nimbus communications ltd

DRAFT RED HERRING PROSPECTUS

Dated September 29, 2010Please read Section 60B of the Companies Act, 1956

(The Draft Red Herring Prospectus will be updated upon filing with the RoC)

Book Building Issue

NIMBUS COMMUNICATIONS LIMITEDOur Company was originally incorporated as ‘Nimbus Communications Private Limited’ on June 30, 1987 under the Companies Act, 1956, as amended, (the “Companies Act”)as a private limited company with the Registrar of Companies, Maharashtra (“RoC”). Our Company became a deemed public company under Section 43A of the Companies Actand its name was consequently changed to ’Nimbus Communications Limited’ with effect from July 1, 1994. Our Company’s corporate identification number as allotted by the

RoC is U99999MH1987PLC043940. In an extraordinary general meeting held on January 4, 2000, our Company’s shareholders passed a resolution converting our Company froma deemed public company to a public company. For further details on change in status, please refer to the section titled “History and Certain Corporate Matters” on page 100

of this Draft Red Herring Prospectus.

Registered & Corporate Office: Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India.

For details on the change in our registered office, please refer to the section titled “History and Certain Corporate Matters” on page 100 of this Draft Red Herring Prospectus.

Company Secretary and Compliance Officer: Mr. Parthasarathy Iyengar.

Telephone: +91 22 2635 2000; Facsimile: +91 22 2635 2123

Email: [email protected], Website: www.nimbus.co.in

PROMOTERS OF OUR COMPANY: MR. HARISH KANAYALAL THAWANI, MS. SHOBHA HARISH THAWANI AND PARAMOUNT CORPORATION LIMITED.

PUBLIC ISSUE OF 22,050,000 EQUITY SHARES OF FACE VALUE Rs.10 EACH (THE “EQUITY SHARES”) FOR CASH AT A PRICE OF Rs.[•] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs.[•] PER EQUITYSHARE) OF NIMBUS COMMUNICATIONS LIMITED (“NCL”, “COMPANY” OR “THE ISSUER”) AGGREGATING Rs.[•] MILLION (THE “ISSUE”). THE ISSUE COMPRISES A FRESH ISSUE OF 14,040,000 EQUITY SHARESAGGREGATING TO Rs.[•] MILLION (THE “FRESH ISSUE”) AND AN OFFER FOR SALE OF 8,010,000 EQUITY SHARES AGGREGATING TO Rs.[•] MILLION BY AMERICORP VENTURES LIMITED, CSI BD (MAURITIUS),FUNDERBURK ENTERPRISES LIMITED, MR. PURSHOTAMDAS NARAINDAS BUDHRANI AND MR. HARICHANDRA NARAINDAS BUDHRANI (THE “SELLING SHAREHOLDERS”) (THE “OFFER FOR SALE”). THE ISSUEWILL CONSTITUTE 29.19% OF THE POST–ISSUE PAID UP SHARE CAPITAL OF OUR COMPANY.

THE FACE VALUE OF THE EQUITY SHARES IS RS. 10/- EACH

PRICE BAND AND THE MINIMUM BID LOT SIZE WILL BE DECIDED BY OUR COMPANY AND SELLING SHAREHOLDERS IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS,

CO-BOOK RUNNING LEAD MANAGER AND ADVERTISED AT LEAST TWO WORKING DAYS PRIOR TO THE BID OPENING DATE.

THE FLOOR PRICE IS [•] TIMES THE FACE VALUE AND THE CAP PRICE IS [•] TIMES THE FACE VALUE.

In case of revision in the Price Band, the Bidding Period will be extended for at least three additional Working Days after revision of the Price Band, subject to the Bidding Period not exceeding a total of 10 Working Days. Any revision in the Price Bandand the revised Bidding Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating thechange on the website of the Book Running Lead Managers (“BRLMs”), Co-Book Running Lead Managers (“Co-BRLM”) and at the terminals of the members of the Syndicate.

The Issue is for a minimum 25% of the post Issue share capital of our Company. The Issue is being made under sub-regulation (2) (a) (i) and (2) (b) (i) of Regulation 26 of the Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations, 2009 (“SEBI ICDR Regulations”), and through the Book Building Process, wherein at least 50% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIB Portion”). Provided that ourCompany may allocate up to 30% of the QIB Portion to the Anchor Investors on discretionary basis (“Anchor Investor Portion”). Further 5% of the QIB Portion (excluding Anchor Investor Portion) shall be available for allocation on a proportionate basisto domestic Mutual Funds only, and the remaining QIB Portion shall be available for allocation to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 50% of the Issue cannot be allocated tothe QIBs then the entire application money will be refunded forthwith. Further, not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders and not less than 15% of the Issue shall be available forallocation on a proportionate basis to Non-Institutional Bidders, subject to valid Bids being received at or above the Issue Price.

Any Bidder (other than Anchor Investor) may participate in this Issue through an Application Supported by Blocked Amount (“ASBA”) providing details of the bank account in which the Bid Amount will be blocked by the Self Certified Syndicate Bank(“SCSBs”). For further details refer to the section titled “Issue Procedure” on page 224 of this Draft Red Herring Prospectus.

RISK IN RELATION TO FIRST ISSUE

This being the first public issue of the Equity Shares of our Company, there has been no formal market for the Equity Shares. The face value of the Equity Shares is Rs.10 each. The Floor Price is [•] times of the face value and the Cap Price is [•] timesof the face value. The Issue Price (as determined and justified by the BRLMs and Co-BRLM, by our Company and the Selling Shareholders as stated in the section titled “Basis for Issue Price” on page 51 of this Draft Red Herring Prospectus) should notbe taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be tradedafter listing.

GENERAL RISKS

Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully beforetaking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares offered in this Issue have not been recommended orapproved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” on page xii of thisDraft Red Herring Prospectus.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer having made all reasonable inquiries, accept responsibility for, and confirm that this Draft Red Herring Prospectus contains all information with regard to the Issuer and this Issue, which is material in the context of this Issue, that the informationcontained in this Draft Red Herring Prospectus is true and correct in all material aspects 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 whichmakes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

SELLING SHAREHOLDER’S RESPONSIBILITY

Each of the Selling Shareholder, having made all reasonable inquiries, accepts responsibility that all statements made by it in this Draft Red Herring Prospectus about itself or its holding of Equity Shares which are being offered through the Offer for Sale,are true and correct. Each Selling Shareholder assumes no responsibility for any other statement including the statements made by the Company or by any other Selling Shareholder in this Draft Red Herring Prospectus.

IPO GRADING

Pursuant to the SEBI ICDR Regulations, this Issue has been graded by [•] and has been assigned a grade of [•]/5 indicating [•].The IPO Grading is assigned on a five point scale from 1 to 5, with “IPO Grade 5/5” indicating strong fundamentals and “IPOGrade 1/5” indicating poor fundamentals. For more information on the IPO Grading, see the section titled “General Information” and “Annexure I” on pages 13 and 284 of this Draft Red Herring Prospectus, respectively.

LISTING ARRANGEMENT

The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and NSE. We have received the in-principle approval from the BSE and the NSE for the listing of our Equity Shares pursuant to letters dated [•] and[•], respectively. For the purposes of this Issue, [•] is the Designated Stock Exchange.

ISSUE SCHEDULE

BID/ISSUE OPENS ON [•]# BID/ISSUE CLOSES ON [•]### Our Company may consider participation by Anchor Investors. The Anchor Investor Bid/Issue date shall be one Working Day prior to Bid/ Issue Opening Date.##Our Company may consider closing the Bid/Issue Period for QIBs one day prior to the Bid/Issue Closing Date

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUECO-BOOK RUNNING LEAD MANAGER

EDELWEISS CAPITAL LIMITED14th FloorExpress TowersNariman PointMumbai – 400 021, IndiaTel: +91 22 4086 3535Fax: +91 22 4086 3610E-mail: [email protected] Grievance Id:[email protected]: www.edelcap.comContact Person: Mr. Chitrang Gandhi /Ms. Neetu RankaSEBI Registration No.: INM0000010650

CENTRUM CAPITAL LIMITEDCentrum House, Vidya Nagari MargCST Road, Kalina, Santacruz (East)Mumbai- 400 098, IndiaTel: +91 22 4215 9000Fax: +91 22 4215 9707Email: [email protected] Grievance Id:[email protected]: www.centrum.co.inContact Person: Mr. Maulik Sanghavi /Ms. Rachna NawhalSEBI Registration No.: INM000010445

PNB INVESTMENT SERVICES LIMITED10, Rakesh Deep BuildingYusuf Sarai Commercial ComplexGulmohar EnclaveNew Delhi – 110 049, IndiaTel: +91 11 4949 5050Fax: +91 11 4103 5057Email: [email protected] Grievance Id: [email protected]: www.pnbisl.comContact Person: Mr. Narender Thakran/V. GujjalSEBI Registration No.: INM000011617

KARVY COMPUTERSHAREPRIVATE LIMITEDPlot nos.17-24, Vittal Rao Nagar, MadhapurHyderabad – 500 081.Andhra Pradesh, India.Toll free no.: 1-800-345-4001Tel: +91 40 2342 0815- 28Fax: +91 40 2343 1551E-mail: [email protected]: www.karvy.comContact Person: Mr. Murali KrishnaSEBI Registration No: INR000000221

MACQUARIE CAPITAL ADVISERS(INDIA) PRIVATE LIMITEDLevel 4, Earnest House, NCPA MargNariman Point, Mumbai 400 021, IndiaTel: +91 22 4230 1200Fax: +91 22 4002 8707Email:[email protected] GrievanceId:[email protected]: www.macquarie.com/in/en/index.htmContact Person: Mr. Hari Kishan MovvaSEBI Registration No.: INM000010932

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TABLE OF CONTENTS

SECTION I – GENERAL ..................................................................................................................................................................... iii Definitions and Abbreviations............................................................................................................................................................... iii Certain Conventions, Use of Financial Information, Industry, Market Data and Currency of Presentation ............................ ix Notice to Investors ................................................................................................................................................................................... x Forward Looking Statements ................................................................................................................................................................ xi SECTION II - RISK FACTORS ........................................................................................................................................................ xii SECTION III - INTRODUCTION ...................................................................................................................................................... 1 Summary of the Business ........................................................................................................................................................................ 1 Summary of the Industry ......................................................................................................................................................................... 3 Summary of our Consolidated Financial, Operating and Other Data ............................................................................................. 5 Issue Details ............................................................................................................................................................................................ 12 General Information .............................................................................................................................................................................. 13 Capital Structure .................................................................................................................................................................................... 23 Objects of the Issue ................................................................................................................................................................................ 41 Basis for Issue Price .............................................................................................................................................................................. 51 Statement of Tax Benefits ...................................................................................................................................................................... 54 SECTION IV - ABOUT US ................................................................................................................................................................. 65 Industry Overview .................................................................................................................................................................................. 65 Business ................................................................................................................................................................................................... 78 Regulations and Policies....................................................................................................................................................................... 92 History and Certain Corporate Matters ........................................................................................................................................... 100 Management .......................................................................................................................................................................................... 116 Promoters and Group Companies ..................................................................................................................................................... 128 Related Party Transactions ................................................................................................................................................................ 140 Dividend Policy .................................................................................................................................................................................... 141 SECTION V - FINANCIAL INFORMATION .............................................................................................................................. 142 Financial Statements ........................................................................................................................................................................... 142 Management's Discussion and Analysis of Financial Condition and Results of Operations as Reflected in the Financial Statements ............................................................................................................................................................................................. 143 Financial Indebtedness ....................................................................................................................................................................... 173 SECTION VI - LEGAL AND OTHER INFORMATION ........................................................................................................... 178 Outstanding Litigation and Material Developments ...................................................................................................................... 178 Government and Other Approvals ..................................................................................................................................................... 194 Other Regulatory and Statutory Disclosures ................................................................................................................................... 204 SECTION VII - OFFERING INFORMATION ........................................................................................................................... 215 Terms of the Issue ................................................................................................................................................................................ 215 Issue Structure ...................................................................................................................................................................................... 219 Issue Procedure .................................................................................................................................................................................... 224 Restriction on foreign ownership of Indian Securities ....................................................................................................................... 256 SECTION VIII - DESCRIPTION OF EQUITY SHARES AND MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF OUR COMPANY .............................................................................................................................................. 258 SECTION IX - OTHER INFORMATION ..................................................................................................................................... 279 Material Contracts and Documents for Inspection ......................................................................................................................... 279 Declaration ........................................................................................................................................................................................... 281 ANNEXURE I – IPO GRADING REPORT .................................................................................................................................. 284

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SECTION I – GENERAL

Definitions and Abbreviations

All capitalised terms and abbreviations used in this Draft Red Herring Prospectus shall have the meaning ascribed to them below, unless defined elsewhere in this Draft Red Herring Prospectus or unless the context otherwise indicates. References to any statute, regulations or policies shall include amendments thereto, from time to time. Issuer Related Terms Term Description 3i 3i Sports Media (Mauritius) LimitedACC Asian Cricket Council ACA Africa Cricket Association Americorp Americorp Ventures Limited Articles of Association or Articles The articles of association of our Company, as amended from time to time. Audit Committee The committee described in the section titled “Management” on page 116 of this Draft Red Herring

Prospectus. Auditors The statutory auditors of our Company, Deloitte Haskins & Sells, Chartered Accountants. BCB Bangladesh Cricket Board. BCCI Board of Control of Cricket in India BCCI Agreement The media rights licensing agreement as entered into by and between our Company and BCCI in February

2006 for the period March 2006 to March 2010. Board or Board of Directors The board of directors of our Company. Cricket Kenya The board of cricket in Kenya CSI CSI BD (Mauritius) Directors The directors of our Company, as specifically set out in the section titled “Management” on page 116 of this

Draft Red Herring Prospectus. ESOP 2007 Employee Stock Option Plan, 2007 of our Company. Funderburk Funderburk Enterprises Limited Group Companies Companies, firms and ventures promoted by the Promoters (irrespective of whether such entities are

covered under Section 370 (1) (B) of the Companies Act or not). For more details, please see the section titled “Promoters and Group Companies” on page 128 of this Draft Red Herring Prospectus.

ICC International Cricket Council Individual Selling Shareholders Individual Selling Shareholders being Mr. Purshotamdas Naraindas Budhrani and Mr. Harichandra

Naraindas Budhrani. Key Management Personnel Those individuals described in the section titled “Management” on page 116 of this Draft Red

Herring Prospectus. Memorandum of Association or Memorandum

The memorandum of association of our Company, as amended from time to time.

“NCL”, “Nimbus”, “the Company”, “our Company” or “the Issuer”

Nimbus Communications Limited, a public limited company incorporated in India under the Companies Act, having its registered and corporate office at Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India.

Neo Sports Broadcast Neo Sports Broadcast Private Limited, our joint venture. New BCCI Agreement The media rights licensing agreement as entered into by and between our Company and BCCI in October

2009 for the period April 1, 2010 to March 31, 2014. Paramount Paramount Corporation Limited, our corporate Promoter. Promoters The promoter(s) of our Company being Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani

and Paramount Corporation Limited. Promoter Group The individuals, companies and entities as enumerated in section titled “Promoters and Group

Companies” on page 128 of this Draft Red Herring Prospectus. Registered Office The registered office of our Company, which, as at the date of this Draft Red Herring Prospectus, is

located at Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, India . Selling Shareholder(s) Selling Shareholders shall mean Americorp Ventures Limited, CSI BD (Mauritius), Funderburk

Enterprises Limited, Mr. Purshotamdas Naraindas Budhrani and Mr. Harichandra Naraindas Budhrani.

Subsidiaries The subsidiaries of our Company, being: • Nimbus Home Entertainment Private Limited; • Nimbus Motion Pictures (AP) Private Limited; • Nirvana Television Limited; • Nimbus Communications Limited BVI; • Nimbus Communications Worldwide Limited; • Nimbus Media Pte. Limited; and • Nimbus Sport International Pte. Limited.

“We”, “us” and “our” Unless the context otherwise requires or implies, Nimbus Communications Limited, together with its Subsidiaries, joint ventures as described in this Draft Red Herring Prospectus on a consolidated basis.

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Term Description Zenith Zenith Sports Broadcast Private Limited, our joint venture. Zenith Agreement The agreement dated March 27, 2006 entered between our Company, Paramount and Zenith Sports

for conduct of broadcasting business through Neo Sports Broadcast.

Issue Related Terms

Term Description Allotment/Allot/ Allotted Unless the context otherwise requires, shall mean the allotment and transfer of Equity Shares to

successful Bidders pursuant to the Issue. Allottee A successful Bidder to whom Equity Shares are being/ have been Allotted. Anchor Investor A Qualified Institutional Buyer, who applies under the Anchor Investor Portion with a minimum Bid of

Rs.100 million. Anchor Investor Bid/Issue Date The day, one working day prior to the Bid/Issue Opening Date, on which Bids by Anchor Investors shall

be submitted and allocation to Anchor Investors shall be completed. Anchor Investor Issue Price The final price at which Equity Shares will be issued and Allotted in terms of the Red Herring

Prospectus and the Prospectus to the Anchor Investors, which will be a price equal to or higher than theIssue Price but not higher than the Cap Price. The Anchor Investor Issue Price will be decided by ourCompany and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM.

Anchor Investor Portion Up to 30% of the QIB Portion which may be allocated by our Company and the Selling Shareholders, inconsultation with the BRLMs and Co-BRLM to Anchor Investors on a discretionary basis. One-third ofthe Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids beingreceived from domestic Mutual Funds at or above the price at which allocation is being done to AnchorInvestors.

Application Supported by Blocked Amount/ ASBA

The application (whether physical or electronic) used by all Bidders (other than Anchor Investors) tomake a Bid authorising an SCSBs to block the Bid Amount in their specified bank account maintainedwith the SCSBs.

ASBA Account

Account maintained by an ASBA Bidder with a SCSB, which will be blocked by such SCSB to theextent of the Bid Amount of the ASBA Bidder.

ASBA Bidder Prospective investors other than Anchor Investors in the Issue who intend to Bid/apply through ASBA. ASBA Bid cum Application Form The form, whether physical or electronic, used by an ASBA Bidder to make a Bid, which will be

considered as the application for Allotment for the purposes of the Red Herring Prospectus and theProspectus.

ASBA Revision Form

The form used by the ASBA Bidders to modify the quantity of Equity Shares or the Bid Amount in anyof their ASBA Bid cum Application Forms or any previous ASBA Revision Form(s)

Bankers to our Company Indian Bank, Oriental Bank of Commerce, Punjab National Bank and Union Bank of India. Banker(s) to the Issue/Escrow Collection Bank(s)

The banks which are clearing members and registered with SEBI as Bankers to the Issue with whomthe Escrow Account will be opened and in this case being [●].

Basis of Allotment The basis on which the Allotment shall be made as described in the section titled “Issue Procedure” onpage 224 of this Draft Red Herring Prospectus.

Bid An indication to make an offer during the Bidding Period by a Bidder, or on the Anchor InvestorBidding Date by an Anchor Investor, pursuant to submission of a Bid cum Application Form tosubscribe to Equity Shares in the Issue at a price within the Price Band, including all revisions andmodifications thereto. For the purposes of ASBA Bidders, it means an indication to make an offer during the Bidding Periodby a Bidder pursuant to the submission of an ASBA Bid cum Application Form to subscribe to theEquity Shares.

Bid Amount The highest value of the optional Bids indicated in the Bid cum Application Form and payable by aBidder on submission of a Bid in the Issue. In case of ASBA Bidders, the Bid amount mentioned in theASBA Bid cum Application Form.

Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and theBid cum Application Form, including an ASBA Bidder and an Anchor Investor.

Bidding Centre A centre for acceptance of the Bid cum Application Form. Bid/Issue Closing Date Except in relation to Anchor Investors, the date after which the Syndicate and SCSBs will not accept

any Bids, which shall be notified in a Hindi national newspaper, an English national newspaper and aMarathi newspaper (which is the regional newspaper), each with wide circulation and in case of anyrevision, the extended Bid/Issue Closing Date also to be notified on the website and terminals of theSyndicate and SCSBs, as required under the SEBI ICDR Regulations.

Bid cum Application Form The form in terms of which the Bidder shall make an offer to purchase Equity Shares and which shall beconsidered as the application for the issue of Equity Shares pursuant to the terms of the Red HerringProspectus and the Prospectus including the ASBA Bid cum Application as may be applicable.

Bid/Issue Opening Date Except in relation to Anchor Investors, the date on which the Syndicate and SCSBs shall start acceptingBids, which shall be notified in a Hindi national newspaper, an English national newspaper and aMarathi national newspaper (which is also the regional newspaper), each with wide circulation.

Bidding Period The period between the Bid Opening Date and the Bid Closing Date, inclusive of both days duringwhich prospective Bidders (excluding Anchor Investors) can submit their Bids, including any revisionsthereof.

Book Building Process Book building process as provided in Schedule XI of the SEBI ICDR Regulations, in terms of whichthis Issue is being made.

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Term Description BRLMs/Book Running Lead Managers

Book Running Lead Managers to the Issue, in this case being Edelweiss Capital Limited, MacquarieCapital Advisers (India) Private Limited and Centrum Capital Limited.

CAN/ Confirmation of Allocation Note

In relation to Anchor Investors, the note or advice or intimation of allocation of Equity Shares sent tothe successful Anchor Investors who have been allocated Equity Shares after discovery of the AnchorInvestor Issue Price, including any revisions thereof.

Cap Price The higher end of the Price Band, above which the Issue Price will not be finalized and above which noBids will be accepted including any revisions thereof.

CCDs Compulsorily convertible debentures of our Company bearing a face value of Rs. 10 each. CCPS Fully and compulsorily convertible preference shares of our Company bearing a face value of Rs. 10

each. Centrum Centrum Capital Limited. Co-BRLM/Co-Book Running Lead Manager

Co-Book Running Lead Manager to the Issue, in this case being PNB Investment Services Limited.

Controlling Branches of the SCSBs Such branches of the SCSBs which coordinate with the BRLMs, Co-BRLM, the Registrar to the Issueand the Stock Exchanges and a list of which is provided on http://www.sebi.gov.in/pmd/scsb.pdf.

Cut-off Price The Issue Price finalized by our Company and the Selling Shareholders, in consultation with theBRLMs, Co-BRLM, which shall be any price within the Price Band. Only Retail Individual Bidderswhose Bid Amount does not exceed Rs. 100,000 are entitled to Bid at the Cut-off Price. No othercategory of Bidders is entitled to Bid at the Cut-Off Price.

DP/Depository Participant A depository participant as defined under the Depositories Act, 1996, as amended from time to time. DP ID Depository Participant’s identity. Designated Branches Such branches of the SCSBs which shall collect the ASBA Bid cum Application Form used by ASBA

Bidders and a list of which is available on http://www.sebi.gov.in/pmd/scsb.pdf. Designated Date The date on which funds are transferred from the Escrow Account(s) and the amount blocked by the

SCSBs is transferred from the bank account of the ASBA Bidders to the Public Issue Account, as thecase may be, after the Prospectus is filed with the RoC.

Designated Stock Exchange [●]. Draft Red Herring Prospectus or DRHP

This Draft Red Herring Prospectus dated September 29, 2010 filed with SEBI and issued in accordancewith Section 60B of the Companies Act and the SEBI ICDR Regulations, which does not containcomplete particulars on the price at which the Equity Shares are offered and the size (in terms of value)of the Issue.

Edelweiss Edelweiss Capital Limited. Eligible NRI A Non Resident Indian in a jurisdiction outside India where it is not unlawful to make an offer or

invitation under the Issue and in relation to whom the Red Herring Prospectus will constitute aninvitation to subscribe for the Equity Shares.

Equity Shares Equity shares of our Company bearing a face value of Rs. 10 each. Escrow Account(s) Account/(s) opened with the Escrow Collection Bank(s) for the Issue and in whose favour the Bidder

(including the Anchor Investor and excluding ASBA Bidders) will issue cheques or drafts in respect ofthe Bid Amount.

Escrow Agreement Agreement to be entered into among our Company, the Selling Shareholders, the Registrar, the BRLMs,Co-BRLM, the Syndicate Member and the Escrow Collection Bank(s) for collection of the BidAmounts and remitting refunds, if any, of the amounts to the Bidders (excluding ASBA Bidders) on theterms and conditions thereof.

First Bidder The Bidder whose name appears first in the Bid cum Application Form or the Revision Form or the ASBA Bid cum Application Form or ASBA Revision Form.

Floor Price The lower end of the Price Band, at or above which the Issue Price will be finalized and below which noBids will be accepted including any revisions thereof.

Fresh Issue The issue of 14,040,000 Equity Shares by our Company offered for subscription pursuant to the termsof the Draft Red Herring Prospectus.

IPO Grading Agency [●] Issue Agreement The agreement entered into by and between our Company, Selling Shareholders, the BRLMs and Co-

BRLM on September 23, 2010, pursuant to which certain inter se arrangements have been agreed to inrelation to the Issue.

Issue This public issue of 22,050,000 Equity Shares of Rs. 10 each at the Issue Price by our Company,aggregating Rs.[●], which includes the Fresh Issue of 14,040,000 Equity Shares, aggregating Rs.[●]million and the Offer for Sale of 8,010,000 Equity Shares aggregating to Rs.[●] million by the SellingShareholders.

Issue Price The final price at which Equity Shares will be issued and Allotted to the successful Bidders in terms ofthe Red Herring Prospectus and the Prospectus. The Issue Price will be decided by our Company andthe Selling Shareholders, in consultation with the BRLMs and Co-BRLM on the Pricing Date.

Macquarie Capital Macquarie Capital Advisers (India) Private Limited. Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996. Mutual Funds Portion 5% of the QIB Portion, or 551,250 Equity Shares available for allocation to Mutual Funds only. Net Proceeds Proceeds of the Issue that are available to our Company, excluding the Issue related expenses and the

proceeds from the Offer for Sale. Net QIB Portion QIB Portion less the number of Equity Shares Allotted to the Anchor Investors. NIF National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated November 23, 2005 of

Government of India published in the Gazette of India. Non Institutional Bidders All Bidders, including sub-accounts of FIIs registered with SEBI, which are foreign corporate or foreign

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Term Description individuals, that are not QIBs (including Anchor Investors) or Retail Individual Bidders and who haveBid for Equity Shares for an amount more than Rs. 100,000.

Non Institutional Portion The portion of the Issue being not less than 15% of the Issue consisting of 3,307,500 Equity Sharesavailable for allocation to Non Institutional Bidders.

Offer for Sale Offer for sale of 8,010,000 Equity Shares of Rs. 10 each by the Selling Shareholders, pursuant to termsof the Draft Red Herring Prospectus.

PNBISL PNB Investment Services Limited. Price Band Price Band of a minimum price of Rs.[●] (Floor Price) and the maximum price of Rs.[●] (Cap Price)

and includes revisions thereof. The Price Band and the minimum Bid Lot size for the Issue will bedecided by our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM,and advertised, at least two Working Days prior to the Bid/ Issue Opening Date, in English, Hindi and aMarathi newspaper.

Pricing Date The date on which our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM, will finalize the Issue Price.

Prospectus The Prospectus to be filed with the RoC in accordance with Section 60B of the Companies Act and the SEBI ICDR Regulations, containing, inter alia, the Issue Price that is determined at the end of the Book Building Process, the size of the Issue and certain other information.

Public Issue Account Account opened by our Company and the Selling Shareholders with the Bankers to the Issue to receivemonies from the Escrow Account on the Designated Date and the ASBA Accounts on the DesignatedDate.

Qualified Institutional Buyers or QIBs

Public financial institutions as defined in Section 4A of the Companies Act, FIIs and sub-accountsregistered with SEBI, other than a sub-account which is a foreign corporate or foreign individual,scheduled commercial banks, Mutual Funds, multilateral and bilateral development financialinstitutions, venture capital funds registered with SEBI, foreign venture capital investors registered withSEBI, state industrial development corporations, insurance companies registered with InsuranceRegulatory and Development Authority, provident funds (subject to applicable law) with minimumcorpus of Rs. 250 million and pension funds with minimum corpus of Rs. 250 million and the NationalInvestment Fund set up by Government of India and insurance funds set up and managed by the army,navy or air force of the Union of India.

QIB Portion The portion of the Issue being a minimum 11,025,000 Equity Shares to be Allotted to QIBs. Refund Accounts Accounts opened with Escrow Collection Bank(s) from which refunds of the whole or part of the Bid

Amount (excluding to the ASBA Bidders), if any, shall be made. Refund Banker(s) The bank(s) which are clearing members and registered with the SEBI as Bankers to the Issue, at which

the Refund Accounts will be opened, in this case being [●]. Refunds through electronic transfer of funds

Refunds through ECS, Direct Credit, NECS, RTGS or the ASBA process, as applicable.

Registrar/ Registrar to the Issue Registrar to the Issue in this case being Karvy Computershare Private Limited. Resident Retail Individual Bidder/Investor

Retail Individual Bidder/Investor who is a person resident in India as defined in the Foreign ExchangeManagement Act, 1999 and who has Bid for Equity Shares for an amount not more than Rs. 100,000 inany of the bidding options in the Issue.

Retail Individual Bidder(s) Individual Bidders (including HUFs and NRIs) and ASBA Bidders who have Bid for Equity Shares foran amount less than or equal to Rs. 100,000 in any of the bidding options in the Issue.

Retail Portion The portion of the Issue being not less than 35% of this Issue, consisting of 7,717,500 Equity Sharesavailable for allocation to Retail Bidder(s) on a proportionate basis.

Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the Bid Amount in any of theirBid cum Application Forms or any previous Revision Form(s).

Red Herring Prospectus/RHP The Red Herring Prospectus issued in terms of Section 60B of the Companies Act and the SEBI ICDRRegulations and which does not contain, inter alia, complete particulars of the price at which the EquityShares are offered and the size (in terms of value) of this Issue and which will become a Prospectusupon filing with the RoC after the Pricing Date.

SEBI Act SEBI Act, 1992, as amended from time to time.SEBI ICDR Regulations SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended from time to time. Self Certified Syndicate Bank/ SCSBs

A banker to the Issue registered with SEBI, which offers services in relation to ASBA, includingblocking of bank account and a list of which is available on http://www.sebi.gov.in.

Stock Exchanges The BSE and the NSE. Sub-Account Sub-accounts registered with SEBI under the Securities and Exchange Board of India (Foreign

Institutional Investor) Regulations, 1995, as amended from time to time. Syndicate The BRLMs, Co-BRLM and the Syndicate Member. Syndicate Agreement Agreement among the Syndicate, our Company and the Selling Shareholders in relation to the collection

of Bids (excluding Bids from the ASBA Bidders) in this Issue. Syndicate Member Intermediaries registered with the SEBI and permitted to carry out activities as an underwriter, in this

case being [●]. TRS/ Transaction Registration Slip The slip or document issued only on demand by the Syndicate or the SCSBs to the Bidder as proof of

registration of the Bid. Underwriters [●] Underwriting Agreement The Agreement between the Underwriters, our Company and the Selling Shareholders to be entered into

on or after the Pricing Date. Working Day All days other than a Sunday or a public holiday (except in reference to the Bid/Issue Date,

announcement of Price Band and Bidding Period where a working day means all days other than a

vii

Term Description Saturday, Sunday or a public holiday), on which commercial banks are open for the business.

Conventional and General Terms and Abbreviations Term Description A/c Account Act or Companies Act The Companies Act, 1956, as amended from time to time. AGM Annual General Meeting AS Accounting Standards issued by the ICAI. AY Assessment Year BPLR Benchmark Prime Lending Rate BSE Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Limited Civil Code The Code of Civil Procedure, 1908 Depositories A depository registered with SEBI under the Securities and Exchange Board of India (Depositories and

Participants) Regulations, 1996, as amended, being NSDL and CDSL. DIN Director’s Identification Number DIPP Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of

India. EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation. ECS Electronic Clearing Service EGM Extraordinary General Meeting EPS Earnings Per Share i.e., profit after tax for a fiscal year divided by the weighted average outstanding

number of equity shares at the end of that fiscal year.ESI Employee’s State Insurance ESIC Employee’s State Insurance Corporation FCNR Account Foreign Currency Non Resident Account FDI Foreign Direct Investment. FEMA

Foreign Exchange Management Act, 1999 read with rules and regulations thereunder and amendmentsthereto.

FEMA Regulations FEMA (Transfer or Issue of Security to a Person Resident Outside India) Regulations, 2000 amendedfrom time to time.

FII(s) Foreign Institutional Investors as defined under SEBI (Foreign Institutional Investor) Regulations, 1995registered with SEBI under applicable laws in India.

FII Regulations Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended.

Financial Year/ Fiscal/ FY Period of 12 months commencing from April 1 to March 31 of the subsequent year, unless otherwisestated.

FIPB Foreign Investment Promotion Board FVCI Foreign Venture Capital Investor registered under the Securities and Exchange Board of India (Foreign

Venture Capital Investor) Regulations, 2000 as amended from time to time. FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000, as

amended from time to time. GDP Gross Domestic Product GIR General Index Register GoI/Government Government of India HNI High Net worth Individual HUF Hindu Undivided Family ICAI The Institute of Chartered Accountants of IndiaIFRS International Financial Reporting Standards Indian GAAP Generally Accepted Accounting Principles in India IPO Initial Public Offering. I.T. Act The Income Tax Act, 1961, as amended from time to time. Ltd. Limited Mn Million MoU Memorandum of Understanding NA Not Applicable NAV Net Asset Value being paid up equity share capital plus free reserves (excluding reserves created out of

revaluation) less deferred expenditure not written off (including miscellaneous expenses not written off) and debit balance of Profit and Loss account, divided by number of issued equity shares.

NECS National Electronic Clearing System NEFT National Electronic Fund Transfer No. Number NOC No Objection Certificate NR/Non Residents Persons resident outside India, as defined under FEMA, including Eligible NRIs and FIIs NRE Account Non Resident External Account NRI A person resident outside India, as defined under FEMA and the FEM (Transfer or Issue of Security by

viii

Term Description a Person Resident Outside India) Regulations, 2000, as amended from time to time.

NRO Account Non Resident Ordinary AccountNSDL National Securities Depository Limited NSE The National Stock Exchange of India Limited OCB/Overseas Corporate Body A company, partnership, society or other corporate body owned directly or indirectly to the extent of at

least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest isirrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Foreign Security by a Person resident outside India) Regulations, 2000, as amendedfrom time to time.

p.a. Per annum PAN Permanent Account Number allotted under the Income Tax Act, 1961, as amended from time to time P/E Ratio Price/Earnings RatioPIO Persons of Indian Origin PLR Prime Lending Rate Pvt. Private RBI The Reserve Bank of India RoC The Registrar of Companies, Maharashtra, having its office at Everest, 100 Marine Drive, Mumbai 400

002, Maharashtra, India. RoNW Return on Net Worth Rs./INR Indian Rupees, the legal currency of the Republic of India. RTGS Real Time Gross Settlement SCRA Securities Contracts (Regulation) Act, 1956 SCRR Securities Contracts (Regulation) Rules, 1957 SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992 Sec./S. Section SIA Secretariat for Industrial Assistance SICA Sick Industrial Companies (Special Provisions) Act, 1985, as amended from time to time. SGD Singapore Dollars, the legal currency of Singapore. Securities Act The U.S. Securities Act of 1933, as amended from time to time. Stamp Act The Indian Stamp Act, 1899 as amended from time to time. State Government The government of a state of India. Takeover Code SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended from time to

time. Trademark Act Trademark Act, 1999, as amended from time to time. UIN Unique Identification NumberU.S./ US / USA / United States The United States of America, including its territories and possessions, any state of the United States and

the District of Columbia. USD/ US$ United States Dollars, the legal currency of the USA. US GAAP Generally Accepted Accounting Principles in the United States of America. VCFs Venture Capital Funds as registered with SEBI and under the SEBI (Venture Capital Funds)

Regulations, 1996 as amended from time to time. w.e.f. With effect from

Technical and Industry-Related Terms and Abbreviations Term Description CAS Conditional Access SystemDTH Direct To Home DNS Domain Name Server DVD Digital Versatile Disc GEC General Entertainment Channel IPTV Internet Protocol Television LCO Local Cable Operator MIB Ministry of Information and Broadcasting MSO Multi Systems Operator ODI One Day International Matches RODP Run of Day Part TAM Television Audience Measurement TRAI Telecom Regulatory Authority of India

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Certain Conventions, Use of Financial Information, Industry, Market Data and Currency of Presentation Financial Data Unless indicated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our financial statements as of the end of Fiscal 2010, 2009, 2008, 2007 and 2006, in each case, prepared in accordance with the Generally Accepted Accounting Principles in India (“Indian GAAP”) and the Companies Act, and restated in accordance with the SEBI ICDR Regulations which differ in certain respects from International Financial Reporting Standards (“IFRS”) and U.S. GAAP. Our consolidated financial statements and reported earnings could be different in a material manner from those which would be reported under IFRS or U.S. GAAP. There are significant differences between Indian GAAP, IFRS and U.S. GAAP. This Draft Red Herring Prospectus does not contain a reconciliation of our consolidated financial statements to IFRS or U.S. GAAP nor does it include any information in relation to the differences between Indian GAAP, IFRS and U.S. GAAP. Since our Company currently holds 49% of the equity shareholding in Zenith and hold indirectly 48.94% in Neo Sports Broadcast, the restated consolidated financial statements of our Company included in this Draft Red Herring Prospectus are consolidated only to the extent of our shareholding in accordance with Accounting Standard 27 – 'Financial Reporting of Interests in Joint Ventures' issued by the ICAI. Had the financial statements and other financial information been prepared in accordance with IFRS or U.S. GAAP, the results of operations and financial position may have been materially different. See the section titled “Risk Factors” on page xii of this Draft Red Herring Prospectus. Accordingly, the degree to which the financial information prepared in accordance with Indian GAAP and restated in accordance with the SEBI ICDR Regulations, included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian standards and accounting practices, Indian GAAP, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI ICDR Regulations on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. In making an investment decision, investors must rely upon their own examination of our Company, the terms of the Issue and the financial information relating to our Company. Potential investors should consult their own professional advisors for an understanding of these differences between Indian GAAP and IFRS or U.S. GAAP, and how such differences might affect the financial information contained herein. Our fiscal year commences on April 1 and ends on March 31, so all references to a particular fiscal year are to the 12 months period ended March 31 of that year. In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. Industry and Market Data Unless stated otherwise, industry and market data used throughout this Draft Red Herring Prospectus has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Draft Red Herring Prospectus is reliable, it has not been independently verified. Similarly, internal Company reports, while believed by us to be reliable, have not been verified by any independent sources. The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data. Currency of Presentation All references to “Indian Rupees” or “Rs.” are to Indian Rupees, the official currency of the Republic of India. All references to US$” or “USD” are to United States Dollars, the official currency of the United States of America. All references to “SGD” are to the Singapore Dollars, the official currency of the Republic of Singapore. All references to “GBP” are to Great Britain Pounds, the official currency of the United Kingdom. This Draft Red Herring Prospectus contains translations of certain U.S. Dollar, SGD, GBP and other currency amounts into Indian Rupees that have been presented solely to comply with the requirements of SEBI ICDR Regulations. Unless stated otherwise, our Company has in this Draft Red Herring Prospectus, used the conversion rate of 1 USD = Rs.45.14, 1 GBP = Rs.68.03 (as on March 31, 2010) (Source: www.rbi.gov.in). In case of Singapore Dollar or SGD the reference rate specified as of March 31, 2010 has been taken as 1 SGD = Rs.32.178 (Source: http://www.mas.gov.sg). These convenience translations should not be construed as a representation that those U.S. Dollar, SGD or other currency amounts could have been, or can be converted into Indian Rupees, at any particular rate, the rates stated above or at all. In this Draft Red Herring Prospectus, our Company has presented certain numerical information in ‘million’ units. One million represents 1,000,000.

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Notice to Investors

The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended ("U.S. Securities Act") or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares have not been recommended by any U.S. federal or state securities commission or regulatory authority. Any representation to the contrary is a criminal offence in the United States. This Draft Red Herring Prospectus has been prepared on the basis that all offers of Equity Shares will be made pursuant to an exemption under the Prospectus Directive, as implemented in Member States of the European Economic Area ("EEA"), from the requirement to produce a prospectus for offers of Equity Shares. The expression "Prospectus Directive" means Directive 2003/71/EC of the European Parliament and Council and includes any relevant implementing measure in each relevant Member State. Accordingly, any person making or intending to make an offer within the EEA of Equity Shares which is the subject of the placement contemplated in this Draft Red Herring Prospectus should only do so in circumstances in which no obligation arises for our Company or any of the BRLMs and Co-BRLM to produce a prospectus for such offer. None of our Company and the BRLMs and Co-BRLM has authorized, nor do they authorize, the making of any offer of Equity Shares through any financial intermediary, other than the offers made by the BRLMs and Co-BRLM which constitute the final placement of Equity Shares contemplated in this Draft Red Herring Prospectus.

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Forward Looking Statements

This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking statements generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “contemplate”, “intend”, “objective”, “plan”, “project”, “seek to”, “should”, “shall”, “will”, “will”, continue”, “will likely result”“will pursue” or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant statement. Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, the following regulatory changes pertaining to the industries in India in which we have our businesses and our ability to respond to them, our ability to successfully implement our strategy, our ability to manage our growth and expansion, technological changes, our exposure to market risks, general economic and political conditions in India and which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in competition in our industry. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following: 1. Our ability to continue our relationship with the BCCI; 2. Our ability to successfully implement our strategy in the broadcasting business through the integration of the operations of

Neo Sports Broadcast, through the acquisition of the remaining equity shares in Zenith; 3. Our ability to successfully acquire and exploit media and other commercial rights for popular sports events; 4. Our ability to obtain licenses for the operations of the two new proposed channels, Neo Cinema and Neo Zindagi; 5. Advertisement income generated by broadcasters including Neo Sports broadcast and our other distributors to which we

sub-license media rights could decline due to a variety of factors which could adversely affect our business and results of operations;

6. General, political, economic, social and business conditions in India and other countries; 7. Changes in the value of the Rupee and other currency changes; 8. Changes in the Governmental policies, laws or regulations that apply to our industry/sector in India; 9. Our ability to successfully implement our strategy, growth and expansion plans; 10. Our dependence on key personnel; 11. Performance of the financial markets in India and globally; 12. The ability of our Company to finance its business and growth; 13. Occurrence of natural calamities or natural disasters affecting the areas in which our Company has operations; 14. The continuing success of our Company’s business model; and 15. Other factors discussed in this Draft Red Herring Prospectus, including under the section titled "Risk Factors" on page xii

of this Draft Red Herring Prospectus.

Only statements which are specifically “confirmed” or “undertaken” by the Selling Shareholders in this Draft Red Herring Prospectus shall be deemed to be statements made by the Selling Shareholders. All other statements in this DRHP shall be statements made by our Company even if the same relates to the Selling Shareholders. For further discussion of factors that could cause our actual results to differ, see the sections titled “Risk Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages xii, 78 and 143, respectively, of this Draft Red Herring Prospectus. Neither our Company, its Directors/officers, the Selling Shareholders, the Selling Shareholders’ directors/officers, any Underwriter nor any of their respective affiliates or associates has any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying event, even if the underlying assumptions do not come to finalisation. In accordance with SEBI requirements, our Company, the Selling Shareholders (in respect to Offer for Sale), the BRLMs and Co-BRLM will ensure that investors in India are informed of material developments until such time as the commencement of listing and trading on the Stock Exchanges of the Equity Shares allotted pursuant to this Issue.

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SECTION II - RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our Equity Shares. If any of the following risks, or other risks that are not currently known or are now deemed immaterial, actually occur, our business, results of operations and financial condition could suffer, the price of our Equity Shares could decline, and all or part of your investment may be lost. In addition, you should be aware that we are incorporated in India and operate in a legal and regulatory environment which may differ from that which prevails in other countries. Unless otherwise stated, we are not in a position to specify or quantify the financial or other risks mentioned herein. This Draft Red Herring Prospectus also contains forward-looking statements that involve risks and uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including events described below and elsewhere in this Draft Red Herring Prospectus. In making an investment decision, prospective investors must rely on their own examination of the Company and the terms of the Issue, including merits and risks involved. Unless otherwise stated, the financial information used in this section is derived from and should be read in conjunction with restated financial statements of our Company for the years ended March 31, 2010, 2009, 2008, 2007 and 2006, the restated consolidated financial statements of our Company as of and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006, and the restated financial statements of Neo Sports Broadcast as of and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 included elsewhere in this Draft Red Herring Prospectus. In this section, a reference to “Nimbus” or “our Company” means Nimbus Communications Limited. Unless the context otherwise requires or implies, references to “we”, “us”, or “our” refers to Nimbus Communications Limited, its subsidiaries and its joint venture, on a consolidated basis. The numbering of the risk factors has been done to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over the other. INTERNAL RISK FACTORS RISKS RELATED TO OUR BUSINESS AND OUR COMPANY

1. Our Company has failed to provide margin money for a bank guarantee. As a result our Company is in default under

the sanction letter for the bank guarantee, which could result in, inter alia, penalty and the enforcement of the security provided under the bank guarantee.

Under the terms of the New BCCI Agreement, our Company has provided a bank guarantee of Rs. 20,000 million to BCCI on January 18, 2010 from PNB, Indian Bank and Union Bank of India. As per the terms of the sanction letters from PNB and Union Bank of India dated January 14, 2010, our Company was required to provide margin capital aggregating to Rs. 600 million (Rs. 300 million each) by April 30, 2010 which had not been provided as of the date of filing the Draft Red Herring Prospectus, which constitutes a default under the sanction letters from PNB and Union Bank of India. However, Union Bank of India has through a letter dated September 29, 2010 provided our Company an extension until December 31, 2010 to provide the magin money (Rs. 300 million).

