 – March 2013

Launching of products and applications June 2012 – December 2012

Launching of NetAlter System March 2013

Appraisal

The objects of the issue and means of finance are not appraised by any bank or financial institution and are based on management estimates.

Interim Use of Net Proceeds

Pending utilization for the purposes described above, we intend to temporarily invest the funds from the Issue in interest bearing liquid instruments including deposits with banks and other fixed and variable return instruments. Monitoring of Utilization of Funds

We have not appointed a monitoring agency to monitor the utilization of the proceeds of the Issue. We will disclose the utilization of the proceeds of the Issue under a separate head along with details, for all such proceeds of the Issue that have not been utilized. We will indicate investments, if any, of unutilized proceeds of the Issue in our Balance Sheet for the relevant Financial Years subsequent to our listing.

Pursuant to clause 49 of the Listing Agreement, our Company shall on a quarterly basis disclose to the Audit Committee the uses and applications of the proceeds of the Issue. On an annual basis, our Company shall prepare a statement of funds utilized for purposes other than those stated in this Draft Red Herring Prospectus and place it before the Audit Committee. Such disclosure shall be made only until such time that all the proceeds of the Issue have been utilized in full. The statement will be certified by the statutory auditors of our Company.

Our Company shall be required to inform material deviations in the utilization of the Net Proceeds of the Issue to the Stock Exchanges and shall also be required to simultaneously make the material deviations/adverse comments of the Audit Committee public through advertisement in newspapers.

No part of the proceeds from the Issue will be paid by us as consideration to our Promoters, Directors, Group Companies or Key Managerial Personnel, except in the normal course of our business.

For risks associated with our proposed utilization of the Net Proceeds of the Issue, see “Risk Factors” on page no. XIV.

36 BASIS FOR ISSUE PRICE

The Issue Price will be determined by our Company in consultation with the BRLM on the basis of assessment of market demand for the Equity Shares offered by way of book building process. The face value of the equity shares is ` 10/- and the Issue Price is [●] times the face value at the lower end of the Price Band and [●] times the face value at the higher end of the Price Band.

Qualitative Factors

- Two of our Promoters Mr. Yogesh C. Rathod and Mr. Rajesh C. Rathod are inventors of the patented NetAlter System and have good knowledge and experience of software/IT industry.

- The NetAlter system, is a unique product being developed by us which we expect, will emerge as an alternative to the present world wide web (www).

- We have been granted patent for the NetAlter System in India and have applied for patent in U.S., Europe and several other countries, which are in various stages of processing.

- BNP Paribas Business Assets Valuation Limited has vide its Valuation Report dated November 15, 2010 estimated the value of the IPR in respect of the patented NetAlter System to be of the order of US. $400 million. - By virtue of the Patent Licensing Agreement dated June 6, 2005 and amended vide Deed of Rectification dated July 12, 2005 and April 1, 2009, we are entitled to receive 40% of proceeds of assignment of patent rights to any third party.

- We have already launched a few other software products, such as Matrimonial Online, Matrimonial Hotline, Community Online and Community Hotline;

- Besides the NetAlter System Patent, we own 22 Registered Trademarks and 4 Copyrights. We also have applied for 2 Trademarks

- We were conferred the Red Herring 100 Global Award for 2007 and Red Herring 100 Asia Award for 2007 which is a testimony to our technological competence.

- Our business forms part of the IT Industry which has been witnessing consistent growth over last several years. For more information, please refer to the Chapter “Business Overview” beginning on page no. 63 of this Draft Red Herring Prospectus.

Quantitative Factors

Information presented in this section is derived from our audited restated standalone financial statements prepared in accordance with Indian GAAP.