The default has not, as of the date of this Draft Red Herring Prospectus, been waived by PNB. The various remedies available to PNB, as a consequence of this default, include, among others, enforcement of security interest under the Facility Agreement dated April 27, 2010, which includes a charge on receivables of our Company, Neo Sports Broadcast and Nimbus Sports International Pte. Ltd ("NSI"), a charge on all the fixed assets of our Company, the personal guarantee of Mr. Harish Thawani (one of our Promoters) and corporate guarantees given by our Company, Neo Sports Broadcast, NSI, Paramount, Zenith, Nimbus Communications Worldwide Limited (Mauritius) and Nimbus Communications Limited, BVI. For more information on the security provided in respect of bank guarantees provided by PNB and Union Bank of India, see section titled “Financial Indebtedness” on page 173 of this Draft Red Herring Prospectus.

During any period in which we are in default under any debt obligation, we may be unable to raise, or face difficulties in raising, further financing. In addition, other third parties may have concerns over our financial position and it may be difficult to bid for new sports and broadcasting rights. Further, this default may trigger cross default provisions under other financing agreements, and may materially and adversely affect our business, financial condition, results of operations and prospects. For information on our outstanding indebtedness, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 143 of this Draft Red Herring Prospectus. Further, there is no assurance that our Company will be in a position to provide the margin money to Union Bank of India by December 31, 2010. We have had negative cash flows in recent years and if the obligations under any of our other financing documents are accelerated, we may be unable to pay our debts as they fall due. Also we may have to dedicate a substantial portion of our future cash flow from operations to make payments under the financing documents, thereby

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reducing the availability of our cash flow to meet working capital requirements and use for other general corporate purposes. For more information on our outstanding indebtedness, see risk factor titled "Our significant indebtedness and the conditions and restrictions imposed by our financing arrangements could restrict our ability to conduct our business and operations and thereby adversely affect our business and results of operations.” on page xx of this Draft Red Herring Prospectus.

2. Our Company had defaulted in the repayment of a loan taken from Punjab National Bank ("PNB") on September 24, 2009 for Rs. 2,250 milion (“PNB Loan”). PNB vide letter dated September 24, 2010 has rolled over the outstanding amount (approximately Rs. 1,400 million) under the PNB Loan by three months ending December 23, 2010 on the same terms and conditions as applicable to the PNB Loan. If our Company is not able to repay the outstanding amounts by December 23, 2010, our Company shall be in default under the PNB Loan agreement, which could result in the acceleration of the payment obligations, levy of penal interest and/ or the enforcement of the security provided under the PNB Loan agreement.

Our Company defaulted in the repayment of a short term loan of Rs. 2,250 million provided by PNB, which was due for repayment in full on June 30, 2010. The total amount outstanding towards the PNB Loan is approximately Rs.1,400 million as on September 24, 2010. PNB through its letter dated September 24, 2010 has rolled over the outstanding amounts for a period of three months ending December 23, 2010. The interest payable on the outstanding amount shall be charged at base rate plus 6.75% while the interest payable under the PNB Loan was BPLR plus 1%. All the other terms of the PNB Loan (including security) apply mutatis mutandis to the roll over facility granted by PNB on September 24, 2010. If our Company is unable to repay the outstanding amount under the roll over facility by December 23, 2010, PNB may enforce the security provided under the terms of PNB Loan. See the Risk Factor titled "Equity Shares held by Harish Kanayalal Thawani, Shobha Harish Thawani and Paramount, our Promoters, will be pledged with certain lenders subsequent to the Issue." For more information on the security provided in respect of PNB Loan agreement and the roll over facility, see section titled “Financial Indebtedness” on page 173 of this Draft Red Herring Prospectus. We have had negative cash flows in recent years and we may not be able to repay the amounts outstanding under the roll over facility granted by PNB. Also we may have to dedicate a substantial portion of our future cash flows from operations to make payments under the roll over facility, thereby reducing the availability of our cash flow to meet working capital requirements and use for other general corporate purposes. For more information on our outstanding indebtedness, see risk factor titled "Our significant indebtedness and the conditions and restrictions imposed by our financing arrangements could restrict our ability to conduct our business and operations and thereby adversely affect our business and results of operations.” on page xx of this Draft Red Herring Prospectus.

3. We have incurred losses in the past and there can be no assurance that we will not incur further losses in the future.

In Fiscal 2006, 2007, 2008, 2009 and 2010, we incurred loss of Rs.352.97 million, Rs.797.11 million, Rs.1081.96 million, Rs.1,317.09 million and Rs.1,423.93 million, respectively. As we continue to expand our broadcasting business and implement our growth strategy, we expect to incur further losses in the future. Our failure to generate profits may adversely affect the market price of our Equity Shares, restrict our ability to pay dividends and impair our ability to raise capital and expand our business.

4. There are legal and regulatory proceedings that have been initiated against our Company, our Subsidiaries and joint

ventures, and our Promoters. Any adverse decision in these proceedings may have a material adverse effect on our reputation, business, financial condition and results of operations.

There are legal and regulatory proceedings that have been initiated against our Company, our Subsidiaries and joint ventures, and our Promoters. The following table sets forth certain information relating to such proceedings.

Sr. No.

Name of entity/person Nature of litigation

No. of outstanding litigations

Amount claimed (in Rs. million, unless otherwise

stated) 1. Our Company

Nimbus Communications Limited

Civil 1 4.38 Tax 5 Amount cannot be quantified

Criminal 1 0.10 2. Promoters/Directors Paramount Civil 1 Amount cannot be quantified 3. Subsidiaries

Nimbus Media Pte. Ltd Civil 1 USD 1.79 million (approx.

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Sr. No.

Name of entity/person Nature of litigation

No. of outstanding litigations

Amount claimed (in Rs. million, unless otherwise

stated) Rs.84.13 million)*

4. Nimbus Sports International Pte.

Ltd. Tax 1 56.96 1 Amount cannot be quantified

Nirvana Television Limited Tax 1 0.53 5. Joint venture company Neo Sports Broadcast Civil 6 Amount cannot be quantified

*For the purpose of computation 1 USD = Rs. 47.

For further information on these proceedings, see "Outstanding Litigation and Material Developments" on page 178 of this Draft Red Herring Prospectus. These proceedings are pending at different levels of adjudication before various courts, tribunals and appellate tribunals. Although we intend to defend or appeal these proceedings, we will be required to devote management and financial resources in their defence or prosecution. Any adverse judgment in any of these legal proceedings could have an adverse impact on our reputation, business, financial condition and results of operations.

5. The cancellation or disruption of our cricketing events due to adverse weather conditions exposes our Company and Neo Sports Broadcast to potential losses. To the extent that we suffer loss or damage for events for which we are not insured or for which our insurance is inadequate, the loss would have to be borne by us, and, as a result, our business, results of operations and financial condition could be adversely affected. As per the New BCCI Agreement, full or partial cancellation of a scheduled match due to adverse weather conditions does not result in a reduction of license fee payable by us to BCCI, i.e. we are required to pay the cost of such affected matches in its entirety to BCCI. We cover the risk of such cancellation of any scheduled match by transferring such risk to the broadcaster to which we license these rights. In accordance with the terms of our agreements with the broadcasters, they are required to pay us our license fees in its entirety irrespective of a match being partially or completely cancelled. The broadcasting rights for BCCI events are given to various broadcasters including Neo Sports Broadcast and NSI. To cover the risk of loss of revenue arising from cancellation of any scheduled matches, Neo Sports Broadcast and NSI procure insurance policies whose coverage includes cover for any loss of revenues on account of abandonment or curtailment of events due to any reason in the case of one-day international matches and T-20 matches involving the Indian national team. The quantum of cover and the events to be covered is decided on a case-to-case basis depending on the time of year, likely perception of risk, quantum of revenues at stake, and other factors. While we believe that the policies that Neo Sports Broadcast maintains are reasonably adequate to cover all normal risks associated with the business, there can be no assurance that any claim under the insurance policies maintained by Neo Sports Broadcast will be honoured fully, in part or on time, or that the insurance obtained would be sufficient (either in amount or in terms of risks covered) to cover all material losses. If any cricketing events are cancelled due to adverse weather conditions and if the quantum of insurance cover for such cricketing events is inadequate or if any claims are not fully honoured, it could have a material adverse impact on the cash flow, financial condition and business operations of Neo Sports Broadcast and our Company. Also, see risk factor titled "We have had negative cash flows in the past years and may continue to do so in the future. There can be no assurance that we will have positive cash flows in the future.” on page xv of this Draft Red Herring Prospectus.

6. The auditors of our Company have without qualifying their opinion drawn attention to the following matters in the restated consolidated financial statements of our Company and the financial statements of certain of our Subsidiaries

The auditors of our Company also have, without qualifying their respective opinions, drawn attention to the following matters in the auditors’ reports for the respective period / years:

For the years ended March 31, 2007, 2008, 2009 and 2010:

As explained in Note III.B of Annexure IV to our restated consolidated financial statements, our management is of the opinion that there is no diminution, other than temporary, in the value of investment (net of the Nimbus group’s share) of Rs.2,279.70 million in Neo Sports Broadcast. Our management is also of the opinion that the outstanding loan (net of the Nimbus Group’s share) of Rs.51.69 million as of March 31, 2010, Rs.48.94 million as of March 31, 2009, Rs.46.52 million as of March 31, 2008 and Rs.43.29 million as of March 31, 2007 given to Zenith is good and fully recoverable and

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outstanding dues net off subsequent realisation and net off group’s share as of March 31, 2010 of Rs. Rs. 3,025.43 million will be realized in due course from Neo Sports Broadcast. For further information, see Note III.B of Annexure IV to our restated consolidated financial statements.

For the years ended March 31, 2010 and 2009:

As stated in Note III.G.2 of Annexure IV to our restated consolidated financial statements, the remuneration paid to Directors for the year ended March 31, 2009 had exceeded the limit prescribed under the Companies Act, 1956 by Rs.2.76 million respectively, which is subject to the approval of the Central Government. Failure to obtain such approval may result in imposition of penalties. For further information, see Note III.G.2 of Annexure IV to our restated consolidated financial statements.

The auditors of Nimbus Sports International Pte. Ltd ("NSI") have, without qualifying their opinion, drawn attention to certain matters in the auditors report on the restated financial statements of NSI, including uncertainty of determination of income tax payment obligations as well as outstanding tax queries from Singapore tax authorities relating to rights fees expense in the income statement and NSI’s compliance with the withholding tax provisions of Singapore income tax laws. For further information, see Note III.A(1) and Note III.A(2) of Annexure IV to our restated consolidated financial statements.

7. We have had negative cash flows in the past years and may continue to do so in the future. There can be no assurance that we will have positive cash flows in the future.

(Rs. In millions)

Particulars Year Ended March 31,

2007 2008 2009 2010

Net Cash from / (used in) Operating Activities (496.39) (1,677.13) (1,299.31) (1,110.03)Net Cash from / (used in) Investing Activities (2,457.39) (690.18) 57.78 (452.30)Net Cash from / (used in) Financing Activities 6,376.93 (596.38) 2,323.10 3,416.53Net Increase / (Decrease) in Cash and Cash Equivalents 3,423.15 (2,963.69) 1,081.57 1,854.20

There can be no assurance that our net cash flow used in operating and investing activities will be positive in the future. Any negative cash flows used in operating and investing activities in future would adversely affect our results of operations and financial condition. See “Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 143 of this Draft Red Herring Prospectus.

8. The equity interest of our Promoters and Promoter Group after the Issue may not enable them to control the business operations and the outcome of matters submitted to shareholders for approval.

Following the completion of the Issue, our Promoters will own less than 26% of our issued and paid-up equity share capital and as a result may not be able to control the business operations and the outcome of matters at shareholder meetings (where significant decisions, including amendment to memorandum and articles of association, alteration of share capital, etc. are taken) which could have an adverse effect on the future operations of our business. For further information, see “Capital Structure”, “History and Certain Corporate Matters”, “Promoters and Group Companies” on pages 23, 100 and 128 respectively of this Draft Red Herring Prospectus.

9. Certain of our Subsidiaries, joint ventures, Group Companies and our Promoters have incurred losses in the last three

years and have a negative net worth.

Certain of our Subsidiaries, joint ventures, Group Companies and our Promoter have, in recent years, incurred losses or have a negative net worth, as set forth in the table below:

(In Rs. million) Entity

Loss Net worth

Fiscal 2008 Fiscal 2009 Fiscal 2010 Fiscal 2008 Fiscal 2009 Fiscal 2010 Subsidiaries Nirvana Television Limited (8.76) (4.28) (15.96) N.A N.A N.A

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Entity

Loss Net worth

Fiscal 2008 Fiscal 2009 Fiscal 2010 Fiscal 2008 Fiscal 2009 Fiscal 2010 Nimbus Motion Pictures (A.P.) Private Limited

(0.05) (0.17) (0.10) (3.46) (3.63) (3.73)

Nimbus Home Entertainment Private Limited

(19.67) (32.34) (14.31) (31.41) (63.75) (78.06)

Nimbus Communication Worldwide Limited

(0.65) (0.01) (97.49) N.A N.A N.A

Nimbus Media Pte. Ltd.

N.A N.A (8.40) N.A N.A N.A

Nimbus Communication Limited (BVI)

(5.04) (0.24) (0.33) N.A N.A N.A

Joint Venture Zenith Sports Private Limited

(5.61) (6.03) (6.54) (9.66) (15.69) (22.23)

Neo Broadcast Limited (formerly known as Nirvana Adzone Limited)

(0.27) (0.06) (0.16) NA NA NA

Neo Sports Broadcast Private Ltd

(2,474.62) (2,876.69) (3,426.91) (1,654.52) (4,731.96) (7,720.71)

Promoter and

Promoter Group entities

Fiscal 2008 Fiscal 2009 Fiscal 2010 Fiscal 2008 Fiscal 2009 Fiscal 2010

Aquarius Transnational

(0.38) (0.36) (0.37) NA NA NA

Carnival Entertainment Private Limited

(0.27) (0.83) (0.97) (0.17) (1.00) (1.97)

Paramount Corporation Ltd

(13.51) NA NA NA NA NA

Exchange rate applied for USD into Rs.

As at March 31, 2008 As at March 31, 2009 As at March 31, 2010

Average rate 40.24 45.99 47.44 Closing rate 39.97 50.95 45.14

(Source: www.rbi.gov.in)

10. We are substantially dependent on our media licensing arrangement with BCCI which contributes a significant portion of our revenues. The termination of any of our agreements – whether relating to media licensing or broadcast or otherwise, including our licensing arrangements with BCCI, will result in a material adverse effect on our business, financial condition and results of operations.

Our current sports rights management portfolio consists of certain agreements with a limited number of sports federations. We are substantially dependent on our media licensing arrangement with BCCI which generates a significant portion of our revenues. We are therefore significantly dependent on our continuing relationships with BCCI in the future. For further information on the BCCI arrangements and our other key media licensing arrangements please see – “Business" on page 78 of this Draft Red Herring Prospectus. Our business and results of operations may be adversely affected if one or more of our contracts entered into for the purpose of, inter alia, management of rights or broadcast of our channels, are terminated. These agreements may be terminated by the relevant parties, including sports federations, as the case may be, under certain circumstances, including, among others, the breach of a material term of such agreement. Certain of these agreements may also be terminated on the occurrence of a material change in circumstances pursuant to a change in applicable laws or regulations or non-compliance of the conditions precedent and conditions subsequent under such agreements, specifically those relating to guarantee arrangements. An inability to comply with the terms of, or otherwise maintain, any of our significant rights management contracts, or an inability to renew such contracts or enter into new contracts with these and other

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sports federations or other owners of media rights relating to future sports events will adversely affect our business and results of operations.

11. Our ability to successfully implement our growth strategy in the broadcasting business depends on our ability to

integrate the operations of Neo Sports Broadcast, a joint venture company which owns and operates two channels, through the acquisition of the remaining equity shares in Zenith. The proposed acquisition of the remaining equity shares in Zenith is not complete and investors should not place undue reliance on the success of such proposed acquisition. Our Company currently holds 49% of the total shareholding of Zenith which, in turn, holds 99.88% of the total equity share capital of Neo Sports Broadcast. Neo Sports Broadcast owns and operates two channels, Neo Sports and Neo Cricket. The remaining 51% shareholding in Zenith is held by Paramount Corporation Limited (“Paramount”), one of our Promoters. On March 27, 2006 (the “Execution Date”) Neo Sports Broadcast, Paramount, Nimbus and Zenith entered into an agreement (the “Zenith Agreement”), which stipulates the manner in which the broadcasting business was to be carried out by Neo Sports Broadcast. Under the Zenith Agreement, at any time following the expiry of one year from the Execution Date, Nimbus and Paramount are entitled to exercise a call option and a put option, respectively, to purchase any or all of the remaining shares held in Zenith by the other party, at a price to be mutually agreed, provided that such price will provide a minimum return of 11.0% per annum on the capital invested in Zenith. In the event that such price cannot be mutually agreed, such price will be determined by an independent international reputed firm of accountants jointly appointed by Paramount and Nimbus, and such valuation shall be binding on the parties. For further information relating to Zenith Agreement, please see “History and Certain Corporate Matters” on page 100 of this Draft Red Herring Prospectus. Pursuant to the resolution of the Board dated February 5, 2010, our Company intends to exercise such call option under the Zenith Agreement. The price of acquisition of the remaining shares in Zenith has been agreed with Paramount at Rs.14.24 per equity share of Zenith, aggregating Rs. 363,050. Our Company had filed an application with FIPB dated March 9, 2010 and received an approval from FIPB vide letter dated May 19, 2010 for the proposed acquisition of the remaining equity shares in Zenith. In the event our Company is able to successfully complete such proposed acquisition, our Company through Zenith will hold 89.62% of the fully diluted equity shareholding of Neo Sports Broadcast, taking into account conversion of certain compulsorily convertible preference shares issued to Funderburk Enterprises Limited, another shareholder in Neo Sports Broadcast. There can be no assurance that we will complete the proposed acquisition as planned, on schedule, or at all. In the event that we are unable to complete the proposed acquisition, we may not be able to integrate the operations of Neo Sports Broadcast with those of our Company to effectively implement our growth strategy in the broadcasting business, which may adversely impact our business, financial condition and results of operations. Investors should not place undue reliance on the success of the proposed acquisition.

12. We intend to use a part of the Net Proceeds to implement our growth strategy in the broadcasting business, including the expansion of the geographic reach of Neo Cricket, the launch of the proposed Neo Cinema and Neo Zindagi channels, the acquisition of new broadcasting rights and upgradation of Neo infrastructure. Neo Sports Broadcast is currently loss making and there can be no assurance whether our further investment in Neo Sports Broadcast or its subsidiaries through the application of a part of the Net Proceeds will be profitable. We intend to use a part of the Net Proceeds to implement our growth strategy in the broadcasting business, including the expansion of the geographic reach of Neo Cricket, the launch of the proposed Neo Cinema and Neo Zindagi channels, the acquisition of new broadcasting rights and upgradation of Neo infrastructure. In this connection, our Company intends to deploy Rs.2274.06 million, from the total Net Proceeds, in the form of equity / preference or debt, for the growth of the broadcasting business of Neo Sports Broadcast or its subsidiaries. For further information, see “Objects of the Issue” on page 41 of this Draft Red Herring Prospectus. Neo Sports Broadcast is currently loss making and there can be no assurance whether our further investment in Neo Sports Broadcast or its subsidiaries through the application of a part of the Net Proceeds will be profitable.

13. We have not entered into any agreement or arrangement in connection with the launch of the proposed new channels,

Neo Cinema and Neo Zindagi and towards the geographic expansion of Neo Cricket. Any delay or failure to conclude such definitive agreements on commercially favourable terms could adversely affect our results of operations and financial condition.

As discussed in “Objects of the Issue” on page 41of this Draft Red Herring Prospectus, we intend to utilise Rs.1,291.74 million, and Rs.132.45 million of the Net Proceeds of the Issue in connection with the launch of the proposed new channels, Neo Cinema and Neo Zindagi and towards the geographic expansion of Neo Cricket, respectively. We have not entered into any definitive agreements for the use of such Net Proceeds. For further information, see “Objects of the Issue” on page 41 of this Draft Red Herring Prospectus. There can be no assurance that we will be able to conclude such definitive agreements on commercially favourable terms and any delay or failure to conclude such definitive agreements

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could adversely affect our results of operations and financial condition.

14. Our consolidated financial statements following the acquisition of the remaining equity shareholding in Zenith may not be comparable to our restated consolidated financial statements included in this Draft Red Herring Prospectus.

We have included in this Draft Red Herring Prospectus (i) the restated financial statements of our Company for Fiscal 2010, 2009, 2008, 2007 and 2006, (ii) the restated consolidated financial statements of our Company for Fiscal 2010, 2009, 2008, 2007 and 2006, and (iii) the restated financial statements of Neo Sports Broadcast for Fiscal 2010, 2009, 2008, 2007 and 2006. As of March 31, 2010, our Company had made an investment of Rs. 4,470 million in Neo Sports Broadcast through equity shares and non-cumulative redeemable preference shares. As of March 31, 2010, our Company also to recover reimbursement of bank gurantee commission from Neo Sports Broadcast for Rs.328.79 million to Neo Sports Broadcast. In addition, our Company has entered into various transactions with Neo Sports Broadcast, including the licensing of the rights under the BCCI arrangements to Neo Sports Broadcast, and revenues of our Company from such licensing arrangements with Neo Sports Broadcast contribute a significant majority of our Company’s total income. We expect such transactions with Neo Sports Broadcast to continue in the future. In Fiscal 2006, 2007, 2008, 2009 and 2010, Neo Sports Broadcast incurred losses of Rs.942.38 million, Rs.1,881.05 million, Rs.2,474.62 million, Rs.2,876.69 million and Rs.3,426.91 million, respectively.

Since our Company currently holds 49% of the equity shareholding in Zenith, the restated consolidated financial statements of our Company included in this Draft Red Herring Prospectus are consolidated only to the extent of our shareholding in accordance with Accounting Standard 27 – 'Financial Reporting of Interests in Joint Ventures' issued by the ICAI. For further information on such consolidation under Accounting Standard 27, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Following the completion of the proposed acquisition of the remaining shareholding in Zenith, full consolidation of the financial statements of Zenith and Neo Sports Broadcast will be required to be made in accordance with Accounting Standard 21- 'Consolidated Financial Statements' issued by the ICAI. Accordingly, our consolidated financial statements following such proposed acquisition may not be comparable to our restated consolidated financial statements included in this Draft Red Herring Prospectus. This Draft Red Herring Prospectus does not include any pro forma balance sheet or pro forma profit and loss statement prepared in accordance with the laws and regulations of any jurisdiction, which would have shown the effect of the proposed acquisition of the remaining equity shares in Zenith on our historical financial condition and results of operations. Investors will therefore need to base their assessment of the financial condition and results of operations of our Company subsequent to the proposed acquisition on the basis of the restated consolidated financial statements of our Company and the restated financial statements of Neo Sports Broadcast and other information with respect to Zenith and Neo Sports Broadcast included in this Draft Red Herring Prospectus.

15. Our sports rights management business is dependent on our ability to acquire and successfully exploit media and other

commercial rights relating to a limited number of cricket and other popular sports events and there can be no assurance that we will be able to acquire and exploit new rights for such sports events.

The acquisition of media and other commercial rights relating to cricket and other popular sports events typically involves a competitive bidding process based on several criteria, including, the competitiveness of the bid, past experience, distribution capabilities, financial strength, technical capabilities, reputation and ability to do financial closure in time, i.e. providing bank guarantee as required under the sports rights management contracts. Our sports rights management business is also dependent on developing and maintaining relationships with sports federations and boards, and other owners of media rights of such sports events. In some instances, our key competitors may possess rights of first refusal with respect to certain sports events, thus further limiting the number of sports events for which we may bid. Given the highly competitive environment we operate in, there can be no assurance that we will be able to successfully implement our strategy to expand our sports rights management business and acquire rights for sports events in the future. There can also be no assurance that we will be able to enter into distribution agreements with broadcasters and distributors on favourable terms in order to exploit the media rights in a commercially successful manner. An inability to successfully acquire new media rights or commercially exploit media rights by us may have a material adverse impact on our business, prospects and results of our operations.

16. Equity Shares held by Harish Kanayalal Thawani, Shobha Harish Thawani and Paramount, our Promoters will be

pledged with certain lenders subsequent to the Issue.

Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount holding 4,187,150, 1,057,952 and 12,000,000 Equity Shares respectively in our Company were pledged in favor of Punjab National Bank for securing the old bank guarantee of Rs. 6,260 million provided to BCCI for the BCCI Agreement. The pledge on the aforesaid Equity Shares of the Promoters was extended to Union Bank of India and Indian Bank from April 1, 2010 in addition Punjab

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National Bank for securing the new bank guarantee of Rs. 20,000 million granted to the BCCI for the New BCCI Agreement. In order to comply with the SEBI ICDR Regulations, the Equity Shares have been temporarily released from the pledge subject to certain conditions imposed by our lenders. Such Equity Shares will be pledged back in accordance with the terms of the corporate guarantee sanctioned for the purpose of financing one or more of the objects of the Issue in compliance with the SEBI ICDR Regulations. In the event of default by our Company and subject to any regulatory requirements, the lenders shall have the right to sell or otherwise dispose of the Equity Shares pledged by the Promoters, which could have the effect of reducing the price of our Equity Shares and adversely affect our business, financial condition and results of operations. For further details, see the section "Capital Structure" on page 23 of the Draft Red Herring Prospectus.

17. Changing customer preferences limit our ability to predict the popularity of sports events with audiences prior to bidding for the rights of such events. If our target audience lose interest in the sports events for which we own media rights, our business, financial conditions and results of operations would be materially and adversely affected.

Any decrease in the appeal or popularity of cricket or other sports events with audiences could materially and adversely impact our business and results of operations. Public acceptance of programming of sports events including for cricket is dependent upon, among other factors, the quality of the programming, the strength of networks on which the programming is broadcast, the promotion and scheduling of the programming and the quality and acceptance of competing television programming and sports events, such as league cricket like Indian Premier League and other sports events for which we do not possess media rights, as well as other sources of entertainment. If our target audiences lose interest in the sports events for which we own the media rights, especially cricket, our business and results of operations would be materially and adversely affected. Further, the commercial success of our joint venture Neo Sports Broadcast is significantly dependent on its ability to plan, acquire and broadcast television programming that caters to viewer preferences and attracts high audience shares. There can be no assurance that it will continue to be able to cater to viewer preferences, or that viewers will continue to watch programs on our channels. If some or all television programs shown on our channels are less attractive in the future, advertisers could reduce their advertising on our channels and the value of our programming content could decrease, having an adverse impact on our business and financial condition.

18. Our operations are dependent on sophisticated equipment and technology and technological failures could adversely

affect our business.

In our broadcasting, sports production and filmed entertainment business, we rely on sophisticated production and broadcast equipment, communications equipment and other information technology to conduct our business. Although we have backup equipment in some cases, if we experience significant damage to certain equipment or other technological breakdowns to equipment or systems, it could disrupt our ability to produce or broadcast our programming. Therefore, any equipment or technological failure or damage that results in a disruption of our services could lead to loss of revenues. In addition, we intend to further expand our new media business operations by creating, re-purposing, formatting, editing and delivering content to the telecom industry, and will in the future be required to implement various hardware and software systems to manage these operations. If we experience integration problems or other difficulties relating to the expansion of our new media operations, or if these systems do not perform as expected, or in the event we are unable to adapt to the rapid advances that are characteristic of the technologies that we use, our business and results of operations could be adversely affected.

19. We operate in a highly competitive environment and an inability to compete could have a material adverse impact on

our business and results of operations.

The businesses in which we engage in are highly competitive. We face competition from a broad range of companies in the media, sports and filmed entertainment industry. The acquisition of media and associated rights relating to cricket and other popular sports events typically involves a competitive bidding process based on several criteria, including, the competitiveness of the bid, past experience, distribution capabilities, financial strength, technical capabilities, reputation and ability to achieve financial closure in time, i.e. providing bank guarantee as required under the sports rights management contracts. Some of our competitors may have greater financial resources and may also benefit from greater economies of scale and operating efficiencies. Our competitors may, whether through consolidation or growth, present more credible integrated media rights management and distribution channels and solutions than we do, causing us to win fewer rights management contracts. In the broadcasting business, we compete with various sports channels, including ESPN and Ten Sports. Our competitors may distribute their media offerings across platforms that are more innovative than the platforms that we currently utilize, which may allow such competitors to attract more subscribers. We are in the process of developing two new television channels targeting a range of viewer preferences. We cannot assure you that we will be able to launch these channels or that, if launched, they will succeed. In particular, the success of any new channel that we launch will depend on our ability to develop attractive programming that generates adequate viewership and enables us to sell advertisement slots at

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profitable rates. The film industry is highly competitive and at times may create supply imbalances of films in the market which could result in the reduction of box office receipts and/or margins. We have limited production and advertising budgets, and may not succeed in adequately marketing films produced and/or distributed by us. Either of these factors could have a material adverse effect on our business, results of operations and financial condition. The home video market in India is currently fragmented and concentrates mainly on rentals of DVDs; the market is dominated by local stores who operate on a standalone basis. These smaller stores may enjoy a loyal following from local customers. We may not be able to develop a similar relationship with home video consumers and thus our business may be adversely affected. There can be no assurance that we can continue to effectively compete with our competitors in the future, and failure to compete effectively may have an adverse effect on our business, financial condition and results of operations.

20. We have not received relevant regulatory approvals for the proposed Neo Cinema and Neo Zindagi channels. In the

event we are unable to obtain such regulatory approvals or if there is any significant delay in obtaining such approvals, we will not be able to utilize Rs.1,291.74 million of the Net Proceeds allocated for this purpose in the manner contemplated in our Objects of the Issue. Any delay or inability in obtaining such approvals will also have an adverse impact on the timely implementation of our growth strategy in the broadcasting business.

Neo Sports Broadcast will require uplinking and downlinking licenses in India issued by the MIB for the purposes of launching the two new channels, Neo Cinema and Neo Zindagi. Neo Broadcast Limited has submitted applications dated August 11, 2010 to the MIB seeking permission for uplink and downlink in India for the channels, Neo Cinema and Neo Zindagi. The current status of these applications is uncertain and there can be no assurance that the MIB will grant us uplinking and downlinking license for either of our proposed channels or that such licenses will be granted to us in time for the proposed launch of these channels. Our inability to obtain such uplink and downlink licenses for either of these channels, or any delay in the issuance of such licenses by the MIB, or the imposition of any conditions by the MIB in connection with the grant of such licenses that we are unable to comply with, will result in us not being able to utilize Rs.1,291.74 million of the Net Proceeds allocated for such purpose as contemplated in the Objects of the Issue. Any such delay or inability in obtaining the uplink and downlink licenses from the MIB will have an adverse impact on the implementation of our growth strategy in the broadcasting business. Further, any re-deployment of the proceeds allocated for this purpose will need to be approved by our shareholders.

21. Our significant indebtedness and the conditions and restrictions imposed by our financing arrangements could restrict

our ability to conduct our business and operations and thereby adversely affect our business and results of operations.

As of March 31, 2010, our indebtedness aggregated to Rs.5,793.73 million, and comprised of secured loans of Rs.3,316.52 million and unsecured loans of Rs.2,477.21 million. We may incur additional indebtedness in the future, for the expansion of our business. For further information relating to our indebtedness, see “Financial Indebtedness” on page 173 of this Draft Red Herring Prospectus, respectively. Some of our borrowings are secured by our movable and other assets. A significant indebtedness in the future could have several important consequences, including but not limited to the following:

• We may be required to dedicate a portion of our cash flow towards repayment of our existing debt, which will reduce

the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate requirements;

• our ability to obtain additional financing in the future at reasonable terms may be restricted or our cost of borrowings may increase due to sudden adverse market conditions, including decreased availability of credit or fluctuations in interest rates;

• fluctuations in market interest rates may affect the cost of our borrowings, as some of our indebtedness is expected to be at variable interest rates; and

• there could be a material adverse effect on our business, financial condition and results of operations if we are unable to service our indebtedness or otherwise comply with financial and other covenants specified in the financing agreements.

Some of our financing agreements also include various conditions and covenants that inter alia require us to obtain lender consents prior to carrying out certain activities and entering into certain transactions. Failure to meet these conditions or

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obtain such consents in a timely manner, or at all, could have significant consequences on our business and operations. Specifically, under some of our financing agreements, we require, and may be unable to obtain, consents from the relevant lenders for, among others, declaration of dividends, proposed expansions or fresh acquisition of fixed assets, investment by way of share capital in any other concern, alter capital structure, formulation of any scheme of amalgamation with any other borrower, undertaking fresh guarantee obligations on behalf of any other person, any repayment of the loans/ deposits or any discharge of obligations. In addition to these, we are also required to obtain the prior permission of the banks in case we conclude any fresh borrowing arrangement, either secured or unsecured with any other bank or financial institution, borrower or otherwise or for creating a further charge over our fixed assets. Some of our financing agreements are also subject to certain conditions and covenants, including the absence of a material adverse change in our business, assets, financial condition, prospects and credit standing, specified financial ratios and maintaining our shareholding and management structure. Such covenants may restrict or delay certain actions or initiatives that we may propose to take from time to time. A failure to observe such covenants or conditions under our financing arrangements or to obtain necessary consents required thereunder may lead to the termination of our credit facilities, acceleration of all amounts due under such facilities and the enforcement of any security provided. Any acceleration of amounts due under such facilities may also trigger cross default provisions under our other financing agreements. Any of these circumstances could adversely affect our business, financial condition and results of operations, as well as adversely affect the price of our Equity Shares.

22. We have significant contingent liabilities and our financial condition may be adversely affected if these contingent liabilities materialise.

The following table sets forth certain information relating to our contingent liabilities as of March 31, 2010 as per our consolidated financial statements:

Sr. No. Particulars As on March 31, 2010

(Rs. in million) 1. Outstanding Tax Litigation

(a) Company 17.84

2. Third party claims against our Company

(a) For a TV program 1.13

(b) By Doordarshan (including interest) 76.24

(c) Television logo 4.38

(d) IT related service contract 11.41

(e) BCCI 39.47

3. Counter claim against Via World Inc 8.51

4. Factoring Facility 103.38

If any of these contingent liabilities materialise, our profitability may be adversely affected. For further description of our contingent liabilities, see “Financial Statements” on page 142 of this Draft Red Herring Prospectus.

23. The success of our filmed entertainment business depends on the commercial success of the films produced and/or

distributed by us, which is unpredictable, and our ability to select and develop new investment and production opportunities.

We face certain risks with respect to our operation in the film production and distribution industry, including unpredictable audience reactions which determine a film’s commercial success. Generally, the popularity of films produced and/or distributed by us depends on many factors, including the critical acclaim they receive, the actors and other key talent, their genre and their specific subject matter. If our films do not find popular appeal with the audiences, there will be a negative impact on the revenue attributable to our filmed entertainment business segment which would affect our results of operations.

24. We have significant capital requirements. Financial resources available to us may be inadequate and the actual

amount and timing of future capital requirements may differ substantially from our current projections.

We have significant capital requirements. Financial resources available to us may be inadequate and the actual amount and timing of future financial requirements may differ substantially from our current projections. Our growth and business

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strategies may depend upon our ability to obtain future funding through equity financing, debt financing (including credit facilities) or the sale or syndication of some or all of our interests in certain projects or other assets. If we do not have access to such financing arrangements, and if other funding does not become available on terms acceptable to us, there could be a material adverse effect on our business, results of operations and financial condition. If we decide to meet these capital requirements through debt financing, our interest obligations will increase and we may be subject to additional restrictive covenants that may affect our ability to implement our business strategy. There can also be no assurance that market conditions and other factors will permit future financing on commercially acceptable terms. Our ability to continue to arrange for financing and the costs of such capital is dependent on numerous factors, including general, economic and capital market conditions, availability of credit from banks and financial institutions, the success of our business and operations and other factors outside our control. If we decide to raise additional funds through the issuance of equity or equity-linked instruments, the interests of existing shareholders will be diluted.

25. Our revenues and results of operations may fluctuate significantly depending on the scheduling of sports events for

which we have been granted media and other rights.

Our revenues and results of operations depend significantly upon the timing and commercial success of the media and other rights associated with the sports events, particularly cricket matches, which are generally played in the period between September and March. Accordingly, our revenues and results of operations may fluctuate significantly from quarter to quarter, and is typically lower in the first half of the fiscal year between April and September when very few cricket events are held, and therefore our results of operations in any quarter may not be indicative of our results of operations for the year.

26. Advertisement income generated by broadcasters, including Neo Sports Broadcast, and our other distributors to which

we sub-license media rights could decline due to a variety of factors, which would adversely affect our business and results of operations.

Revenues of broadcasting companies, including that of Neo Sports Broadcast, are significantly dependent on advertising income, which may be generated from advertisements aired on the television channels or the distribution of advertisement time for live coverage sports events. In addition, our revenues are dependent on income from sale of advertisement time for live coverage sports events for which we have acquired all advertisement rights, or income from agency commission received on advertising time marketed and distributed by us on behalf of the owners of such advertisement space. Advertisement income is influenced by various factors, including the viewership of our programs and popularity of the sports events that we broadcast on our television channels. Advertising is also impacted by general economic conditions and a downturn in the economy generally or in particular industries and markets served by advertising customers may cause advertisers to decrease advertising budgets. The loss of major advertisers, or advertisers in specific industries, which contribute a large percentage of such advertising revenues, could cause our advertising income to decline, which would adversely affect our business and results of operation. In Fiscal 2010, 2009 and 2008, our broadcasting advertising income was 17.50%, 11.73% and 15.51% respectively of our consolidated total income. The loss of any major advertiser could cause its advertising income to decline. Further, in the advertising market, television competes with other advertising media, including radio and the print media. As a consequence, Neo Sports Broadcast's advertising income will be influenced by the extent to which advertisers prefer to advertise on television compared to other media. Any change in advertiser preferences regarding our channels, which may arise due to the loss of market share, general economic conditions, changes in the media preferences of advertising customers or other reasons, will adversely affect our business and financial condition.

27. Our ability to acquire desired programming and artistic talent may be adversely affected by competition and increasing

prices.

Our success depends in part on our ability to acquire desired programming and artistic talent at reasonable prices. We face competition from other sports broadcasters and entertainment companies in making arrangements with artistic talent for the production of programming, including in-house programming. Further, prices to acquire desired programming have generally increased. The inability to obtain high quality programming or the talent to produce such programming on reasonable terms, or at all, could have an adverse effect on our business and financial condition.

28. A part of the Net Proceeds amounting to Rs.600 million and Rs.500 million will be utilized to bid for upcoming sports

and broadcasting rights respectively. This information is generally not available in public domain. Therefore, we cannot guarantee the accuracy or completeness of information with respect to such information as contained in this Draft Red Herring Prospectus.

A part of the Net Proceeds amounting to Rs.600 million and Rs.500 million will be utilized to bid for upcoming sports and broadcasting rights respectively. While the information with respect to upcoming sports and broadcasting rights for

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bidding contained herein has been obtained from sources generally believed to be reliable but there can be no assurance as to the accuracy and completeness of the information. While reasonable actions have been taken by the Company to ensure that the information is extracted accurately and in its proper context since this information is generally not available in public domain, we have not been able to independently verify any of the data from third parties contained in the section titled “Objects of the Issue” on page 41 in the Draft Red Herring Prospectus and cannot guarantee the accuracy or completeness of information with respect to such information.

29. Piracy of feature films may adversely affect our filmed entertainment business.

Piracy of media products, including digital and internet piracy and the sale of counterfeit consumer products, may decrease revenue received from the exploitation of our products. Consumer awareness of illegally accessed content and the consequences of piracy is lower in India than it is in Western countries and the move to digital formats has facilitated high-quality piracy in particular through the internet and cable television. Monitoring infringement of our intellectual property rights is difficult and the protection of intellectual property rights in India may not be as effective as in other countries. Existing copyright and trademark laws in India afford only limited practical protection and the lack of internet-specific legislation relating to trademark and copyright protection creates a further challenge for us to protect our content delivered through such media. Notwithstanding the anti-piracy measures we take, there can be no assurance that we will be able to prevent piracy of our products. Piracy of our films and sales of counterfeit media, including digital versatile discs (“DVDs”) and compact discs (“CDs”), and continued or increased unauthorised use of our proprietary and intellectual property could result in lost revenue, result in significantly reduced pricing power and could have a material adverse effect on our business, prospects, financial condition and results of operations. Further, home videos in the form of VCDs or DVDs are released after a substantial period following the theatrical release of a feature film. This is typically done to ensure better performance of a feature film at the box office. However, due to piracy, illegal copies of feature films make their way to the markets and into the hands of the consumers that we target through our home video business under the brand “Showtime Video”. These illegal copies are usually priced less than the legitimate home videos. Further, due to the lack of an effective enforcement mechanism, such piracy remains largely unchecked. Therefore, piracy of feature films may adversely affect our business filmed entertainment business.

30. We rely on our business associates for intellectual property rights compliance with respect to production content that we obtain from third parties, and in the event of non-compliance, the third parties may take action against us.

With respect to production content that we obtain from third parties, we rely on our business associates, to inform us of any programming in which intellectual property rights have not been obtained. It is possible that one of our partners may not possess all of the re-distribution rights for every component of programming that it has licensed to us. Moreover, there is no guarantee that our partners can adequately identify and advise us of content that we are not permitted to distribute in time for us to prevent the broadcasting of such content. In either case, other third parties that possess the intellectual property rights for specific segments of programming that we broadcast under certain licensing agreements may take action against us and/or our associates. In the event that our associates are in breach of the distribution rights related to specific programming and other content, we may be required to cease distributing or marketing the relevant content to prevent any infringement of related rights, and may be subject to claims of damages for infringement of such rights. We may also be required to file a claim against our partners if the distribution rights related to specific programming is breached and there is no assurance that we would be successful in any such claim.

31. We may be unsuccessful in implementing our growth strategies and our business may be adversely affected should the

marketplace not accept our new offerings.

As we undertake our growth strategies we may become subject to unpredictable challenges which may hinder our ability to implement these strategies. Our growth will be subject to a number of risks including, but not limited to: (i) the difficulty of assimilating our growth operations and personnel into our current operations and personnel; (ii) additional operating losses and expenses that are generally part and parcel of business growth and expansion; (iii) the difficulty of integrating new technology and rights into our existing businesses and the unanticipated expenses related to such integration; (iv) the impairment of relationships with our current customers and partners resulting from any adverse affect our growth strategies may have on their businesses; and (v) in the case of growth in our foreign operations, uncertainty regarding foreign laws and regulations, difficulty integrating operations as a result of cultural and operational differences, political and economic instability. Our industry is highly competitive and, in some instances, rapidly changing. The success of our growth strategies will depend upon the market acceptance of our new offerings. We cannot assure you that our new broadcasting channels, films, home video products, or mobile content products will be accepted by the customers and subscribers and our business, financial condition and results of operations will not be adversely affected.

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32. Our joint venture company, Neo Sports Broadcast solely relies on its alliance with MSM Discovery Private Limited for

distributing its channels. If its relationship with MSM Discovery Private Limited deteriorates or terminates, it could have a material adverse effect on Neo Sports Broadcast’s business and results of operations.

The penetration of television channels among cable and satellite homes in India and other jurisdictions is dependent on the channels' distribution system and the terms of their commercial agreements with DTH providers, MSOs and LCOs, who control signal access to subscribers. On April 20, 2010, Neo Sports Broadcast entered into a distribution agreement with MSM Discovery Private Limited for the pan-India distribution of its two channels - Neo Sports and Neo Cricket. Pursuant to this agreement¸ Neo Sports Broadcast solely relies on its alliance with MSM Discovery Private Limited for distributing its channels and does not have direct business relationship with MSOs and LCOs. In the event that we have a disagreement with MSM Discovery Private Limited or our agreement with MSM Discovery Private Limited is terminated, the viewership of Neo Sports and Neo Cricket will be adversely affected. Further, any of these MSOs, LCOs or other distributors may refuse to offer Neo Sports and Neo Cricket for subscription on terms commercially acceptable to us. This could adversely affect the viewership of Neo Sports and Neo Cricket, resulting in a decrease in our subscription revenues and advertisement revenues from the broadcasting business thereby affecting the profitability and financial results of our Company.

33. We do not have experience for launch of channels for broadcasting movies (Neo Cinema) and factual programming channel (Neo Zindagi) and there is no assurance that we will be able to successfully grow this business. At present, Neo Sports Broadcast owns and operates two channels, Neo Sports and Neo Cricket. Our experience in operating channels so far is limited to these channels that focus on telecast of cricket and international sports. We do not have experience with respect to launching channels for broadcasting movies and factual programming content that we intend to provide through our two proposed channels, Neo Cinema and Neo Zindagi, respectively. Limited experience in handling creative management, production and technical aspects of the launch of these channels may expose our Company to operational and administrative difficulties, which may cause it to react slower than its competitors to changing market conditions and may have an adverse effect on its our Company’s operations and profitability.

34. A press report has alleged that our Company currently owes unpaid taxes to the Service Tax Department, Government of Maharashtra for the period between Fiscal 2005 and Fiscal 2009. A press report has alleged that our Company has service tax dues of Rs.1,730 million payable to the Service Tax Department, Government of Maharashtra for the period between Fiscal 2005 and Fiscal 2009 based on the draft audit report prepared pursuant to a service tax audit conducted by the aforesaid Service Tax Department on our Company between the period December 2009 to January 10, 2010. However, our Company has neither received any notice of claim or show cause notice. Any proceedings initiated relating to this matter may take up time and attention of our management, and any adverse ruling may have a material adverse effect on our reputation, business, financial condition and results of operations.

35. The funding requirements of our Company as described in "Objects of the Issue" are based on management estimates

and have not been appraised or evaluated by any bank or financial institution.

The funding requirements of our Company and the deployment of the Net Proceeds as described in "Objects of the Issue" are based on management estimates and have not been appraised by any bank or financial institution. Our management will have discretion in the application of the Objects of the Issue and investors will not have the opportunity, as part of their investment decision, to assess whether we are using the proceeds in a manner that they believe enhances our market value. Our business, by its nature, is dynamic and competitive, which may necessitate changes in our estimates at our management’s discretion, including availing of new opportunities, meeting competitive threats or other changes that we may not anticipate. The actual costs may vary from the above estimates, and we may need to reschedule, revise (including increase or decrease) or cancel our planned requirements and deployment of funds. For further details, please refer to the section titled “Objects of the Issue” on page 41 of this Draft Red Herring Prospectus.

36. We have entered into, and will continue to enter into, related party transactions. There can be no assurance that such

transactions, individually or in aggregate will not have an adverse effect on our business, financial condition and results of operations.

We have entered into certain transactions with related parties, including our Subsidiaries, joint ventures, Group Companies, Promoters, Directors and their relatives, key management personnel and enterprises in which key management personnel/ Directors have significant influence. For further information on our related party transactions, see "Related Party Transactions" on page 140 of this Draft Red Herring Prospectus. While we believe that all our related party transactions have been conducted on an arm’s length basis, there can be no assurance that we could not have

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achieved more favorable terms had such transactions been entered into with unrelated parties. Also, it is likely that compliances required under the Companies Act to enter into such related party transactions may not have been complied with. Furthermore, it is possible that we will enter into related party transactions in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our business, financial condition and results of operations. Further, our Promoters may also be regarded as having interest in the Equity Shares, if any, held by them or by the companies/ firms/ventures promoted by them or that may be subscribed by or allotted to the companies, firms, trusts, in which they are interested as directors, members, partners, trustees and promoters, pursuant to this Issue. All of our Promoters may also be deemed to be interested to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. For detailed information, please see the section titled "Capital Structure" appearing on page 23 of this Draft Red Herring Prospectus

37. Our Company has given unsecured loans and advances aggregating Rs.588.87 million as of March 31, 2010 to our

Subsidiaries/joint ventures/ Group Companies. If these entities are unable to repay these loans or if our Company is unable to enforce repayment of such loans or interest due to non execution of definitive agreements, then our financial condition and results of operations may be adversely impacted. We have extended various loans and advances, which are not secured, to our Subsidiaries/joint ventures and Group Companies aggregating Rs.588.87 million as on March 31, 2010. We have not entered into any definitive agreements in connection with such loans and advances that govern the terms and conditions of such loans. If such Subsidiaries/joint ventures/ Group Companies are unable to repay these loans and advances or we are unable to enforce repayment of loan or interest due to non-execution of definitive agreements, then our financial condition and results of operations may be adversely impacted.

38. Our Promoters have issued several personal guarantees in connection with our financing arrangements and certain

media licensing arrangements. There can be no assurance that the Promoters will continue to provide such guarantees in relation to our debt obligations in the future or that we will be in a position to maintain our current debt facilities or to otherwise obtain any additional debt facilities in the absence of such personal guarantees provided by our Promoters.

Our Promoters have provided various personal guarantees in connection with our financing arrangements and certain media licensing arrangements including the following:

• Personal guarantee of Mr. Harish Kanayalal Thawani provided for the bank guarantee provided by Union Bank of

India and Punjab National Bank in favour of BCCI for the sum of Rs.7,500 million each to our Company.

• Third Party guarantee of Mr. Harish Kanayalal Thawani and Mrs. Shobha Thawani provided for the sanction of the bank guarantee facility of Rs.30 million from Oriental Bank of Commerce to our Company.

• Personal guarantee of Mr. Harish Kanayalal Thawani provided for short term funding facility provided by Indian

Bank, Singapore in favour of NSI for the sum of USD 12.093 million.

There can be no assurance that the Promoters will continue to provide such guarantees in relation to our debt obligations in the future or that we will be in a position to maintain our current debt facilities or to otherwise obtain any additional debt facilities in the absence of such personal guarantees provided by our Promoters.

39. We have limited experience in film production and distribution and there is no assurance that we will be able to successfully grow this business.

Our experience in film production so far is limited to production of three films, a Marathi film, Telugu film and Hindi film. Further, we have not produced or distributed any feature film in the past two financial years, and currently, there are none that we propose to produce or distribute. Limited experience in handling creative management, production and technical aspects of the film production process may expose our Company to operational and administrative difficulties, which may cause it to react slower than its competitors to changing market conditions or may otherwise have an adverse effect on its operations.

40. Certain of the unsecured loans availed by our Company are payable on demand, and the acceleration of repayments on

any such loans may adversely affect our financial condition.

Certain of the unsecured loans availed by our Company are payable on demand. Any such unsecured loan being called for ahead of anticipated time of repayment may adversely affect our business and financial condition. Further, we do not have

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any definitive agreements in connection with the aforesaid unsecured loans that govern the terms and conditions of such loans. The acceleration of repayments on any such loans may adversely affect our financial condition.

41. Our insurance coverage may not adequately protect us against all material losses. To the extent that we suffer loss or damage for events for which we are not insured or for which our insurance is inadequate, the loss would have to be borne by us, and, as a result, our business, results of operations and financial condition could be adversely affected.

Our significant insurance policies include standard fire policy. While we believe that the policies that we maintain would reasonably be adequate to cover all normal risks associated with the operation of our business, there can be no assurance that any claim under the insurance policies maintained by us will be honoured fully, in part or on time, or that we have obtained sufficient insurance (either in amount or in terms of risks covered) to cover all material losses. To the extent that we suffer loss or damage for events for which we are not insured or for which our insurance is inadequate, the loss would have to be borne by us, and, as a result, our business, results of operations and financial condition could be adversely affected. The price, terms and availability of insurance fluctuate significantly and all insurance policies on equipment may not continue to be available on commercially reasonable terms or at all. For further information on our insurance policies, see “Business” on page 78 of this Draft Red Herring Prospectus.

42. We may be subject to penalties imposed by regulatory authorities such as the RoC/RBI/MIB resulting from a failure to comply with applicable laws which may adversely affect our business, reputation, our financial condition and results of operations.

We may be subject to penalties imposed by various regulatory authorities such as the RoC/RBI/MIB resulting from a failure to comply with applicable laws which may adversely affect our business, reputation, our financial condition and results of operations:

• In the past there have been certain delays in the filing of response(s)/ return(s)/form(s) with the RoC, which our

Company or Subsidiary or joint venture is under a statutory obligation to report. Non-compliance with such statutory and regulatory requirements may result in penalties. If we fail to comply with these laws, regulatory sanctions could have a material adverse effect on our reputation, financial condition and results of operations.

• In addition, the position of the whole time company secretary in our Company was vacant from October 1, 2009 until December 10, 2009 and April 17, 2010 to May 16, 2010. Section 383A of the Act provides that every company with a paid up capital of not less than Rs.50 million shall have a whole time company secretary. The failure to comply with this provision may be punishable with fine which may extend to Rs.500 for each day of default.

• Our joint venture, Neo Sports Broadcast, being a company with a paid-up capital greater than Rs.50 million, has not yet appointed, managing director or constituted an audit committee as statutorily required under the Companies Act. Further, Neo Sports Broadcast did not have a company secretary from March 26, 2007 until August 6, 2010. Such historical non-compliance may result in penalties being levied by RoC, which may affect or damage the reputation of Neo Sports Broadcast.

• In addition, there may be certain non-compliances with respect to delay in meeting the filing requirements specified under FEMA, which may result in penalties being levied by RBI.

• In addition, there may also be certain non-compliances with the Uplinking and Downlinking Guidelines issued by MIB which may result in penalties being levied by MIB, which may affect or damage the reputation of the Neo Sports Broadcast and its operations.

43. Our inability to manage our growth could disrupt our business and reduce our profitability.

We have experienced significant growth in recent years. We expect this growth to place significant demands on us and require us to continuously evolve and improve our operational, financial and internal controls across the organization. In particular, continued expansion increases the challenges involved in:

• recruiting, training and retaining sufficient skilled management, technical, execution and marketing personnel;

• preserving a uniform culture, values and work environment across our operations; and

• developing and improving our internal administrative infrastructure, particularly our financial, operational,

communications and other internal systems.

We will need to continuously develop and improve our financial, internal accounting and management controls, reporting systems and procedures as we continue to grow and expand our business. An inability to manage our growth may have an adverse effect on our business and results of operations.

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44. Some of our agreements may be inadequately stamped or may not have been registered, as a result of which our

documents may be inadmissible as evidence in a court in India or attract penalty as prescribed under applicable law which may result in a material adverse effect on the continuance of the operations and business of our Company .

Some of our agreements such as those concerning film distribution and acquisition of sports content may not be adequately stamped or registered. In the event of any such irregularity, we may not be able to enforce our rights therein, which could materially and adversely affect our business, results of operation and financial condition. Further, certain of our lease agreements with respect to our immovable properties may not be adequately stamped or duly registered. Unless such documents are adequately stamped or duly registered, such documents may be rendered as inadmissible as evidence in a court in India or attract penalty as prescribed under applicable law, which may result in a material adverse effect on the continuance of the operations and business of our Company.

45. We have not paid dividends since Fiscal 2006 and any material adverse effect on our future earnings, financial

condition, and cash flows will affect our ability to pay dividends in the future.

Our Company has not paid dividends to its equity shareholders since Fiscal 2006. Our ability to pay dividends in the future will depend on our earnings, financial condition and capital requirements and that of our Subsidiaries and the dividends they distribute to us. Our ability to declare dividends is also restricted under certain financing arrangements. We may be unable to declare dividends in the near or medium term, and our future dividend policy will depend on our capital requirements and financing arrangements, financial condition and results of operations. Accordingly, realization of a gain on shareholders' investments would depend on the appreciation of the price of the Equity Shares. There is no guarantee that our Equity Shares will appreciate in value.

46. Our business and operations are significantly dependent on our Promoters, senior management and other skilled

personnel, and may be adversely affected if we are unable to retain them and fail to find equally skilled replacements.

Our business to a large extent depends on the abilities and continued services of our Promoters, senior management, as well as other skilled personnel, including creative and programming personnel. Our Promoters and senior management is particularly important to our business because of their experience and knowledge of the sports rights management and the media industry both in India and internationally. The loss or non-availability to us of any of our senior management, and an inability to replace these individuals with suitable alternative executives, could have significant adverse affects on our business. We may also not be able to either retain our present personnel or attract additional qualified personnel as and when needed. To the extent we are required to replace any of our senior management or other skilled personnel, there can be no assurance that we will be able to locate or employ similarly qualified persons on acceptable terms or at all. This could materially and adversely affect our reputation, business and results of operation.

47. Our Promoters, certain of our Directors and certain Group Companies are engaged in business activities similar to

ours, which could lead to conflict of interest and adversely affect our business.

Some of our Promoters and entities forming part of the Group Companies are engaged in a similar line of business as compared to our business. For more details regarding our Promoters and Group Companies, see section titled "Promoters and Group Companies" on page 128 of this Draft Red Herring Prospectus. We cannot assure you that our Promoters will not favour the interests of other Group Companies over our interests. The other Group Companies, including those in a similar line of business, may adversely affect our Promoters’ attention to our business, which could adversely affect our business, financial condition and results of operations. Commercial transactions in the future between us and related parties could result in conflicting interests. There can be no assurance that our Promoters or Group Companies will not provide comparable services, expand their presence or acquire interests in competing ventures in the locations in which we operate. A conflict of interest may occur between our business and the business of our Group Companies which could have an adverse effect on our business, financial conditions and results of operations.

48. The business interest of some of our investors may differ from us. Also some of our investors have the right to appoint

director(s) on the Board even after the listing of our Equity Shares in the Issue and these nominee directors may choose to exercise their rights in a manner different to what other directors of our Company believe is in the best interests of our Company. This may have an adverse effect on our business, financial results and operations of our Company.

Certain offshore private equity funds, including Americorp Ventures Limited, Funderburk Enterprises Limited, 3i Sports Media (Mauritius) Limited and CSI BD (Mauritius), have made investments into our Company and these Investors have the right to appoint director(s) on the Board even after the listing of our Equity Shares in the Issue. Further, Funderburk Enterprises Limited has also invested in Neo Sports Broadcast and has inter alia the right to nominate director(s) on board of Neo Sports Broadcast. Such investors and/or their nominee directors may hold different views about various aspects of our business and

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operations. This and other factors may cause these investors and their nominee directors to act in a way that is contrary to our interests, or otherwise be unwilling to fulfill their obligations under the relevant arrangements. Any disputes or conflicts that may arise between us and our investors could have a material adverse effect on our business, financial condition, results of operations and reputation.

The shareholding of the aforesaid investors in our Company as is provided in the following table:

S. No. Name of Shareholder Percentage Shareholding

(%) 1. Funderburk Enterprises Limited 28.62 2. 3i Sports Media (Mauritius) Limited 30.17 3. CSI BD (Mauritius) 7.36 4. Americorp Ventures Limited 3.48

For further information, see "Capital Structure" on page 23 of this Draft Red Herring Prospectus.

49. Protecting and defending against intellectual property could result in substantial costs and diversion of resources and

such claims may have a material adverse effect on our business.

We attempt to protect proprietary and intellectual property rights of our productions through available copyright and trademark laws and licensing and distribution arrangements with reputable international companies in specific territories and media for limited durations. Despite these precautions, existing copyright and trademark laws afford only limited practical protection in certain countries. We may also distribute our programs in other countries in which there is no copyright or trademark protection. As a result, it may be possible for unauthorized third parties to copy and distribute our productions or certain portions or applications of our intended productions, which could have a material adverse effect on our business, results of operations and financial condition. Litigation may also be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity. Any such litigation could result in substantial costs and the diversion of resources and could have a material adverse effect on our business, results of operations and financial condition.

Further, the weak enforcement regime in India and other countries where we may operate, coupled with the high levels of cable, satellite and video piracy could impose an increased burden on us to protect the intellectual property rights in our television and film programming.

50. We have not registered all the trademarks or we do not own all the trademarks under which we operate our business,

which may weaken our brands and thereby impact our business and adversely affecting our reputation, and business.

Neo Sports Broadcast has applied for trademark registrations for the brands “Neo Sports”, “Neo Cricket”, “Showtime Video”, “Prime Sports”, “Prime Cricket” and “Neo Sports +” in Classes 9, 35, 38, 41, 42 in India. There is no certainty that our trademarks will be registered in India. The “Neo Sports” and “Neo Sports +” channel brands owned by Nimbus Sports Broadcast are protected by mere copyright registration for logos, and the trade mark (word and logo) applications for these brands are pending registration. Until the registration of these trademarks in India or other countries where we operate, the value of our trademarks and the Neo Sports and Neo Cricket channel brands could be weak thereby adversely affecting our reputation, and business.

The word mark “Nimbus” and the “N” logo are the primary trademarks used by our Company. While both these trademarks are registered with the Trademark Registry, the registered proprietor of these trademarks is our Subsidiary Nirvana Television Limited (previously known as Nimbus Online Limited).

Though Nirvana Television Limited has granted our Company the permission to use the aforesaid trademarks till the date permission is terminated by the Nirvana Television Limited vide a trade mark assignment agreement dated March 29, 2010, our Company may not be able to take action against any third party infringing these trademarks, since only registered proprietors and ‘registered users’ are entitled to institute proceedings for infringement.

51. We have received oppositions in relation to some of our trademark applications. In the event these oppositions are successful in establishing their claim over the impugned marks, we may fail to get the trademarks registered in our name which may adversely affecting our reputation, and business. We have received oppositions in relation to some of trademark applications made by our Company and Neo Sports Broadcast. For further details on oppositions filed, please refer to section titled “Government and other approvals” on page 194 of this Draft Red Herring Prospectus. There is no certainty that we will be successful in establishing the distinctive character of the trademark and hence the trademarks may not be registered in India. In the event these

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oppositions are successful in establishing their claim over the impugned marks, we may fail to get the trademarks registered in our name which may adversely affecting our reputation, and business.

52. We may be dependent on third parties to provide services and support our operations. Any delay or failure by any third party to provide such services may affect our ability to carry on operations of our Company.

We may require significant infrastructure support, including outsourced equipment supplier, logistics supplier, uplinking / satellite space suppliers for our business. We may be dependent on third parties, including local and international service providers, to provide such services. Any delay or failure by any third party to provide such additional services may affect our ability to carry on operations of our Company

53. Any significant decrease in the value of our investments in unlisted Subsidiaries or Group Companies may not be

reflected in our financial statements.

As of March 31, 2010 our Company has an aggregate investment of Rs.4,584.55 million in Subsidiaries or Group Companies which are not listed on any stock exchanges. Except to the extent as may be prescribed as per applicable accounting standard, in the event the investment value of such Subsidiaries or Group Companies were to significantly decrease, such decrease may not be reflected in our financial statements until such time as a valuation is undertaken. The values of such investments are therefore not marked to market. Therefore, our financial statements included in this Draft Red Herring Prospectus may not form a meaningful basis for investors to evaluate our financial condition.

54. Certain premises of our registered office from where we operate are not owned by us.

The registered office of our Company as recorded with the RoC, Maharashtra is Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India. Of which, we do not own and occupy certain premises forming part of the registered office. For details of our properties, see section titled “Business” on page 78 of this Draft Red Herring Prospectus. Further, we have not entered into any formal arrangement with the owners of such premises. Any claim by the owners of such premises or withdrawal of their consent to the arrangement may disrupt our operations.

55. Any failure in our information technology systems could adversely impact our business.

We utilize both customised and standard IT systems to maintain data integrity and reliability. Further, we have implemented an IT management system to consolidate operational and other data across all of our Subsidiaries. There can be no assurance that our IT systems shall function effectively. Any disruption to or delay due to our integrated IT systems could disrupt our ability to track, record and analyse our work in progress, process financial information, engage in normal business activities or manage our creditors and debtors, and could cause certain data loss. This could adversely affect our business, prospects, financial condition and results of operations.

56. We face risks from doing business internationally.

In the course of our business, we acquire media rights associated with sports events from various sports federations and other owners of sports content and enter into licensing and distribution arrangements to distribute these media rights through various third party licensees internationally and derive revenues from these sources. Nimbus Sport International Pte. Ltd., our wholly owned Subsidiary which operates our sports rights management business and contributes significant portion of our consolidated revenues, is established in Singapore. In addition, a key element of Neo Sports Broadcast’s business strategy includes the expansion of the distribution of the sports channels Neo Sports and Neo Cricket internationally.

Our international operations require us to understand local customs, practices and competitive conditions as well as develop a management infrastructure to support our international operations. As a result, our business is subject to certain risks inherent in international business, many of which are beyond our control. For instance, we are exposed to risks from foreign laws and regulations that may have an adverse impact on our business and market opportunities, or presence of fewer intellectual property protection abroad may pose difficulty in enforcing intellectual property rights in certain countries, or distributors of our programs in certain jurisdictions may have longer payment cycles, or challenges caused by distance, language and cultural differences or the difficulty of enforcing agreements and collecting receivables through foreign legal systems, etc. Any of these risks could adversely affect our business, financial condition and results of operations.

57. Our broadcasting operations are subject to extensive governmental regulations and our failure to comply with

regulations could adversely affect our results of operations, financial condition and business. Our businesses are regulated by governmental authorities in the jurisdictions in which we operate. Because of our international operations, we must comply with diverse and evolving regulations. This is especially true for our broadcasting operations, where the applicable regulations relate to, among other things, management, licensing, and

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content. Our failure to comply with all applicable laws and regulations could result in, among other things, regulatory actions or legal proceedings against us, the imposition of fines, penalties or judgments against us or significant limitations on our activities. In addition, the regulatory environment in which we operate is subject to change. New or revised requirements imposed by governmental authorities could have adverse effects on us, including increased costs of compliance. Changes in the regulation of our operations or changes in interpretations of existing regulations by courts or regulators or our inability to comply with current or future regulations could adversely affect us by reducing our revenues, increasing our operating expenses and exposing us to significant liabilities. Changes in regulations relating to one or more of licensing requirements, access requirements, programming transmission, uplinking requirements, spectrum specifications, consumer protection, or other aspects of our or any competitor’s business, could have an adverse effect on our business and results of operation. We require certain approvals, licenses, registrations and permissions for the operation of our broadcasting business, some of which are pending approval. For more information, see the section titled “Government and other approvals” on page 194 of this Draft Red Herring Prospectus. If we fail to obtain any of these approvals or licenses, or renewals thereof, in a timely manner, on acceptable terms, or at all, our business may be adversely affected. There can be no assurance that we will succeed in obtaining all requisite approvals in the future for our operations with or without the imposition of restrictions which may have an adverse consequence to us nor that compliance issues will not be raised in respect of operations conducted prior to the date of this Draft Red Herring Prospectus.

58. Fluctuations in currency exchange rates may adversely affect our financial condition and results of operations.

Changes in currency exchange rates influence our results of operations. A portion of our revenues, include income from media rights and license fees, is denominated in currencies other than Indian Rupees, most significantly the U.S. dollar. Similarly, a significant portion of our expenses, including the cost of acquisition of media rights under various sports rights contracts, part of our production expenses, as well as other operating expenses in connection with our international operations are denominated in currencies other than Indian Rupees, most significantly the U.S. dollar and Singapore dollar. Significant fluctuations in currency exchange rates between the Indian Rupee and these currencies and inter-se such currencies may adversely affect our results of operations.

Furthermore, the financial reporting currency of our Company and its Indian subsidiaries is Indian Rupees, while the financial reporting currency of our international subsidiaries is in various local currencies of countries that they operate in. Our foreign currency exchange risks therefore arise from the mismatch between our financial reporting currencies, the currency of a portion of our revenue and the currency of a substantial portion of our expenses and our indebtedness, as well as timing differences between receipts and payments which could result in an increase of any such mismatch.

In addition, since we enter into transactions in derivative financial instruments that are sensitive to movements in certain interest and currency exchange rates, and changes in the fair values of our derivative financial instruments are recognized in the income statement at the end of each financial reporting period, any resulting decrease in the fair value of such derivative financial instruments could have a material adverse effect on our results of operations.

59. Increases in interest rates may adversely impact our results of operations and financial condition.

Changes in interest rates could significantly affect our financial condition and results of operations. If the interest rates for our existing or future borrowings increase significantly, our cost of servicing such debt will increase. This may adversely impact our results of operations, planned expenditures and cash flows. Although we may enter into hedging arrangements against interest rate risks from time to time, there can be no assurance that these arrangements will successfully protect us from losses due to fluctuations in interest rates.

60. Our results of operations could be adversely affected by strikes, work stoppages or increased wage demands by our

employees or any other kind of disputes with our employees.

We employ a significant number of employees for our operations. Our employees are not affiliated to any trade or labor union. However, there can be no assurance that we will not experience disruptions to our operations due to disputes or other problems with our work force, or strikes or work stoppages by our employees or employees of our distributors and other business partners.

61. Changes in governmental policies/regulations/laws could adversely affect our business and profitability.

Adverse changes, if any, in the governmental policies relating to the media and entertainment sector such as the discontinuation of the Income Tax concessions could adversely affect our business prospects. Additionally, upon the coming into effect of the proposed direct tax code, 2009, or the passing of the Companies Bill, 2009 by the Indian legislature or any amendments to policy guidelines for downlinking or uplinking of television channels by MIB, the Indian regulatory environment may undergo drastic overhaul, which may adversely affect us, our business, operations and profitability.

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62. Significant differences exist between Indian GAAP and other accounting principles, such as US GAAP and IFRS, which may be material to investors’ assessment of our financial condition and results of operations. Our failure to successfully adopt IFRS required effective April 2011 could have a material adverse effect on our stock price.

Our financial statements, including the restated consolidated financial statements included in this Draft Red Herring Prospectus are prepared in accordance with Indian GAAP. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Draft Red Herring Prospectus, nor do we provide a reconciliation of our financial statements to those of U.S. GAAP or IFRS. U.S. GAAP and IFRS differ in significant respects from Indian GAAP. We have made no attempt to quantify the effect of any of those differences. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. In making an investment decision, investors must rely upon their own examination of us, the terms of this Issue and the financial information contained in this Draft Red Herring Prospectus.

The Institute of Chartered Accountants of India, the accounting body that regulates the accounting firms in India, has announced a road map for the adoption of, and convergence with, the International Financial Reporting Standards, or IFRS, pursuant to which all public companies in India, such as us, will be required to prepare their annual and interim financial statements under IFRS beginning with financial year period commencing April 1, 2011. Because there is significant lack of clarity on the adoption of and convergence with IFRS and there is not yet a significant body of established practice on which to draw in forming judgments regarding its implementation and application, we have not determined with any degree of certainty the impact that such adoption will have on our financial reporting. There can be no assurance that our financial condition, results of operations, cash flows or changes in shareholders' equity will not appear materially different under IFRS than under Indian GAAP. As we transition to IFRS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing our management information systems. Moreover, there is increasing competition for the small number of IFRS-experienced accounting personnel available as more Indian companies begin to prepare IFRS financial statements. There can be no assurance that our adoption of IFRS will not adversely affect our reported results of operations or financial condition and any failure to successfully adopt IFRS by April 2011 could have a material adverse effect on our stock price.

63. The requirements of being a listed company may strain our resources and distract management.

We have no experience as a listed company and have not been subjected to the increased scrutiny of our affairs by shareholders, regulators and the public at large that is associated with being a listed company. As a listed company, we will incur significant legal, accounting, corporate governance and other expenses that we did not incur as an unlisted company. We will be subject to the listing agreements with the Stock Exchanges which requires us to file audited annual and unaudited quarterly reports with respect to our business and financial condition. If we experience any delays, we may fail to satisfy our reporting obligations and/or we may not be able to readily determine and accordingly report any changes in our results of operations as timely as other listed companies. As a listed company, we will need to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, for which significant resources and management supervision will be required.

RISKS RELATING TO THIS ISSUE AND INVESTMENT IN OUR EQUITY SHARES

64. In the last 12 months, our Company has issued Equity Shares at a price which may be lower than the Issue Price.

In the 12 months prior to the date of filing of the Draft Red Herring Prospectus, Nimbus has issued the following Equity Shares on the dates specified below at a price which may be lower than the Issue Price:

Date of allotment Name of the Shareholder

Whether Belongs to Promoter

Group

Number of Equity Shares

Issue Price (Rs.)

Reasons for allotment

February 9, 2010

Funderburk Enterprises Limited No 1,751,656 351.87 Conversion of

CCPS February 9, 2010


CCDs February 9, 2010

3i Sports Media (Mauritius) Limited No 1,055,098 354.07 Conversion of


3i Sports Media (Mauritius) Limited No 5,275,264 215.82 Conversion of

CCDs February 9, 2010 CSI BD (Mauritius) No 407,810 375.27 Conversion of

CCPS

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Group


Issue Price (Rs.)


February 9, 2010 CSI BD (Mauritius) No 4,095,775 222.38 Conversion of

CCDs February 9, 2010 Mr. Harish Thawani Yes 279,581 348.38 Conversion of

CCPS March 25, 2010

Brand Equity Treaties Limited No 268,934 446.20 Preferential

allotment

For further information, see "Capital Structure" on page 23 of this Draft Red Herring Prospectus. 65. The price of the Equity Shares may be highly volatile after the Issue.

The price of the Equity Shares on the Indian stock exchanges may fluctuate after this Issue as a result of several factors, including: volatility in the Indian and global securities market; operations and our performance; performance of our competitors and the perception in the market about investments in the media and entertainment industry; adverse media reports on us or the Indian media and entertainment industry; changes in the estimates of our performance or recommendations by financial analysts; significant developments in India’s economic liberalization and deregulation policies; and significant developments in India’s fiscal and environmental regulations. There can be no assurance that the prices at which the Equity Shares are initially traded will correspond to the prices at which the Equity Shares will trade in the market subsequently.

66. Future issuances or sales of the Equity Shares could significantly affect the trading price of the Equity Shares.

Any future issuance of Equity Shares by our Company could dilute your shareholding. Any such future issuance of our Equity Shares or sales of our Equity Shares by any of our significant shareholders may also adversely affect the trading price of our Equity Shares, and could impact our ability to raise capital through an offering of our securities. Any issuance of Equity Shares may dilute our existing shareholders. Sales of a large number of our Equity Shares by our Promoters could adversely affect the market price of our Equity Shares.

There can be no assurance that we will not issue further Equity Shares or that our shareholders will not dispose of, pledge or otherwise encumber their Equity Shares. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares.

Upon completion of the Issue, 20.00% of our post-Issue paid-up capital held by our Promoters will be locked in for a period of three years from the date of allotment of Equity Shares in the Issue. For further information relating to such Equity Shares that will be locked in, please see Notes to the Capital Structure in the section “Capital Structure” on page 23of this Draft Red Herring Prospectus. All other remaining Equity Shares that are outstanding prior to the Issue will be locked up for a period of one year from the date of allotment of Equity Shares in the Issue.

67. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a

shareholder’s ability to sell, or the price at which it can sell Equity Shares at a particular point in time.

We are subject to a daily circuit breaker imposed by all stock exchanges in India which does not allow transactions beyond certain volatility in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by SEBI on Indian Stock Exchanges. The percentage limits of circuit breakers are set by the NSE and the BSE. The NSE and the BSE does not inform us of the percentage limit of such circuit breakers and may change it without our knowledge. This circuit breaker effectively limits the upward and downward movements in the price of the Equity Shares. As a result of this circuit breaker, there can be no assurance regarding the ability of our equity shareholders to sell the Equity Shares or the price at which equity shareholders may be able to sell their Equity Shares at a particular point in time.

68. Fluctuation in the exchange rate between the Rupee and other foreign currencies, including the Singapore Dollar,

Euro, GBP and the United States Dollar could have a material adverse effect on the value of Equity Shares, independent of our operating results.

The Equity Shares are quoted in Rupees on the BSE and the NSE. Any dividends in respect of the Equity Shares will be paid in Rupees and subsequently converted into other currencies for repatriation. Any adverse movement in exchange rates during the time it takes to undertake such conversion may reduce the net dividend to investors. In addition, any adverse movement in exchange rates during a delay in repatriating outside India the proceeds from a sale of Equity Shares, for example, because of a delay in regulatory approvals that may be required for the sale of Equity Shares may reduce the net proceeds received by shareholders.

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The exchange rate between the Rupee, Singapore Dollar, Euro, GBP and the U.S. Dollar has changed substantially in the last two decades and could fluctuate substantially in the future, which may have a material adverse effect on the value of the Equity Shares and returns from the Equity Shares, independent of our operating results.

69. There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the BSE and the NSE in a

timely manner or at all.

In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant to the Issue will not be granted until after those Equity Shares have been issued and allotted. Approval will require all other relevant documents authorising the issuing of Equity Shares to be submitted. Approval will require all other relevant documents authorising the issuing of Equity Shares to be submitted. There could be a failure or delay in listing the Equity Shares on the BSE and the NSE. Any failure or delay in obtaining the approval would restrict your ability to dispose of your Equity Shares. Further, historical trading prices, therefore, may not be indicative of the prices at which the Equity Shares will trade in the future.

70. You will not be able to immediately sell any of the Equity Shares you purchase in this Issue on the Stock Exchanges.

Under the SEBI ICDR Regulations, we are permitted to allot Equity Shares within 12 Working Days of the Bid Closing Date. Consequently, the Equity Shares you purchase in the Issue may not allotted to you until 12 Working days of the Bid Closing Date. You can start trading in the Equity Shares only after they have been credited to your dematerialized account and listing and trading permissions are received from the Stock Exchanges. We can apply for listing and trading permissions only after allotment. There can be no assurance that Equity Shares will be allotted to you within 12 Working Days of the Bid Closing Date or that listing and trading permissions are received from either of the Stock Exchanges.

71. You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

Sale of Equity Shares by any shareholder may give rise to tax liability in India, as discussed in the section titled “Statement of Tax Benefits” on page 54 of this Draft Red Herring Prospectus.

72. Foreign investors are subject to foreign investment restrictions under Indian law that limits our ability to attract

foreign investors, which may adversely impact the market price of the Equity Shares.

Under the foreign exchange regulations currently in force in India, transfers of shares between non-residents and residents is freely permitted (subject to certain restrictions) if they comply with the pricing guidelines and reporting requirements specified by the RBI. If the transfer or shares, which are sought to be transferred, is not in compliance with such pricing guidelines or reporting requirements or fall under any of the exceptions referred to above, then the prior approval of the RBI will be required. Additionally, shareholders who seek to convert the Rupee proceeds from a sale of Equity Shares in India into foreign currency and repatriate that foreign currency from India will require a no objection/ tax clearance certificate from the income tax authority. We cannot assure investors that any required approval from the RBI or any other Government agency can be obtained on any particular terms or at all.

73. There is no standard valuation methodology or accounting practice relating to the media and entertainment related industries.

There is no standard valuation methodology or accounting practices in the media and related industries. Additionally, current valuations may also not be reflective of future valuations within the industry. Therefore, it may not be possible to gauge our financial performance vis-à-vis our industry peers.

EXTERNAL RISK FACTORS RISKS RELATING TO INDIA AND THE INDIAN ECONOMY 74. Our growth is dependent on the Indian economy.

Our performance and the growth of our business are dependent on the performance of the Indian economy. India’s economy could be adversely affected by a general rise in interest rates, currency exchange rates, adverse conditions affecting food and agriculture, commodity and electricity prices or various other factors. A slowdown in the Indian economy could adversely affect our business, including our ability to implement our strategy. The Indian economy is currently in a state of transition and it is difficult to predict the impact of certain fundamental economic changes upon our business. Conditions outside India, such as slowdowns in the economic growth of other countries or increases in the price of oil, have an impact on the growth of the Indian economy, and government policy may change in response to such conditions. While recent governments have been keen on encouraging private participation in the industrial sector, any adverse change in policy could result in a slowdown of the Indian economy. Additionally, these policies will need continued support from stable regulatory regimes that stimulate and encourage the investment of private capital into

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industrial development. Any downturn in the macroeconomic environment in India could adversely affect our business, prospects, financial condition and results of operations.

75. Rights of shareholders under Indian law may be more limited than under the laws of other jurisdictions.

Our Articles of Association, regulations of our Board of Directors and Indian law govern our corporate affairs. Legal principles relating to these matters and the validity of corporate procedures, Directors' fiduciary duties and liabilities, and shareholders' rights may differ from those that would apply to a company in another jurisdiction. Shareholders' rights under Indian law may not be as extensive as shareholders' rights under the laws of other countries or jurisdictions. Investors may have more difficulty in asserting their rights as a shareholder of our Company than as a shareholder of a corporation in another jurisdiction.

76. We cannot guarantee the accuracy or completeness of facts and other statistics with respect to India, the Indian

economy and the Indian media and entertainment sector contained in this Draft Red Herring Prospectus.

While facts and other statistics in this Draft Red Herring Prospectus relating to India, the Indian economy as well as the Indian media and entertainment sector have been based on various publications and reports from agencies that we believe are reliable, we cannot guarantee the quality or reliability of such materials. While we have taken reasonable care in the reproduction of such information, industry facts and other statistics have not been prepared or independently verified by us or any of our respective affiliates or advisers (including the BRLMs and Co-BRLM and its advisers) and, therefore we make no representation as to their accuracy or completeness. These facts and other statistics include the facts and statistics included in the section titled "Summary of Industry" on page 3 of this Draft Red Herring Prospectus. Due to possibly flawed or ineffective data collection methods or discrepancies between published information and market practice and other problems, the statistics herein may be inaccurate or may not be comparable to statistics produced elsewhere and should not be unduly relied upon. Further, there is no assurance that they are stated or compiled on the same basis or with the same degree of accuracy, as the case may be, elsewhere.

77. Instability in financial markets could materially and adversely affect our results of operations and financial condition.

The Indian economy and financial markets are significantly influenced by worldwide economic, financial and market conditions. Any financial turmoil, especially in the United States of America, Europe or China, may have a negative impact on the Indian economy. Although economic conditions differ in each country, investors’ reactions to any significant developments in one country can have adverse effects on the financial and market conditions in other countries. A loss in investor confidence in the financial systems, particularly in other emerging markets, may cause increased volatility in Indian financial markets.

78. Civil disturbances, regional conflicts and other acts of violence in India and abroad may disrupt or otherwise adversely

affect our business and our profitability.

Certain events that are beyond our control, such acts of violence or war may adversely affect worldwide financial markets, which could adversely affect our business, results of operations, financial condition and cash flows, and more generally, any of these events could lower confidence in India’s economy. Southern Asia has, from time to time, experienced instances of civil unrest and political tensions and hostilities among neighbouring countries. Political tensions could create a perception that there is a risk of disruption of services provided by India-based companies, which could have an adverse effect on our business, future financial performance and price of the Equity Shares. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that are protracted or involve the threat or use of nuclear weapons, our operations might be significantly affected.

India has from time to time experienced social and civil unrest and hostilities, including riots, regional conflicts and other acts of violence. Events of this nature in the future could have a material adverse effect on our ability to develop our business. This could adversely affect our business, prospects, financial condition and results of operations.

79. The market value of an investors' investment may fluctuate due to the volatility of the Indian securities markets. Stock

exchanges in India have in the past experienced substantial fluctuations in the prices of listed securities. The BSE SENSEX increased by more than 76%, representing approximately 7,560 points, in the calendar year 2009. The stock exchanges in India, in line with global developments, have witnessed substantial volatility in 2008 and continue to be volatile in 2010. The year-to-date percentage increase in BSE SENSEX as of June 30, 2010 stood at 0.25%, as compared to 6.27% decrease for the Dow Jones Industrial Average, 7.97% decrease for the Hang Seng Index, and 2.67% decrease for the Strait Times Index (Singapore). However, as of June 30, 2010 100 day volatility of the SENSEX as per Bloomberg data stood at a comparable figure of 17.00 relative to 19.09 for Dow Jones Industrial Average, 21.25 for the Hang Seng Index and 15.97 for Strait Times Index (Singapore). The Indian Stock Exchanges have experienced temporary exchange closures, broker defaults, settlement delays and strikes by brokerage firm employees. In addition, the governing bodies of the Indian stock exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Furthermore, from time to time, disputes have occurred between

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listed companies and stock exchanges and other regulatory bodies, which in some cases may have had a negative effect on market sentiment.

The Indian Stock Exchanges have experienced temporary exchange closures, broker defaults, settlement delays and strikes by brokerage firm employees. In addition, the governing bodies of the Indian stock exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Furthermore, from time to time, disputes have occurred between listed companies and stock exchanges and other regulatory bodies, which in some cases may have had a negative effect on market sentiment.

80. Political instability or a change in economic liberalization and deregulation policies could seriously harm business and

economic conditions in India generally and our business in particular.

The Government of India has traditionally exercised and continues to exercise influence over many aspects of the economy. Our business and the market price and liquidity of our Equity Shares may be affected by interest rates, changes in Government policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India. The Government of India has in recent years sought to implement economic reforms and the current government has implemented policies and undertaken initiatives that continue the economic liberalization policies pursued by previous governments. There can be no assurance that liberalization policies will continue in the future. The rate of economic liberalization could change, and specific laws and policies affecting the media and entertainment sector, foreign investment and other matters affecting investment in our securities could change as well. A change in the Government pursuant to ongoing elections may result in significant change in the Government policies in the future. Any significant change in such liberalization and deregulation policies could adversely affect business and economic conditions in India, generally, and could adversely affect our business, prospects, financial condition and results of operations, in particular.

81. Natural calamities could have a negative impact on the Indian economy which may have an adverse affect on our

business and results of operations.

India has experienced floods, earthquakes, tsunamis, cyclones and droughts in recent years. Such natural catastrophes could disrupt our operations, production capabilities, distribution chains or damage our manufacturing facility. For example in December 2004, Southeast Asia, including the eastern coast of India, experienced a tsunami and in October 2005, the State of Jammu and Kashmir experienced an earthquake, both of which caused significant loss of life and property damage. Occurrence of such events in the future may cause a material adverse effect on our business, prospects, financial condition and results of operations.

82. An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere could have a

material adverse effect on our business and results of operations.

The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern such as swine influenza around the world could have a negative impact on economies, financial markets and business activities worldwide, which could have a material adverse effect on our business. Although, we have not been adversely affected by such outbreaks, we can give no assurance that a future outbreak of an infectious disease among humans or animals or any other serious public health concern will not have an adverse effect on our business, prospects, financial condition and results of operations.

83. Our ability to raise foreign capital may be constrained by Indian law.

As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing sources and hence could constrain our ability to obtain financing on competitive terms and refinance existing indebtedness. In addition, we cannot assure you that the required approvals will be granted to us without onerous conditions, if at all. Limitations on raising foreign debt may have an adverse effect on our business growth, financial condition and results of operations.

There are provisions in Indian law that may delay, deter or prevent a future takeover or change in control. Although these provisions have been formulated to ensure that interests of investors/shareholders are protected, these provisions may also discourage a third party from attempting to take control over us. Consequently, even if a potential takeover would result in the purchase of the Equity Shares at a premium to their market price or would otherwise be beneficial to our stakeholders, it is possible that such a takeover would not be attempted or consummated because of Indian takeover regulations.

84. Our revenues are subject to several tax regimes and changes in the legislation governing the rules implementing them

or the regulator enforcing them in any one of these countries could negatively and adversely affect our results of operations.

We are subject to the jurisdiction of several tax authorities and regimes. The revenues recorded and income earned in these various jurisdictions are taxed on differing bases, including net income actually earned, net income deemed earned and revenue-based tax withholding. The final determination of our tax liabilities involves the interpretation of local tax

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laws, tax treaties and related authorities in such jurisdiction as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred. Changes in the operating environment, including changes in tax law and currency/repatriation controls, could impact the determination of our tax liabilities for any given Fiscal year.

Foreign income tax returns of foreign subsidiaries, affiliates and related entities are routinely examined by foreign tax authorities. These tax examinations may result in assessments of additional taxes or penalties or both.

Taxes and other levies imposed by the central or state governments in India that affect our industry include customs duties, excise duties, sales tax, income tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time. The central and state tax scheme in India is extensive and subject to change from time to time. Any adverse changes in any of the taxes levied by the central or state governments may adversely affect our competitive position and profitability.

85. Investors may not be able to enforce a judgment of a foreign court against us.

We are a limited liability company incorporated under the laws of India. Substantially all of the directors and executive officers named herein are residents of India and a substantial portion of our assets and such persons are located in India. To initiate any proceedings against us in a foreign court, it may be necessary to serve process upon us using methods of service as permitted under the Hague Convention.

Recognition and enforcement of foreign judgment is provided for under Section 13 and Section 44A of the Civil Code. Section 13 of the Civil Code provides that foreign judgments shall be conclusive regarding any matter directly adjudicated subject to certain exceptions.

Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court, within the meaning of that section, in any country or territory outside India which the Government has by notification declared to be reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being in the same nature of amounts payable in respect of taxes, other charges of a like nature or in respect of a fine or other penalties.

Only certain countries, including the United Kingdom have been declared by the Government to be a reciprocating territory for the purposes of Section 44A of the Civil Code. A judgment of a court of a country which is not a reciprocating territory may be enforced in India only by a suit, brought within 3 years from the date of judgment upon the judgment under Section 13 of the Civil Code, and not by proceedings in execution. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian Court would enforce foreign judgment if it viewed the amount of damages awarded as excessive or inconsistent with public policy. A party seeking to enforce a foreign judgment in India is required to obtain approval from the RBI to repatriate outside India any amount recovered and any such amount may be subject to income tax in accordance with applicable laws.

86. Any downgrading of India’s debt rating by an international rating agency could have a negative impact on our

business

Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing may be available. This could have an adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of the Equity Shares.

PROMINENT NOTES TO RISK FACTORS 1. Investors may contact any of the BRLMs and Co-BRLM who have submitted the due diligence certificate to SEBI, for any

complaint pertaining to the Issue.

2. The net worth of our Company as on March 31, 2010 was Rs.4,468.55 million and Rs.9,502.54 million based on restated consolidated financial information and restated standalone financial information of our Company respectively.

3. The average cost of acquisition of our Equity Shares by our Promoters:

Name of Promoters Average cost of acquisition per Equity Share (In Rs.)* Mr. Harish Kanayalal Thawani 20.21 Ms. Shobha Harish Thawani Nil

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Paramount 10.00 *The average cost of acquisition of our Equity Shares by our Promoters has been calculated by taking into account the amount paid by them to acquire, by way of fresh issuance or transfer, the Equity Shares, including the issue of bonus shares to them. For more information, please refer to the section titled “Capital Structure” on page 23 of the Draft Red Herring Prospectus.

4. Public Issue of 22,050,000 Equity Shares for cash at a price of Rs.[●] per Equity Share (including a share premium of

Rs.[●] per Equity Share), including Offer for Sale of 8,010,000 Equity Shares aggregating to Rs.[●] million. The Issue will constitute 29.19% of our post Issue paid up capital.

5. For details of our related party transactions, see section titled “Related Party Transactions” on page 140 of this Draft Red

Herring Prospectus. 6. There are no financing arrangements whereby the Promoter Group, directors of our corporate Promoter, Directors and/ or

their relatives have financed the purchase by any other person of securities of our Company other than in the normal course of the business of the financing entity during the period of six months immediately preceding the date of filing of this DRHP with SEBI.

7. Our Company was originally incorporated as ‘Nimbus Communications Private Limited’ on June 30, 1987 under the

Companies Act as a private limited company with the RoC, Maharashtra. Our Company became a deemed public company under Section 43A of the Companies Act and its name was consequently changed to ‘Nimbus Communications Limited’ with effect from July 1, 1994. The aforesaid changes were made in the name to reflect the changing nature of the constitution of our Company. For further details, including changes in our Memorandum of Association see section titled “History and Certain Corporate Matters” on page 100 of this Draft Red Herring Prospectus.

8. We have not entered into any non-compete agreement with our individual Promoters. Further, we undertake, execute and develop several of our projects in association with our Group Companies. Other than as stated here, and as disclosed in section titled “Financial Statements”, none of our Group Companies have any business interest in our Company. For further details, see section titled “History and Certain Corporate Matters” on page 100 of this Draft Red Herring Prospectus. For details on the business of our Company, see section titled “Business” on page78 of this Draft Red Herring Prospectus.

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SECTION III - INTRODUCTION

Summary of the Business

The following information should be read together with the more detailed financial and other information included in this Draft Red Herring Prospectus, including the information contained in the section titled “Risk Factors” on page xii of this Draft Red Herring Prospectus. In this section, a reference to “Nimbus” or “our Company” means Nimbus Communications Limited. Unless the context otherwise requires or implies, references to “we”, “us”, or “our” refers to Nimbus Communications Limited, its Subsidiaries and its joint venture, on a consolidated basis. OVERVIEW We believe we are one of the leading sports rights management companies engaged in the acquisition, management and marketing of commercial rights relating to cricket events globally. Our joint venture company, Neo Sports Broadcast, owns and operates two 24-hour channels, Neo Cricket and Neo Sports. Our Company currently holds an indirect 48.94% shareholding in Neo Sports Broadcast through Zenith Sports Private Limited (“Zenith”), our joint venture company with one of our Promoters, Paramount Corporation Limited (“Paramount”). We have the right of exercising the call option in accordance with the terms of the Zenith Agreement for an aggregate consideration of Rs.0.36 million to acquire the remaining shares of Zenith from Paramount for which we have received the requisite prior approval from FIPB on May 19, 2010. For further information, see “Government and other Approvals”, “History and Certain Corporate Matters” and “Risk Factors” on pages 194, 100 and xii, respectively. We own the global media rights for all international cricket matches organised by the BCCI in India until March 2014 and have licensed the broadcast rights with respect to such matches in India to Neo Sports Broadcast. In addition to the rights that we have acquired from the BCCI, we have acquired and manage certain rights with respect to other sports federations, including Bangladesh Cricket Board, Asian Cricket Council Cricket Kenya and Singapore Cricket Association. Nimbus was founded by Mr. Harish Thawani, and we commenced operations in 1987. The television channels, Neo Cricket and Neo Sports were launched by Neo Sports Broadcast in October 2006. We are also involved in the filmed entertainment business through distribution rights management, content generation and our home video rental business under our brand “Showtime Video”. Our other businesses include production of television content as well as creation and maintenance of online cricket-related content through our proprietary website www.cricketnirvana.com. KEY BUSINESS SEGMENTS Sports management: We are a full service sports rights management and marketing company and provide a complete range of “on-ground to on-air” solutions in sports. The sports rights management business consists of three key lines of activities: (i) commercial rights management (including sponsorship, media rights management and licensing, merchandising and hospitality); (ii) television production (including production of live feed and creation of packaged content); and (iii) owned events. Broadcasting: Neo Sports Broadcast owns and operates two 24-hour sports channels, namely Neo Cricket and Neo Sports. These channels are broadcasted over cable and direct-to-home (“DTH”) platforms, and telecast cricket and international sports. Since its launch in October 2006, among the sports channel in India, Neo Cricket has achieved number one ranking in the half hour cumulative ratings for sport channel as per TAM viewership data for calendar years 2008, 2009 and for the period from January 1, 2010 to July 31, 2010 (Source: TAM PeopleMeter Systems). We also plan to launch two new 24 hours channels namely, Neo Cinema and Neo Zindagi. The applications dated August 11, 2010 for uplinking and downlinking licenses for these two new channels have been made with MIB, along with application for another channel the plans for which are at a very preliminary stage. For further details, refer to section titled “Government and Other Approvals” on page 194 of this Draft Red Herring Prospectus. Filmed entertainment: We are a producer and distributor of film content in India. As of August 31, 2010, we have produced three and distributed 10 feature films. Our home production, “Ek Hoti Wadi”, a Marathi film, won the Sixth Maharashtra Cine-Natya Mahotsav Award in the year 2002. We have also commenced our home video rental business under the brand “Showtime Video” and currently operate four stores in Mumbai.

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FINANCIAL OVERVIEW Our total income in Fiscal 2008, 2009 and 2010 was Rs.7,043.16 million, Rs.6,610.43 million and Rs.7,687.20 million, respectively.

3

Summary of the Industry The information in this section has not been independently verified by us, the Book Running Lead Managers, Co – Book Running Lead Manager or any of our or their respective affiliates or advisors. The information may not be consistent with other information compiled by third parties within or outside India. Industry sources and publications generally state that the information contained therein has been obtained from sources it believes to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Industry and government publications are also prepared based on information as of specific dates and may no longer be current or reflect current trends. Industry and government sources and publications may also base their information on estimates, forecasts and assumptions which may prove to be incorrect. Accordingly, investment decisions should not be based on such information. The information in this section is derived from: (a) “The Indian Media and Entertainment Industry”, FICCI KPMG Report 2009 (“FICCI KPMG Report 2009”) and FICCI-KPMG Indian Media and Entertainment Industry Report 2010 (“FICCI KPMG Report 2010”) (b) Report on “The Business of Sports in India”, October 2008, published by SportBusiness Group. (c) TAMMedia Research (d) Reports by Internet & mobile Association of India The information in this section also includes extracts from publicly available information, data and statistics which have been derived from various government publications and industry sources. The Indian economy India is the world's largest democracy in terms of population (approximately 1.17 billion people) for the year 2010. (Source: www.census india.gov.in) The GDP on a purchasing power parity basis of approximately US$3,752 billion in the year 2009. This makes India the fourth largest economy in the world in terms of GDP after the United States of America, China and Japan. (Source: www.siteresources.worldbank.org.) The following table sets forth the key indicators of the Indian economy for the past five Fiscal years.

(Annual percentage change)

Item As at and for the year ended March 31

2006 2007 2009 2010 GDP Growth 9.5 9.7 6.7 7.4 Index of Industrial Production 8.2 11.6 2.6 10.4 Inflation - Wholesale Price Index 4.4 5.4 8.4 11.0 (Source: Economic Survey 2008.2009 & 2009-2010 RBI, Central Statistics Organization, Ministry of statistics and Programme Implementation.)

India has experienced rapid economic growth over the past five Fiscal years. However, economic activity in India slowed down in the first two quarters of Fiscal 2009 as compared with over nine percent growth in the previous three years. Growth decelerated sharply in the third quarter following the failure of Lehman Brothers in mid-September 2008 and adverse effects of the global financial crisis on the Indian economy. Consequently, the growth rate during the first three quarters (April – December) of 2008-09 slowed down to 6.9 percent from 9 percent in the corresponding period of the previous year. However, RBI’s monetary Policy for the Q1 2010-11 indicated that the Indian economy grew by 7.4 percent in 2009-10. The momentum was particularly pronounced in Q4 of 2009-10 with growth at 8.6 percent as compared with 6.5 percent in the previous quarter. The double digit growth in the Index of Industrial Production (IIP) that began in October 2009 continued during the current financial year although there was modest deceleration in May 2010. In the first two months of this fiscal, April-May 2010, the IIP recorded a year-on-year growth of 14 percent with as many as fifteen out of the seventeen industry groups (two digits NIC classification) showing positive growth. The lead indicators of service sector also suggest increased economic activity (Source: RBI Annual Policy Statement 2009-10 & 2010-11). India‘s ability to recover from the global slowdown (and its own domestic liquidity crunch) has been driven by the country‘s large domestic savings and corporate retained earnings, which have been used to finance investment. The fiscal policy, primarily in the form of reduced interest rates and Government intervention, has further helped to maintain private demand, liquidity and short-term rates, thereby reducing the risk of loan losses.

(Source: International Monetary Fund, World Economic Outlook Update, July 2009 (Calendar Year Growth Rates) and the RBI‘s First Quarter Review, 2009-2010).

4

Media and entertainment industry Current size The Media and Entertainment (M&E) industry in India is comprised primarily of television, print, film, radio, music, animation, outdoor advertising, internet and gaming. The overall M&E industry size grew from INR 579 billion in 2008 to INR 587 billion in the year 2009 at a rate of 1.4 percent. The growth rate is expected to increase to ~11.2 percent in 2010, as the industry witnesses a recovery. (Source: FICCI KPMG Report 2010) Segment wise break up of the Indian M&E industry is given below:

(Source: FICCI KPMG Report 2010)

Sports Marketing Industry Sports marketing include both marketing of sports events and teams as well as using sports to market non-sports products. In the year 2008, this business was worth Rs. 20 billion in India out of which cricket alone accounted for Rs 18 billion). More importantly, the sports marketing business is growing at a rapid pace of 20 percent a year compared to the global average growth of 5 percent a year. While developed countries have a mature sport marketing industry, this industry is still in a nascent stage in India (Source: FICCI KPMG Report 2009). Revenue from the sports marketing industry is generated through three main sources i.e.

• broadcasting fee and advertising • endorsement; and • on ground activation

Following chart shows the percentage of total revenues generated in the different segments of sports marketing business in India for the year 2008:

Break up of sports marketing business in India

On ground activation, 20%

Broadcast fee + advertising, 60%

Endorsement , 20%


Cricket accounts for over 90 percent of total value of the sports marketing business in India. Cricket rights worldwide have been sold at a premium over the last three-four years, with each deal outsizing the previous one (Source: The Business of Sports in India, October 2008, published by BusinessSports Group).

5

Summary of our Consolidated Financial, Operating and Other Data

NIMBUS COMMUNICATIONS LIMITED ANNEXURE I : STATEMENT OF RESTATED CONSOLIDATED ASSETS AND LIABILITIES (Rupees in Million)

As at Particulars March 31,

2006 March 31,

2007 March 31,

2008 March 31,

2009 March

31, 2010 A Fixed Assets Gross Block 911.21 1,077.16 2,617.67 2,665.19 1,405.52 Less : Depreciation/ Amortisation 718.09 836.35 1,700.27 1,901.05 800.34 Net Block 193.12 240.81 917.40 764.14 605.18 Less : Revaluation Reserve 6.72 6.38 472.89 445.79 420.24 Net Block After Adjustment for Revaluation

Reserve 186.40 234.43 444.51 318.35 184.94 Capital Work in Progress 98.36 34.91 15.89 0.59 0.94 284.76 269.34 460.40 318.94 185.88

B Goodwill on Consolidation 12.77 12.77 12.77 12.77 12.77

C Investments 1.68 2,415.05 2,281.38 2,281.38 2,788.95

D Deferred Tax Assets (Net) 4.31 17.65 - 2.14 29.76

E Current Assets, Loans and Advances Inventories 25.96 34.65 6.50 9.65 9.11 Sundry Debtors 1,567.42 1,249.54 2,296.82 3,397.70 5,372.72 Cash and Bank Balances 1,077.49 4,500.64 1,536.95 2,618.52 4,472.72 Loans and Advances 440.24 873.09 1,297.88 656.93 989.47 Other Current Assets 1.89 16.12 2.04 32.19 84.16 Total

3,113.00 6,674.04 5,140.19 6,714.99

10,928.1

8

3,416.52 9,388.85 7,894.74 9,330.22

13,945.5

4

F Liabilities and Provisions Secured Loans 399.89 1,541.50 780.84 2,585.91 3,316.52 Unsecured Loans 91.05 5,517.97 5,788.64 6,527.08 2,477.21 Deferred Tax Liabilities (net) - - 6.24 - - Current Liabilities 857.83 1,157.65 1,263.56 1,252.11 3,503.47 Provisions 88.14 58.63 57.26 60.78 174.83 Total 1,436.91 8,275.75 7,896.54 10,425.88 9,472.03

G Preference Shares issued by Jointly Controlled Entity - - - - 1.69

H Equity warrants issued by Jointly Controlled Entity - - - - 3.27

Net Worth (A+B+C+D+E-F-G-H) 1,979.61 1,113.10 (1.80) (1,095.66) 4,468.55 I Represented by Share Capital - Equity Shares 324.65 326.06 326.06 326.06 615.02 - Preference Shares - - - 2.18 - Stock Option Outstanding - - 5.65 4.27 4.24 324.65 326.06 331.71 332.51 619.26 Reserves and Surplus - Securities Premium 2,008.31 1,948.49 1,948.49 2,040.87 8,786.61 - Capital Redemption Reserve 0.55 0.55 0.55 0.55 0.55 - Capital Reserve On Consolidation 7.35 7.35 7.35 7.35 7.35 - Foreign Exchange Reserve On

Consolidation 1.24 (9.75) (48.57) 81.48 34.01 - General Reserve 0.80 0.80 1.03 1.03 1.03 - Revaluation Reserve 6.72 6.38 472.89 445.79 420.24 - Profit and Loss Account

(363.29) (1,160.40) (2,242.36) (3,559.45) (4,980.26

) Less: Revaluation Reserve 6.72 6.38 472.89 445.79 420.24 Reserves and Surplus (Net of Revaluation

Reserve) 1,654.96 787.04 (333.51) (1,428.17) 3,849.29 Net Worth 1,979.61 1,113.10 (1.80) (1,095.66) 4,468.55

Note:

6

The above statement should be read together with Principles of Consolidation, Significant Accounting Policies and Notes to the

Restated Consolidated Summary Statements- Annexure IV. ANNEXURE II : STATEMENT OF RESTATED CONSOLIDATED PROFITS AND LOSSES (Rupees in Million) Year ended

Particulars March 31,

2006 March 31,

2007 March 31,

2008 March 31,

2009 March 31,

2010 Income Sales and Services Airtime Sales (net) 612.77 973.19 820.09 392.41 347.94 Income from Sports Rights 1,248.97 2,083.16 3,808.29 3,833.52 4,421.50 Ad Sales Broadcasting - 389.23 1,092.24 775.62 1,345.06 Distribution Revenue Broadcasting - 335.50 239.92 459.58 495.36 Production Fees 231.25 375.26 545.33 421.42 666.90 Sports Services Income 58.29 272.96 164.16 25.46 49.29 Income from Film Rights (Acquired) 11.09 74.29 69.41 - - Income from Motion Picture Produced - 12.11 14.10 - -Income from assignment of Television Programme Rights 5.46 1.95 0.94 0.32 4.61 Disks Sales/ Rental Income - - 0.55 1.44 2.43 Total 2,167.83 4,517.65 6,755.03 5,909.77 7,333.09 Other Income 339.45 234.02 295.81 697.50 354.65 Increase/(Decrease) in Air Time Inventory 2.52 10.84 (7.68) 3.16 (0.54) Total Income 2,509.80 4,762.51 7,043.16 6,610.43 7,687.20 Expenditure Cost of Sports Rights 1,903.10 3,272.77 5,642.03 5,252.54 6,834.24 Marketing Rights and Telecast Costs 322.97 907.40 677.98 238.38 330.52 Production Expenses 188.01 405.30 559.57 498.43 526.46 Marketing Expenses 23.52 111.34 86.65 59.01 37.34 Payments to and Provision for Employees 44.84 97.91 154.41 187.67 160.85 Interest and Other Financial Charges 37.76 186.63 204.43 432.53 583.12 Administrative and Other Expenses 143.19 351.21 341.33 577.88 314.23 Depreciation/Amortisation (Net) 84.17 133.11 803.98 242.56 428.40 2,747.56 5,465.67 8,470.38 7,489.00 9,215.16 (Loss) before Tax and Restatement Adjustments (237.76) (703.16) (1,427.22) (878.57) (1,527.96)Provision for Tax - Current Tax (* Net of MAT Credit) 3.15 18.21 22.50 * 45.49 165.47 - Deferred Tax 16.10 22.97 60.93 (22.35) (113.42) - Fringe Benefit Tax 1.77 1.20 1.88 2.37 -- Wealth Tax 0.01 - - - - - Short provision for Income Taxin respect of earlier years - 12.25 28.39 1.39 24.97 - Short provision for Fringe Benefit Tax for an earlier year - - - 0.25 0.21 - Deferred tax relating to Short provision for tax for an earlier year - - (26.49) - - - (Loss) After Tax before Restatement Adjustments (a) (258.79) (757.79) (1,514.43) (905.72) (1,605.19) Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of Part A of Schedule VIII of the ICDR Regulations - Restatement Adjustments (b) (86.16) (56.09) 389.84 (378.05) 248.72 - Restatement Adjustments relating to Current Tax / Fringe Benefit Tax/ Deferred Tax (c) (20.56) 6.66 5.18 (19.65) 17.74 - Deferred Tax Impact of Restatement Adjustments(d) (12.54) (10.11) (37.45) 13.67 85.20 Net Profit / (Loss) After Restatement Adjustments (a+b+c-d) (352.97) (797.11) (1,081.96) (1,317.09) (1,423.93) Balance Brought Forward from Previous Year 14.39 (363.29) (1,160.40) (2,242.36) (3,559.45) Minority Contribution on dilution of Group Interest - - - - 3.12 Balance Available for Appropriations (338.58) (1,160.40) (2,242.36) (3,559.45) (4,980.26)Appropriations Dividend 21.19 - - - - Dividend Tax 2.97 - - - - Transfer to Capital Redemption Reserve 0.55 - - - -Balance carried forward (363.29) (1,160.40) (2,242.36) (3,559.45) (4,980.26) Note: The above statement should be read together with Principles of Consolidation, Significant Accounting Policies and Notes to the Restated Consolidated Summary Statements- Annexure IV.

7

ANNEXURE III : CONSOLIDATED RESTATED STATEMENT OF CASH FLOWS

(Rupees in Million)

Particulars Year Ended

March 31,

2007 March 31,

2008 March 31,

2009 March 31,

2010 A. Cash Flow from Operating Activities : Net Loss before Taxation after restatement adjustments (759.25) (1,037.38) (1,256.62) (1,279.24) Adjustments for :

Depreciation / Amortisation (net) 144.77 864.90 182.39 134.19 Interest Income (44.21) (169.90) (127.13) (102.88) Dividend Income (59.93) (4.07) (6.99) (3.50) Credit balances no longer payable, written back (0.01) (0.32) (58.65) (3.06) Interest expense 147.43 105.00 309.45 309.79 Employee compensation expenses - 1.95 1.00 0.89 (Profit)/Loss on redemption of Mutual Fund held as current investments - 0.32 - (0.04) Bad Debts written off 99.61 17.55 23.44 3.02 Advances/ Deposits written off 7.81 2.81 14.98 2.37 Provision for Doubtful Debts (net) (7.24) 8.65 32.54 57.76 Provision for Doubtful Advances - 3.51 - 13.55 Air Time Inventory written Off 2.15 20.48 - - Capital Work in Progress relating to Television Programmes and Motion Pictures,

written off 4.36 5.40 3.21 - (Profit)/Loss on sale/write off of Fixed Assets (net) - (49.79) 1.86 (1.75) Unrealised foreign Exchange (gain)/loss (net) 0.46 1.14 (0.96) 10.40 Operating Loss before Working Capital Changes (464.05) (229.75) (881.48) (858.50)

Adjustments for changes in Assets and Liabilities :-

Inventories (10.84) 7.67 (3.15) 0.54 Sundry Debtors 221.88 (1,087.03) (1,113.94) (2,061.72) Loans and Advances (414.15) (327.85) 690.36 (345.90) Current Liabilities 257.71 93.88 97.68 2,233.51 Provisions 3.30 2.17 3.83 1.60 Compensated Absences/ Gratuity transitional liability adjusted in General Reserve - 0.35 - -

Cash used in operations (406.15) (1,540.56) (1,206.70) (1,030.47) Less : Income Taxes (including Fringe Benefit Tax ) paid (net) (90.24) (136.57) (92.61) (79.56) Net Cash used in Operating Activities (A) (496.39) (1,677.13) (1,299.31) (1,110.03) B. Cash Flow from Investing Activities Payments for acquisition of Fixed Assets(after adjustment of Increase/decrease in Capital work in progress and advances for capital expenditure) (133.93) (1,074.47) (47.57) (42.55) Sale of Fixed Assets - 62.89 1.38 43.37 Purchase of Current Investments in Mutual Funds (6,500.02) (1,083.38) (1,957.43) (4,007.09) Sale of Current Investments in Mutual Funds 6,366.35 1,216.73 1,957.43 3,499.56 Investments in Joint Venture ! (2,279.70) - - - Interest Received 29.98 183.98 96.98 50.91 Dividend Received 59.93 4.07 6.99 3.50 Net Cash from / (used in) Investing Activities(B) (2,457.39) (690.18) 57.78 (452.30) C. Cash Flow from Financing Activities Proceeds from issue of shares(including Securities Premium) 55.20 @ *- $1,262.98 Preference Shares and Equity warrants issued by Jointly Controlled Entity - - - 311.65 Minority Contribution on dilution of Group Interest - - - 3.12 Expenses relating to issue of shares (82.61) - (2.84) (2.05) Repayments of Vehicle Loans (1.60) (1.51) (1.25) (0.17) Repayment of Short Term Loans from Banks (252.34) (1,362.78) (740.48) (2,526.37) Proceeds from Short Term Loans from Banks 1,350.00 620.57 2,526.37 3,282.92 Proceeds from /(Repayment) of Working Capital Loan (Net) 45.55 (16.94) 20.43 (25.77) Proceeds from Unsecured Loans 5,464.90 272.42 935.76 2,317.00 Repayment of Unsecured Loans (37.98) (1.75) (99.92) (996.01) Dividend Paid (21.19) - - - Dividend Tax paid (2.97) - - - Interest paid (140.03) (106.39) (314.97) (210.77) Net Cash from / (used in) Financing Activities (C) 6,376.93 (596.38) 2,323.10 3,416.53 Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 3,423.15 (2,963.69) 1,081.57 1,854.20 Cash and Cash Equivalents as at the beginning of the year 1,077.49 4,500.64 1,536.95 2,618.52 Cash and Cash Equivalents as at the end of the year 4,500.64 1,536.95 2,618.52 4,472.72

8

Notes: 1. The Cash flow has been prepared under the "Indirect Method" as set out in Accounting Standard 3 - Cash Flow Statements. 2. The above statement should be read together with Significant Accounting Policies and Notes to Consolidated Restated Summary Statements. 3. ! The entire purchase consideration is discharged by means of cash. 4 (i) * Excludes 217,965 preference shares of Rs. 10 each issued at a premium of Rs. 436.86 to the founder director by adjustment of the part

of the loan Rs. 97.40 million being a non cash transaction. (ii) $ Excludes 28,626,495 equity shares of Rs. 10 each issued on conversion of the Compulsorily Convertible Preference Shares and

Compulsorily Convertible Debentures being non cash transactions. 5. The Company has prepared the consolidated financial statements for the first time for the year ended March 31, 2006. Accordingly in the

absence of consolidated financial statements for the year ended March 31, 2005, it is not practicable for the Company to prepare the consolidated cash flow for the previous year ended March 31, 2006and consequently the Company has not prepared and presented the Consolidated Restated Statement of Cash Flows for the year ended March 31, 2006.

6. Cash and cash equivalents include: (Rupees in Million)

Particulars As at

March 31, 2007

March 31, 2008

March 31, 2009

March 31, 2010

Cash on Hand 0.31 0.14 1.43 1.51 Balances with Scheduled Banks - On Current Accounts # 616.77 901.58 1,147.01 699.63 - In Margin Accounts - - - 392.50 - In Deposit Accounts £ 3,883.56 635.23 1,470.08 3379.08 Total cash and cash equivalents 4,500.64 1,536.95 2,618.52 4472.72 # Including balances in escrow accounts 242.41 47.66 504.98 457.89 £ Includes Deposits kept as margin for bank guarantees 3,522.35 596.67 1,418.09 3,257.67

9

ANNEXURE I : RESTATED STANDALONE STATEMENT OF ASSETS AND LIABILITIES

(Rupees in Million)

Particulars

As at March 31,

2006 March 31,

2007 March 31,

2008 March 31,

2009 March 31,

2010

A Fixed Assets Gross Block 821.98 981.05 2,427.84 2,459.98 1,212.03 Less : Depreciation/ Amortisation 643.27 783.69 1,635.62 1,812.24 701.96 Net Block 178.71 197.36 792.22 647.74 510.07 Less: Revaluation Reserve 6.72 6.38 421.35 397.08 374.21

Net block after adjustment for Revaluation Reserve 171.99 190.98 370.87 250.66 135.86

Capital work in progress 91.34 5.37 11.12 0.59 0.94 263.33 196.35 381.99 251.25 136.80

B Investments 113.55 4,718.11 4,584.55 4,584.55 5,057.77

C Deferred Tax Assets (Net) 4.31 26.81 11.06 25.60 29.76

D Current Assets, Loans and Advances Inventories 25.95 34.65 6.50 9.65 9.11 Sundry Debtors 1,756.32 763.72 2,555.20 4,783.02 7,648.16 Cash and Bank Balances 1,018.22 3,775.27 1,357.67 2,193.68 4,227.34 Loans and Advances 327.62 525.46 570.66 469.89 863.63 Other Current Assets 1.89 16.12 2.04 32.19 84.16 Total 3,130.00 5,115.22 4,492.07 7,488.43 12,832.40 3,511.19 10,056.49 9,469.67 12,349.83 18,056.73

E Liabilities and Provisions Secured Loans 254.50 1,404.35 660.93 2,484.01 3,316.52 Unsecured Loans 53.07 5,517.97 5,788.39 6,017.25 126.17 Current Liabilities 889.41 838.22 671.35 1,356.28 4,996.06 Provisions 49.34 14.67 7.15 9.72 115.44 Total 1,246.32 7,775.21 7,127.82 9,867.26 8,554.19

F Net Worth (A+B+C+D-E) 2,264.87 2,281.28 2,341.85 2,482.57 9,502.54

G Represented by Share Capital - Equity Shares 324.65 326.06 326.06 326.06 615.02 - Preference Shares - - - 2.18 - Stock Option Outstanding - - 5.65 4.27 4.24 324.65 326.06 331.71 332.51 619.26 Reserves and Surplus - Securities Premium 2,008.31 1,948.49 1,948.49 2,040.87 8,479.92 - Capital Redemption Reserve 0.55 0.55 0.55 0.55 0.55 - General Reserve 0.80 0.80 1.03 1.03 1.03 - Revaluation Reserve 6.72 6.38 421.35 397.08 374.21 - Profit and Loss Account (69.44) 5.38 60.07 107.61 401.78 Less: Revaluation Reserve 6.72 6.38 421.35 397.08 374.21

Reserves and Surplus (Net of Revaluation Reserve) 1,940.22 1,955.22 2,010.14 2,150.06 8,883.28

Net worth 2,264.87 2,281.28 2,341.85 2,482.57 9,502.54 Note: The above statement should be read together with Significant Accounting Policies and Notes to the Restated Summary Statements- Annexure IV

10

ANNEXURE II : RESTATED STANDALONE STATEMENT OF PROFITS AND LOSSES (Rupees in Million)

Particulars

Year Ended March 31,

2006 March 31,

2007 March 31,

2008 March 31,

2009 March 31,

2010 Income Sales and Services Airtime Sales (net) 297.17 973.19 820.09 392.41 347.94 Income from Sports Rights 1,640.42 3,432.03 5,886.91 5,175.05 6,925.27 Production Fees 66.97 44.66 42.41 30.25 43.44 Sports Services Income 38.22 74.95 99.91 29.34 51.52 Income from Film Rights (Acquired) 11.09 74.29 69.41 - - Income from Motion Picture Produced - 12.11 14.10 - - Income from assignment of Television Programme Rights 7.82 1.95 0.94 0.32 4.61 Total 2,061.69 4,613.18 6,933.77 5,627.37 7,372.78 Other Income 66.92 111.58 241.11 194.09 123.38 Increase/(Decrease) in Air Time Inventory 2.52 10.84 (7.68) 3.16 (0.54) 2,131.13 4,735.60 7,167.20 5,824.62 7,495.62 Expenditure Cost of Sports Rights 1,569.60 3,253.28 5,164.78 4,597.52 6,039.87 Marketing Rights and Telecast Costs 248.04 789.27 611.10 238.38 330.51 Production Expenses 52.18 68.54 65.93 54.89 61.02 Marketing Expenses 16.03 28.34 14.51 10.05 3.27 Payments to and Provision for Employees 32.27 37.03 69.41 81.86 60.43 Interest and Other Financial Charges 18.60 147.35 137.29 260.53 335.93 Administrative and Other Expenses 65.72 159.98 118.88 318.91 213.91 Depreciation/Amortisation (Net) 77.63 124.04 786.83 217.51 376.03 2,080.07 4,607.83 6,968.73 5,779.65 7,420.97 Profit Before Tax and Restatement Adjustments 51.06 127.77 198.47 44.97 74.65 Provision for Taxation - Current Tax (* Net of MAT credit) 3.15 10.00 22.18 * 44.03 163.25 - Deferred Tax 12.49 22.97 60.93 (22.35) (113.42) - Fringe Benefit Tax 1.77 0.85 0.92 1.04 - - Wealth Tax 0.01 - - - - - Short provision for Income Tax in respect of earlier years - 11.70 27.67 - 22.71 - Short provision for Fringe Benefit Tax for an earlier year - - - 0.26 0.21 - Deferred tax relating to Short provision for tax for an earlier year - - (26.49) - - Profit After Tax before Restatement Adjustments (a) 33.64 82.25 113.26 21.99 1.90 Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of Part A of Schedule VIII of the ICDR Regulations - Restatement Adjustments (b) (28.78) (38.12) (112.75) 41.29 378.59 - Restatement Adjustments relating to Current Tax / Fringe Benefit Tax / Deferred Tax (c) (15.01) 11.41 8.59 (8.22) 22.33 - Deferred Tax Impact of Restatement Adjustments (d) (12.54) (19.28) (45.59) 7.52 108.65 Net Profit After Restatement Adjustments [(a) + (b) + (c) - (d)] 2.39 74.82 54.69 47.54 294.17 Balance Brought Forward from Previous Year (47.12) (69.44) 5.38 60.07 107.61 Balance Available for Appropriations (44.73) 5.38 60.07 107.61 401.78 Appropriations Dividend 21.19 - - - - Dividend Tax 2.97 - - - - Transfer to Capital Redemption Reserve 0.55 - - - - Balance carried forward (69.44) 5.38 60.07 107.61 401.78 Note: The above statement should be read together with Significant Accounting Policies and Notes to the Restated Summary Statements- Annexure IV.

11

ANNEXURE III : RESTATED STANDALONE STATEMENT OF CASH FLOWS (Rupees in Million)


March 31, 2006

March 31, 2007

March 31, 2008

March 31, 2009

March 31, 2010

A. Cash Flow from Operating Activities : Net Profit before Taxation after restatement adjustments 22.28 89.65 85.72 86.26 453.24 Adjustments for :

Depreciation / Amortisation (net) 61.39 140.08 852.13 160.59 94.82 Interest Income (5.45) (44.12) (155.69) (128.74) (104.13) Dividend Income (41.19) (59.24) (2.79) (0.72) (2.43) Credit balances no longer payable, written back - - (0.32) (57.72) (0.78) Interest expense 14.62 134.85 92.04 200.99 209.47 Employee compensation expenses - - 1.95 1.00 0.89 (Profit) / Loss on redemption of Mutual Fund held as current investments - - 0.31 - (0.04) Bad Debt written off 4.87 87.71 10.15 5.71 - Debit Balances / Advances written off 30.24 3.50 1.28 14.96 1.43 Provision for Doubtful Debts 8.71 - - - 17.74 Provision for Doubtful Advances/Deposits 18.00 27.24 27.18 18.09 6.36 Air Time Inventory written Off 5.79 2.15 20.48 - - Capital Work in Progress relating to Television Programmes and Motion Pictures, written off 9.40 4.36 4.78 0.13 - (Profit) / Loss on sale/write off of Fixed Assets (net) 0.27 - (50.12) 1.80 (4.00) Unrealised foreign Exchange (gain)/loss (net) - - 1.15 (0.96) 10.40 Operating Profit before Working Capital Changes 128.93 386.18 888.25 301.39 682.97

Adjustments for changes in Assets and Liabilities :- Inventories (2.03) (10.85) 7.67 (3.15) 0.54 Sundry Debtors (1,620.29) 904.89 (1,802.37) (2,233.53) (2,893.13) Loans and Advances (191.28) (208.30) 22.10 92.45 (388.28) Current Liabilities 602.94 (89.59) (165.74) 748.74 3,635.97 Provisions 2.34 3.30 1.51 2.57 (0.32) Compensated Absences/ Gratuity transitional liability

adjusted in General Reserve - - 0.35 - - Cash Generated from / (used in) operations (net) (1,079.39) 985.63 (1,048.23) (1,091.53) 1,037.75 Less : Income Taxes (including Fringe Benefit Tax ) paid (net) (16.83) (72.01) (117.44) (79.40) (71.90) Net Cash from / (used in) Operating Activities (A) (1,096.22) 913.62 (1,165.67) (1,170.93) 965.85 B. Cash Flow from Investing Activities Payments for acquisition of Fixed Assets(after adjustment of Increase/decrease in Capital work in progress) (57.25) (77.46) (1,054.63) (32.34) (21.37) Sale of Fixed Assets 47.70 - 62.20 0.55 45.00 Purchase of Current Investments in Mutual Funds (2,207.98) (6,363.78) (672.21) (40.72) (3,641.73) Sale of Current Investments in Mutual Funds 2,207.98 6,230.22 805.46 40.72 3,168.55 Investments in Subsidiaries $ (6.25) (0.80) - - - Investments in Joint Venture $ - (4,470.20) - - - Sale of Investments in Subsidiary $ 0.05 - - - - Interest Received 3.56 29.89 169.77 98.59 52.16 Dividend Received 41.19 59.24 2.79 0.72 2.43

Net Cash from / (used in) Investing Activities(B) 29.00 (4,592.89) (686.62) 67.52 (394.96) Cash flow from financing activities Proceeds from issue of Share Capital - 476.90 - - 10.15 Advance Subscription towards Share Capital 0.10 - - - - Securities Premium received - 3,814.27 - - 431.50 Interest Paid (6.33) (44.71) (103.54) (127.63) (290.75) Unsecured Loans taken (net of repayments) - 51.52 - - (2.00) Net cash (used in)/ generated from financing activities (6.23) 4,297.98 (103.54) (127.63) 148.90 Net cash (used in)/ generated 0.10 1,025.68 (976.20) 665.85 (554.80) Cash and cash equivalents at the beginning of the year - 0.10 1,025.78 49.59 715.45 Cash and cash equivalents at the end of the year 0.10 1,025.78 49.59 715.44 160.62

Note: (1) The above statement should be read together with Significant Accounting Policies, Notes on Adjustments to Restated Financial Information, Notes on Restated Financial Information and Audit Qualifications. (2) Figures have been regrouped for consistency of presentation.

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Issue Details

Issue1: 22,050,000 Equity Shares

Which comprises:

Fresh Issue2: 14,040,000 Equity Shares aggregating Rs.[●] million

Offer for Sale3: 8,010,000 Equity Shares aggregating Rs.[●] million

Of which A) QIB Portion4: At least 11,025,000 Equity Shares Of which

Available for allocation to Mutual Funds only 551,250 Equity Shares

Balance for all QIBs including Mutual Funds 10,473,750 Equity Shares

B) Non-Institutional Portion5: Not less than 3,307,500 Equity Shares

C) Retail Portion5: Not less than 7,717,500 Equity Shares

Equity Shares outstanding prior to the Issue: 61,501,870 Equity Shares

Equity Shares outstanding post Issue: 75,541,870 Equity Shares

Use of the Issue proceeds:

For details of the Objects of the Fresh Issue, see the section titled “Objects of the Issue” on page 41. Our Company will not receive any proceeds from the Offer for Sale. Further, no part of the Net Proceeds will be paid by our Company as consideration to our Promoters, our Directors, and key managerial personnel, except as may be required in the normal course of business.

1The Issue currently comprises of the Fresh Issue of 18.59% of our post-Issue share capital and the Offer for Sale by the Selling Shareholders of 10.60% of our post-Issue share capital. 2The present Issue has been authorised by circular resolution passed by our Board on March 25, 2010 and by the shareholders of our Company at the extraordinary general meeting held on March 29, 2010. 3Each of Americorp Ventures Limited, CSI BD (Mauritius) and Funderburk Enterprises Limited confirm that the Offer for Sale has been authorised pursuant to the board resolutions passed by their board of directors dated September 22, 2010, March 26, 2010 and September 23, 2010 respectively. The Individual Selling Shareholders being Mr. Purshotamdas Naraindas Budhrani and Mr. Harichandra Naraindas Budhrani have also given their consent to participate in the Offer for Sale. The Selling Shareholders are offering 8,010,000 Equity Shares aggregating Rs. [●] million which have been held for a period of at least one year (either as Equity Shares or as convertible instruments) prior to the date of filing of the Draft Red Herring Prospectus with SEBI and, hence, are eligible for being offered for sale in this Issue. 4 Our Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to Anchor Investors. In the event of under-subscription in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. 5% of the Net QIB Portion shall be available for allocation to Mutual Funds. Mutual Funds participating in the 5% reservation in the Net QIB Portion will also be eligible for allocation in the remaining Net QIB Portion. Further attention of all QIBs is specifically drawn to the following: (a) Our Company may consider closing the Bid/Issue Period for QIBs one day prior to the Bid/Issue Closing Date. (b) QIBs will not be allowed to withdraw their Bid cum Application Forms on the Bid/Issue Closing Date; and (c) each QIB, including a Mutual Fund is required to deposit a Bid Amount with its Bid cum Application Form. In the event of under subscription in the Mutual Fund Portion only, the unsubscribed portion would be added to the balance of the Net QIB Portion to be allocated on a proportionate basis to the QIB Bidders. Provided further that the Anchor Investors shall pay Bid Amount at the time of submission of the Anchor Investor Bid. For further details, please see the section titled “Issue Procedure” on page 224 of this Draft Red Herring Prospectus. 5 Subject to valid Bids being received at or above the Issue Price. Under-subscription, if any, in the Non Institutional Portion, and Retail Portion would be allowed to be met with spill-over from other categories or a combination of categories, at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs, Co-BRLM and the Designated Stock Exchange. If at least 50% of the Issue cannot be allotted to QIBs, then the entire application money will be refunded forthwith.

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General Information

Our Company was originally incorporated as ‘Nimbus Communications Private Limited’ on June 30, 1987 under the Companies Act as a private limited company with the RoC, Maharashtra. Our Company became a deemed public company under Section 43A of the Companies Act and its name was consequently changed to ‘Nimbus Communications Limited’ with effect from July 1, 1994. In an extraordinary general meeting of our Company held on January 4, 2000, our Company’s shareholders passed a resolution converting our Company from a deemed public company to a public company. For further details on the change in status, name and change in registered office, please see the section titled “History and Certain Corporate Matters” on page 100 of this Draft Red Herring Prospectus. Registered and Corporate Office of our Company Nimbus Communications Limited Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India.

Tel: +91 22 2635 2000 Fax: +91 22 2635 2123

Details Registration/Identification numberRegistration Number 043940Corporate Identification Number U99999MH1987PLC043940 Website address: www.nimbus.co.in For details of the changes to our registered office, please refer to the section titled “History and Certain Corporate Matters” on page100 of this Draft Red Herring Prospectus. Address of the Registrar of Companies Our Company is under the jurisdiction of the Registrar of Companies, Maharashtra having its office at the following location: Everest, 100 Marine Drive, Mumbai 400 002, Maharashtra, India. Website: www.mca.gov.in Board of Directors The following table sets out the details regarding our Board as on the date of the filing of this Draft Red Herring Prospectus:

Name and designation DIN Age

(In years) Address

Mr. Harish Kanayalal Thawani Designation: Executive Chairman and Whole-Time Director

01082908 51 701, Rendezvous, 120-121, Perry Road, Bandra (West), Mumbai 400 050, Maharashtra, India.

Ms. Shobha Harish Thawani Designation: Non-Executive and Non-Independent Director

00156100 55 701, Rendezvous, 120, Perry Road, Bandra (West), Mumbai 400 050, Maharashtra, India.

Dr. Akash Chandra Khurana Designation: Executive Vice Chairman and Whole-Time Director

01220599 57 19, Dunhill, Dr. Ambedkar Road, Khar (West), Mumbai 400 052, Maharashtra, India.

Mr. Supratim Subimal Basu Designation: Non-Executive and Independent Director

01910081 40 302, Laxmi Gopal Building, 3rd Floor, Hatiskar Marg, Prabhadevi, Mumbai, 400 025, Maharashtra, India.

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Name and designation DIN Age (In years)

Address

Mr. Kishore Manohar Musale Designation: Non-Executive and Independent Director

00144029 56 601, Kubelisque, Dr. Ambedkar Road, Palihill, Bandra (West), Mumbai – 400 050, Maharashtra, India.

Mr. Peter Robin Paxton Designation: Non-Executive and Independent Director

01874298 59 23 Lonsdale Road, Barnes, London, United Kingdom – SW139JP.

Mr. Richard Dorfman Designation: Non-Executive and Independent Director

01787931 58 10 Evelyn Gardens, London, United Kingdom – SW73BG.

Mr. Ranjan Kapur Designation: Non-Executive and Independent Director

00035113 67 B-281, Twin Towers, Veer Savarkar Marg, Prabhadevi, Mumbai 400 025, Maharashtra, India.

For further details regarding our Board, please see the section titled “Management” on page 116 of this Draft Red Herring Prospectus. Company Secretary and Compliance Officer Our Company Secretary and Compliance Officer is Mr. Parthasarathy Iyengar. His contact details are as follows: Nimbus Communications Limited Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India. Tel: +91 22 2635 2000; Fax: +91 22 2635 2123. Email: [email protected] Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary account or refund orders, etc. All grievances relating to ASBA process may be addressed to the Registrar to the Issue, with a copy to the SCSBs, giving full details such as name, address of the applicant, number of Equity Shares applied for, Bid Amount blocked, ASBA account number and the Designated Branch of the SCSBs where the ASBA Bid cum Application Form was submitted by the ASBA Bidders. Book Running Lead Managers Edelweiss Capital Limited 14th Floor, Express Towers, Nariman Point, Mumbai – 400 021, India. Tel: +91 22 4086 3535 Fax: +91 22 4086 3610 E-mail: [email protected] Investor Grievance Id: [email protected] Contact Person: Mr. Chitrang Gandhi / Ms. Neetu Ranka Website: www.edelcap.com SEBI registration number: INM0000010650 Macquarie Capital Advisers (India) Private Limited Level 4, Earnest House NCPA Marg, Nariman Point, Mumbai 400 021, India Tel: +91 22 4230 1200 Fax: +91 22 4002 8707

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Email:[email protected] Investor Grievance Id: [email protected] Website: http://www.macquarie.com/in/en/index.htm Contact Person: Mr. Hari Kishan Movva SEBI Registration number: INM000010932 Centrum Capital Limited Centrum House, Vidya Nagari Marg, CST Road, Kalina, Santacruz (East), Mumbai - 400 098, India. Tel: +91 22 4215 9000 Fax: +91 22 4215 9707 Email: [email protected] Investor Grievance Id: [email protected] Website: www.centrum.co.in Contact Person: Mr. Maulik Sanghavi / Ms. Rachna Nawhal SEBI registration number : INM000010445 Co-Book Running Lead Manager PNB Investment Services Ltd. 10, Rakesh Deep Building, Yusuf Sarai Commercial Complex, Gulmohar Enclave, New Delhi – 110 049, India Tel: +91 11 4949 5050 Fax: +91 11 4103 5057 Email: [email protected] Investor Grievance Id: [email protected] Website: www.pnbisl.com Contact Person: Mr. Narender Thakran/V. Gujjal SEBI registration number: INM000011617 For all Issue related queries and for redressal of complaints, investors may also write to the Book Running Lead Managers and Co-Book Running Lead Manager. All complaints, queries and comments received by SEBI shall be forwarded to the Book Running Lead Managers and Co-Book Running Lead Manager, who shall respond to the same. Legal Counsel Domestic Legal Counsel to our Company Nishith Desai Associates Legal and Tax Counseling Worldwide 93-B Mittal Court, Nariman Point, Mumbai 400 021, Maharashtra, India. Tel: +91 22 6669 5000 Fax: +91 22 6669 5001 Email: [email protected] Domestic Legal Counsel to the BRLMs International Legal Counsel to the BRLMs Trilegal One Indiabulls Centre, 14th Floor, Tower One, Jupiter Mills, Elphinstone Road, Mumbai 400 013, Maharashtra, India Tel: +91 22 4079 1000 Fax: +91 224079 1098 Email: [email protected]

DLA Piper Singapore Pte. Limited 80 Raffles Place, #48-01 UOB Plaza 1, Singapore 048624. Tel: +65 6512 9595 Fax: +65 6512 9500

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Registrar to the Issue Karvy Computershare Private Limited Plot nos.17-24, Vittal Rao Nagar, Madhapur, Hyderabad – 500 081. Andhra Pradesh, India. Toll free no.: 1-800-345-4001 Tel: +91 40 2342 0815- 28 Fax: +91 40 2343 1551 E-mail: [email protected] Website: www.karvy.com Contact Person: Mr. Murali Krishna SEBI Registration No: INR000000221 Bankers to the Issue/ Escrow Collection Bank [●] Refund Banker(s) [●] Syndicate members [●] Self Certified Syndicate Banks The list of banks that have been notified by SEBI to act as SCSB for the ASBA process are provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSBs collecting the ASBA Bid cum Application Form, please refer to the above mentioned SEBI link. Auditors to our Company Deloitte Haskins & Sells Chartered Accountants, ‘Heritage’, 3rd Floor, Near Gujarat Vidyapith, Off Ashram Road, Ahmedabad – 380 014 Gujarat, India. Tel: +9179 2758 2542 Fax: +91 79 2758 2551 Email: [email protected] Bankers to our Company Punjab National Bank Large Corporate Branch, Centenary Building, 28 MG Road, Bangalore 560 001 Karnataka, India. Tel:+91 80 2558 1861 Fax: + 91 80 2558 2515 Contact person: Mr. S Guha Roy Email: [email protected] Website: http://www.pnbindia.com Indian Bank 210, Mittal Tower B Wing, Nariman Point, Mumbai - 400 021, Maharashtra, India. Tel:+91 22 2287 0318

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Fax:+9122 2204 5290 Contact person: Mr. Pradip D Mopkar Email: [email protected] Website: http://www.indianbank.co.in Oriental Bank of Commerce M.G.Seva Trust Building, S.V.Road, Bandra (West ), Mumbai - 400 050, Maharashtra, India. Tel:+ 91 22 2634 8787 Fax:+ 91 22 2643 8789 Contact person: Mr. T. R. Lakhani Email: [email protected] Website: https://www.obcindia.co.in Union Bank of India Nariman Point Branch, (MMO) 239, Vidhan Bhavan Marg, Nariman Point, Mumbai - 400 021. Maharashtra, India. Tel:+91 22 2289 2060 Fax:+91 22 2283 1594/ 2202 4033 Contact person: Mr. Ravi Kumar Gupta Email: [email protected] Website: http://www.unionbankofindia.co.in/ Monitoring Agency As this is an Issue for less than Rs. 5,000 million, there is no requirement for the appointment of a monitoring agency. Experts Except the report of [●] in respect of the IPO grading of this Issue annexed herewith, our Company has not obtained any expert opinions. The above expert has provided its written consent to act as an “expert” to this Issue. The certificate and the opinion stated above form a part of the section titled “Material Contracts and Documents for Inspection” on page 279 of this Draft Red Herring Prospectus. Statement of Inter se Allocation of Responsibilities for the Issue The following table sets forth the distribution of responsibility and coordination for various activities of the BRLMs and Co-BRLM:

Sr. No. Activities Responsibility Coordinator

1 Capital structuring with the relative components and formalities such as composition of debt and equity, type of instruments, etc.

Edelweiss, Macquarie

Capital, Centrum, PNBISL

Edelweiss

2 Due diligence of the Company’s operations/ management/business plans/ legal etc. Drafting and design of the Red Herring Prospectus and of statutory advertisement including memorandum containing salient features of the Prospectus. Drafting of MD&A and Industry section of the Prospectus



Edelweiss

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Sr. No. Activities Responsibility Coordinator

3 Drafting and approval of all publicity material other than statutory advertisement as mentioned in (2) above including corporate advertisement, brochure, corporate films etc.



Macquarie Capital

4 Appointing Intermediaries and Agencies:



Printer & Registrar - Edelweiss

Advertising Agency -

Macquarie Capital

Bankers to the Issue – Centrum

5 International institutional marketing of the Issue, which will cover, inter alia, – Preparing road show presentation and frequently asked questions; – Finalizing the list and division of investors for one to one

meetings; and – Finalizing road show schedule and investor meeting schedules



Macquarie Capital

6 Domestic institutional marketing of the Issue, which will cover, inter alia, – Finalizing the list and division of investors for one to one

meetings; and – Finalizing road show schedule and investor meeting schedules



Edelweiss

7 Non-Institutional & Retail Marketing of the Offer, which will cover, inter alia, – Formulating marketing strategies, preparation of publicity budget; – Finalizing Media and PR strategy; – Finalizing centres for holding conferences for brokers etc.; – Finalizing collection centres; and – Follow-up on distribution of publicity and Offer material

including form, prospectus and deciding on the quantum of the Offer material



Centrum

8 Managing the book, coordinating with Stock Exchanges, pricing and allocation to the QIB Bidders and post bidding activities including managing of Escrow Accounts, coordinating non-institutional allocation, intimating allocation and dispatching of refunds to the Bidders.



Centrum

9 The Post Issue activities for the Issue will involve essential follow up steps, which include the finalisation of basis of allotment, dispatch of refunds, demat and delivery of shares, finalisation of listing and trading of instruments with the various agencies connected with the work such as the Registrar(s) to the Issue and Escrow Collection Banks. (The BRLMs shall be responsible for ensuring that these agencies fulfill their functions and enable it to discharge this responsibility through suitable agreements with our Company)



Centrum

The post issue activities of the Issue will involve essential follow up steps, which include finalising of trading and dealing instruments and dispatching of certificates and demat delivery of shares, with the various agencies connected with the work such as Registrars to the Issue, Bankers to the Issue and the bank handling the refunds business. The BRLMs and Co-BRLM shall be responsible for ensuring that these agencies fulfil their functions and enable them to discharge this responsibility through suitable agreements with our Company. Credit Rating As the Issue is of Equity Shares only, credit rating is not required.

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IPO Grading Pursuant to the SEBI ICDR Regulations, this Issue has been graded by [●] and has been assigned a grade of [●]/5 indicating [●]. The IPO Grading is assigned on a five point scale from 1 to 5, with IPO Grade 5/5 indicating strong fundamentals and IPO Grade 1/5 indicating poor fundamentals. For details in relation to the rationale furnished by [●], see the “Annexure I” on page 284 of this Draft Red Herring Prospectus. Trustees As the Issue is of Equity Shares only, the appointment of trustees is not required. Appraising Entity The objects of the Issue have not been appraised by any agency. The objects of the Issue and the means of finance are therefore based on the internal estimates of the management of our Company. Book Building Process “Book building” refers to the process of collection of Bids from investors on the basis of the Red Herring Prospectus, the Bid cum Application Forms and the ASBA Bid cum Application Forms. The Issue Price shall be determined by our Company and the Selling Shareholders, in consultation with the Book Running Lead Managers and Co-Book Running Lead Manager, after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are: 1. Our Company; 2. The Selling Shareholders; 3. The Book Running Lead Managers; 4. Co-Book Running Lead Manager, 5. Syndicate Members who are intermediaries registered with SEBI or registered as brokers with any of the Stock

Exchanges and eligible to act as underwriters; 6. Registrar to the Issue; 7. Escrow Collection Banks; 8. Refund Bankers to the Issue; and 9. SCSBs.

The Issue is being made under sub-regulation (2) (a) (i) and (2) (b) (i) of Regulation 26 of the SEBI ICDR Regulations, and through the Book Building Process, wherein atleast 50% of the Issue shall be allocated on a proportionate basis to QIB Portion. Provided that our Company may allocate up to 30% of the QIB portion to the Anchor Investors on discretionary basis (“Anchor Investor Portion”). At least one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds only. If atleast 50% of the Issue cannot be allocated to the QIBs then the entire application money will be refunded forthwith. Further, not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders and not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders, subject to valid Bids being received at or above the Issue Price. Allocation to Anchor Investors shall be on a discretionary basis subject to minimum number of two Anchor Investors. An Anchor Investor shall make a minimum Bid of such number of Equity Shares that the Bid Amount is at least Rs. 100 million. Further, Anchor Investors shall pay the Bid Amount at the time of submission of the Bid cum Application Form to the Book Running Lead Managers and Co- Book Running Lead Manager. In the event of under-subscription or non-Allotment in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to QIBs, subject to valid Bids being received from them at or above the Issue Price. However, if the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the Net QIB Portion and allocated proportionately to the QIBs in proportion to their Bids. In accordance with the SEBI ICDR Regulations, QIBs bidding in the Net QIB Portion are not allowed to withdraw their Bids after the Bid/Issue Closing Date. Our Company will comply with the SEBI ICDR Regulations and any other ancillary directions issued by SEBI for this Issue. In this regard, our Company and Selling Shareholders have appointed the Book Running Lead Managers and Co- Book Running Lead Managers to manage the Issue and procure subscriptions to the Issue. The Selling Shareholders confirm that they will comply with SEBI ICDR Regulations and any other directions issued by SEBI as

20

applicable to the Selling Shareholders in relation to the Equity Shares offered by the Selling Shareholders under the Offer for Sale. The process of book building under the SEBI ICDR Regulations is subject to change. Investors are advised to make their own judgment about investment through this process prior to submitting a Bid or Application in the Issue. Illustration of Book Building Process and the Price Discovery Process (Investors should note that the following example is solely for the purpose of illustration and is not specific to the Issue) Bidders can bid at any price within the price band. For instance, assuming a price band of Rs. 20 to Rs. 24 per share, an issue size of 3,000 equity shares and receipt of five bids from bidders, details of which are shown in the table below, the illustrative book would be as given below. A graphical representation of the consolidated demand and price would be made available at the NSE and BSE websites during the bidding period. The illustrative book as shown below indicates the demand for the shares of the issuer company at various prices and is collated from bids from various investors.

Bid Quantity Bid Price (Rs.) Cumulative Quantity Subscription 500 24 500 16.67%

1,000 23 1,500 50.00% 1,500 22 3,000 100.00% 2,000 21 5,000 166.67% 2,500 20 7,500 250.00%

The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired number of shares is the price at which the book cuts off, i.e., Rs. 22 in the above example. The Issuer and the Selling Shareholders, in consultation with the Book Running Lead Managers and Co-Book Running Lead Manager, will finalise the issue price at or below such cut-off, i.e., at or below Rs. 22. All bids at or above this issue price and cut-off bids are valid bids and are considered for allocation in the respective categories. Steps to be taken by the Bidders for Bidding:

1. Check eligibility for making a Bid. For further details, see the section titled “Issue Procedure” on page 224. 2. Ensure that you have a demat account and the demat account details are correctly mentioned in the Bid cum

Application Form or the ASBA Bid cum Application Form, as the case may be; 3. Ensure that the Bid cum Application Form or ASBA Bid cum Application Form is duly completed as per the

instructions given in the Red Herring Prospectus and in the respective forms; 4. Ensure that you have mentioned your PAN in the Bid cum Application Form or ASBA Bid cum Application Form

(see the section titled “Issue Procedure” on page 224); 5. Ensure the correctness of your Demographic Details (as defined in the section titled “Issue Procedure – Bidder’s

Depository Account and Bank Details” on page 236), given in the Bid cum Application Form or ASBA Bid cum Application Form, with the details recorded with your Depository Participant;

6. Bids by ASBA Bidders will only have to be submitted to the SCSBs at the Designated Branches. ASBA Bidders should ensure that their bank accounts have adequate credit balance at the time of submission to the SCSB to ensure that their ASBA Bid cum Application Form is not rejected; and

7. Bids by QIBs (including Anchor Investors) will only have to be submitted to members of the Syndicate. Bid/Issue Programme

BID/ISSUE OPENS ON [●]# BID/ISSUE CLOSES ON [●]##

#Our Company may consider participation by Anchor Investors. The Anchor Investor Bid/Issue date shall be one Working Day prior to Bid/ Issue Opening Date. ##Our Company may consider closing the Bid/Issue Period for QIBs one day prior to the Bid/Issue Closing Date.

Our Company may consider participation by the Anchor Investors for upto 30% of the QIB Portion to Anchor Investors at the Anchor Investor Price on a discretionary basis, subject to a minimum of two Anchor Investors in accordance with SEBI ICDR Regulations on the Anchor Investor Bidding Date. For details see section titled “Issue Procedure” on page 224 of this Draft Red Herring Prospectus. Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time)

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during the Bidding Period as mentioned above at the Bidding Centres mentioned on the Bid cum Application Form or, in case of Bids submitted through ASBA, the Designated Branches of the SCSBs, except that on the Bid/Issue Closing Date, Bids shall be accepted only between 10.00 A.M. and 3.00 P.M. (Indian Standard Time) and uploaded until (i) 4.00 P.M. in case of Bids by QIBs bidding in the Net QIB Portion, Non-Institutional Bidders where the Bid Amount is in excess of Rs.100,000 and (ii) until 5.00 P.M in case of Bids by Retail Individual Bidders, where the Bid Amount is up to Rs.100,000 which may be extended up to such time as deemed fit by the Stock Exchanges after taking into account the total number of applications received up to the closure of timings and reported by Book Running Lead Managers and Co-Book Running Lead Manager, to the Stock Exchanges within half an hour of such closure. Due to limitation of the time available for uploading the Bids on the Bid/Issue Closing Date, the Bidders, except Anchor Investors, are advised to submit their Bids one day prior to the Bid/Issue Closing Date and, in any case, no later than 3.00 p.m. (Indian Standard Time) on the Bid/Issue Closing Date. Bidders other than Anchor Investors are cautioned that in the event a large number of Bids are received on the Bid/Issue Closing Date, as is typically experienced in public offerings in India, which may lead to some Bids not being uploaded due to lack of sufficient time to upload, such Bids that cannot be uploaded will not be considered for allocation under this Issue. If such Bids are not uploaded our Company, the Selling Shareholders, BRLMs and Co-BRLM shall not be responsible. Bids by ASBA Bidders shall be uploaded only by SCSBs in the electronic system to be provided by the BSE and the NSE. Bids will only be accepted on Working Days. In case of discrepancy in the data entered in the electronic book vis-à-vis the data contained in the physical Bid form, for a particular Bidder, the details as per physical application form of that Bidder may be taken as the final data for the purpose of Allotment. In case of discrepancy in the data entered in the electronic book vis-à-vis the data contained in the physical or electronic Bid cum Application Form submitted through the ASBA process, for a particular ASBA Bidder, the Registrar to the Issue shall ask for rectified data from the SCSBs. On the Bid/Issue Closing Date, extension of time will be granted by the Stock Exchanges only for uploading the Bids received from the Retail Individual Bidders after taking into account the total number of Bids received up to the closure of timings for acceptance of Bid cum Application Forms as stated herein and reported by the BRLMs and Co-BRLM to the Stock Exchange within half an hour of such closure. Our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM, reserve the right to revise the Price Band during the Bidding Period in accordance with the SEBI ICDR Regulations. The Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. Subject to compliance with the immediately preceding sentence, the Floor Price can move up or down to the extent of 20% of the Floor Price advertised at least two Working Days before the Bid/ Issue Opening Date. In case of revision in the Price Band, the Bidding Period will be extended for at least three additional Working Days after revision of the Price Band, subject to the Bidding Period not exceeding a total of 10 Working Days. Any revision in the Price Band and the revised Bidding Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by indicating the change on the website of the BRLMs, Co-BRLM and at the terminals of the members of the Syndicate. Withdrawal of the Issue Our Company and/or the Selling Shareholders, in consultation with the Book Running Lead Managers and Co-Book Running Lead Manager, if required in terms of their engagement letters, reserve the right not to proceed with the Issue in accordance with SEBI ICDR Regulations. Provided, if our Company withdraws the Issue after the Bid/Issue Closing Date but before Allotment, we will give the reason thereof within two days of the Bid/Issue Closing Date by way of a public notice in the same newspapers where the pre-Issue advertisement had appeared. The Stock Exchanges shall also be informed promptly. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment and (ii) the final RoC approval of the Prospectus after it is filed with the RoC. In terms of the SEBI ICDR Regulations, QIB Bidders shall not be allowed to withdraw their Bid after the Bid/Issue Closing Date. Underwriting Agreement After the determination of the Issue Price and allocation of our Equity Shares but prior to filing of the Prospectus with the RoC, our Company and the Selling Shareholders confirm that they will enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be offered through this Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLMs and Co-BRLM shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfill their underwriting obligations. Pursuant to the terms of the Underwriting Agreement, the obligations of the Underwriters are subject to certain conditions to closing, as specified therein.

22

The Underwriters have indicated their intention to underwrite the following number of Equity Shares: (This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC)

Name and Address of the Underwriters Indicative Number of Equity Shares to be Underwritten

Amount Underwritten (In Rs. million)

[●] [●] [●] [●] [●] [●] [●] [●] [●]

The above mentioned amount is indicative and will be finalized after determination of the Issue Price and finalization of the section titled “Basis of Allotment” as described in the section titled “Issue Procedure” on page 245 of this Draft Red Herring Prospectus. In the opinion of our Board and the Selling Shareholders (based on certificates dated [●] given to them by the BRLMs, Co-BRLM and the Syndicate Members), the resources of the Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The above-mentioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the Stock Exchanges. The above Underwriting Agreement dated [●] has been accepted by the Board and the Selling Shareholders has issued letters of acceptance to the Underwriters. Allocation among Underwriters may not necessarily be in proportion to their underwriting commitments. Notwithstanding the above table, the Underwriters shall be severally responsible for ensuring payment with respect to the Equity Shares allocated to investors procured by them. In the event of any default, the respective Underwriters in addition to other obligations to be defined in the Underwriting Agreement, will also be required to procure/subscribe to the extent of the defaulted amount in accordance with the Underwriting Agreement, except in cases where the allocation to QIBs is less than 50% of the net Issue, in which case the entire subscription monies will be refunded.

23

Capital Structure

Our share capital as on the date of filing of this Draft Red Herring Prospectus is set forth below.

(Rs. in million except share data) Particulars Aggregate nominal value Aggregate value at Issue

Price A. Authorised share capital 95,000,000 Equity Shares of Rs. 10 each 950 5,000,000 preference shares of Rs. 10 each 50 B. Issued, Subscribed and paid-up capital before the Issue 61,501,870 Equity Shares 615.02 C. Present Issue in terms of this Draft Red Herring Prospectus (a) Issue of: 22,050,000 Equity Shares Comprising:

Fresh Issue of 14,040,000 Equity Shares Offer for Sale of 8,010,000 Equity Shares (b)

220.50

140.40 80.10

[●]

[●] [●]

Of which:

QIB Portion of at least 11,025,000 Equity Shares (c) 110.25 [●] Out of which Mutual Fund Portion of at least 551,250 Equity Shares (c) 5.51 [●]

Non-Institutional Portion of not less than 3,307,500 Equity Shares (d) 33.08 [●] Retail Portion of not less than 7,717,500 Equity Shares (d) 77.17 [●]

D. Equity Share capital after the Issue 75,541,870 Equity Shares 755.41 [●] E. Share premium account Before the Issue 8,479.91 After the Issue* [●] * The securities premium account will be determined after completion of the Book Building Process and determination of the Issue Price.

(a) The Issue has been authorised by a circular resolution passed by our Board dated March 25, 2010 and special resolution passed pursuant to section 81(1A) of the Companies Act at the extraordinary general meeting of the shareholders of our Company held on March 29, 2010.

(b) Each of Americorp Ventures Limited, CSI BD (Mauritius) and Funderburk Enterprises Limited have been authorised transfer of Equity Shares as the Offer for Sale pursuant to resolutions dated September 22, 2010, March 26, 2010 and September 23, 2010 respectively passed by their board of directors. The Individual Selling Shareholders namely Mr. Purshotamdas Naraindas Budhrani and Mr. Harichandra Naraindas Budhrani have given their consent to participate in the Offer for Sale. The Selling Shareholders are offering 8,010,000 Equity Shares aggregating Rs.[●] million, which have been held for a period of at least one year (either as Equity Shares or as convertible instruments) prior to the date of filing of the Draft Red Herring Prospectus with SEBI and, hence, are eligible for being offered for sale.

(c) Our Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to Anchor Investors. In the event of under-subscription in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to QIBs, subject to valid Bids being received from them at or above the Issue Price. However, if the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the Net QIB Portion and allocated proportionately to the QIBs in proportion to their Bids. Further, attention of all QIBs bidding under the Net QIB Portion is specifically drawn to the following: QIBs will not be allowed to withdraw their Bid cum Application Forms after Bid/Issue Closing Date; In the event of under-subscription in the Mutual Fund Portion, the unsubscribed portion would be added to the balance of the Net QIB Portion for allocation on a proportionate basis to the QIBs bidding in the Net QIB Portion.

(d) Under-subscription, if any, in the Non-Institutional Portion and the Retail Portion would be allowed to be met with spill-over from other categories or a combination of categories, at the sole discretion of our Company and the Selling Shareholders, in consultation with the Book Running Lead Managers, Co-Book Running Lead Manager and Designated Stock Exchange. Changes in the Authorised Capital

1. The authorized share capital of our Company was increased from Rs. 100,000 divided into 10,000 Equity Shares of Rs. 10 each to Rs.60,000,000 divided into 6,000,000 Equity Shares of Rs. 10 each through a resolution passed by the shareholders of our Company at an extraordinary general meeting held on April 4, 1994.

2. The authorized share capital of our Company was further increased from Rs. 60,000,000 to Rs. 300,000,000 divided

into 30,000,000 Equity Shares of Rs. 10 each through a resolution passed by the shareholders of our Company at an extraordinary general meeting held on January 4, 2000.

24

3. Each Equity Share of our Company of Rs. 10 each was split into two equity shares of Rs. 5 each, without any change in the aggregate authorised share capital, through a resolution passed by the shareholders of our Company at an extraordinary general meeting held on August 9, 2000.

4. The authorized share capital of our Company was further increased from Rs. 300,000,000 to Rs. 500,000,000 divided into 100,000,000 equity shares of Rs. 5 each through a resolution passed by the shareholders of our Company at an extraordinary general meeting held on June 29, 2005.

5. The authorized share capital of our Company was consolidated as follows: every two equity shares of Rs. 5 each were consolidated into one Equity Share of Rs. 10. Further, the authorised share capital of our Company was increased from Rs. 500,000,000 to Rs. 650,000,000 divided into 65,000,000 Equity Shares of Rs. 10 each, through a resolution passed by the shareholders of our Company at a general meeting held on June 26, 2007.

6. The authorized share capital of our Company was further increased from Rs. 650,000,000 to Rs. 1,000,000,000 divided into 100,000,000 Equity Shares of Rs. 10 each through a resolution passed by the shareholders of our Company at an extraordinary general meeting held on February 11, 2008.

7. The authorised share capital was reclassified into 100,000,000 shares of Rs. 10 each, whether in the nature of Equity Shares or preference shares having such right as may be determined from time to time by the Board through a resolution passed by the shareholders of our Company at an extraordinary general meeting held on April 20, 2009.

8. The authorised share capital was further reclassified as Rs.1,000,000,000 divided into 95,000,000 Equity Shares of

Rs.10 each and 5,000,000 non cumulative preference shares of Rs.10 each through a resolution passed by the shareholders of our Company at an extraordinary general meeting held on February 11, 2010.

Share capital history of our Company:

a) Equity Share capital

The following is the history of the Equity Share capital of our Company:

Date of issue/

Allotment

Name of the allottee

No. of Equity Shares

Face value per

Equity Share (Rs.)

Issue Price per

Equity Share (Rs.)

Nature of consideration (cash / other than cash)

Mode of acquisition

(preferential allotment,

transfer, gift, bonus etc)

Cumulative

Equity Share premium (Rs.)

Cumulative number of

Equity Shares

Cumulative

Equity Share capital (Rs.)

June 30, 1987

Mr. Harish Thawani

150 10 10 Cash Subscription to the

Memorandum of

Association

Nil 150 1,500

Ms. Shobha Harish

Thawani

105 10 10 Nil 255 2,550

Dr. Akash Chandra Khurana

150 10 10 Nil 405 4,050

Ms. Meera Khurana

60 10 10 Nil 465 4,650

Mr. Irfaan Khan

5 10 10 Nil 470 4,700

Mr. Anupam Pushkar Kher

5 10 10 Nil 475 4,750

Mr. Sumedh Shah

25

10 10 Nil 500 5,000

25

Date of issue/ Allotment



Face value per

Equity Share (Rs.)

Issue Price per

Equity Share (Rs.)


Mode of acquisition



Cumulative



Equity Shares

Cumulative


December 7, 1988

Mr. Harish Kanayalal Thawani

7,500 10 10 Cash Preferential allotment

Nil 8,000 80,000

December 7, 1988

Ms. Shobha Harish

Thawani


Nil 10,000 100,000

August 10, 1994


3,150,105 10 - Consideration other than

Cash

Bonus issue out of

revaluation reserve in the

ratio of 399:1(1)

Nil 3,160,105 31,601,150

Ms. Shobha Harish

Thawani

839,895 10 - Nil 4,000,000 40,000,000

December 31, 1997


1,579,000 10 - Consideration other than

Cash

Bonus issue out of general reserve in the ratio of 1:2 (2)

Nil 5,579,000 55,790,000

Ms. Shobha Harish

Thawani

421,000

10 - Nil 6,000,000

60,000,000

January 10, 2000

Paramount (3) 12,000,000 10 - Consideration other than

Cash

Preferential allotment

Nil 18,000,000

180,000,000

Sub division of 18,000,000 Equity Share of Rs. 10 each into two equity shares of Rs. 5 each resulting into 36,000,000 equity shares of Rs. 5each.(4) October 25, 2001

Transatlantic Corporation

4,285,714 5 70 Cash Preferential allotment

278,571,410 40,285,714 201,428,579

January 11, 2002

Aggregate of 30 employees

of our Company

95,100 5 5 Cash Allotment pursuant to an

employee stock option

scheme during 2002

(5)

278,571,410 40,380,814 201,904,070

December 31, 2002


of our Company

98,300 5 5 Cash Allotment pursuant to an

employee stock option

scheme during 2002

to 2005(5)

278,571,410 40,479,114 202,395,570

May 21, 2003


of our Company

49,500 5 5 Cash 278,571,410 40,528,614 202,643,070

July 8, 2003

Aggregate of two employees

of our Company

37,800 5 5 Cash 278,571,410 40,566,414 202,832,070

March 2, 2005

Aggregate of four

employees of our Company

57,200 5 7.23 Cash 278,698,966 40,623,614 203,118,070

June 24, 2005

One employee of our

Company

26,200 5 7.23 Cash 278,757,392 40,649,814 203,249,070

August 5, 2005

3i Sports Media

(Mauritius) Limited(6)

24,389,888 5 80.85 Cash Preferential allotment

2,128,730,397 65,039,702 325,198,510

Buy back of 110,150 Equity Shares of Rs. 5 each from its employees at a price of Rs. 80.85 per Equity Share.(7) January 11, 2007

Funderburk Enterprises

Limited

177,081 5 194.83 Cash Preferential allotment

2,153,990,805 65,106,633 325,533,165

January 11, 2007

3i Sports Media

(Mauritius) Limited

(formerly 3i (Mauritius) Investments

2 Technologies

Limited)


2,165,195,900 65,165,660 325,828,300

26

(1) Issued pursuant to the resolution passed at the extraordinary general meeting held on August 9, 1994. (2) Issued pursuant to the resolution passed at the extraordinary general meeting held on December 28, 1997. (3) The allotment was made by our Company to Paramount (formally known as “Nimbus Creative Corporation Limited”) as consideration in lieu of cash pursuant

to an agreement entered into in September, 1999 between our Company and Paramount under which Paramount transferred its business to our Company at a book value of Rs. 120,000,000.

(4) Sub division of Equity Share of Rs. 10 each into two equity shares of Rs. 5 each pursuant to the resolution passed at the extraordinary general meeting held on August 9, 2000.

(5) Issued pursuant to the resolution passed at the extraordinary general meeting held on September 29, 1999.

(6) Allotment of 24,389,888 to 3i Sports Media (Mauritius) Limited pursuant to share subscription and shareholders agreement dated August 4, 2005 between 3i Sports Media (Mauritius) Limited (formerly known as ‘3i (Mauritius) Investments 2 Technologies Limited’), our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount (formerly known as ‘Nimbus Creative Corporation Limited’). For the details of the Share Subscription and Shareholders’ Agreement see section titled “History and Certain Corporate Matters” on page 100 of the Draft Red Herring Prospectus.

(7) On December 19, 2005, our Company performed a buy back of 110,150 Equity Shares of Rs. 5 each of its employees at a price of Rs. 80.85 per Equity Share. Consequent to the buy back, the issued share capital was reduced from 24,389,888 Equity Shares of Rs. 5 each to 24,279,738 Equity Shares of Rs. 5. The buy back was authorised by the shareholders of our Company through a resolution in a general meeting held on September 30, 2005. A portion, Rs. 2,120,423,074, of the aggregate buy back price in excess of the face value amount of the Equity Shares was paid out of the securities premium amount.

(8) Consolidation of equity shares of Rs. 5 each into one Equity Share of Rs. 10 each pursuant to the resolution passed at the extraordinary general meeting held on

June 26, 2007. Further, out of fractional equity shares arising out of consolidation 2 Equity Shares were allotted to Ms. Shobha Harish Thawani.

(9) 28,626,495 Equity Shares of Rs.10 each were allotted on February 09, 2010 pursuant to conversion of CCPS and CCDs. Our Company filed revised e-form 2 with the Ministry of Corporate Affairs on July 27, 2010 pursuant to a calculation error in the number of Equity Shares to be allotted on conversion of CCPS and CCDs.

(10) Allotment pursuant to Subscription Agreement between our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani, Paramount, Brand Equity

Treaties Limited dated March 9, 2010. For the details of the share subscription and shareholders’ agreement see section titled “History and Certain Corporate Matters” on page 100 of the Draft Red Herring Prospectus.

Date of issue/

Allotment



Face value per

Equity Share (Rs.)

Issue Price per

Equity Share (Rs.)


Mode of acquisition



Cumulative



Equity Shares

Cumulative


January 11, 2007

CSI BD (Mauritius)


2,174,159,863 65,212,881 326,064,405

June 2, 2007

Ms. Shobha Harish

Thawani

1 5 195 Cash Preferential allotment

2,174,160,053 65,212,882 326,064,410

Consolidation of equity shares of Rs. 5 each into one Equity Share of Rs. 10 resulting into 32,606,441 Equity Shares.(8) February 9, 2010

Funderburk Enterprises Limited(9)

1,751,656 10 351.87 Cash Conversion of CCPS

2,772,998,690 34,358,097 343,580,970

February 9, 2010

Funderburk Enterprises Limited (9)

15,761,311 10 216.71 Cash Conversion of CCDs

6,031,019,286 50,119,408 501,194,080

February 9. 2010

3i Sports Media


1,055,098

10 354.07 Cash Conversion of CCPS

6,394,046,855 51,174,506 511,745,060

February 9. 2010

3i Sports Media


5,275,264

10 215.82 Cash Conversion of CCDs

7,479,801,692 56,449,770 564,497,700

February 9. 2010

CSI BD (Mauritius)

(9)

407,810


7,628,762,450 56,857,580 568,575,800

February 9. 2010

CSI BD (Mauritius)

(9)

4,095,775

10 222.38 Cash Conversion of CCDs

8,498,623,145 60,953,355 609,533,550

February 9. 2010

Mr. Harish Kanayalal Thawani (9)

279,581


8,593,227,764 61,232,936 612,329,360

March 25, 2010

Brand Equity

Treaties Limited(10)


8,710,536,775 61,501,870 615,018,700

Total 61,501,870 8,710,536,775 61,501,870 615,018,700

27

b) Preference share capital

The following is the history of the compulsorily convertible preference share capital of our Company:

Date of Issue/

Allotment


No. of preference

Shares

Face value

Issue price (Rs.)

Consideration in cash/ other

than cash

Mode of acquisition

(preferential allotment, gift, bonus

etc)

Cumulative share premium

Cumulative no. of CCPS

Cumulative preference

share capital (Rs.)

March 6, 2009


217,965 10 446.86 Cash Preferential allotment(1) 95,220,190 217,965 2,179,650

April 20, 2009


Limited 539,270 10 446.86 Cash Preferential

allotment(1) 330,805,682.20 757,235 7,572,350

April 20, 2009

3i Sports Media

(Mauritius) Limited

555,599 10 446.86 Cash Preferential allotment(1) 573,524,661.34 1,312,834 13,128,340

April 28, 2009


Limited. 840,028 10 446.86 Cash Preferential

allotment(1) 940,499,293.42 2,152,862 21,528,620

April 29, 2009

3i Sports Media

(Mauritius) Limited

280,401 10 446.86 Cash Preferential allotment(1) 1062,995,274.28 2,433,263 24,332,630

September 25, 2009

CSI BD (Mauritius) 342,478 10 446.86 Cash Preferential

allotment(1) 1212,610,213.36 2,775,741 27,757,410

Total 2,775,741(2) 1,212,610,213.36 2,775,741 27,757,410

(1) Allotment pursuant to Restated and Amended Subscription and Shareholders Agreement dated March 6, 2009 and Supplemental Restated and Amended Subscription

and Shareholders Agreement dated May 22, 2009 entered between our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani, Paramount, Funderburk Enterprises Limited, 3i Sports Media (Mauritius) Limited and CSI BD (Mauritius). For the details of the agreements see section titled “History and Certain Corporate Matters” on page100of the Draft Red Herring Prospectus.

(2) All the outstanding 2,775,741 CCPS of Rs.10 each were converted on February 09, 2010 into 3,494,145 Equity Shares of Rs. 10 each.

c) Details of Equity Shares allotted for consideration other than cash The following is the list of Equity Shares allotted for consideration other than cash by our Company:

Date of Issue/ Allotment Name of the allottee No. of Equity Shares

Reasons for the issue and benefits accrued to our Company

August 10, 1994 Mr. Harish Kanayalal Thawani 3,150,105 Bonus issue out of revaluation reserve

Ms. Shobha Harish Thawani 839,895

December 31, 1997

Mr. Harish Kanayalal Thawani 1,579,000 Bonus issue out of general reserve

Ms. Shobha Harish Thawani 421,000

January 10, 2000

Paramount 12,000,000 Acquisition of business of Paramount

1. Promoters and Promoter Group build up, Contribution and lock-in

Our Company has two individual Promoters, namely Mr. Harish Kanayalal Thawani and Ms. Shobha Harish Thawani and one corporate Promoter – Paramount.

28

a) History of the Equity Share capital held by the Promoters

Name of

the Promoter

Date of allotment/ transfer


Face value (Rs.)

Issue/ transfer

price (Rs.)

Nature of

consideration

Nature of transaction


June 30, 1987 150 10 10 Cash Subscription to memorandum of association

July 25, 1987 5 10 10 Cash Transfer from Mr. Anupam Kher

November 12, 1987

25 10 10 Cash Transfer from Mr. Sumedh Shah

November 12, 1987

150 10 10 Cash Transfer from Dr. Akash Chandra Khurana

November 12, 1987

60 10 10 Cash Transfer from Mrs. Meera Khurana

December 7, 1988


March 25, 1990 5 10 10 Cash Acquisition on transfer from Mr. Irfaan Khan

August 10, 1994

3,150,105 10 - Non-Cash Bonus issue out of revaluation reserve

December 31, 1997

1,579,000

10

- Non-Cash

Bonus issue out of general reserve

January 4, 2000 (100)

10 - Non-Cash

Transfer by way of gift to Mr. Raj Kumar Goel

January 4, 2000 (100)

10 - Non-Cash

Transfer by way of gift to Dr. Akash Chandra Khurana

January 4, 2000 (100)

10 - Non-Cash

Transfer by way of gift to Mr. Sunil Manocha

January 4, 2000 (100)

10 - Non-Cash

Transfer by way of gift to Mr. Uday SinhWala

January 4, 2000 (100)

10 - Non-Cash

Transfer by way of gift to Mr. Atul Pandey

January 4, 2000 (100)

10 - Non-Cash

Transfer by way of gift to Mr. Sudhir Mishra

January 4, 2000 (100)

10 - Non-Cash

Transfer by way of gift to Mr. Kallol Sen

January 4, 2000 (1,000)

10 - Non-Cash Transfer by way of gift to Mr. Kanayalal Thawani

January 4, 2000 (1,000)

10 - Non-Cash Transfer by way of gift to Ms. Kamla Thawani

January 4, 2000 (1,000)

10 - Non-Cash Transfer by way of gift to Mr. Dilip Thawani

January 10, 2000

(50,000)

10 10 Cash Transfer to Soex Flora Private Limited

February 11, 2000

(40,000) 10 10 Cash Transfer to Mr. P N Budhrani

February 11, 2000

(10,000)

10 10 Cash Transfer to Niketan Traders Private Limited

February 11, 2000

(14,000)

10 10 Cash Transfer to Mackertich Consultancy Services Private Limited

February 11, 2000

(40,000) 10 10 Cash Transfer to Becker Traders Private Limited

February 22, 2000

(25,000) 10 10 Cash Transfer to Mr. Hemendra Sheth

March 31, 2000 10,000 10 10 Cash Transfer from Niketan Traders Private Limited

March 31, 2000 40,000

10 10 Cash Transfer from Becker Traders Private Limited

March 31, 2000 25,000 10 10 Cash Transfer from Mr. Hemendra Sheth

July 10, 2000 (100) 10 - Non -Cash Transfer by way of gift to Mr. Sanjay Sharma

August 9, 2000 9,258,400 5 - - Sub division in denomination of Rs.5/- each

January 2, 2002 (120,000) 5 - Non-Cash Transfer by way of gift to Dr. Akash Chandra Khurana

January 2, 2002

(120,000)

5

- Non -Cash Transfer by way of gift to Mr. Sunil Manocha

May 31, 2002

(5,600)

5 5 Cash Transfer to Vatican Communication Ltd

February 3, 2004

(20,000)

5 5 Cash Transfer to Soex Investments and Finance Limited

29

Name of the

Promoter



Face value (Rs.)

Issue/ transfer

price (Rs.)

Nature of

consideration


December 19, 2005

(18,500) 5 5 Cash Transfer to Rational Art & Press Private Limited

June 26, 2007 4,487,150 10 - - Consolidation in denomination of Rs.10/- each

February 09, 2010

279,581

10 348.38

Non Cash Conversion of CCPS

Total 4,766,731 Ms. Shobha Harish Thawani

June 30, 1987 105 10 10 Cash Subscription to memorandum of association

December 7, 1988


August 10, 1994

839,895 10 Nil Non-Cash Bonus issue out of revaluation reserve

December 31, 1997

421,000 10 Nil Non-Cash Bonus issue out of general reserve

January 4, 2000 (1,000) 10 10 Cash Transfer to Mr. Mavis Monterio

January 10, 2000

(50,000) 10 10 Cash Transfer to Mr. Soex Flora Private Limited

February 11, 2000

(36,500) 10 10 Cash Transfer to Mr. P N Budhrani

February 11, 2000

(3,500) 10 10 Cash Transfer to Mr. Rajendra Babani

February 11, 2000

(10,000) 10 10 Cash Transfer to Niketan Traders Private Limited

February 11, 2000

(14,000) 10 10 Cash Transfer to Mackertich Consultancy Services Private Limited

February 11, 2000

(40,000) 10 10 Cash Transfer to Wacker Trading Private Limited

February 22, 2000

(25,000) 10 10 Cash Transfer to Mr. Hemendra R. Sheth

February 22, 2000

(78,000) 10 10 Cash Transfer to Mr. Shashi Agarwal

March 31, 2000 25,000 10 10 Cash Transfer from Mr. Hemendra R. Sheth

March 31, 2000 10,000 10 10 Cash Transfer from Niketan Traders Private Limited

March 31, 2000 40,000 10 10 Cash Transfer from Wacker Trading Private Limited

August 9, 2000 2,160,000 5 - - Sub Division in denomination of Rs.5/- each

May 31, 2002 (5,600) 5 5 Cash Transfer to Vatican Commercial Ltd

February 3, 2004


December 13, 2005


June 2, 2007 1 5 195 Cash Preferential Allotment

June 26, 2007 1,057,950 10 - - Consolidation in denomination of Rs.10/- each

July 17, 2007 2 10 Nil Non-Cash Fractional Shares arising out of consolidation

1,057,952 Paramount January 10,

2000 12,000,000 10 10 Consideration

other than cash* Preferential Allotment

Total 17,824,683 10 * The allotment was made by our Company to Paramount (then known as ’Nimbus Creative Corporation Limited’) as consideration in lieu of cash pursuant to an

agreement entered into in September 1999 between our Company and Paramount through which Paramount transferred its business to our Company at a book value of Rs. 120,000,000.

b) Details of Equity Shares pledged by the Promoters Out of the total Equity Shares held by the Promoters, only 300,000 Equity Shares held by Mr. Harish Kanayalal Thawani are subject to pledge.

17,245,102 Equity Shares of our Company as held by Promoters were pledged in favor of Punjab National Bank for securing the bank guarantee of Rs. 6,260 million provided to BCCI under BCCI Agreement. The pledge on the aforesaid Equity Shares of the Promoters was further required to be extended to Union Bank of India and Indian Bank from April 1, 2010 for securing the new bank guarantee of Rs. 20,000 million granted to the BCCI for the New BCCI Agreement.

30

Punjab National Bank, Indian Bank and Union Bank of India by letters dated March 31, 2010, April 30, 2010 and September 28, 2010, 2010 respectively, have released the pledge on the 17,245,102 Equity Shares held by the Promoters based on the following conditions:

a) That the Company and the Promoters agree to re-pledge the Equity Shares within 30 days from the date

of Allotment in the Issue; b) That the Company and the Promoters provide appropriate board resolutions, undertakings and powers of

attorney in favour of Punjab National Bank, Indian Bank and Union Bank of India for creation of the aforesaid pledge of said Equity Shares; and

c) That the Company makes appropriate disclosure regarding the proposed pledge in the DRHP.

The authorization for the release of the pledge from Punjab National Bank, Indian Bank and Union Bank of India as described above is a specific approval for temporary release of the pledged Equity Shares for the purpose of enabling the Issue. The Equity Shares will be pledged to Punjab National Bank and co-pledged with Indian Bank and Union Bank of India, as the case may be, as collateral security pursuant to the terms of the sanction letter for the purpose of financing one or more objects of the Issue.

c) History of the Equity Share capital held by the Promoter Group

The following is the history of Equity Share capital as held by the members forming part of the Promoter Group:

Name of the member of the

Promoter Group



Face value (Rs.)

Issue/ transfer price (Rs.)

Nature of

consideration


Mr. Kanayalal Thawani

January 4, 2000

1,000 10 10 Non-Cash Acquisition by way of gift from Mr. Harish Kanayalal

Thawani Ms. Kamla Thawani

January 4, 2000


Thawani Mr. Dilip Thawani

January 4, 2000


Thawani Mr. Mavis Monterio

January 4, 2000

1,000 10 10 Cash Transfer from Ms. Shobha Harish Thawani

Further, none of the entities forming part of the Group companies hold any Equity Shares in our Company.

d) Details of shareholding of the directors of Paramount

Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Dr. Akash Chandra Khurana are directors of Paramount, our corporate Promoter. They hold Equity Shares in our Company. The details of their aggregate shareholding in our Company as on the date of filing this Draft Red Herring Prospectus are as follows:

Sr. No Name of the directors No of Equity Shares

1. Mr. Harish Kanayalal Thawani 4,766,731 2. Ms. Shobha Harish Thawani 1,057,952 3. Dr. Akash Chandra Khurana 72,800 Total 5,897,483

31

Summary of Promoters’ contribution locked-in for three years

Pursuant to Regulation 32 and 36 of the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted post- Issue equity capital of our Company, held by the Promoters shall be locked in for a period of three years from the date of Allotment in the Issue.

a. Details of the Promoters’ Contribution are as are follows:

S. No.

Name of the Promoters

Date of Allotment/ transfer/

when made fully paid-

up

Nature of allotment Nature of consideration


locked in*

Face value (Rs.) (per

share)

% of pre-Issue paid-up capital

% of post-Issue paid-up capital on fully diluted basis

1. Mr. Harish Kanayalal Thawani

June 26, 2007

Consolidation in denomination of

Rs.10/- each

Consolidation in denomination of

Rs.10/- each

3,342,000 10 5.43 4.36

3,342,000

2. Paramount January 10,

2000 Preferential Allotment

Consideration other than cash

12,000,000 10 19.51 15.64

12,000,000 Total 15,342,000 24.94 20.00

* Commencing from the date of the Allotment of the Equity shares in the Issue Our Promoters have, by a written undertaking dated September 29, 2010, given consent for 15,342,000 Equity Shares held by them to be considered as Promoters’ contribution and locked-in for a period of three years from the date of Allotment of the Public Issue, constituting 20% of the post-Issue equity share capital of our Company on fully diluted basis (“Promoters’ Contribution”). The Promoters have pursuant to their undertaking dated September 29, 2010, agreed not to sell or transfer or pledge or otherwise dispose off in any manner, the Equity Shares forming part of the Promoters’ contribution from the date of filing of this Draft Red Herring Prospectus until the commencement of the lock-in period specified above. The Promoters’ contribution has been brought in to the extent of not less than the specified minimum lot and from persons defined as promoters in the section titled “Promoters and Group Companies” on page 128 of this Draft Red Herring Prospectus as per SEBI ICDR Regulations. The Equity Shares that are being locked-in are not ineligible for computation of Promoter’s contribution under Regulation 33 of the SEBI ICDR Regulations. In this connection, we confirm the following:

i. The Equity Shares offered for minimum 20% Promoters’ contribution are not acquired for consideration other than cash and revaluation of assets or capitalization of intangible assets or bonus shares out of revaluation reserves, or reserves created without accrual of cash resources or against Equity Shares which are otherwise ineligible for computation of Promoters’ contribution;

ii. The minimum Promoters’ contribution does not include any Equity Shares acquired during the preceding one year at a price lower than the price at which the Equity Shares are being offered to the public in the Issue;

iii. Our Company has not been formed by the conversion of a partnership firm into a company; iv. The Equity Shares held by the Promoters and offered for minimum 20% Promoters’ contribution are not subject

to any pledge; v. The minimum Promoters’ contribution does not consist of any private placement made by solicitation of

subscriptions from unrelated persons either directly or through any intermediary; and vi. The minimum Promoters’ contribution does not consist of Equity Shares for which specific written consent has

not been obtained from the respective Promoters for inclusion of their subscription in the minimum Promoters’ contribution subject to lock-in.

b. Details of capital locked in for one year

Other than the above Equity Shares that are locked in for three years, the entire pre-Issue share capital less the number of Equity Shares for which transfer is made under the Offer for Sale shall be locked in for a period of one year from the date of Allotment in this Issue. However, as per Regulation 37 of SEBI ICDR Regulations, the remaining Equity Shares held by the Americorp Ventures Limited, one of the Selling Shareholder, who is registered as a FVCI bearing registration number IN/FVCI/02-03/03 vide certificate of registration dated May 30, 2002, which have been held for more than one year by Americorp Ventures Limited, shall be exempt from lock in for one year from the date of Allotment in this Issue.

32

c. Other requirements in respect of lock-in As per Regulation 39(a) read with Regulation 36 (a) of the SEBI ICDR Regulations, the locked-in Equity Shares held by the Promoters may be pledged with scheduled commercial banks or public financial institutions as collateral security for loans granted by such scheduled commercial banks or public financial institutions, provided the pledge of such shares is one of the terms of sanction of loan and the loan has been granted by such banks or financial institutions for the purpose of financing one or more of the Objects of the Issue as mentioned in the section “Objects of the Issue” on page 41 of this Draft Red Herring Prospectus. As per Regulation 39(b) read with Regulation 36(b) of the SEBI ICDR Regulations, the locked-in Equity Shares held by the Promoters may be pledged with any scheduled commercial banks or public financial institutions if such pledge is one of the terms of the sanction of the loan. All of the 15,342,000 Equity Shares forming part of the Promoters’ contribution will be re-pledged with Punjab National Bank, Indian Bank and Union Bank of India within 30 days from the date of Allotment in the Issue. The Equity Shares held by persons other than the Promoters, prior to the Issue, which are locked-in for a period one year from the date of Allotment as mentioned above may be transferred to any other person holding the Equity Shares which are similarly locked-in for one year, subject to continuation of the lock-in in the hands of transferees for the remaining period and compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as applicable. Further, as per the Regulation 40 of the SEBI ICDR Regulations Equity Shares held by the Promoters, which are locked-in, may be transferred to and amongst the Promoters/Promoter Group or to a new Promoter or persons in control of our Company, subject to continuation of lock-in in the hands of the transferees for the remaining period and compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as applicable. Furthermore, the Equity Shares subject to lock-in will be transferable, subject to compliance with the SEBI ICDR Regulations, including the provisions for lock-in, as amended from time to time.

d. Lock-in requirements for Anchor Investor

Any Equity Shares allotted to Anchor Investors in the Anchor Investor Portion shall be locked-in for a period of 30 days from the date of Allotment.

e. Details of transactions in Equity Shares by the Directors, Promoters, directors of corporate Promoter and members of Promoter Group or their immediate relatives during six months preceding the filing of this Draft Red Herring Prospectus with SEBI Nil.

2 Our Promoters, directors of corporate Promoter, our Selling Shareholders, our Company, our Directors, and the BRLMs and Co-BRLM have not entered into any buy-back, safety net or standby arrangements or any other similar arrangement for purchase of Equity Shares being offered in this Issue.

2. An over-subscription to the extent of 10% of the net offer to public can be retained for the purposes of rounding off to

the minimum allotment lot and further to the nearest multiple of market lot.

3. The Equity Shares issued pursuant to this Issue shall be fully paid-up at the time of Allotment of Equity Shares.

4. Our Company may allocate up to 30% of the QIB Portion to Anchor Investors at the Anchor Investor Price on a discretionary basis, subject to a minimum of two Anchor Investors out of which at least one-third will be available for allocation to domestic Mutual Funds only. In the event of under-subscription or non-Allotment in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to QIBs, subject to valid Bids being received from them at or above the Issue Price. However, if the aggregate demand from Mutual Funds is less than 385,875 Equity Shares, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the Net QIB Portion and allocated proportionately to the QIBs in proportion to their Bids.

5. Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.

33

6. Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in the Retail Portion or the

Non Institutional Portion would be met with spill over from other categories or combination of categories at the discretion of our Company and Selling Shareholders in consultation with the Book Running Lead Managers, Co-Book Running Lead Manager and the Designated Stock Exchange. Such inter-se spill-over, if any, would be effected in accordance with applicable laws, rules, regulations and guidelines.

7. Except as disclosed in this section, the Directors, the Promoters, directors of corporate Promoter or the members of

our Promoter Group or their immediate relatives have not purchased or sold or financed the purchase of any securities of our Company, during a period of six months preceding the date of filing this Draft Red Herring Prospectus with SEBI.

8. Shareholding pattern of our Company

The shareholding pattern of our Company before and after the Issue is as follows:

Category code

Category of shareholder

No. of

share

holder

Total no. of shares

(Pre-IPO)

Number of shares held

in demateriali

zed form

Total shareholding as a percentage of total

number of shares (Pre-IPO)

Shares Pledged or otherwise encumbered

Total Post Issue Shareholding

As a Percentage of A+B (%)

As a Percentag

e of A+B+C

(%)

Number of shares

As a percentag

e (%)

Total Number of Shares

As a Percentage of A+B+

C (%)

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=(VII

I/ (IV)*100)

(X) (XI)

A

PROMOTER AND PROMOTER GROUP

1 INDIAN

a Individual / HUF 6 5,828,683 5,548,102 9.48 9.48 300,000 5.15 5,828,683 7.72

b

Central Government / State Government

-

-

- - -

- - -

-

c Bodies Corporate 1 12,000,000 0 19.51 19.51 0 0.00 12,000,000 15.89

d

Financial Institutions / Banks

-

-

- - -

- - -

-

e Others -

-

- - -

- - -

-

Sub Total A(1) 7 17,828,683 5,548,102 28.99 28.99 300,000 1.68 17,828,683 23.60

2 FOREIGN

a

Individuals (NRIs / Foreign Individuals)

-

-

- - -

- - -

-

b Bodies Corporate

-

-

- - -

- - -

-

c Institutions -

-

- - -

- - -

-

d Any Others (specify)

-

-

- - -

- - -

-

Sub Total A(2) :

-

-

- - -

- - -

-

Total A= A(1) + A (2) 7

17,828,683

5,548,102 28.99 28.99

300,000 1.68 17,828,683 23.60

B

PUBLIC SHAREHOLDING

34

Category code


No. of

share

holder

Total no. of shares

(Pre-IPO)


in demateriali

zed form






As a Percentag

e of A+B+C

(%)

Number of shares

As a percentag

e (%)



C (%)


I/ (IV)*100)

(X) (XI)

1 INSTITUTIONS

a Mutual Funds / UTI

-

-

- - -

- - [●] [●]

b

Financial Institutions / Banks

-

-

- - -

- - [●] [●]

c

Central Government / State Government (s)

-

-

- - -

- - [●] [●]

d Venture Capital Funds

-

-

- - -

- - [●] [●]

e Insurance Companies

-

-

- - -

- - [●] [●]

f

Foreign Institutional Investors

-

-

- - -

- - [●] [●]

g

Foreign Venture Capital Investors 1 2,142,857 2,142,857 3.48 3.48

- - [●] [●]

h Others -

-

- - -

- - [●] [●]

Sub Total B(1)

1

2,142,857

2,142,857 3.48 3.48

- - [●] [●]

2

NON - INSTITUTIONS

a Bodies Corporate 12 480,684 189,750 0.78 0.78

- - [●] [●]

b Individuals

( i ) Individual holding nominal share capital up to Rs. 1 lakh 59 76,625 47,300 0.12 0.12

- - [●] [●]

( ii ) Individual holding nominal share capital in excess of Rs. 1 lakh 5 228,300 107,900 0.37 0.37

- - [●] [●]

c Any Other (Specify)

FOREIGN BODIES 3 40,683,521 0 66.15 66.15

- - [●] [●]

NON RESIDENT INDIANS 2 61,200 61,200 0.10% 0.10%

- - [●] [●]

Sub Total B(2) 81 41,530,330 406,150 67.53 67.53 - [●] [●]

Total B = B(1) + B (2)

82

43,673,187

2,549,007 71.01 71.01

- - [●] [●]

Total (A + B) 89

61,501,870

8,097,109 100.00 100.00

300,000 0.49 [●] [●]

35

Category code


No. of

share

holder

Total no. of shares

(Pre-IPO)


in demateriali

zed form






As a Percentag

e of A+B+C

(%)

Number of shares

As a percentag

e (%)



C (%)


I/ (IV)*100)

(X) (XI)

C

Shares held by custodians. against which depository receipts have been issued

-

-

- - -

- - [●] [●]

GRAND TOTAL ( A + B + C)

89

61,501,870

8,097,109 100 100

300,000 0.49 75,541,870 100

• The list of top ten shareholders of our Company and the number of Equity Shares held by them is as under:

a. The list of top ten shareholders of our Company and the number of Equity Shares held by them as on

the date of filing of this Draft Red Herring Prospectus is as follows:

S. No.

Name of shareholder Number of Equity Shares Percentage shareholding (%)

1. 3i Sports Media (Mauritius) Limited 18,554,819 30.17 2. Funderburk Enterprises Limited 17,601,507 28.62 3. Paramount 12,000,000 19.51 4. Mr. Harish Kanayalal Thawani 4,766,731 7.75 5. CSI BD (Mauritius) 4,527,195 7.36 6. Americorp Ventures Limited 2,142,857 3.48 7. Ms. Shobha Harish Thawani 1,057,952 1.72 8. Brand Equity Treaties Limited 268,934 0.44 9. Rational Art & Press Private Limited 138,500 0.23 10. Mr. Sunil Manocha 92,600 0.15

Total 61,151,095 99.43

b. The list of top ten shareholders of our Company and the number of Equity Shares held by them ten days prior to the date of filing of this Draft Red Herring Prospectus is as follows:

S.

No. Name of shareholder Number of Equity Shares Percentage shareholding

(%) 1. 3i Sports Media (Mauritius) Limited 18,554,819 30.17 2. Funderburk Enterprises Limited 17,601,507 28.62 3. Paramount 12,000,000 19.51 4. Mr. Harish Kanayalal Thawani 4,766,731 7.75 5. CSI BD (Mauritius) 4,527,195 7.36 6. Americorp Ventures Limited 2,142,857 3.48 7. Ms. Shobha Harish Thawani 1,057,952 1.72 8. Brand Equity Treaties Limited 268,934 0.44 9. Rational Art & Press Private Limited 138,500 0.23 10. Mr. Sunil Manocha 92,600 0.15

Total 61,151,095 99.43

c. The list of top ten shareholders of our Company and the number of Equity Shares held by them two years prior to the date of filing of this Draft Red Herring Prospectus is as follows:

S.

No. Name of Shareholder Number of Equity Shares Percentage Shareholding

(%) 1. 3i (Mauritius) Investments 2 Technology Ltd (now

known as 3i Sports Media (Mauritius) Limited) 12,224,457 37.49 2. Paramount 12,000,000 36.80 3. Mr. Harish Kanayalal Thawani 4,487,150 13.76 4. Americorp Ventures Limited 2,142,857 6.57 5. Ms. Shobha Harish Thawani 1,057,952 3.24

36

S. No.

Name of Shareholder Number of Equity Shares Percentage Shareholding (%)

6. Rational Art & Press Private Limited 138,500 0.42 7. Mr. Sunil Manocha 92,600 0.28 8. Funderburk Enterprises Limited 88,540 0.27 9. Dr. Akash Chandra Khurana 72,800 0.22 10. Mr. Devidas Naraindas Budhrani 38,250 0.12

Total 32,343,106 99.19

9. Details of Equity Shares allotted out of revaluation reserves

Name of the allottee Date of allotment No of Equity Shares Face value (Rs.)

(per share) Issue price

Reason for the issue and benefits that have accrued to the Company out of the issue

Mr. Harish Kanayalal Thawani August 10, 1994

3,150,105 10 - Bonus issue out of revaluation reserves

Ms. Shobha Harish Thawani August 10, 1994

839,895 10 - Bonus issue out of revaluation reserves

Total - 3,990,000 - - -

10. As of the date of this Draft Red Herring Prospectus, none of the BRLMs, Co-BRLM and their associates

hold any Equity Shares in our Company.

11. Our Company will not, without the prior written consent of the Book Running Lead Managers and Co-Book Running Lead Manager, during the period ending 180 calendar days after the date of listing and commencement of trading of the Equity Shares, alter our capital structure except to the extent of options granted under ESOP 2007 in any manner including by way of split or consolidation of the denomination of Equity Shares or further issue of Equity Shares or any securities convertible into or exchangeable, directly or indirectly, for the Equity Shares. If we enter into acquisitions or joint ventures for the purposes of our business, we may, subject to necessary approvals and consents, consider raising additional capital to fund such activities or use the Equity Shares as currency for acquisition or participation in such joint ventures.

12. Except as stated in the section titled “Management” on page 116 of this Draft Red Herring Prospectus, none

of our Directors or key management personnel hold any Equity Shares in our Company.

13. This Issue is being made through Book Building Process wherein at least 50% of the Issue shall be Allotted to QIBs. If at least 50% of the Issue cannot be Allotted to QIBs, then the entire application money will be refunded forthwith.

14. The Equity Shares of our Company are fully paid-up and there are no partly paid-up Equity Shares as on the

date of this Draft Red Herring Prospectus.

15. As of the date of the filing of this Draft Red Herring Prospectus, the total number of holders of our Equity Shares is 89.

16. A Bidder cannot make a Bid for more than the number of Equity Shares offered through the Issue, subject to

the maximum limit of investment prescribed under relevant laws applicable to each category of Bidder. 17. ESOP 2007

On January 8, 2007, the Board of our Company resolved to issue employee stock option to employees under an employee stock option plan (the “ESOP 2007”).

37

Particulars Details

Eligibility

A permanent employee or full time consultant of our Company, a Director of our Company (including of subsidiaries where our Company holds at least 75% equity capital or has irrevocable options to acquire at least 75% equity capital) but excluding: (a) an employee who is a promoter or belongs to the promoter group; (b) a director who either by himself or through his relatives or through any body corporate, directly or indirectly holds more than 10% of the issued and subscribed Shares of the company; (c) Part time consultants or other associates who may be covered under a separate stock option plan. (Group companies, affiliates, etc may have their individual schemes and employees of any such affiliate which has its own scheme would not be covered by this plan.)

Exercise Period Within 6 months from the date of public issue in the event of the company going in for an Initial Public Offer (IPO) or 2 years from the date of vesting whichever is earlier.

Options granted

Date of grant No. of options granted August 01, 2007 1,224,000 September 07, 2007 306,000 Total Options Granted 1,530,000 Less options cancelled 369,000 Less options exercised 0 Total options outstanding under ESOP 2007 1,161,000

Pricing formula Exercise price per option would be equal to the fair market value of one equity Share of our Company. The exercise price shall be Rs. 161.66 per option with a share of a face value of Rs. 10/- each for such options as are granted in 2007 and prior to our Company’s IPO.

Vesting period

• 10% of the options shall vest on the completion of 12 months from the grant date. • 20% of the options shall vest on the completion of 24 months from the grant date. • 30% of the options shall vest on the completion of 36 months from the grant date. • 40% of the options shall vest on the completion of 48 months from the grant date.

Options vested (excluding the options that have been exercised)

696,600 have vested till date.

Options exercised No options have been exercised till date The total number of shares arising as a result of exercise of options (including options that have been exercised)

Nil

Options forfeited / lapsed / cancelled

369,000 options have been cancelled/ lapsed

Variation of terms of options Nil

Money realized by exercise of options

Nil

Total number of options in force

1,161,000

38

Particulars Details

Employee wise detail of options granted to (i) Directors / key managerial personnel

Directors No. of options granted under ESOP 2007

Dr. Akash Chandra Khurana 250,000 Mr. Robin Paxton 25,000 Mr. Ranjan Kapur 25,000 Mr. Richard Dorfman 25,000

Key managerial personnel No. of options granted under ESOP 2007

Mr. Subbarathnam K R 9,000 Mr. Yannick Colaco 80,000

ii) Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year

Nil

iii) Identified employees who were granted options during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of our Company at the time of grant

None

Lock-in Nil

Impact on profit and EPS of the last three years Nil

Weighted average exercise price and the weighted average fair value of options whose exercise price either equals or exceeds or is less than the market price of the stock

N.A.

Method and significant assumptions used to estimate the fair value of options granted during the year

Our Company has followed the fair value based method of accounting for stock options granted based on Guidance Note on Accounting on Employee Share-based Payments, issued by the ICAI. The Fair Value of the Share has been calculated by an independent valuer on the basis of Weighted Average of “Discounted Cash Flow Method”, “PE Multiple Methods” “Future Maintainable Profits” and “Net Asset Value”. The valuation has been done using the Adjusted Black-Scholes Option Pricing Model based on the assumptions given by the management.

Method used Fair value based method of accounting for stock options granted based on Guidance Note on Accounting on Employee Share-based Payments, issued by the ICAI.

Risk free return This rate has been assumed at 8.09% for all the four years.

Expected life These stock options will vest in the following proportion from the date of grant and can be exercised within 6 months from the date of IPO in the event of the company going for an IPO or two years from the vesting date whichever is earlier.

Expected volatility

As the shares of the company are unlisted, the volatility is considered as 1 % for all the four years

Expected dividends Expected dividend per share on the grant date is 7.50% for all the four years.

Price of underlying shares in market at the time of the options grant

NA

39

Particulars Details

Intention of the holders of Equity Shares allotted on exercise of options to sell their shares within three months after the listing of Equity Shares pursuant to the Issue

Our Company is currently not aware of any intention of the holders of Equity Shares allotted on exercise of options to sell their shares within three months after the listing of Equity Shares pursuant to the Issue.

Intention to sell Equity Shares arising out of the ESOP 2007 within three months after the listing of Equity Shares by directors, senior managerial personnel and employees having equity shares arising out of the ESOP 2007 amounting to more than 1% of the issued capital (excluding outstanding warrants and conversions)

N.A

18. Our Company has not raised any bridge loans against the proceeds of the Issue.

19. Except for the employee stock options granted pursuant to ESOP 2007 of our Company, there are no

outstanding warrants, options or rights to convert debentures.

20. Our Company during the preceding one year from the date of filing the Draft Red Herring Prospectus has issued the following Equity Shares at variable prices which may be lower than the Issue Price:



Group


Issue Price (Rs.)


February 9, 2010




CCDs February 9, 2010

3i Sports Media (Mauritius) Limited. No 1,055,098 354.07 Conversion of


3i Sports Media (Mauritius) Limited. No 5,275,264 215.82 Conversion of

CCDs February 9, 2010 CSI BD (Mauritius) No 407,810 375.27 Conversion of

CCPS February 9, 2010 CSI BD (Mauritius) No 4,095,775 222.38 Conversion of

CCDs February 9, 2010 Mr. Harish Thawani Yes 279,581 348.38 Conversion of

CCPS March 25, 2010

Brand Equity Treaties Limited No 268,934 446.20 Preferential

allotment

21. Except to the extent of options granted under ESOP 2007, we presently do not intend or propose any further issue of Equity Shares, whether by way of spilt or consolidation of the denomination of the shares or issue of specified securities on a preferential basis or bonus or rights issue or qualified institutions placement, within a period of six months from the date of opening of the present Issue. Further, we presently do not intend or propose to alter our capital structure from the date of submission of this Draft Red Herring Prospectus until the Equity Shares have been listed on the Stock Exchanges.

22. There shall be only one denomination of the Equity Shares, unless otherwise permitted by law.

23. We shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time.

24. Our Promoters, Promoter Group and Group Companies will not participate in this Issue.

25. Our Company has issued Equity Shares as bonus shares out of its revaluation reserves.

26. Our Company, Directors, Promoters, Promoter Group and the Selling Shareholders confirm that they shall

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not make any payments, direct or indirect, provide discounts, commission, allowances or otherwise to persons who receive allotment, in connection with this Issue except as disclosed in the DRHP.

27. Our Company has not issued Equity Shares under any scheme of arrangement (amalgamation, merger, etc).

28. As per the existing regulations, OCBs cannot participate in this Issue.

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Objects of the Issue

The Issue comprises of a Fresh Issue by our Company and an Offer for Sale by the Selling Shareholders. Objects of the Offer for Sale This Issue includes an Offer for Sale of 8,010,000 Equity Shares aggregating to Rs.[●] million by the Selling Shareholders. Our Company will not receive any proceeds from the Offer for Sale. Objects of the Fresh Issue The objects of the Fresh Issue are: 1. Expansion of sports management business; 2. Investing in Neo Sports Broadcast Private Limited for expansion of broadcasting business; and 3. General Corporate Purposes.

The main object clause of our Memorandum of Association enable us to undertake our existing activities and the activities for which we are raising funds through this Issue. The details of the proceeds of the Issue are summarized in the table below:

Particulars Rs. (in million)

Gross proceeds of the Issue raised through the Fresh Issue [●]

Issue related expenses incurred by our Company [●]*

Net Proceeds of the Fresh Issue [●]*

*To be finalized post Issue

Requirement of funds After deducting the Issue related expenses and Offer for Sale, we estimate our Net Proceeds of the Fresh Issue to be Rs.[●] (“Net Proceeds”). We intend to utilise the Net Proceeds as per the table set forth below:

(Rs. in million) S# No.

Expenditure items Total estimated cost(1)

Amount deployed

as of August 31, 2010

Balance payable

as of August 31, 2010

Amount to be financed

from the Net Proceeds of

the Issue

Estimated Schedule of deployment of Net Proceeds for Fiscal

2010-11 2011-12 2012-13 2013-14

1. Expansion of sports management business

a. Obtaining bank guarantee and provide security deposit for sports rights

3,537.90 2,378.96(2) 1,158.94 1,158.94

451.04

529.70

126.60

51.60

2. Investing in Neo Sports Broadcast Private Limited for expansion of broadcasting business

a. Launching of new channels: Neo Cinema and Neo Zindagi 1,291.74 Nil 1,291.74 1,291.74 Nil 1,291.74 Nil Nil

b. Geographic expansion of Neo Cricket in North America 139.40 6.95(3) 132.45 132.45 63.62 68.83 Nil Nil

c. Upgradation of Neo infrastructure 349.87 Nil 349.87 349.87 Nil 349.87 Nil Nil

d. Acquisition of new broadcasting rights 500.00 Nil 500.00 500.00 Nil 300.00 100.00 100.00

3. General Corporate Purposes [●] Nil - [●] [●] [●] [●] [●]

Total [●] 2,385.91 [●] [●] [●] [●] [●] [●]

(1) Total estimated costs are based on management estimates. (2) As per the certificate from M/s Chordiya Naveen & Co., Chartered Accountants dated September 25, 2010. Out of the total monies deployed, Rs.2,230 million

comprising cash margin by way of fixed deposits of Rs.2,040 million and Rs.190 million as processing fee for the bank guarantee provided to BCCI under New BCCI Agreement have been deployed by way of advances received by our Company from Nimbus Communications Worldwide Limited against license of media rights and Rs.148.96 million paid towards annual commission fee for 2010-2011 have been deployed from internal accruals.

(3) As per the certificate from M/s Chordiya Naveen & Co., Chartered Accountants dated September 25, 2010. The said monies have been deployed by way of internal accruals.

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The fund requirement is based on management estimates and current business plans of our Company. The same has not been appraised by any bank or financial institution or any other independent agency. These are based on current conditions and are subject to change on account of changes in external circumstances or costs, business environment etc. In the event of variations in the actual utilisation of funds earmarked for the purposes set forth above, increased fund requirements for a particular purpose may be financed by surplus funds, if any, available in respect of the other purposes for which funds are being raised in the Issue. If surplus funds are unavailable, the required financing will be done through internal accruals through cash flow from our operations, advances received from customers, equity and debt, as required. We may have to revise our expenditure and fund requirements as a result of variations in the cost structure, changes in estimates, exchange rate fluctuations and external factors, which may not be within the control of our management. This may entail rescheduling, revising or cancelling the planned expenditure and fund requirement and increasing or decreasing the expenditure for a particular purpose from its planned expenditure at the discretion of our management. Any such change in our plans may require us to reschedule the estimated dates of launch /completion of various proposals as described herein. Means of Finance Since the entire requirements of the objects detailed above are intended to be funded from the Net Proceeds, there is no requirement for us to make firm arrangements of finance through verifiable means towards 75% of the stated means of finance, excluding the amount to be raised through Fresh Issue and existing identifiable internal accruals. Details of the Objects

1. Expansion of sports management business a. Obtaining bank guarantee and provide security deposit for sports rights

Our Company’s core business is management of commercial rights of global sports events. To acquire these rights, our Company typically provides an earnest money deposit (“EMD”) for rights which are tendered out by the sports federations and a guarantee of payment of fee (if our Company has been successful in acquiring said rights) to the rights owner. The guarantee is usually provided in the form of bank guarantees, for which our Company is required to pay security deposit and commission charges to the banks, or in the form of a cash security deposit. Thus, our Company is required to make significant financial commitments at the time of acquiring commercial rights in order to further exploits these rights to generate revenues. For instance, in 2006 the BCCI offered the media rights for various cricket events organised by it by way of tender. The invitation to tender (“ITT”) required all bidders to submit a refundable EMD of Rs. 890 million. As a participant to the ITT our Company submitted the said EMD. Further, on being declared the winning bidder of the tender process, our Company was required to submit a bank guarantee of the entire license fee due from our Company to the BCCI for the first year of the contract.

1. Existing commercial rights

Our Company entered into media rights licensing agreement dated October 15, 2009 with the BCCI. As required by the media rights licensing agreement, our Company provided a bank guarantee of Rs.20,000 million to the BCCI on January 15, 2010 from Punjab National Bank, Indian Bank and Union Bank of India. Under the said bank guarantees, our Company has provided a cash margin, aggregating to Rs.2,040 million by way of fixed deposit receipts, to the aforesaid banks,and has incurred Rs. 190 million as processing fee and bank guarantee commission towards the said bank guarantee aggregating to Rs.2,230 million. The said monies have been deployed by way of advances received by our Company from Nimbus Communications Worldwide Limited against license of media rights. Further, under the said bank guarantees, our Company has to pay an annual commission fee for a period of four years aggregating to Rs.707.90 million to Punjab National Bank, Indian Bank and Union Bank of India. For further details on these bank guarantees, please see section titled “Financial Indebtedness” on page 173 of this Draft Red Herring Prospectus. Of which an amount aggregating to Rs.148.96 million has already been paid by our Company towards commission fee for the year 2010-11. In this regard, our Company intends to use Rs.558.94 million of Net Proceeds towards completion of obligations under its agreement with

43

BCCI and the banks for providing the guarantee namely towards payment of annual commission fee of Rs.558.94 million. For details on our agreement with the BCCI, see section titled “Business” on page 78 of this Draft Red Herring Prospectus. As mentioned above, our Company intends to use Rs.558.94 million of the Net Proceeds to pay the annual commission fee to the banks providing the guarantee. Following is the commission amount due each year:

(Rs. in million)

2010-11 2011-12 2012-13 2013-14 Total

Annual Commission fee

payable(1) 300.00 229.70 126.60 51.60 707.90

Annual Commission fee to be paid from

the Net Proceeds

151.04 229.70 126.60 51.60 558.94

(1)As per sanction letters from Punjab National Bank and Union Bank of India dated January 14, 2010 and estimates of the management on the outstanding amount of the bank guarantee at the end of each year. 17,245,102 Equity Shares of our Company as held by our Promoters were pledged with Punjab National Bank for securing the old bank guarantee of Rs.6,260 million provided to BCCI under the BCCI Agreement for securing the exclusive global media rights between March 2006 to March 2010. These Equity Shares were required to be pledged with Punjab National Bank and co-pledged with Indian Bank and Union Bank of India from April 1, 2010 for securing the new bank guarantee of Rs. 20,000 million granted to the BCCI for New BCCI Agreement from April 2010 to March 2014. Punjab National Bank, Indian Bank and Union Bank of India by letters dated March 31, 2010, April 30, 2010 and September 28, 2010 respectively released the pledge on 17,245,102 Equity Shares collectively held by the Promoters based on the following conditions:

• That our Company and the Promoters agree to re-pledge the Equity Shares within 30 days from the date

of Allotment in the Issue; • That our Company and the Promoters provide appropriate board resolutions, undertakings and powers

of attorney in favour of these banks for creation of the aforesaid pledge of said Equity Shares for securing the new bank guarantee of Rs. 20,000 million granted to the BCCI; and

• That our Company makes appropriate disclosure regarding the proposed pledge in the DRHP.

The authorization for the release of the pledge from Punjab National Bank, Indian Bank and Union Bank of India as described above is a specific approval for temporary release of the pledged Equity Shares for the purpose of enabling the Issue. The Equity Shares will be pledged to Punjab National Bank and co-pledged with Indian Bank and Union Bank of India as the case may be as collateral security pursuant to the terms of the sanction letter within 30 days from the date of Allotment in the Issue.

2. Acquisition of future commercial rights

Our Company intends to use Rs.600 million from the Net Proceeds to fund the expansion of our sports rights management business. This is in line with our growth plans and will help us consolidate our position in our sports management business. Our Company intends to expand its commercial rights management business by bidding for and acquiring various commercial rights of sports events, which are expected to come up for sale in the next two years. Below is a representative list of sports federations that are expected to open tender process for sale of rights:

Particulars Tender process expected to open by*

Bangladesh Cricket Board (Sponsorship and signage rights) Middle of 2010

England and Wales Cricket Board (Media rights) Early 2011

Cricket Australia (Media rights) Early 2011

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*Based on management estimates The amount required for the acquisition of future commercial rights has been estimated based on past experience where our Company participated in the tender process for bidding and acquiring various commercial rights of sports events. For example: BCCI on-ground sponsorship rights: In the past, the last tender for BCCI on-ground sponsorship rights (for the period September 2007 to March 2010), we understand the BCCI required an EMD (or tender security) of approximately Rs.250 million to be deposited at the time of submission of the bid. Further, we believe that amongst other terms and conditions, the winning bidder was required to provide an annual bank guarantee for the licensee fee in the range of Rs.700 - 800 million on basis of reserve price. BCCI team sponsorship: In October 2005, BCCI issued tender inviting bids for acquisition of the sponsor for the Indian cricket team for the period January 2006 to December 2009. We understand the said tender required bidders to submit and EMD of approximately Rs.150 million before submission of the bid alongwith other conditions. Further, we believe that amongst other terms and conditions, the winning bidder was required to provide an annual bank guarantee for the first year in the range of Rs.500 - 600 million. PCB media rights: In the past, the last tender for PCB media rights for the period 2009-2013 required each bidder to provide security of an amount equivalent to Rs.22.5 million or 10 per cent of the bid amount whichever is lower. Further, the successful bidder was also required to pay 10 per cent of the total consideration within five business days from the date of entering into the agreement for such media rights. The monetary consideration payable to PCB by the licensee and other obligations of the licensee under the media rights agreement were also required to be secured by bank security Asia Cup: We understand that for the last tender for Asia Cup rights (for the period 2010 to 2014), an upfront bid security amount of Rs.22.5 million was required to be deposited at the time of submission of the bid.. Any expenses incurred by our Company towards expansion of our sports management business till the actual utilization of the Net Proceeds would be recouped from the Net Proceeds.

2. Investing in Neo Sports Broadcast Private Limited for expansion of broadcasting business

Neo Sports Broadcast Private Limited (“Neo Sports Broadcast”), our joint venture, currently owns and operates Neo Cricket and Neo Sports channels. We intend to acquire a majority stake in Neo Sports Broadcast through internal accruals and make it our subsidiary, for which we have received the requisite prior approval from FIPB vide letter dated May 19, 2010. For further details, please refer to the section titled “History and Certain Corporate Matters” on page 100 of this Draft Red Herring Prospectus. In accordance with our Company’s long-term strategy of product and geographic expansion of the broadcasting business being carried out by Neo Sports Broadcast or its subsidiary, our Company intends to use Rs.1,291.74 million from the Net Proceeds towards launching two new television channels (Neo Cinema and Neo Zindagi) and Rs.139.40 million towards geographic expansion of Neo Cricket in North America. The form of investment in Neo Sports Broadcast or its subsidiary has not been finalised. We may either make investment in equity or preference or provide loans on an arm’s length basis to Neo Sports Broadcast from the Net Proceeds. Nature of benefit expected to accrue to our Company as a result of investment Since our Company intends to acquire majority stake in Neo Sports Broadcast from our internal accruals, through our investment in Neo Sports Broadcast, we anticipate to benefit from certain operational synergies and

Cricket South Africa (Media rights) Middle of 2011

West Indies Cricket Board (Media rights) Late 2011

45

consolidation of financial statements. However, there can be no assurance of any dividend being declared by Neo Sports Broadcast.

a) Launch of new channels: Neo Cinema and Neo Zindagi Our Company through Neo Sports Broadcast or its subsidiary intends to use Rs.1,291.74 million of the Net Proceeds towards the launch of two new channels Neo Cinema and Neo Zindagi. Neo Cinema is intended to be a 24 hour Bollywood channel focusing on a mix of music, movies and Bollywood news, which will enable us to increase our presence in the films and entertainment space. Neo Zindagi is intended to be a 24 hour women-centric, lifestyle and factual programming channel. The details with regard to the infrastructural capabilities and preparatory steps taken for launch of new channels are as follows: Approvals: Neo Broadcast Limited, subsidiary of Neo Sports Broadcast made an application dated August 11, 2010 to Ministry of Information and Broadcasting, Government of India (“MIB”) for downlinking and uplinking licenses for two non news channels namely ‘Neo Cinema’ and ‘Neo Zindagi’. For more information, see “Risk Factors – We have not yet received relevant regulatory approvals for operations relating to Neo Cinema and Neo Zindagi” in section titled “Risk Factors” on page xii of this Draft Red Herring Prospectus. Infrastructural capabilities: Neo Sports Broadcast has 14 MHz of satellite space on IS-10 satellite until December 31, 2012. Neo Sports Broadcast currently transmits Neo Cricket and Neo Sports in mpeg2 format and plans to upgrade the mode of transmission to mpeg4. Upon conversion to mpeg4 format, satellite space available to Neo Sports Broadcast is adequate for four channels in mpeg4 format. This process is scheduled for completion prior to the launch of the two channels namely ‘Neo Cinema’ and ‘Neo Zindagi’ in June 2011. Equipment: Preliminary discussions have been initiated with the vendors for procuring additional equipment for operating Neo Cinema and Neo Zindagi. However, formal orders will be placed closer to the launch. Content Acquisition: Neo Sports Broadcast or its subsidiary intends to use part of the Net Proceeds to acquire television broadcasting rights of old and new Bollywood movies for telecast on Neo Cinema. Neo Sports Broadcast intends to enter into agreements for content procurement for Neo Zindagi and Neo Cinema close to the proposed launch of the channels. Thereafter, content will be procured on an ongoing basis based on channel requirements. Senior management: The existing senior management of Neo Sports Broadcast will also run Neo Cinema and Neo Zindagi. There would be no incremental cost in terms of added recruitments at senior management. Studio space: Neo Sports Broadcast has a fitted studio and one vacant studio space in Malad, Mumbai. These will be used for additional channels also. Capital expenditure is intended to be incurred for fitment of the one vacant studio space. The necessary expansion area beyond the current Neo Sports operations has been secured and is available for incremental requirements for running of Neo Cinema and Neo Zindagi channels. Detailed break up of various cost estimates for the proposed launch of Neo Zindagi and Neo Cinema is as below: 1) Set up costs for Neo Zindagi and Neo Cinema We intend to use Rs. 244.74 million of the Net Proceeds as a one-time cost to set up full-time operations of Neo Zindagi and Neo Cinema. Detailed break-up of costs based on the quotations dated August 18,, 2010 is provided below:

(Rs. in million)

Sr. No Description of cost Cost*

1 Production & playout costs 66.59

2 Uplink & downlink equipment 102.42

3 Channel Branding and Packaging costs 13.46

4 Studio & Production Control Room equipment 46.67

5 Studio Set cost 5.70

6 Office fit out costs 7.37

7 Installation commissioning and Miscellaneous expenses 2.52

46

Sr. No Description of cost Cost*

Total 244.74 * Based on the quotation received in USD. For the purpose of this computation 1 USD = 47 INR (approx.).

2) Content Acquisition costs for Neo Cinema We intend to use Rs.787.50 million of the Net Proceeds in acquiring content for the proposed launch of our new channel Neo Cinema in the following manner:

(Rs. in million)

Description Cost per title (year of film release) No. of titles Total#

1970-1998 1998-2005 A-grade 2.50 - 50 125.00 B-grade 2.00 - 50 100.00 A-grade - 15.00 20 300.00 B-grade - 5.25 50 262.50

787.50 # Total costs are based on management estimates. We intend to fund 100% of the content costs of Neo Cinema for the first year through the Net Proceeds as we set up the channel. The library acquisition costs for the subsequent years will be funded through operating revenues.

3) Direct costs for Neo Cinema (excluding content costs) Our Company intends to cover the preliminary costs of Neo Cinema for the first year through the Net Proceeds. This is estimated to be Rs.59.50 million, as provided below:

(Rs. in millions) Operating cost items Cost#

Initial production costs 41.50

Initial distribution and marketing 18.00

Direct Costs (excluding Content) 59.50 # Total costs are based on management estimates. We intend to use Rs. 59.50 million in Fiscal 2012. 4) Direct costs for Neo Zindagi (including content costs) Our Company intends to utilize Rs. 200 million of Net Proceeds for covering initial costs for first year of operation for Neo Zindagi. The remaining costs will be funded through operating revenues. Detailed break-down of the direct cost is provided below:

(Rs. in millions) Operating cost items Cost#

Initial production costs 65

Programme acquisition costs 102

Initial distribution and marketing 33

Total Direct Costs 200 # Total costs are based on management estimates. We intend to use Rs. 200 million in Fiscal 2012.

b) Geographic expansion of Neo Cricket in North America Our Company intends to tap the demand for Indian cricket in different parts of the world, through Neo Sports Broadcast, especially in regions having a substantial concentration of Indian population. Neo Cricket already has a pan-Asian presence and is available in more than 25 countries which includes countries in the Middle-East, South Asia and South-East Asia. Our Company intends to expand the reach of Neo Cricket in North America, which we believe has a sizeable Indian diaspora. Recognizing the vast demand for cricket among South Asian community in the USA, we are in the process of launching Neo Cricket in the USA. In this regard, we have recently incorporated a company called ‘Neo Broadcast America, Inc.’ as subsidiary of Neo Broadcast Limited (formerly known as Nirvana Adzone Limited). The company

47

was incorporated under the laws of Delaware and undertakes sales and marketing operations from the state of New Jersey to carry Neo Cricket across all cable and satellite platforms in the USA. We have also recruited a whole time business and distribution head in the USA and plan to more employees in the next couple of months. Neo Sports Broadcast intends to create separate television feed using the existing programming line-up, infrastructure facilities and personnel for servicing the North American markets. Neo Sports Broadcast also intends to incur additional capital expenditure for equipment and playout in addition to cost of delivery of feed to the target markets. Our Company intends to use Rs.139.40 million of the Net Proceeds towards the geographic expansion of Neo Cricket in North America. This covers the operating costs for the first year and second year, and also the one-time set-up costs. The detailed break-up of the cost for Neo Cricket in North America based on the quotation dated August 10, 2010 is given below:

(Rs. in millions) Sr. No Description Cost#

1 Equipment list for US

a Ingest, Playout Server & centralized storage 4.23

b Channel branding system 0.94

c Logo generator 0.56

d Automation system for play-list and as-run-log -

e Testing and measurement system 0.37

f Video and monitoring systems 0.33

g Talkback panel system 0.04

h Router 0.35

I IRD 0.16

j Video Switcher 0.47

k Additional digital glues 0.94

l Audio monitoring 0.03

m Encoder 0.71

n ASI extractor (one service) 0.24

o Sony Digibetacam player VTR for ingest 0.71

Total 10.08

2 Equipment list for Mumbai

a Ingest, Playout Server & centralized storage 4.23

b Channel branding system 0.94

c Automation system for play-list and as-run-log -

d Testing and measurement system 0.37

e Video and monitoring systems 0.33

f Talkback panel system 0.04

g Router 0.35

h IRD 0.16

I Video Switcher 0.47

j Additional digital glues 0.94

k Audio monitoring 0.03

l Sony Digibetacam player VTR for ingest 0.71

m ASI to Telco or Ethernet output 1.18

n ACO-ASI 0.30

Total 10.05

GRAND TOTAL 20.13 # The total capital expenditure estimated for geographic expansion of Neo Cricket in North America is Rs. 20.13 million which is based on the quotation received in USD. For the purpose of above computation 1 USD = 47 INR (approx.). Apart from the one-time capital expenditure costs, our Company also intends to utilize Rs. 119.27 million to cover operating cost for the first two years. Following is the detailed break-up of the estimated direct costs for the first two years:

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(Rs. in millions)

Operating cost items Cost in Year 1# (August 2010 to March 2011)

Cost in Year 2#

(April 2011 to March 2012)

Distribution costs to be incurred in U.S. 23.06 30.49

Distribution costs to be incurred in Canada 4.23 12.92

Legal and marketing costs 10.48 8.70

Maintenance/ insurance 4.36 7.93

Miscellaneous 8.31 8.79

Total operating costs 50.44 68.83

Net utilisation from Net Proceeds 119.27 # Total costs are based on management estimates. Any expenses incurred by Neo Sports Broadcast towards expansion of broadcasting business till the actual utilization of the Net Proceeds would be recouped from the Net Proceeds.

c) Upgradation of Neo infrastructure Our Company intends to utilize Rs.349.87million of Net Proceeds for upgrading the Neo broadcasting infrastructure from standard definition (“SD”) to high definition (“HD”) and expects to upgrade the infrastructure by the first quarter of 2012. We are upgrading the entire infrastructure to HD production for producing HD and SD content simultaneously. Our intention is to serve Indian and international market with SD and HD simultaneously. Almost all the international broadcasters in the world are moving towards HD. Sports content is increasingly being produced in HD format and we are also receiving most of the content feed on HD. In addition to this, HD is becoming popular in India and we will be targeting especially DTH and digital operators like major MSO's who are already capable of HD service and have scope for moving to HD if they haven't already. The facility upgrade would involve only upgradation and new purchase of HD equipment. The budgetary cost summary for upgrading SD facility to HD production facility based on quotations dated August 10, 2010 given below:

Sr. No Description Budgetary cost in Rs. in million Capital expenditure

1 Production & Playout

(a) Broadcast IT 109.04

(b) Broadcast Video & Audio 87.89

2 Uplink & Downlink

(a) Downlink 1.88

(b) Compression Chain 17.86

(c) Encryption System (CAS3 version) 5.17

(d) Set top boxes (10000 quantity) 56.40

(e) Irdeto Smart Cards (10000 quantity) 4.70

3 Channel Branding/Packaging

(a) Channel Re-branding/Re-packaging cost 15.04

4 Studio & PCR

(a) Broadcast Video & Audio equipment cost 44.65

5 Set

(a) Real set cost + one time costing for lighting cameraman etc 3.53

6 Fit out costs

(a) Broadcast desk fit outs 0.94

(b) Office IT items 0.71

7 Miscellaneous

(a) Installation & Training 1.41

(b) Pre-operating expenses 0.66

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Sr. No Description Budgetary cost in Rs. in million Total 349.87

d) Acquisition of new broadcasting rights

In addition to the existing rights, Neo Sports Broadcast further intends to acquire new broadcasting rights, to strengthen its position in the market. We intend to use Rs.500 million of the Net Proceeds for the purpose of acquisition of new broadcasting rights from sports rights management companies who own the broadcast rights of such sports events. Neo Sports Broadcast actively engages with rights holders and federations and evaluates opportunities for rights acquisition on an ongoing basis. For further details, please refer section titled “Business” on page 78 of this Draft Red Herring Prospectus. We believe that the following opportunities for rights acquisitions may arise in the near future:

Particulars Rights Period

UEFA European Championships 2012 Football (Media rights for Indian sub-continent) 2012

The Football Association (Media rights for Indian sub-continent) 2012-13 onwards

FA Premier League football (media rights for Indian sub-continent) 2013 – 16

FIFA Football World Cup 2014 (Media rights for Indian sub-continent) 2014

Asian Games 2014 (Media rights for Indian sub-continent) 2014

These rights are expected to become available through tenders or come up for negotiations with the rights holders at various points of time prior to the commencement of rights period. It is not possible at this stage to estimate the likely costs of these rights since it would depend on the market conditions prevailing at that time and the rights may be awarded through a competitive bidding process. Neo Sports Broadcast would seek to participate in one or more of these rights acquisition opportunities. Upon successful acquisition of some of these rights, Neo Sports Broadcast may, depending on the terms specified by the rights owner, selectively need to provide partial advance payments, financial guarantees or cash deposits. The above estimates have been arrived based on past experience where our Company participated in the tender process for bidding and acquisition of various broadcasting rights of sports events. For example in the past the broadcasting rights for the Indian subcontinent for the events such as Champions Tour Events in US/ PGA Tour Asia, “Bundesliga” German Soccer League, Italian Soccer “Serie A”, Davis Cup / Fed Cup, NASCAR Sprint Cup Series were acquired by Neo Sports Broadcast for an approximate amount of Rs.175 million.

3. General Corporate Purposes

In accordance with the policies set up by the Board, our Company will have flexibility in applying the remaining Net Proceeds for general corporate purposes, including but not restricted to expansion of home video, new media business, strategic initiatives and acquisitions, brand building exercises, strengthening of our marketing initiatives and meeting exigencies which our Company may be subject to in the ordinary course of its business or for any other purposes as approved by the Board. Our management, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from time to time and consequently our funding requirement and deployment of funds may also change. This may also include rescheduling the proposed utilization of Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilization of Net Proceeds. In case of a shortfall in the Net Proceeds, our management may explore a range of options including utilizing our internal accruals or seeking debt. Our management, in accordance with the policies of our Board, will have flexibility in utilizing the proceeds earmarked for general corporate purposes. Appraisal Our fund requirements as described above are based on management estimates and our current business plan and have not been appraised by any bank or financial institution. Also see, “Risk Factors –“The funding requirements of our Company as described in "Objects of the Issue" are based on management estimates and have not been appraised or evaluated by any bank or financial institution”.

50

Interim use of Net Proceeds Our Company’s management, in accordance with the policies established by the Board, will have flexibility in deploying the Net Proceeds. Pending utilization of the Net Proceeds for the purposes described above, our Company intends to temporarily invest the funds in high quality interest bearing liquid instruments including deposits with banks or temporarily deploy the funds in working capital loan accounts. Such investments would be in accordance with the investment policies formulated or investment approvals granted by the Board from time to time. Issue Expenses* The total expenses of the Issue are estimated to be approximately Rs.[●] million. The Issue related expenses include, among others, Issue management fees, registrar fees, printing and distribution expenses, fees of the legal counsels, advertisement and road show expenses, stamp duty, depository charges, listing fees to the Stock Exchanges. Lead Management, selling commission would be shared by our Company and Selling Shareholders on a pro rata basis as mutually agreed. All other expenses shall be borne by our Company. The breakdown of the total expenses for the Issue estimated at approximately [●] % of the Issue is as follows:

*To be completed after finalization of Issue Price

Monitoring of utilisation of funds Our Board shall monitor the utilization of the Net Proceeds. We will disclose the utilization of the Net Proceeds under a separate head along with details, for all such Net Proceeds that have not been utilized. We will indicate investments, if any, of unutilized Net Proceeds 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 Net Proceeds. On an annual basis, our Company shall prepare a statement of funds utilised 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 Net Proceeds have been utilised in full. The statement will be certified by the statutory auditors of our Company. Our Company shall be required to inform the Stock Exchanges of any material deviations in the utilisation of Net Proceeds and shall also be required to simultaneously make the material deviations/adverse comments of the Audit Committee public through advertisement in newspapers. Other Confirmation No part of the Net Proceeds will be paid by us as consideration to our Promoters, our Directors, Promoter companies, Group Companies or key managerial personnel, except in the normal course of our business. No part of the Net Proceeds will be used for Promoters’ Contribution.

Activity Expenses (Rs. in million)* As % of total Issue Expenses As % of Issue

Lead Management, selling commission underwriting and SCSB’s commissions

[●] [●] [●]

Listing fees and grading agency fees [●] [●] [●]

Advertising and marketing expenses [●] [●] [●]

Printing and stationery [●] [●] [●]

Fee to Registrar to the Issue and Bankers to the Issue [●] [●] [●]

Advisors (legal and others) [●] [●] [●]

Others [●] [●] [●]

Total estimated Issue expenses [●] [●] [●]

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Basis for Issue Price

The Issue Price will be determined by the Company in consultation with the BRLMs & Co-BRLM on the basis of assessment of market demand for the Equity Shares through the Book Building Process. The face value of the Equity Shares is Rs. 10 each. The financial data presented in this section are based on the Company’s restated financial statements. Investors should also refer to the sections “Risk Factors” and “Financial Statements” on pages xii and 142 respectively, of this Draft Red Herring Prospectus to get a more informed view before making the investment decision. Qualitative Factors Some of the qualitative factors which form the basis for computing the price are:

• Leadership position in India and established track record in sports rights management • Leadership position in sports broadcasting in India • Integrated business model in sports encompassing acquisition of commercial rights, production and

broadcasting • Strong relationships with sports federations • Experienced management team

Quantitative Factors 1. Diluted Earnings Per Share (EPS):

On consolidated basis

Period Diluted EPS (Rs.) Weightage Year ended March 31, 2010 (23.40) 3 Year ended March 31, 2009 (40.39) 2 Year ended March 31, 2008 (33.18) 1 Weighted Average (30.69)

On unconsolidated basis

Period Diluted EPS (Rs.) Weightage Year ended March 31, 2010 4.83 3 Year ended March 31, 2009 0.82 2 Year ended March 31, 2008 0.95 1 Weighted Average 2.85

Note: The earning per share has been computed by dividing net profit, as restated, after tax attributable to equity shareholders by weighted average number of diluted Equity Shares outstanding during the year. Weighted average number of Equity Shares has been computed as per Accounting Standard -20 “Earning per Share” issued by Institute of Chartered Accountants of India. 2. Price to Earnings (P/E) ratio in relation to Issue Price of Rs. [●]:

a. Based on the diluted EPS of Rs. (23.40) as per consolidated financials for the year ended March 31, 2010, the P/E ratio is [●]*

b. Based on the diluted EPS of Rs. 4.83 as per unconsolidated financials for the year ended March 31, 2010, the P/E ratio is [●]*

c. Based on the weighted average diluted EPS of Rs. (30.69), as per consolidated financials the P/E ratio is [●]*

d. Based on the weighted average diluted EPS of Rs. 2.85, as per unconsolidated financials the P/E ratio is [●]* *P/E Ratio will be determined on conclusion of book building process.

e. Industry P/E# i) Highest: 132.2 ii) Lowest: 7.5 iii) Average: 26.7 # Source:"Capital Market Volume XXV/15; 20 September 2010 - 3October 2010; 23/03/10 Industry Classification: Entertainment / Electronic Media Software”.

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3. Return on Net Worth As per consolidated restated financial statements

Period Return on Net Worth(%)

Weightage

Year ended March 31, 2010 (31.87%) - Year ended March 31, 2009 NA - Year ended March 31, 2008 NA - Weighted Average NA -

*We on a consolidated basis have a negative networth incurred losses in the Fiscal 2008 and 2009 and therefore we cannot calculate the return on net worth for those years. As per unconsolidated restated financial statements

Period Return on Net Worth(%)

Weightage

Year ended March 31, 2010 3.10 3 Year ended March 31, 2009 1.91 2 Year ended March 31, 2008 2.34 1 Weighted Average 2.58

Note: Net worth has been computed by aggregating share capital, reserves and surplus and adjusting for revaluation reserves, as per our audited restated financial statements.

4. Minimum Return on increased Net Worth required to maintain pre-Issue EPS.

The minimum return on increased net worth required to maintain pre-Issue EPS of Rs. [●]: Based on consolidated restated financial statements:

a. At the Floor Price – [●]% b. At the Cap Price – [●]%

Based on Unconsolidated Restated Financial Statements: a. At the Floor Price – [●]% b. At the Cap Price – [●]%

5. Net Asset Value per Equity Share

Based on consolidated restated financial statements: As of March 31, 2010, Rs. 72.66

Based on unconsolidated Restated Financial Statements:

As of March 31, 2010, Rs. 154.51 • NAV per Equity Share after the Issue is Rs. [●] • Issue Price per Equity Share is Rs. [●]* *Issue Price per Equity Share will be determined on conclusion of book building process.

#Net Asset Value per Equity Share represents Net Worth excluding revaluation reserve at the end of the year,, as restated divided by the number of Equity Shares outstanding at the end of the period/ year. 6. Comparison of Accounting Ratios

EPS (Rs.) P/E Return on Net Worth (%)

Book Value/ Share

Nimbus Communications Limited as of March 31, 2010*

4.83 [●] (3.1) 154.51

ZEE Entertainment 8.9 28.7 13.9 55.5 UTV Software 13.9 22.4 5.7 244.7 SUN TV 13.1 32.4 29.8 51.1

*Based on standlone financial statements Source: "Capital Market Volume XXV/15; 20 September 2010 - 3October 2010; 23/03/10 Industry Classification: Entertainment / Electronic Media Software”. Note: EPS, RONW and NAV based on March 31, 2010 and P/E based on trailing twelve months and market data

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Our Company is engaged in the business of acquisition, management and marketing of commercial rights relating to cricket events globally. There are no listed entities which are strictly comparable with our Company. We are also involved in the broadcasting business through out joint venture with Neo Sports Broadcast which owns and operates two 24-hour sports channels, namely Neo Cricket and Neo Sports. Our broadcasting advertisement income was Rs 1,345.06 million which are 17.46% of the total consolidated revenues of our Company for the year ended March 31, 2010. The peer group above has been determined on the basis of listed companies comparable to our company engaged in the business of broadcasting. The Issue Price of Rs. [●] is determined by the Company, in consultation with the BRLMs & Co-BRLM, on the basis of assessment of market demand for the Equity Shares through the Book Building Process and is justified based on the above accounting ratios. See the section titled “Risk Factors”, “Business” and “Financial Statements” on pages xii, 78 and 142 respectively of this Draft Red Herring Prospectus to have a more informed view.

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Statement of Tax Benefits Date: September 23, 2010 To, The Board of Directors, Nimbus Communications Limited, Nimbus Centre Oberoi Complex, Andheri (East), Mumbai – 400 059. Maharashtra, India. Dear Sirs, Subject: Statement of Possible Tax Benefits We hereby report that the enclosed annexure states the probable tax benefits that may be available to Nimbus Communications Limited (the “Company”) and to the shareholders of the Company under the provisions of the Income Tax Act, 1961 (IT Act) and other allied direct and indirect tax laws presently prevailing and in force in India. Several of these benefits are subject to 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 subject to fulfilment of such conditions, which 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 neither exhaustive nor are they conclusive. 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. In view of the individual nature of the tax consequences, the changing tax laws, each investor is advised to consult his/her/their own tax consultant with respect to the specific tax implications arising out of their participation in the issue. We do not express any opinion or provide any assurance as to whether:

The Company or its shareholders will continue to obtain 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. 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 opinion we accept no responsibility for any errors and 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 IPO of the Company under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the SEBI ICDR Regulations) and is not to be used, referred to or distributed for any other purpose without our prior written consent. For S A R A & ASSOCIATES Firm Reg. No. 120927W Chartered Accountants (Alok Bairagra) Partner Membership No. 105153

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1. Special Tax benefits available to the Company

No special tax benefit is available to the Company.

2. General tax benefits available to the Company under the Income-tax Act, 1961 (‘the Act’)

A) Business Income:

A.i. Depreciation

The Company is entitled to claim depreciation on:

specified tangible assets (being Buildings, Plant & Machinery, Computer and Vehicles); and

intangible assets (being Knowhow, Copyrights, Patents, Trademarks, Licenses, Franchises or any other business or commercial rights of similar nature acquired on or after 1st April, 1998) owned by it and used for the purpose of its business under section 32 of the Act.

In case of any new plant and machinery (other than ships and aircraft) that will be acquired and installed by the Company engaged in the business of manufacture or production of any article or thing, the Company will be entitled to a further sum equal to twenty per cent of the actual cost of such machinery or plant subject to conditions specified in section 32 of the Act.

Unabsorbed depreciation if any, for an Assessment Year (AY) can be carried forward & set off against any source of income in subsequent AYs as per section 32 (2) subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73 of the Act. A.ii. Preliminary Expenditure:

As per Section 35D, the Company is eligible for deduction in respect of specified preliminary expenditure incurred by the Company in connection with extension of its undertaking or in connection with setting up a new unit for an amount equal to 1/5th of such expenses over 5 successive AYs subject to conditions and limits specified in that section 35D(3).

A.iii. Carry forward of business loss

Business losses if any, for any AY can be carried forward and set off against business profits for eight subsequent AYs.

A.iv. MAT Credit:

As per section 115JAA(1A), the Company is eligible to claim credit for Minimum Alternate Tax (“MAT”) paid under sub-section (1) of section 115JB for any AY commencing on or after April 1, 2006 against normal income tax payable in subsequent AYs. MAT credit shall be allowed under sub-section (1A) shall be the difference of the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by the assessee on his total income computed in accordance with the other provisions of this Act.

The amount of tax credit determined shall be carried forward and set off up to 7 (seven) AYs immediately succeeding the assessment year in which tax credit becomes allowable.

All the deductions mentioned above, will result into reduction in tax liability of the company.

B) Capital Gains:

B. i. Capital asset means property of any kind held by an assessee whether or not connected with his business or profession but does not include any stock-in-trade, consumables stores or Raw Materials held for the purpose of his business or profession and personal effects i.e. movable property held for personal use.

Capital assets may be categorised into short term capital assets and long term capital assets based on the period of holding.

Shares in a company, listed securities or units of UTI or units of mutual fund specified under section 10 (23D) or zero coupon bond will be considered as long term capital assets if they are held for a period exceeding twelve months. In case of all other assets if the period of holding exceeds thirty six months they are termed as long term capital assets.

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B. ii.

a. Long term Capital Gain (LTCG)

LTCG means capital gain arising from the transfer of a long term capital asset.

b. Short Term Capital Gain (STCG)

STCG means gain arising out of transfer of capital asset being share held in a company or any other security listed in a recognized stock exchange in India or unit of the Unit Trust of India or a unit of a mutual fund specified under clause (23D) of section 10, held by an assessee for 12 months or less.

In respect of any other capital asset, STCG means capital gain arising from the transfer of capital asset, held by an assessee for 36 months or less.

(i) As per Section 48 of the ITA, which prescribes the mode of computation of capital gains, provides for deduction of cost of acquisition/ improvements and expenses incurred in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains.

(ii) As per second and third proviso to section 48, LTCG arising on transfer of capital assets, other than bonds and debentures excluding capital indexed bonds issued by Government, is to be computed by deducting the indexed cost of acquisition and indexed cost of improvement from the full value of consideration.

(iii) Further as per fifth proviso to Section 48 of the ITA, while computing income under the head “Capital Gains”, no deduction shall be allowed in respect of any sum paid on account of securities transaction tax.

(iv) As per Section 112 of the ITA, taxable long-term capital gains, if any, on sale of listed securities where such transaction is not chargeable to securities transaction tax (STT) will be charged to tax at the rate of 20% (plus applicable surcharge and education cess and Secondary and higher education cess) after considering indexation benefits or at 10% (plus applicable surcharge and education cess and Secondary and higher education cess) without indexation benefits, whichever is less.

(v) As per section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented fund, on a recognized stock exchange are subject to tax at the rate of 15 per cent (plus applicable surcharge and education cess and Secondary and higher education cess), provided the transaction is chargeable to STT.

(vi) As per Section 10(38) of the ITA, long term capital gains arising to the company from the transfer of long term capital asset being an equity share in a company or a unit of an equity oriented fund where such transaction is chargeable to securities transaction tax will be exempt in the hands of the Company.

For this purpose, “Equity Oriented Fund” means a fund -

a. where the investible funds are invested by way of equity shares in domestic companies to the extent of more than sixty five percent* of the total proceeds of such funds; and

b. which has been set up under a scheme of a Mutual Fund specified under Section 10(23D) of the ITA. *Provided that the percentage of equity shareholding of the fund shall be computed with reference to the annual average of the monthly averages of the opening and closing figures;

(vii) As per Section 14A, no deduction shall be allowed in respect of expenditure incurred by the company in relation to income which does not form part of the total income under this Act.

(viii) If the Company is paying tax as per Section 115JB, while calculating “book profits” the Company will not be able to reduce the long term capital gains to which the provisions of Section 10(38) of the ITA apply and will be required to pay Minimum Alternate Tax @ 10% (plus applicable surcharge and education cess and Secondary and higher education cess) of the book profits.

(ix) As per section 71 read with section 74, Short-term capital loss arising during a year is allowed to be set off against short-term as well as long-term capital gains of the said year. Balance loss, if any, should be carried forward and set-off against short-term as well as longterm capital gains for subsequent 8 years.

(x) As per section 71 read with section 74, Long-term capital loss arising during a year is allowed to be set off only against long-term capital gains. Balance loss, if any, should be carried forward and set-off against subsequent year’s long-term capital gains for subsequent 8 years.

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(xi) As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long term

capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a longterm capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed Rs. 50 lacs.

However, if the Company transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

A “long term specified asset” for making investment under this section on or after 1st April 2007 means any bond, redeemable after three years and issued on or after the 1st April 2007 by:

a. National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or

b. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.

C) Income from Other Sources

Dividend Income:

As per Section 10(34) of the ITA, any income by way of dividends referred to in Section 115 - O (i.e. dividends declared, distributed or paid on or after 1st April, 2003 by domestic companies) received on the shares of any company is exempt from tax. As per Section 10(35) of the ITA, the following income will be exempt in the hands of the company: (a) Income received in respect of the units of a Mutual Fund specified under clause (23D) of section 10; or

(b) Income received in respect of units from the Administrator of the specified undertaking; or

(c) Income received in respect of units from the specified company:

However, this exemption does not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified Company or of a mutual fund, as the case may be.

For this purpose (i) “Administrator” means the Administrator as referred to in Section 2(a) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and (ii) “Specified Company” means a Company as referred to in Section 2(h) of the said Act. D) Dividend Distribution Tax:

The domestic company is required to pay dividend distribution tax u/s 115O @ 15% (plus applicable surcharge and education cess and Secondary and higher education cess).

However, the company will also be entitled to avail the credit of dividend received by it from its subsidiaries in accordance with the provisions of section 115-O (1A) on which tax on distributed profits has been paid by the subsidiary. This credit is available to ultimate parent company i.e. the domestic company is not a subsidiary of any other company. For the purposes of this sub-section, a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company.

3. Special Tax benefits available to the shareholders of the Company

No special Tax benefit is available to the shareholders of the Company. 4. General Tax benefits available to the Shareholders (not engaged in business or profession of shares trading) of the company

4.1 Resident Shareholders

4.1.i Dividend income:

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Dividend (both interim and final) income, if any, received by the resident shareholder from a domestic company is exempt under Section 10(34) read with Section 115O of the Act. 4.1.ii Capital gains:

(i) As per Section 2(29A) read with Section 2(42A), shares held in a company are treated as long term capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the benefits enumerated below in respect of long term capital assets would be available if the shares are held for more than twelve months.

(ii) As per Section 48 of the ITA, which prescribes the mode of computation of capital gains, provides for deduction of cost of acquisition/ improvements and expenses incurred in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. (iii) As per second and third proviso to section 48, LTCG arising on transfer of capital assets, other than bonds and debentures excluding capital indexed bonds issued by Government, is to be computed by deducting the indexed cost of acquisition and indexed cost of improvement from the full value of consideration.

(iv) As per Section 112 of the ITA, taxable long-term capital gains, if any, on sale of listed securities where such transaction is not chargeable to STT will be charged to tax at the rate of 20% (plus applicable surcharge and education cess and Secondary and higher education cess) after considering indexation benefits or at 10% (plus applicable surcharge and education cess and Secondary and higher education cess) without indexation benefits, whichever is less.

(v) As per section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented fund, on a recognized stock exchange are subject to tax at the rate of 15 per cent (plus applicable surcharge and education cess and Secondary and higher education cess), provided the transaction is chargeable to STT.

(vi) If the resident shareholder is a company is paying tax as per Section 115JB, while calculating “book profits” the Company will not be able to reduce the long term capital gains to which the provisions of Section 10(38) of the ITA apply and will be required to pay Minimum Alternate Tax @ 10% (plus applicable surcharge and education cess and Secondary and higher education cess) of the book profits. (vii) As per section 71 read with section 74, Short-term capital loss arising during a year is allowed to be set off against short-term as well as long-term capital gains of the said year. Balance loss, if any, should be carried forward and set-off against short-term as well as long term capital gains for subsequent 8 years. (viii) As per section 71 read with section 74, Long-term capital loss arising during a year is allowed to be set off only against long-term capital gains. Balance loss, if any, should be carried forward and set-off against subsequent year’s long-term capital gains for subsequent 8 years.

(ix) As per Section 10(38) of the ITA, long term capital gains arising from the transfer of a long term capital asset being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt in the hands of the shareholder.

(x) Further as per proviso 5 of Section 48 of the ITA, while computing income under the head “Capital Gains”, no deduction shall be allowed in respect of any sum paid on account of securities transaction tax. (xi)As per Section 14A, no deduction shall be allowed in respect of expenditure incurred by the company in relation to income which does not form part of the total income under this Act. (xii) As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed Rs. 50 lacs.

However, if the shareholder transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money. A “long term specified asset” for making investment under this section on or after 1st April 2007 means any bond, redeemable after three years and issued on or after the 1st April 2007 by:

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a. National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or

b. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956. (xiii) As per Section 54F of the ITA, long term capital gains (in cases not covered under Section 10(38)) arising on the transfer of the shares of the Company held by an individual or Hindu Undivided Family (HUF) will be exempt from capital gains tax if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a residential house, or for construction of a residential house within three years. Such benefit will not be available:

(a) if the individual or Hindu Undivided Family- owns more than one residential house, other than the new residential house, on the date of transfer of the

shares; or

purchases another residential house within a period of one year after the date of transfer of the shares; or

constructs another residential house within a period of three years after the date of transfer of the shares; and

(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head “Income from house property”.

If only a part of the net consideration is so invested, so much of the capital gain as bears to the whole of the capital gain, the same proportion as the cost of the new residential house bears to the net consideration, will be exempt.

If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, will be deemed to be income chargeable under the head “Capital Gains” of the year in which the new residential house is transferred.

4.1.iii Clubbing of Income:

Any income of minor children clubbed with the total income of the parent under section 64(1A) of the IT Act, will be exempt from tax to the extent of Rs. 1500/- per minor child under section 10(32) of the IT Act.

4.2 Tax Benefits available to Non-Resident Indians/Non-Resident Shareholders (Other than FIIs)

4.2.i Dividend income: Dividend (both interim and final) income, if any, received by the non-resident shareholders from a domestic company shall be exempt under section 10(34) read with Section 115-O of the Act. 4.2.ii Capital gains:


(ii) As per Section 48 of the ITA, which prescribes the mode of computation of capital gains, provides for deduction of cost of acquisition/ improvements and expenses incurred in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. (iii) As per first proviso to Section 48 of the ITA, in case of a non resident shareholder, the capital gain/loss arising from transfer of shares of the Company, acquired in convertible foreign exchange, is to be computed by converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively incurred in connection with such transfer, into the same foreign currency which was initially utilized in the purchase of shares. Cost Indexation benefit will not be available in such a case. (iv) As per second and third proviso to section 48, LTCG arising on transfer of capital assets, other than bonds and debentures excluding capital indexed bonds issued by Government, is to be computed by deducting the indexed cost of acquisition and indexed cost of improvement from the full value of consideration.

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(v) As per Section 10(38) of the ITA, long term capital gains arising from the transfer of a long term capital asset being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt in the hands of the shareholder. (vi) As per Section 112 of the ITA, taxable long-term capital gains, if any, on sale of listed securities where such transaction is not chargeable to STT will be charged to tax at the rate of 20% (plus applicable surcharge and education cess and Secondary and higher education cess) after considering indexation benefits or at 10% (plus applicable surcharge and education cess and Secondary and higher education cess) without indexation benefits, whichever is less.

(vii) As per section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented fund, on a recognized stock exchange are subject to tax at the rate of 15 per cent (plus applicable surcharge and education cess and Secondary and higher education cess), provided the transaction is chargeable to STT.

(viii) As per section 71 read with section 74, Short-term capital loss arising during a year is allowed to be setoff against short-term as well as long-term capital gains of the said year. Balance loss, if any, should be carried forward and set-off against short-term as well as long term capital gains for subsequent 8 years. (ix) As per section 71 read with section 74, Long-term capital loss arising during a year is allowed to be set off only against long-term capital gains. Balance loss, if any, should be carried forward and set-off against subsequent year’s long-term capital gains for subsequent 8 years.

(x) Further as per proviso 5 of Section 48 of the ITA, while computing income under the head “Capital Gains”, no deduction shall be allowed in respect of any sum paid on account of securities transaction tax.

(xi) As per Section 14A, no deduction shall be allowed in respect of expenditure incurred by the company in relation to income which does not form part of the total income under this Act.

(xii) As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed Rs. 50 lacs. However, if the shareholder transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

A “long term specified asset” for making investment under this section on or after 1st April 2007 means any bond, redeemable after three years and issued on or after the 1st April 2007 by: a. National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or b. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.

(xiii) As per Section 54F of the ITA, long term capital gains (in cases not covered under Section 10(38)) arising on the transfer of the shares of the Company held by an individual or Hindu Undivided Family (HUF) will be exempt from capital gains tax if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a residential house, or for construction of a residential house within three years. Such benefit will not be available:

(a) if the individual or Hindu Undivided Family- owns more than one residential house, other than the new residential house, on the date of transfer of the

shares; or

purchases another residential house within a period of one year after the date of transfer of the shares; or

constructs another residential house within a period of three years after the date of transfer of the shares; and

(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head “Income from house property”.

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If only a part of the net consideration is so invested, so much of the capital gain as bears to the whole of the capital gain, the same proportion as the cost of the new residential house bears to the net consideration, will be exempt.

If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, will be deemed to be income chargeable under the head “Capital Gains” of the year in which the new residential house is transferred. 4.2.iii Special provisions in respect of income / LTCG from specified foreign exchange assets available to Non resident Indians under Chapter XII-A

(i) Non-Resident Indian (NRI) means a citizen of India or a person of Indian origin who is not a resident, Person is deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India. (ii) Specified foreign exchange assets include shares of an Indian company acquired/purchased/subscribed by NRI in convertible foreign exchange.

(iii) As per Section 115E of the ITA, in the case of a shareholder being a Non-Resident Indian, and subscribing to the shares of the Company in convertible foreign exchange, in accordance with and subject to the prescribed conditions, long term capital gains arising on transfer of the shares of the Company (in cases not covered under Section 10 (38) of the ITA) will be subject to tax at the rate of 10% (plus applicable surcharge and education cess and Secondary and higher education cess), without any indexation benefit.

(iv) As per Section 115F of the ITA and subject to the conditions specified therein, in the case of a shareholder being a Non-Resident Indian, gains arising on transfer of a long term capital asset being shares of the Company will not be chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period of six months in any specified asset or savings certificates referred to in Section 10(4B) of the ITA. If part of such net consideration is invested within the prescribed period of six months in any specified asset or savings certificates referred to in Section 10 (4B) of the ITA then such gains would not be chargeable to tax on a proportionate basis. Further, if the specified asset or savings certificate in which the investment has been made is transferred within a period of three years from the date of investment, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such specified asset or savings certificates are transferred.

(v) As per Section 115G of the ITA, Non-Resident Indians are not obliged to file a return of income under Section 139(1) of the ITA, if their only source of income is income from specified investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the ITA.

(vi) As per Section 115H of the ITA, where Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under Section 139 of the ITA to the effect that the provisions of Chapter XIIA shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

(vii) As per Section 115I of the ITA, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing a declaration along with his return of income for that assessment year under Section 139 of the ITA, that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the ITA.

4.2.iv Clubbing of Income:

Any income of minor children clubbed with the total income of the parent under section 64(1A) of the ITA, will be exempt from tax to the extent of Rs. 1500/- per minor child under section 10(32) of the ITA. 4.2.v Tax Treaty Benefits:

In respect of non-residents (including Foreign Company), the tax rates and consequent taxation mentioned above will be further subject to any benefits available under the Tax Treaty, if any, between India and the country in which the non-resident or Foreign Company is resident. As per the provisions of Section 90(2) of the ITA, the provisions of the ITA would prevail over the provisions of the Tax Treaty to the extent they are more beneficial to the non-resident or Foreign Company.

4.3 Tax Benefits available to Foreign Institutional Investors (FIIs)

4.3.1 Dividend income:

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Dividend (both interim and final) income, if any, received by the shareholder from the domestic company shall be exempt under Section 10(34) read with Section 115O of the Act. 4.3.2 Capital Gains:


(ii) As per Section 10(38) of the ITA, long term capital gains arising from the transfer of a long term capital asset being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt in the hands of the shareholder. (iii) As per Section 14A, no deduction shall be allowed in respect of expenditure incurred by the company in relation to income which does not form part of the total income under this Act. (iv) As per section 71 read with section 74, Short-term capital loss arising during a year is allowed to be setoff against short-term as well as long-term capital gains of the said year. Balance loss, if any, should be carried forward and set-off against short-term as well as longterm capital gains for subsequent 8 years.

(v) As per section 71 read with section 74, Long-term capital loss arising during a year is allowed to be setoff only against long-term capital gains. Balance loss, if any, should be carried forward and set-off against subsequent year’s long-term capital gains for subsequent 8 years.

(vi) Further as per proviso 5 of Section 48 of the ITA, while computing income under the head “Capital Gains”, no deduction shall be allowed in respect of any sum paid on account of securities transaction tax. (vii) As per section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented fund, on a recognized stock exchange are subject to tax at the rate of 15 per cent (plus applicable surcharge and education cess and Secondary and higher education cess), provided the transaction is chargeable to STT. (viii) In case of long term capital gains, (in cases not covered under Section 10(38) of the ITA), the tax is levied on the capital gains computed without considering the cost indexation and without considering foreign exchange fluctuation.

(ix) As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed Rs. 50 lacs. However, if the FII transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

A “long term specified asset” for making investment under this section on or after 1st April 2007 means any bond, redeemable after three years and issued on or after the 1st April 2007 by: a. National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or b. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956. (x) As per Section 115AD of the ITA, FIIs as notified by the Central Government in the official gazette will be taxed on the capital gains that are not exempt under the provision of Section 10(38) of the ITA, at the following rates: Nature of income Rate of tax

(%) Long Term Capital Gains on transfer of securities 10 Short term capital gains (other than referred to in Section 111A) on 30

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transfer of securities

The above tax rates have to be increased by the applicable surcharge and education cess and Secondary and higher education cess.

(xi) As per Section 196D(2), no tax is to be deducted from any income, by way of capital gains arising from the transfer of shares payable to Foreign Institutional Investor.

4.3.3 Tax Treaty Benefits

The tax rates and consequent taxation mentioned above will be further subject to any benefits available under the Tax Treaty, if any, between India and the country in which the FII is resident. As per the provisions of Section 90(2) of the ITA, the provisions of the ITA would prevail over the provisions of the Tax Treaty to the extent they are more beneficial to the FII. 4.4 Tax Benefits available to Mutual Funds

As per Section 10(23D) of the ITA, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under, Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorised by the Reserve Bank of India will be exempt from income tax, subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf.

4.5 Tax Benefits available to Venture Capital Companies/Funds

As per section 10(23FB) of the ITA, any income of a venture capital company or venture capital fund from investment in a venture capital undertaking is exempt from income tax.

“Venture Capital company” which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 (SEBI) and which fulfils the conditions as may be specified, with the approval of the Central Government, as notified by the SEBI in the Official Gazette;

“Venture Capital Fund”, operating under a trust deed under the provisions of Registration Act or operating as a venture capital scheme made by the Unit Trust of India, which has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992 and which fulfils the conditions as may be specified, with the approval of the Central Government, as notified by the SEBI in the Official Gazette;

“Venture Capital Undertaking” means such domestic company whose shares are not listed in a recognized stock exchange in India and which is engaged in the—

(i) business of—

A. nanotechnology; B. information technology relating to hardware and software development; C. seed research and development; D. bio-technology; E. research and development of new chemical entities in the pharmaceutical sector; F. production of bio-fuels; G. building and operating composite hotel-cum-convention centre with seating capacity of more than

three thousand; or H. developing or operating and maintaining or developing, operating and maintaining any

infrastructure facility as defined in the Explanation to clause (i) of sub-section (4) of section 80-IA;

or

(ii) dairy or poultry industry;

5. Wealth Tax Act, 1957.

Asset as defined under Section 2(ea) of the Wealth tax Act, 1957 does not include shares in companies and hence, shares of the Company are not liable to wealth tax in the hands of shareholders.

6. The Gift Tax Act, 1958

Gift of shares of the company made on or after October 1, 1998 are not liable to Gift tax.

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7. Security Transaction Tax (STT)

STT in respect of any taxable securities transaction shall be collected from the seller or the buyer, on the value of such transaction, by every recognized stock exchange or the prescribed person in case of any Mutual Fund, at the rate specified in section 98 of the Act. 8. Notes:

The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of equity shares; The above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the Company and its shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws;

The above Statement of Possible Direct Tax Benefits is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue; At present, the Company does not enjoy any special tax benefits. All the above benefits are as per the current tax law as amended by the Finance Act, 2008. These benefits will be available only to the sole/ first named holder in case the shares are held by joint holders; and

In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile.

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SECTION IV - ABOUT US

Industry Overview

The information in this section has not been independently verified by us, the Book Running Lead Managers, Co- Book Running Lead Manager or any of our or their respective affiliates or advisors. The information may not be consistent with other information compiled by third parties within or outside India. Industry sources and publications generally state that the information contained therein has been obtained from sources it believes to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Industry and government publications are also prepared based on information as of specific dates and may no longer be current or reflect current trends. Industry and government sources and publications may also base their information on estimates, forecasts and assumptions which may prove to be incorrect. Accordingly, investment decisions should not be based on such information. The information in this section is derived from: (a) “The Indian Media and Entertainment Industry”, FICCI KPMG Report 2009 (“FICCI KPMG Report 2009”) and FICCI-KPMG Indian Media and Entertainment Industry Report 2010 (“FICCI KPMG Report 2010”). (b) Report on “The Business of Sports in India”, October 2008, published by SportBusiness Group. (c) TAMMedia Research. (d) Reports by Internet & mobile Association of India. The information in this section also includes extracts from publicly available information, data and statistics which have been derived from various government publications and industry sources. The Indian economy India is the world's largest democracy in terms of population (approximately 1.17 billion people) for the year 2010. (Source: www.census india.gov.in) The GDP on a purchasing power parity basis of approximately US$3,752 billion in the year 2009. This makes India the fourth largest economy in the world in terms of GDP after the United States of America, China and Japan. (Source: www.siteresources.worldbank.org.) The following table sets forth the key indicators of the Indian economy for the past five Fiscal years.

(Annual % change)

Item As at and for the year ended March 31

2006 2007 2009 2010 GDP Growth 9.5 9.7 6.7 7.4 Index of Industrial Production 8.2 11.6 2.6 10.4 Inflation - Wholesale Price Index 4.4 5.4 8.4 11.0 (Source: Economic Survey 2008.2009 & 2009-2010 RBI, Central Statistics Organization, Ministry of statistics and Programme Implementation.) India has experienced rapid economic growth over the past five Fiscal years. However, economic activity in India slowed down in the first two quarters of Fiscal 2009 as compared with over nine percent growth in the previous three years. Growth decelerated sharply in the third quarter following the failure of Lehman Brothers in mid-September 2008 and adverse effects of the global financial crisis on the Indian economy. Consequently, the growth rate during the first three quarters (April – December) of 2008-09 slowed down to 6.9 percent from 9 percent in the corresponding period of the previous year. However, RBI’s monetary Policy for the Q1 2010-11 indicated that the Indian economy grew by 7.4 percent in 2009-10. The momentum was particularly pronounced in Q4 of 2009-10 with growth at 8.6 percent as compared with 6.5 percent in the previous quarter. The double digit growth in the Index of Industrial Production (IIP) that began in October 2009 continued during the current financial year although there was modest deceleration in May 2010. In the first two months of this Fiscal, April-May 2010, the IIP recorded a year-on-year growth of 14 percent with as many as fifteen out of the seventeen industry groups (two digits NIC classification) showing positive growth. The lead indicators of service sector also suggest increased economic activity. (Source: RBI Annual Policy Statement 2009-10 & 2010-11) Despite the global economic decline in Fiscal 2008, India continues to be one of the fastest growing countries in the world and is showing positive signs of recovery following the global financial downturn. India‘s growth is expected to outperform advanced and developing economies. Recent data suggests that the rate of decline in economic activity is moderating, although this is occurring to varying degrees across different regions.

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India‘s ability to recover from the global slowdown (and its own domestic liquidity crunch) has been driven by the country‘s large domestic savings and corporate retained earnings, which have been used to finance investment. The fiscal policy, primarily in the form of reduced interest rates and Government intervention, has further helped to maintain private demand, liquidity and short-term rates, thereby reducing the risk of loan losses. (Source: International Monetary Fund, World Economic Outlook Update, July 2009 (Calendar Year Growth Rates) and the RBI‘s First Quarter Review, 2009-2010). Due to the increasing economic growth, the potential for increase in advertisement expenditure remains strong. Further, the emergence of India’s young middle class with greater earning power and higher disposable incomes signifies good potential for increased marketing and advertising expenditure in the country which will translate into the overall growth of the advertisement industry. Media spend in India as a percent of GDP is 0.41 percent. This ratio is almost half of the world’s average of 0.80 percent and is much lower compared to developed countries like US and Japan. This indicates the potential for growth in spends as the industry in India matures. As we move towards a more brand-conscious society, this is likely to get reflected in the future growth rates.


If we compare the contribution of India to the world in terms of population, it is second only to China at 22 percent. China’s media spend ratio at 0.75 percent is much in line with the world average, whereas India lags behind. This is largely due to some of the media platforms being in a relatively nascent stage. As penetration increases and more audiences come into the fold of M&E industry, it is expected to see higher growth going forward. The current media expenditure per capita for India is very low at USD 4 compared to the other countries. Even though it is challenging to reach the levels of countries like US, Japan and UK, due to a very large population base and lower spending power per capita, there is scope to follow China and enhance this ratio.


With revised growth estimates for GDP at 6.8 percent in 2009 by IMF, which is higher than the world average and the expected recovery from the slow down, the M&E industry is expected to grow steadily over the next five year period. The industry is looking at reaching newer target segments, geographies and mediums, while tapping the potential of the existing ones.

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Media and entertainment industry Current size The Media and Entertainment (M&E) industry in India is comprised primarily of television, print, film, radio, music, animation, outdoor advertising, internet and gaming. The overall M&E industry size grew from INR 579 billion in 2008 to INR 587 billion in the year 2009 at a rate of 1.4 percent. The growth rate is expected to increase to ~11.2 percent in 2010, as the industry witnesses a recovery. (Source: FICCI KPMG Report 2010) Segment wise break up of the Indian M&E industry is given below:


Key Growth Drivers The primary factors that have and will continue to contribute to the growth of the M&E industry in India are. Regionalisation: Regionalisation is likely to be one of the significant factors driving rapid growth in literacy, consumption and disposable incomes in Tier 2 & 3 cities. Advertisers are also increasing focus on rural markets due to the saturation of urban markets. Demand for regional content is also growing. Consolidation: The M&E industry is increasingly becoming fragmented in nature due to entry of newer players and newer customers and regions getting added. Growing regionalisation is also helping some regional players to become strong by tapping newer markets. Also, media players are looking at leveraging their content across platforms leading to the emergence of conglomerates. These trends are giving rise to increasing competition and are expected to give way to consolidation of operations. Mergers and acquisitions activity in this space over the next two years is expected to significantly increase along with the level of participation by private equity players. Competition expanding the market: In many cases, the entry of newer players in the market has had a positive impact on the overall market as it has helped in expanding the market size. This is likely to continue in future with new players emerging to capture newer set of audiences with advancements in their product, marketing and distribution to tap these customer segments. To take the example of DTH, the entry of Sun which was a strong regional broadcaster in the business has expanded the overall subscriber base by tapping the entire Southern Pay TV market. Organized funding for the M&E industry: Over the past few years, the M&E industry has witnessed increased investments in the form of public equity issues, strategic stakes and private equity funding. This is ushering an era of corporatization and professionalism in the M&E industry. Most of the organized funding in the sector from global players has so far been concentrated in the television segment of the M&E industry. Digitization: In the past few years, the Indian M&E industry has witnessed the advent of digital TV distribution platforms such as digital cable, DTH and IPTV, digitization of film prints and digitization of music libraries and sales of online and mobile music. The digitisation of TV platforms has given way to better technology and picture and sound quality for viewers, more transparent distribution of revenues for stakeholders in the value chain and more bandwidth becoming available to broadcasters, giving them the opportunity to provide value added services. This could boost the availability of niche content in the future. The entry of DTH players was a major development in the M&E industry. The DTH subscriber base is expected to increase to around 43 million by the year 2014 from the

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current level of 16 million in 2009, which translates into a CAGR of 22 percent in five years (Source: FICCI KPMG Report 2010). This will result in minimising revenue leakages through increased transparency in reporting of subscriber numbers. Convergence of various media platforms: The M&E industry is witnessing increased convergence between entertainment, information and telecommunication sectors, fueled by the merging of functionalities of devices such as TV, personal computers, and mobile phones to carry similar kind of content. Convergence is expected to transform the landscape of the Indian M&E industry by enabling players to leverage media synergies and attract a whole new set of consumers. Innovation: Innovation is essential for players to adapt to the changing market scenario, technology and consumer behaviour. If done rightly, it not only helps in making an impact in the increasingly competitive market place but also increases the overall market size by tapping newer customer segments and retaining the existing ones. An example of successful product innovation was the evolution of IPL as a brand, which effectively combined entertainment and sports. Changes in regulatory framework: Some regulatory actions that spurred growth in M&E industry are:

• the appointment of Telecom Regulatory Authority of India (TRAI) in 2004 as a regulator for the television industry (with its scope increased to cover broadcasting and cable services);

• the introduction of Conditional Access System (CAS) for television; and • the grant of an industry status to the Indian film sector in the year 2001 and permitting FDI up to 100

percent in film related activities.

SPORTS MARKETING INDUSTRY Sports marketing include both marketing of sports events and teams as well as using sports to market non-sports products. In 2008, this business was worth Rs. 20 billion in India out of which cricket alone accounted for Rs 18 billion). More importantly, the sports marketing business is growing at a rapid pace of 20 percent a year compared to the global average growth of 5 percent a year. While developed countries have a mature sport marketing industry, this industry is still in a nascent stage in India. (Source: FICCI KPMG Report 2009) Revenue from the sports marketing industry is generated through three main sources i.e.

• broadcasting fee and advertising; • endorsement; and • on ground activation.

Following chart shows the percentage of total revenues generated in the different segments of sports marketing business in India for the year 2008:

Break up of sports marketing business in India

On ground activation, 20%

Broadcast fee + advertising, 60%

Endorsement , 20%


Cricket accounts for over 90 percent of total value of the sports marketing business in India. Cricket rights worldwide have been sold at a premium over the last three-four years, with each deal outsizing the previous one. (Source: The Business of Sports in India, October 2008, published by BusinessSports Group)

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TELEVISION INDUSTRY The Indian TV broadcast began in 1959 when Doordarshan, a Government-owned channel, commenced operations. In 1992, the Government authorized the licensing of privately-owned cable & satellite television channels. The number of channels has grown from approximately 120 in the year 2003 to over 512 as of the end of 2009. (Source: Ministry of Information and Broadcasting) There has been rapid growth in the number of channels in news and other niche segments such as lifestyle, kids and infotainment. Apart from GECs, India now has eight sports channels inclusive of two exclusive cricket channels beaming content 24 hours a day. The Television (TV) industry constitutes the largest segment of the Indian M&E industry with a size of Rs. 257 billion in the year 2009 and has contributed 43.78 percent to the total revenues of the M&E industry in the year 2009. It has grown at a CAGR of 12 percent from the year 2006 to 2009 and is expected to grow at a CAGR of 15 percent from 2010 to 2014. It is expected that amongst the segments of the M&E industry, the television segment will continue to contribute the largest share, just as it has in the preceding three years.

(Source: FICCI KPMG Report 2009) The average time spent on watching television remained largely flat. The number of advertisers on TV increased from ~8500 in 2008 to ~9400 in 2009. Out of this, ~4600 were new advertisers on TV indicating strong interest from advertisers even in times of recession. Also, TV’s share of ad spends was 40 percent in 2009 indicating its nature as a powerful medium for advertisers. With digitisation of TV distribution, bandwidth constraints may get resolved and the rapid growth in number of channels is likely to continue. This is likely to increase the average viewership time. The impact is already visible in the increased daily average time spent by viewers in watching television, which has increased.

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Revenues in the television industry The primary revenue streams of television broadcasters comprise of subscription and advertising revenues. Subscription revenues: Subscription revenues are projected to be the key growth driver for the Indian television industry over the next five years. As the TV distribution market grows, the television subscription revenues are projected to rise from the size of Rs. 169 billion in the year 2009 to Rs. 340 billion in 2014, which is a CAGR of 15 percent over the next five years. Growth in subscription revenues will be attributable to an increase in number of pay TV subscriptions as well as increase in subscription rates. The buoyancy of the Indian economy will drive customers in both rural and urban (second TV set subscribers) areas to buy televisions and subscribe to the pay services. New distribution platforms such as DTH and IPTV will only increase the subscriber base and increase the subscription revenues. The DTH subscriber base is estimated to grow to around 43 million by 2014 from the size of 16 million in 2009 which was 10 million in 2008. (Source: FICCI KPMG Report 2010)


The main sources of television subscription revenues are the DTH and Cable sectors DTH: The current structure of the cable industry results in high leakage of revenues with cable operators under-declaring their subscriber bases to broadcasters of pay-TV channels. The under-declaration results in low addressability of a channel’s subscriber base and consequently low subscription revenues for broadcasters. The issue of under reporting of subscribers can be dealt with to a large extent by DTH. The launch of Direct-to-Home (DTH) has created a much larger market with high addressability. Players in the market include Dish TV, Tata Sky, Sun Direct, Reliance Big TV, Airtel Digital TV and Videocon DTH services. Doordarshan too has its DTH service. DTH broadcasting may offer revenue growth opportunities to broadcasters by increasing the addressable viewer base of their channels and consequently their subscription revenues or by the creation of niche channels that depend more on subscription than advertising as a source of revenue. DTH subscriber base is expected to increase from 16 million in the year 2009 to 43 million in 2014. Cable: Cable television can be classified into analogue cable subscribers and digital cable subscribers. Unlike in digital cable, in the case of analogue cable, there is a risk of under reporting of subscribers by the MSOs and LCOs resulting into lower subscription revenues. Recently, there has been a significant shift in the number of cable subscribers moving from analogue cable to digital cable due to implementation of CAS and improved quality of picture and sound provided by digital cable. The number of digital cable subscribers is expected to increase from 4 million in 2009 to 40 million in 2014 leading to an increase in the subscription revenues on a year on year basis. (Source: FICCI KPMG Report 2010) Advertising revenues: Advertising revenues is one of the main drivers behind the growth of the Indian M&E industry. The TV industry is one of the main sources for advertisement revenues in India and contributed revenues of Rs. 88 billion in 2009 which consists 39.95 percent of the total advertisement sector revenues. TV’s share of overall advertising expenditure has increased consistently over the last few years and is expected to grow significantly until 2014 to become the highest contributor to the advertising industry. Economic growth is encouraging Indian companies to increase their advertising budgets. This increase is benefiting the TV broadcasting segment. The television advertising market is expected to grow from the size of Rs. 88 billion in 2009 to Rs. 181.5 billion by 2014, a 15.6 percent cumulative annual growth over the next five years. (Source: FICCI KPMG Report 2010)

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Sports broadcasting The major sports channels in India are as follows:

• DD Sports • ESPN • Neo Cricket • Neo Sports • Star Sports • Star Cricket • Ten Sports • Zee Sports

The fragmentation of audiences among hundreds of channels has given the most popular sports enormous bargaining power. With the increase in the number of channels, large audiences have become much more difficult to find but sports channels have retained their ability to generate viewers. In fact, the average time spent watching sports channels by C&S subscribers, has been increasing steadily. Sports channels are continuously experiencing an increasing trend of viewership and outgrowing the other genres like news. Over a period of time, the time spent (in minutes) on sports channels has consistently gone up, as evident in the following graphs:

(Source: FICCI KPMG Report 2009) With the growth in sports viewership, the number of advertisers has also risen steadily. The number of advertisers in the sports genre grew at a CAGR of 32 percent from 2005 to 2007. As a result of the growth in advertisement revenues from the sports genre, a significant amount of competition has emerged to acquire sports broadcasting rights. (Source: FICCI KPMG Report 2009) In 2006, we entered into a contract with the BCCI to purchase the media rights to international cricket matches played in India and domestic cricket until 2010 for Rs. 27,242 million. Pursuant to the exercise of first right of negotiation, we have renewed the BCCI rights until 2014 at a fixed license fees of Rs. 20 billion. ESPN Star broadcasts events staged by the ICC, cricket’s global governing body, including World Cups, for which it paid more than USD 1 billion for the global rights between 2007 and 2014. The below given charts depicts the increasing trend in the number of advertisers in sports advertising. (Source: FICCI KPMG Report2009)

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Growth in sports advertising

(Source: TAM Adex)

79 new advertisers have come to sports between 2007 to 2009. Cricket attracted 40 new advertisers. Advertisement expenditure of the companies has surged as local and international brands are competing to acquire new consumers. New pay TV channels have carved out a profitable market positions, for themselves on the back of sports content which in turn has increased the value of sports rights which are forecast to reach an annual value of USD 500 million. There are significant opportunities for the agencies representing and investing in sports rights, with sports content increasingly seen as essential to driving commercial revenues. (Source: The report on The Business of Sports in India, October 2008, published by SportBusiness Group) Dominance of cricket amongst the Indian sports In 2008, the sports business was worth Rs. 20 billion in India out of which cricket alone accounted for Rs 18 billion. (Source: FICCI KPMG Report 2009). In India, sports and cricket are synonymous. Among the three mega sports events in India, in recent years, TV viewing of Cricket World Cup 2007 was highest (with 114 million viewers) followed by FIFA Football World Cup 2010 (with 64 million viewers) and Olympics 2008 (with 57 million viewers). (Source: TAM PeopleMeter Systems) TRP comparison of cricket versus other major sports in India

Event TRPIndia South Africa ODIs Feb 2010 5.04IPL 2010 4.65India Sri Lanka Bangladesh ODI Tri series Jan 2010 3.31ICC T20 World Cup 2010 2.02Asia Cup 1.75India South Africa Test Feb 2010 1.21India Zimbabwe T20 Jun 2010 1.20India Sri Lanka Zimbabwe ODI Tri series May 2010 0.93FIFA W orld Cup 2010 0.84Hockey World Cup 2010 0.37W imbledon 2010 0.06French Open Tennis 2010 0.04

TRP comparison cricket vs. other sports-2010

(Source: TAM, CS 4+ Yrs)

In India, non cricket sports viewership ratings are a fraction of any form of cricket including tests. The dominance of cricket amongst other sports in India is also evident based on the BMRB Market Research data which shows that cricket has been consistently dominating all other sports in terms of TV viewership, press relationships, event attendance and participation. According to the BMRB Market Research Data, in 2007, 47.4 percent of the people in India follow cricket on TV while 31.4 percent were tracking events in the press. (Source: The report on The Business of Sports in India, October 2008, published by SportBusiness Group).

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Cricket is the most viewed programme on TV at the time of live international matches telecasted on the television in India. A recent example is the viewing pattern during the India Sri Lanka and India Australia ODIs and tests in Oct-Dec 2009 shown on Neo Cricket. During an India international ODI cricket telecast, cricket’s share of TV viewing is up to six times of the most popular general entertainment channel. In fact, ODIs capture a higher share of TV viewing than IPL T20 matches as reflected in below table. Dominance of Cricket in TV viewing among other Channels during live cricket events

Programme/ChannelShare of TV viewing (%) Programme/Channel

Share of TV viewing (%) Programme/Channel

Share of TV viewing (%) Programme/Channel

Share of TV viewing (%)

India vs. Sri Lanka ODIs - Dec 2009 28.84 India vs. Australia

ODIs - Sep 2009 26.76 India vs. Sri Lanka Tests - Nov 2009 11.01 IPL 2009 21.92

Star Plus 4.93 Colors 4.38 Star Plus 5.57 Colors 5.42Colors 4.83 Star Plus 3.79 Colors 4.53 Star Plus 5.35Zee TV 4.72 Zee TV 3.58 Zee TV 3.87 Zee TV 4.91Sony Ent TV 2.83 Sony Ent TV 3.03 Sony Ent TV 3.58 Zee Cinema 3.00MAX 1.65 MAX 2.07 MAX 2.58 NDTV Imagine 1.95NDTV Imagine 1.53 Zee Cinema 2.00 Zee Cinema 2.29 Sony Ent TV 1.69Zee Cinema 1.49 NDTV Imagine 1.63 NDTV Imagine 1.91 Star Gold 1.56Star Gold 1.21 Star Gold 1.54 Star Gold 1.60 Star One 1.12SAB 1.07 SAB 1.05 SAB 1.19 SAB 1.08

Source: TAM Peoplemeter Systems, Target Audience: CS 4+ Yrs, All India Urban Class 1 towns (TV viewing has been calculated considering the live telecast timings alone)

Recent trends in the television industry Increase in television advertising’s share of total advertising revenue: The share of television advertising as a percentage of the total advertising revenue grew steadily in the 1990s. Although it has remained relatively stable in recent years at around 37 percent, there may be potential for further growth with increased consumerism and the continued entry of global brands in India. Many industries that are currently experiencing rapid growth generally choose to advertise on television rather than through other mediums. In India, companies in the automotive, telecommunications, pharmaceuticals, banking and insurance industries have followed this trend Increase in DTH & digital television homes: Better quality of picture & sound and valued added services provided by C&S satellite will lead to increase DTH subscribers as well as digital television homes. Increase in international revenue streams: Indian markets are generating interest from both foreigners and persons of Indian origin living outside India. This represents a significant opportunity for Indian broadcasters and quality content providers in terms of potential revenue from international subscription, advertising and content syndication. Revenues from international arrangements could increase as international markets are addressed through focused programming and greater penetration. Growing investors’ interests in M&E industry: Recent deals include ZEE Entertainment’s investment in Ten Sports, Apollo tunes’s (US based private equity firm) investment in Dish TV etc. Some other deals in the TV distribution sector were Sun TV’s investment in Red FM, Morgan Stanley investment in Hathway Cable, the IPO of Den Network and India Infrastructure Holding Funds’ investment in Datacom. FILM INDUSTRY An overview of the present scenario Filmed entertainment is the most pervasive and visible segment within the M&E industry as it is the primary content source for music and radio besides being a major contributor to the television segment. India’s film industry is one of the largest in the world with more than 1000 releases and over three billion movie goers annually (Source: FICCI KPMG 2009). The Indian movie industry, being an integral part of the Indian socio-economic psyche and the most popular source of entertainment, contributes about 15 percent to the Rs 587 billion M&E industry (Source: FICCI KPMG 2010). However, factors such as piracy, poorly developed revenue streams, excessive reliance on domestic box office collections and inefficiencies prevalent across the value chain has resulted in relatively lower revenues for the industry. The industry was also very highly fragmented with independent producers and single screen cinemas dominating the value chain. Poor infrastructure facilities, high entertainment taxes and long theatrical windows, resulted in India being a highly under-screened and under priced market. Over the past three to four years, the film entertainment industry has witnessed significant changes. Availability of organised funding, growing number of multiplexes and increasing overseas collections have led to improved

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realization in the industry. The industry is also enjoying greater acceptance and recognition in the global arena as is evident by the recent success of films like ‘Slumdog Millionaire’ and deals between DreamWorks and Reliance ADA Group, Disney and UTV etc. With Moser Baer entering the markets, DVDs and VCDs have become affordable and home video has come to stay. Hence the domestic theatrical lifecycle of movies has decreased, while due to ever expanding budgets and increasing market spends, the breakeven point of movies has increased. Market size and growth The filmed entertainment sector is estimated to have grown at CAGR of 4.6 percent over the past three years from the year 2006 to 2009. The industry is estimated to reach Rs. 89.3 billion in size in the year 2009. The performance of the industry was mainly driven by increased realizations from the domestic theatrical as well other revenue streams. Domestic theatrical has been estimated to grow at 8 percent over the year 2009 to 2014 where as home video and C&S rights are estimated to grow from Rs. 4.3 billion to Rs. 7.4 billion and Rs. 6.3 billion to Rs. 11.4 billion respectively from the year 2009 to 2014 at a CAGR of 1.8 percent and 12.8 percent respectively. The industry is projected to grow at a CAGR of 8.9 percent over the next five years and reach the size of Rs. 136.7 billion by 2014. (Source: FICCI KPMG Report 2010)

(Source: FICCI KPMG Report 2010) Film production The film entertainment industry is characterised by the presence of privately held and family owned production houses. In the last three to four years, a small number of publicly listed companies have ventured into film production, but the industry is still largely dominated by the smaller privately owned companies. Because of this fragmented structure, film production in India has largely been closed to funding from bank and institutional sources and has relied on unorganised financing sources. The Government of India has granted the film segment an “industry” status in 2001, which has resulted in the emergence of corporatisation in the industry. This has also resulted in an increase in the financing for films by banks, which had earlier been reluctant to fund films. Also, new initiatives are being taken by institutions to finance the production industry in an organized manner. In 2008, Vistaar Religare Film fund was set up to finance the film production companies. Film distribution The Indian film distribution industry is also highly fragmented with the majority of distributors having limited presence. Producers typically need to tie-up with a number of regional distributors for theatrical distribution of their films across the country. Producers may either sell their rights in a film directly to various channels or may opt to sell part or all of their rights to a distributor for on-sale in the various end markets. Rights are typically allocated to buyers on the basis of geographical territories or on the basis of distribution channels in order to exploit markets more effectively. Additionally, the emergence of revenue streams beyond cinema is changing the face of the Indian film industry, thereby lowering the risk associated with film production and enticing new participants, such as Indian corporations and Hollywood studios, to enter the market Film revenues are derived primarily from the following basic sources:

• cinema exhibition in India and markets outside of India; • exhibition on various home entertainment formats, such as DVD or VCD platforms; and

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• exhibition on pay-per-view and premium pay television programming services; Digitization of film prints is having a major impact on film distribution thereby enabling greater number of prints to be distributed at a low cost shortening the theatrical window and reducing piracy. Therefore, theoretically, a movie can be released in the metros and smaller cities and towns simultaneously. This reduces the potential loss caused due to delay in movie releases. The overseas distribution rights, comprising overseas theatrical, C&S rights are sold in a single package. International demand for Indian content has been there for some time, with the telecast of Indian TV channels across the world and Bollywood releases getting a significant share of their box office earnings from abroad. With the large NRI population base of about 25 million, M&E companies continue to have good opportunity to further increase their revenues from overseas market. (Source: FICCI KPMG 2009) Strong growth being demonstrated by home video segment There is a growing emphasis on the home video segment owing to decreasing DVD prices, availability of more titles due to shorter-release windows of theatrical releases and new international titles being launched. While the home video market grew at 13.1 percent CAGR between the years 2006 and 2009, it increased from Rs. 2.9 billion in the year 2006 to Rs. 4.3 billion in 2009, accounting for approximately 4.82 percent of total revenues of the film industry in the year 2009. (Source: FICCI KPMG Report 2010) The home entertainment market in India has largely been a rental market due to the widespread sale of pirated DVDs and VCDs. In early 2007, the Indian technology company Moser Baer entered the home entertainment market. The company reduced prices of its DVDs to below Rs. 30 in a bid to curb growing sales of cheaper pirated CDs and grow the home entertainment market. This announcement paved the way for other home entertainment companies to follow suit. Notwithstanding this move, the home entertainment market is still hampered by piracy. It is estimated that the Indian film industry loses as much as Rs. 20 billion per year to piracy. (Source: FICCI KPMG Report 2009) EMERGENCE OF NEW DISTRIBUTION PLATFORMS A direct impact of digitization has been the convergence of media over the recent years enabling consumers to access audio and visual media content (in digital formats) across multiple devices including computers, MP3 players and mobile phones. Distribution of sports content through new media services including internet and mobile streaming of live sports events is a big opportunity for owner of sports rights going forward. Mobile telephony According to the Telecom Regulatory Authority of India (“TRAI”), there were approximately 506.4 million mobile phone subscribers in India as of November 30, 2009. The increasing penetration of mobile phones is expected to create increasing opportunities for media companies to provide content such as music, news and entertainment which can be accessed through these devices. The following graph sets forth certain information in relation to the number of mobile phone subscribers in India.

Number of Mobile Subscribers

48.01 75.94149.5

233.63

346.89

506.04

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 Nov-09

(Source: TRAI)

Considering the declining ARPU and increasing competition among the operators, it is imperative to focus on alternate revenue streams. Value added services (“VAS”) markets have started gaining significance in light of the

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above fact. Also, increasing demand from the young population for more than basic telephony is driving the mobile VAS market. The current mobile VAS industry is estimated at Rs. 57.8 billion by end June 2008 and is estimated to grow steadily at 70% over the next two years to touch Rs. 97.6 billion by end June 2009 and Rs.165.2 billion by end June 2010. Mobile VAS currently contributes around 9 % to the operator’s revenue. It is expected to increase to 10.4 % in the next 1 year and 12% by June 2010. (Source: Internet & mobile Association of India) The big four operators are Bharti Airtel, Reliance, Vodafone, and the public sector run BSNL. Research from WPP company Mindshare Performance suggests that 20 percent of the Indian population would prefer to watch sports on their mobile phone, more than anywhere else in the world. The rollout of 3G has been much delayed in India but once launched will offer great opportunity to market broadcasting rights for mobile viewing. (Source: The report on The Business of Sports in India, October 2008, published by SportBusiness Group) Internet Internet usage has been continuously increasing in India. This growth is attributed to the variety of online applications like online communication, information search, user generated content as well as online entertainment applications like gaming. As of November 30, 2009, there were approximately 7.57 million broadband subscribers (source: TRAI), making internet-based distribution technology, such as on-demand-screening and downloads, an increasingly viable business option. There has also been stable increase in the active internet user in India as depicted by the chart below:

(Source: I cube, 2008, Annual IMRB Syndication) As a result of an increase in the number of internet users, internet advertising has been one of the fastest growing segments in the Indian M&E industry. It grew by 58.9 percent from 2007 to reach Rs. 6.2 billion in 2008; this growth was accentuated due to the increase in the internet user base and increase in broadband penetration. The on-line medium has also witnessed an increase in spends from top brands, as many of them are moving from being experimental advertisers on the web to adopting more continuous and consistent campaigns on-line. Internet advertising constituted 2.8 percent of the total advertisement expenditure in the year 2008 and increased from 1.9 percent in 2007 Sports coverage on the internet is still in its infancy. ESPN Star Sports was the first broadcaster to start offering internet cricket highlights for the inaugural Twenty20 World Championship in South Africa in 2007. Since then, the demand for the sports coverage on the internet has been encouraging, but the small number of users with high speed connections and the cost is limiting the growth in this segment. Indian users have shown themselves to be highly price sensitive and a small fluctuation in price can have a huge impact on the demand. Thus, with the improvement in technology infrastructure, lower cost of hardware and software and better penetration of internet, this segment also has the potential to generate good revenues in the future. (Source: The report on The Business of Sports in India, October 2008, published by SportBusiness Group) Introduction of 3G Services The first 3G mobile service in India was introduced by MTNL in New Delhi in December 2008. As of June 30, 2009, the 3G spectrum has only been allotted to state-controlled entities MTNL and BSNL. The Department of Telecom has taken the pioneering decision of launching of 3G services by BSNL and MTNL and initiation of process for auction of spectrum for 3G services to private operators. Allocation of spectrum for third-generation (3G) and broadband wireless access (BWA) services was done through a controlled simultaneous, ascending e-auction process The allocation of spectrum for 3G is expected to boost the development of the sector, as operators will be able to provide new services to customers, such as video telephony, high speed mobile broadband, mobile TV, video streaming,

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video on demand and mobile gaming. With the advent of 3G, the adoption of mobile TV is set to experience a huge growth in the next few years, experts say. This, in turn, can lead to attractive business opportunities for the media & entertainment (M&E) sector. Introduction of WiMAX networks to increase broadband coverage in India WiMAX is a technology used to provide wireless high-speed broadband access. As the most economical solution to provide up-to-the-minute connectivity in rural and remote areas, WiMAX operators are expected to have strong growth potential given the low broadband coverage in the rural areas.

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Business

The following information should be read together with the more detailed financial and other information included in this Draft Red Herring Prospectus, including the information contained in the section titled “Risk Factors” on page xii of this Draft Red Herring Prospectus. In this section, a reference to “Nimbus” or “our Company” means Nimbus Communications Limited. Unless the context otherwise requires or implies, references to “we”, “us”, or “our” refers to Nimbus Communications Limited, its Subsidiaries and its joint venture, on a consolidated basis. OVERVIEW We believe we are one of the leading sports rights management companies engaged in the acquisition, management and marketing of commercial rights relating to cricket events globally. Our joint venture company, Neo Sports Broadcast, owns and operates two 24-hour channels, Neo Cricket and Neo Sports. Our Company currently holds an indirect 48.94% shareholding in Neo Sports Broadcast through Zenith Sports Private Limited (“Zenith”), our joint venture company with one of our Promoters, Paramount Corporation Limited (“Paramount”). We have the right of exercising the call option in accordance with the terms of the Zenith Agreement for an aggregate consideration of Rs. 0.36 million to acquire the remaining shares of Zenith from Paramount for which we have received the requisite prior approval from FIPB on May 19, 2010. For further information, see “Government and other Approvals”, “History and Certain Corporate Matters” and “Risk Factors” on pages 194, 100 and xii, respectively. We own the global media rights for all international cricket matches organised by the BCCI in India until March 2014 and have licensed the broadcast rights with respect to such matches in India to Neo Sports Broadcast. In addition to the rights that we have acquired from the BCCI, we have acquired and manage certain rights with respect to other sports federations, including Bangladesh Cricket Board, Asian Cricket Council Cricket Kenya and Singapore Cricket Association. Nimbus was founded by Mr. Harish Thawani, and we commenced operations in 1987. The television channels, Neo Cricket and Neo Sports were launched by Neo Sports Broadcast in October 2006. We are also involved in the filmed entertainment business through distribution rights management, content generation and our home video rental business under our brand “Showtime Video”. Our other businesses include production of television content as well as creation and maintenance of online cricket-related content through our proprietary website www.cricketnirvana.com. KEY BUSINESS SEGMENTS Sports management: We are a full service sports rights management and marketing company and provide a complete range of “on-ground to on-air” solutions in sports. The sports rights management business consists of three key lines of activities: (i) commercial rights management (including sponsorship, media rights management and licensing, merchandising and hospitality); (ii) television production (including production of live feed and creation of packaged content); and (iii) owned events. Broadcasting: Neo Sports Broadcast owns and operates two 24-hour sports channels, namely Neo Cricket and Neo Sports. These channels are broadcasted over cable and direct-to-home (“DTH”) platforms, and telecast cricket and international sports. Since its launch in October 2006, among the sports channel in India, Neo Cricket has achieved number one ranking in the half hour cumulative ratings for sport channel as per TAM viewership data for calendar years 2008, 2009 and for the period from January 1, 2010 to July 31, 2010 (Source: TAM PeopleMeter Systems). We also plan to launch two new 24 hours channels namely, Neo Cinema and Neo Zindagi. The applications dated August 11, 2010 for uplinking and downlinking licenses for these two new channels have been made with MIB, along with application for another channel the plans for which are at a very preliminary stage. For further details, refer to section titled “Government and Other Approvals” on page 194 of this Draft Red Herring Prospectus. Filmed entertainment: We are a producer and distributor of film content in India. As of August 31, 2010, we have produced three and distributed 10 feature films. Our home production, “Ek Hoti Wadi”, a Marathi film, won the Sixth Maharashtra Cine-Natya Mahotsav Award in the year 2002. We have also commenced our home video rental business under the brand “Showtime Video” and currently operate four stores in Mumbai. FINANCIAL OVERVIEW

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Our total income in Fiscal 2008, 2009 and 2010 was Rs.7,043.16 million, Rs.6,610.43 million and Rs.7,687.20 million, respectively. OUR KEY STRENGTHS Leading position in India and established track record in sports rights management We believe we are one of the leading sports rights management companies in India. We own a large portfolio of commercial rights for popular sports events, including cricket, which we believe is the most popular sport in the Indian sub-continent. We acquired the global media rights for all international cricket matches organised by the BCCI in India for the period April 2006 through March 2010, and we have successfully extended this arrangement with the BCCI until March 2014. In addition to the rights that we have acquired from the BCCI, we have acquired and manage certain rights with respect to other leading sports federations, including Bangladesh Cricket Board, Asian Cricket Council, Cricket Kenya and Singapore Cricket Association. We have also established strong relationships with broadcasters across the world including BBC, British Sky Broadcasting Limited, ESPN INC and Premier Media Group Pty Ltd. with whom we have entered into agreements for sub-licensing of sports rights. The sports marketing business in India is growing at a rapid pace of 20 per cent a year compared to the global average growth of five percent a year (Source: The Indian Media and Entertainment Industry, FICCI KPMG Report 2009) We believe that as a leading sports rights management company, we benefit from strong brand awareness and are in a strong position to capitalise on the growth of the sports media industry in India. Leading position in sports broadcasting in India We operate two channels viz. Neo Cricket and Neo Sports, through our joint venture Neo Sports Broadcast. Neo Cricket was launched in October 2006 and was available for viewing in more than 25 countries within the first 12 months of its launch. According to TAM viewership data, Neo Cricket was the number one sports broadcaster in India in 2008 and 2009. According to cable and satellite homes estimates in India published by TAM, there were 103 million cable and satellite households (including digital) in India as of calendar year 2010 (Source: TAM) and according to AMAP connectivity data, Neo Cricket reached a peak connectivity of 87% of the total cable and satellite households on a particular day in 2010 in India. Neo Cricket's shows "Ballebaaz", a cricket-based show had the highest reach in cricket related programmes on sports channel in India in the calendar year 2009 and "Extra Cover", a wraparound show had the highest cumulative reach of various wrap around shows across the sports channels in India in the calendar year 2009 (Source: TAM PeopleMeter Systems). Further, Neo Cricket and Neo Sports have won several awards, including the 2008 PROMAX World Gold Award for ‘Live Event Promotion Campaign’, 2008 award from PROMAX India for ‘Best Script’, 2008 award from PROMAX India for ‘Best Sports Promo’. Integrated business model in sports encompassing acquisition of commercial rights, production and broadcasting We are an end-to-end player in the sports management business. We participate across the value chain, from sourcing to delivery in the following manner: Content sourcing and ownership. We acquire and manage sports rights globally. We also represent sports federations as an intermediary to facilitate the sale of commercial rights to various broadcasters around the world. We have to date produced over 3,800 hours of live feed of sports events, and believe that we are one of the leading producers of live feed of cricket events. Content production and distribution. We, through our joint venture, Neo Sports Broadcast operate two channels Neo Cricket and Neo Sports, which are 24-hour sports channels that broadcast cricket and international sports. The content for broadcast for these two channels is a combination of live and packaged content. We use our in-house production capabilities to produce packaged content like “Sportszone”, “Extra Cover”, “Ballebaaz”, “Cricket Central” and “Dial C for Cricket”. We believe that our integrated business model will enable us to capitalise on the growth of the sports media industry in India.

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Strong relationships with sports federations We have entered into rights management contracts with, amongst others, BCCI, the Bangladesh Cricket Board, Cricket Kenya, the Asian Cricket Council, the International Cricket Council (mandated through our agreement with Global Cricket Corporation Pte. Ltd, Singapore), Sri Lanka Cricket, Singapore Cricket Association, and the Premier League, some of which are subsisting as on the date of this Draft Red Herring Prospectus. We believe that our relationships with sports federations enable us to compete successfully for further acquisition of commercial rights management contracts, sanctions for staging events and world feed production contracts in the future. Experienced management team Our senior management team has significant experience in the sports rights management, broadcasting, filmed entertainment and television content production businesses. We believe that this depth of experience is a key element of our ability to acquire commercial rights for top sporting events and our ability to produce quality packaged content. Our Promoter Mr. Harish K. Thawani, who is also the executive chairman and whole time Director of Nimbus, has a long-standing track record of more than two decades in the media and entertainment industry He has been crucial in identifying business opportunities in the media and entertainment industry in India and in implementing our growth strategy. Along with Mr. Thawani, we believe that the experience of Dr. Akash Chandra Khurana, the executive vice chairman and whole-time Director of Nimbus, Mr. Kunwar Digvijay Singh, a director in Nimbus Sports International Pte. Ltd, Singapore (“NSI”), and Mr. Yannick Colaco, the chief operating officer of Nimbus Sport, a division of our Company, have been instrumental to our success. For further information with respect to our management team, see “Management” on page 116 of this Draft Red Herring Prospectus. We believe that our experienced management team and the relationships they have developed with various sports federations are critical to our success in the sports rights management business. OUR KEY STRATEGIES Expand the broadcasting business Neo Sports Broadcast, our joint venture, currently owns and operates two television channels, Neo Cricket and Neo Sports. Our flagship channel, Neo Cricket is available in over 25 countries globally. We intend to expand the reach of Neo Cricket to cover additional regions around the world, particularly in regions with a concentration of expatriate Indian population. As a part of the next phase of expansion, we intend to expand the geographical reach of Neo Cricket to include North America and other parts of Asia with a high Indian expatriate population. For further information on our expansion plans, see “Objects of the Issue” on page 41 of this Draft Red Herring Prospectus. We also plan to launch two new 24 hours channels. In this regard, Neo Broadcast Limited (formerly known as Nirvana Adzone Limited), a subsidiary of Neo Sports Broadcast made an application dated August 11, 2010 with the Ministry of Information and Broadcasting, Government of India for downlinking and uplinking licenses for three non news channels, including ‘Neo Cinema’ and ‘Neo Zindagi’. The plans to launch the third channel, however, are currently at a preliminary stage. A part of the Net Proceeds will be applied for the launch of two new channels, namely Neo Cinema and Neo Zindagi, by Neo Sports Broadcast or its subsidiary in Fiscal 2011 subject to receipt of applicable regulatory approvals. For further information, see Risk Factor titled “We have not received relevant regulatory approvals for the proposed Neo Cinema and Neo Zindagi channels. In the event we are unable to obtain such regulatory approvals or if there is any significant delay in obtaining such approvals, we will not be able to utilize Rs.1,291.74 million of the Net Proceeds allocated for this purpose in the manner contemplated in our Objects of the Issue. Any delay or inability in obtaining such approvals will also have an adverse impact on the implementation of our growth strategy in the broadcasting business.” appearing in the section titled “Risk Factors” on page xii of this Draft Red Herring Prospectus. Neo Cinema shall focus on Hindi feature films and film-based content, while Neo Zindagi will be a lifestyle channel primarily for women. Our association with cricket, particularly involving the Indian cricket, has provided us brand recognition in India and with the Indian diaspora which serves as a platform for us to market other channels for a similar target audience.

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Expand our sports rights management business Our core competency is sports rights management. Over the years we have successfully acquired / represented, managed and marketed various commercial rights for a number of global sports events. We have an integrated approach to our sports rights management business. Our success in this business has enabled us to build strong relationships with event owners (typically sports bodies, including federations, associations and boards) and rights licensees (including broadcasters and sponsors) across the world. We intend to continue to leverage our relationships and proven expertise in acquiring commercial rights from other cricket federations as well as federations and rights owners in other sports such as football and golf. Develop a portfolio of owned/proprietary sports events In building our sports management business, we have managed and marketed commercial rights including sponsorship, signage, media rights, official supplier rights and hospitality for various sports federations across the world. In addition, we have also produced live television feed (for broadcast) for a number of sports events globally, such as the cricket events organised under the aegis of BCCI. The ownership of the events for which we have acquired rights however continues with the relevant sports bodies, including federations, associations and boards. One of our key strategies in the future is to develop a portfolio of sports events for which the commercial interest and intellectual property rights are entirely owned by us. We believe this will enable us to leverage our expertise and experience in rights management for such events to fully benefit from the economic rights associated with the monetization of such events. This diversification of our sports management business will allow us to own and build a consistent stream of assets across various sports. In this connection, we have procured sanctions for events in cricket, golf and football. On February 3, 2010, we entered into any agreement with the Asian Tour International Limited, Hong Kong (“Asian Tour Golf”) to organize a series of golf events across Asia. We have also recently entered into an agreement with the Singapore Cricket Association to act as sales and marketing representative for an initial period until March 31, 2012 with an option to extend the agreement for a further period of three years. This agreement also permits our Company to organise its own club level cricket tournaments in Singapore. We intend to commence the roll out of these events in the second half of 2010. In addition, we believe that this business model benefits from its scalable nature and potential replication across other sports events. We believe that this will result in an increase in product offerings for our clients and enable us to further enhance our relationships with our clients. Selectively invest in film production and distribution In order to establish ourselves as an integrated filmed entertainment company, we also intend to expand our film distribution business, both domestically and internationally. While we will continue to produce films selectively, we intend to focus on the film distribution business. Film rights distribution generates revenues from primary sources, such as theatrical distribution, as well as from secondary sources such as television rights, home video and internet rights. OUR OPERATIONS We operate in the following principal business segments: (i) sports management (including commercial rights management, sports television production, and owned events), (ii) broadcasting of cricket and other sports through the two channels owned and operated by our joint venture, Neo Sports Broadcast, and (iii) production and distribution of feature films and our home video business. Sports management Our sports management business consists of three main lines of business activity - commercial rights management, sports television production and owned events. Commercial rights management Our commercial rights management business involves the management, marketing and monetization of commercial rights for sports events owned by sports bodies, including federations, associations and cricket boards worldwide. These rights are typically managed through exclusive agreements with the sports bodies who own these events. We manage the rights relating to these sports events either by acquiring such rights for a stipulated period from such sports bodies at a fixed fee or on an agency basis where we earn a commission on revenues generated from our services. The agreements with these sports bodies are typically for one or a combination of the following commercial rights:

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• Sponsorship and in-stadia signage rights

The sponsorship and in-stadia signage rights are typically “on-ground signage rights” of sports events. These include naming rights to an event, official sponsorships, association opportunities and branding in and around the field of play. The sale of sponsorship and in-stadia signage rights involve competitive assessment of sponsorship opportunities and potential clients, contract negotiations, development of sponsorship strategies including packaging of benefits, on-site management and execution of promotional and leveraging activities.

We believe that we are one of the largest sponsorship and in-stadia signage rights management companies for international cricket matches in the world. We have managed various prestigious cricket events including the Asia Cup 2010, ICC Cricket World Cup 2003 in South Africa, ICC Cricket World Cup 2007 in West Indies, ICC Champions Trophy 2002 in Sri Lanka, ICC Champions Trophy 2004 in England, ICC Champions Trophy 2006 in India, India vs. Pakistan 2004 and 2006 series, Pakistan vs. West Indies 2006 series, Pakistan vs. South Africa 2007 series and the India vs. Sri Lanka 2009 series.

• Media rights management

Media rights typically include the right to broadcast live and archived content of events across television platforms (including terrestrial satellite and cable), internet platforms, mobile platforms and radio. We compete with the rights management companies across the world to acquire, manage and monetize global media rights packages in relation to cricket and other sports events. On the acquisition of such rights, we package such rights across platforms and types of content and market them to licensees on the basis of geographical territories.

Key agreements and relationships

Certain of our key sports rights management arrangements with various sports federations and boards are described below:

1. BCCI

We entered into a media rights licensing agreement with the BCCI in February 2006 (the “BCCI Agreement”) pursuant to which the BCCI granted us the worldwide exclusive license to market the media rights relating to all international matches and series organised by the BCCI in India between March 2006 and March 2010. Under the BCCI Agreement we had the right of first negotiation to exclusively negotiate the renewal of our agreement with the BCCI. Pursuant to the exercise of this right of first negotiation, we entered into the media rights licensing agreement dated October 15, 2009 (“New BCCI Agreement”) for the period April 2010 through March 2014. Through the New BCCI Agreement, we have been granted exclusive global media rights, including broadcast on television as well as on radio, relating to all international matches and series organised by the BCCI in India. We have acquired such rights on an exclusive basis for the duration of the match being played as well as for repeat telecasts until 72 hours following the conclusion of the match. The New BCCI Agreement also contains a right of first negotiation similar to that in the BCCI Agreement. This right of first negotiation relates to media rights for the next four-year period from April 2014 through March 2018.

The following table sets forth the schedule of sports events for which we have acquired the exclusive worldwide media rights under the New BCCI Agreement for the period April 2010 through March 2014:

Year Month(s) Visiting Team

Types of international cricket matches Total

international matches 20/20 Tests

One-day international

matches

2010-2011 October 2010 Australia 0 0 7 7

2010-2011 November – December 2010 New Zealand 0 3 5 8

2011-2012 October- November 2011 England 1 0 5 6

2011-2012 November - December 2011 West Indies 0 3 5 8

2011-2012 March 2012 Pakistan 0 3 5 8

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Year Month(s) Visiting Team

Types of international cricket matches Total

international matches 20/20 Tests

One-day international

matches

2012-2013 November - December 2012 England 0 4 0 4

2012-2013 January 2013 England 1 0 7 8

2012-2013 February - March 2013 Australia 0 4 0 4

2013-2014 October 2014 Australia 2 0 9 11

Total - - 4 17 43 64

The BCCI Agreement entitled us to media rights with respect to 72 days of domestic cricket matches per year while the New BCCI Agreement has increased the number of available domestic cricket match days to 78 days per year.

As consideration for the New BCCI Agreement, we are required to pay to the BCCI a fixed license fee of Rs. 20 billion for the media rights of 64 international matches and 312 domestic match days, and the fees are to be paid on a per-series basis. As required by the New BCCI Agreement, we have furnished a bank guarantee of Rs. 20 billion in favour of the BCCI. Since the above schedule is subject to change, the actual number of matches played may be higher or lower than anticipated by the original schedule. Therefore, the aggregate license fee we are required to pay could increase or decrease accordingly.

As per the New BCCI Agreement, full or partial cancellation of a scheduled match due to adverse weather conditions does not result in a reduction of license fee payable by us to the BCCI i.e. we are required to pay the cost of such affected matches in its entirety to the BCCI. We cover the risk of such cancellation of any scheduled match by transferring such risk to the broadcaster to which we license these rights. In accordance with the terms of our agreements with the broadcasters we license these rights to, such broadcasters are required to pay us our license fees in its entirety irrespective of a match being partially or completely cancelled due to adverse weather conditions.

Pursuant to the New BCCI Agreement, we have been granted rights to transmit, distribute and exploit all audio, still and moving image visual, audio-visual, data and textual material on television, radio and mobile for the term of the agreement. We are permitted to produce unilateral coverage and unilateral commentary for transmission and delivery by means of television broadcast. We are permitted to exploit the rights granted to us on a live, delayed and repeat basis.

With respect to the BCCI Agreement, some of the sub-licensing arrangements entered into by us with broadcasters around the world included the following:

Licensee Rights Territory Event Term

Super Sport International (Pty) Ltd

Television broadcasting rights

South Africa and rest of Africa

All events upto March 2010 2006-2010

Neo Sports Broadcast Television broadcasting rights

India, Middle East and South-East Asia

All events upto March 2010 2006-2010

British Sky Broadcasting Limited (Sky Sports)

Exclusive television broadcasting rights

UK, Republic of Ireland, Channel Islands and Isle

of Man

All Events upto March 2010 2006-2010

Premier Media Group Pty Ltd (Fox Sports)

Exclusive television broadcasting rights Australia Only Australia

tours Until March

2010

Setanta Sports Pty Ltd Television and broadband broadcasting rights Australia England 2008, Series only

BBC Radio broadcasting rights in English United Kingdom All events upto

Mar 2010 2006-2010

With respect to the New BCCI Agreement, some of the sub-licensing arrangements entered into by us with broadcasters around the world are:

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Licensee Rights Territory Event Term Premier Media Group Pty

Ltd Exclusive television rights

including live broadcasting and recording rights.

Australia All events upto March 2014

Until March 31, 2014

Neo Sports Broadcast*

Television/broadband rights, broadband internet transmission rights and the

promotional rights

India, Indian Sub-continent (excluding India), rest of Asia,

United Arab of Emirates, Hong Kong, Singapore, Malaysia, USA, Puerto

Rico, Canada*

All events upto March 2014

Until March 31, 2014

*Our Company has entered into an MoU with Neo Sports Broadcast on March 31, 2010 for sub-licensing of television broadcasting rights in the above mentioned inter alia countries.

2. Bangladesh Cricket Board (“BCB”)

We have an agreement with the BCB pursuant to which the BCB has appointed us as the exclusive worldwide agency to market their TV, Radio, internet and mobile rights (excluding terrestrial television and radio rights in Bangladesh) for all cricket matches and series played in Bangladesh under the auspices of the BCB for the period November 2006 to March 2012. The upcoming cricket matches covered by our agreement with the BCB include the following:

Team playing against Bangladesh Game scheduled for:

New Zealand October 2010 Zimbabwe December 2010 Australia April-May 2011 West Indies October 2011 Pakistan December 2011 England January/February 2012 Sri Lanka March 2012

Pursuant to this agreement, we entered into various sub-licensing agreements for these rights. Some of them were as follows:

Licensee Rights Territory Event Term Super Sport International (Pty) Ltd

Television broadcasting rights

Republic of South Africa

All events as per schedule, except New

Zealand tour to be held in October 2010

All events upto April 2012

British Sky Broadcasting Limited

Rights in English language to the broadcast through all

forms of scheduled, on demand, and pay per view television programming

services and non-exclusively in all languages

via the internet

UK, Republic of Ireland, Channel Islands and Isle

of Man

Australia, Pakistan and England tours only

May 2007 to March 2012

Premier Media Group Pty Ltd

Exclusive television broadcasting rights

Australia Australia tour of Bangladesh in

April/May 2011

Until 31 December 2011

ESPN Inc All Media rights USA, Puerto Rico, Guam,

Northern Marian Islands, United States Virgin

Islands, Palmyra Atoll, American Samora, Wake

Islands, Midway Island, Johnston

Atoll, Baker Island, Howland

Island, Jarvis Island, Kingman

Reef, Bajo

All events in term December 2009 to March 2012

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Licensee Rights Territory Event Term Nuevo Bank,

Navassa Island and Serranilla

Bank

3. Asian Cricket Council – Asia Cup We have entered into an agreement with the Asian Cricket Council on April 7, 2010 pursuant to which we have been granted all commercial rights globally for three editions of the quadrangular Asia Cup to be held between the national teams of India, Pakistan, Sri Lanka and Bangladesh in the years 2010, 2012 and 2014. The 2010 edition of the Asia Cup was conducted in Sri Lanka whereby we managed all the commercial rights including marketing of broadcast, sponsorship, ground signage, and television production of the matches which were played in Sri Lanka. Pursuant to this agreement for the Asia Cup 2010, we entered into various sub-licensing agreements and sponsorship agreements.

4. Cricket Kenya (“CK”)

We have entered into an agreement with CK pursuant to which, for the period between January 1, 2007 and March 31, 2013, we have been granted exclusive worldwide media rights (including television, radio, internet, television production and mobile rights) and sponsorship rights (including the right to name the event, arrange for co-sponsorship and in-stadia signage rights) relating to cricket matches and series organised under the auspices of CK in Kenya. The agreement includes all matches and tours scheduled in Kenya.

CK has also appointed us as the sole and exclusive television production company in respect of all international matches played in Kenya and elsewhere where CK enjoys the right to arrange television coverage of international cricket. We also have the rights to use and to sub-license all logos, emblems and designs owned by CK.

Since Kenya is not a test playing nation but is an associate member of the ICC and a full ODI nation, CK will seek tours from all test playing nations. Pursuant to our agreement with CK, we will monetize the media, sponsorship and television production rights on CK’s behalf and earn a revenue share in connection with such services.

We have also been granted the right to negotiate agreements with potential third parties for the exploitation of commercial rights relating to CK. We also have the exclusive right to promote, organise and stage other cricket matches and tournaments in Kenya, and we shall own all the rights in these matches and/or tournaments which we have the exclusive right to exploit.

5. Afro Asia Cup

The Afro Asia Cup is an event which is staged under the aegis of the Asian Cricket Council (“ACC”) and the Africa Cricket Association (“ACA”). Scheduled to be staged annually, it features a selection of the best cricketers from each continent playing each other in a series of three one-day international matches. We have acquired all exclusive media rights, ground sponsorship rights and team sponsorship rights for the 2010 event and, in accordance with the terms of the agreement, have the option to match the best bid for the Afro Asia Cup scheduled to be held in 2011, 2012 and 2013 events. In the past, we had acquired similar rights for the 2009 event.

6. Singapore Cricket Association

We have entered into an agreement with the Singapore Cricket Association on June 10, 2010 pursuant to which we have been appointed as its sales and marketing representative for the period between June 10, 2010 and March 31, 2012, with an option to extend the agreement for a further period of three years subject to fulfilment of the pre-requisites as specified in the aforesaid agreement. This agreement also permits our Company to organise its own club level cricket tournaments in Singapore. We intend to commence the roll out of these events in the second half of 2010.

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Sports television production Sports television production involves the production of live and packaged content for sports events. We have to date produced over 3,800 hours of live content for sports events. We produced the live feed for all international cricket events pursuant to the BCCI Agreement, BCB agreement and CK agreement, Asia Cup event in 2010. Our contract with the BCCI also included the world feed production of 72 days of BCCI domestic cricket in a year. Pursuant to a letter dated September 3, 2010, we have been appointed by the BCCI as a production company during the period 2010 to 2014 for the purpose of live television production of cricketing events as owned and/ or sanctioned by BCCI on a sole and exclusive basis to produce the feed for and on behalf of BCCI. Sports television production is typically effected by utilizing a company's own employees and personnel hired on an on-contract project basis. Our resource utilisation is a combination of full time employees, contracted employees (contracted to our company for a one year period at a time) and project-based consultants. We also use leased equipment and external suppliers for our live production as this provides us with flexibility and reduces the overhead costs relating to production. Having access to sophisticated video and audio post-production facilities enables us to offer a complete production solution to our clients, which include world feed and host broadcast production, customised content and unilaterals, packaged programming including customised highlight programming. We provide clients with line feeds, customized feeds, packaged shows, clip production, digital broadcast studios with advanced recording facilities, post-production facilities including linear and non-linear edit suites, audio dubbing suites, graphics design and DVD production and replication. Our production, marketing and sales teams typically work closely to determine the optimal marketing strategy for a particular programme, taking into consideration channel choice, target audience, regional segmentation, programme popularity and time slot. Our cost control team also seeks to minimise production costs by entering into long term agreements with vendors including hotel chains, airlines and suppliers of production equipment. Owned events Owned events are sports events in which we own the commercial interests and intellectual property rights and therefore manage all aspects of the event including event management, creation of content, sponsorship and signage sales and media rights licensing. We intend to use our existing relationships with sports bodies, sponsors and broadcast licensees to launch our owned sports events. This diversification of our sports management business will enable us to own and build a consistent stream of assets across various sports. We have acquired a ten year sanction from the ACC to stage an annual cricket event across multiple ACC nations. We have also entered into an agreement with the Asian Tour Golf through which we have been granted a sanction to stage, promote, monetise and own multiple international golf events across Asia till 2015, with an option to renew the arrangement for a period of five years. We have recently entered into a long-term agreement with Singapore Cricket Council to organize club-level tournaments in Singapore. Pursuant to the agreement with CK, we have the exclusive right to promote, organise and stage other cricket matches and tournaments in Kenya, and we shall own all the rights in these matches and/or tournaments which we have the exclusive right to exploit. We intend to begin the roll out of these events by the mid of 2011. We also intend to continue our discussion with various sanctioning bodies in the sport of cricket, football, golf and tennis to acquire sanctions for other such events. Broadcasting

Neo Sports Broadcast, our joint venture, is a sports broadcaster with a presence in more than 25 countries, and it and operates two 24-hour channels, Neo Cricket and Neo Sports. We currently hold an indirect 48.94% shareholding in Neo Sports Broadcast through Zenith, our joint venture company with one of our Promoters, Paramount. We have the right of exercising the call option in accordance with the terms of the Zenith Agreement for an aggregate consideration of Rs. 0.36 million to acquire the remaining shares of Zenith from Paramount for which we have received the requisite prior approval from FIPB on May 19, 2010. For further information, see “Government and other Approvals”, “History and Certain Corporate Matters” and “Risk Factors” on pages 194, 100 and xii respectively.

• Neo Cricket. Neo Cricket was launched in October 2006. Neo Cricket primarily broadcasts live domestic and international cricket matches, as well as archived cricket matches, studio and packaged cricket-related shows. According to cable and satellite homes estimates in India published by TAM, there are 103 million cable and