Some of the quantitative factors which form the basis for computing the Issue Price are as follows : Weighted Average Earnings Per Share (EPS)

Period EPS (`) Weights

Year ended March 31, 2008 - 1

Year ended March 31, 2009 0.01 2

Year ended March 31, 2010 0.07 3

Weighted Average EPS 0.04

Notes:

1. EPS calculations are done in accordance with Accounting Standard 20 “Earnings per Share” issued by the Institute of Chartered Accountants of India

2. EPS is calculated as Net Profit/(loss) after tax and minority interest as restated after excluding extraordinary income attributable to equity shareholders divided by weighted average number of shares outstanding during the year/period

37 3. Weighted Average number of equity shares is the number of equity shares outstanding at the beginning of the year/period adjusted by the number of equity shares issued during the year/period multiplied by the time weighting factor. The time weighting factor is the number of days for which the specific shares are outstanding as a proportion of total number of days during the year

Price/Earning Ratio (P/E) in relation to Issue Price of ` [ ] per share of ` 10/- each

Particulars P/E at the lower

end of the price band (` [ ])

P/E at the higher end of the price band (` [ ]) Based on 2009-10 EPS of `

Based on weighted average EPS of `

We have given above, the PE ratio of the IT industry. However, although our business forms part of the IT industry, since our major business focus will be on development of the NetAlter system which we expect will emerge as an alternative to the world-wide web, we feel our business profile will not strictly be comparable with any of the existing listed companies in the IT industry in India.

Return on Net Worth

Period RONW (%) Weights

Year ended March 31, 2009 0.17 1

Year ended March 31, 2010 0.69 2

Weighted Average RONW 0.52

Minimum Return on increased Net Worth needed after the Issue to maintain pre-Issue EPS At the lower end of the price band [ ]

At the higher end of the price band [ ]

Net Asset Value (`)

Particulars At the lower end of the

price band (` [ ])

At the higher end of the price band (` [ ])

As on March 31, 2009 [ ] [ ]

As on March 31, 2010 [ ] [ ]

After Issue [ ] [ ]

Issue Price [ ]

Comparison with Peer Group Companies

Our company is engaged in research and development of the NetAlter System which we believe will emerge as an alternative to the world-wide-web. There are no companies in the universe of Indian listed companies whose business profile is strictly comparable with ours and as such comparison with peer group companies is not possible.

The face value of our Equity Shares is `10 per share and the Issue Price of ` [ ] is [ ] times of the face value of our Equity Shares. The final price would be determined on the basis of the demand from the investors.

The BRLM believes that the Issue Price of ` [ ] per Equity Shares is justified in view of the above parameters. The investors may also want to peruse the risk factors and our financials as set out in the Auditors Report in the Draft Red Herring Prospectus to have a more informed view about the investment proposition.

38 STATEMENT OF TAX BENEFITS

To,

The Board of Directors, NetAlter Software Limited

813 & 814, Nirmal Corporate Centre, Nirmal Lifestyle, LBS Marg, Mulund (W), Mumbai – 400 080. Maharashtra, India.

Dear Sirs,

Sub: Statement of Possible Tax Benefits available to the company and its shareholders

We refer to the proposed Initial Public Offer of NetAlter Software Limited (the “Company”) and hereby enclose as an annexure, the possible tax benefits that may be available to the Company and to the shareholders of the Company under the provisions of the Income-tax Act, 1961, Wealth Tax Act, 1957 presently in force in India as of date.

Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws and their interpretations. Hence, the ability of the Company or its shareholders to derive tax benefits is dependent upon fulfilling such conditions, which is based on business imperatives the Company faces in the future, the Company may or may not choose to fulfil. The benefits discussed in the enclosed statement are not exhaustive nor are they conclusive. The preparation of the contents stated is the responsibility of the Company’s management. This statement is only intended to provide general information and to guide the investors and is neither designed nor intended to be a substitute for professional tax advice. A shareholder is advised to consult his/ her/ their own tax consultant with respect to the tax implications of an investment in the equity shares particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the benefits, which an investor can avail.

We do not express any opinion or provide any assurance as to whether:

The Company or its shareholders will continue to be eligible for these benefits in future; or The conditions prescribed for availing the benefits have been / would be met with; The revenue authorities / courts will concur with the views expressed herein.

Our views are based on the existing provisions of law and its interpretations, which are subject to change from time to time. We do not assume responsibility to up-date the views of such changes. The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. While all reasonable care has been taken in the preparation of this statement, we accept no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it. This report is intended solely for information and for the inclusion in the offer Document in connection with the proposed initial public offer of the equity shares of the Company to the public and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For Rajendra & Co Chartered Accountants Firm Registration No: 108355W Akshay R. Shah

Partner

Membership No. 103316

39

STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS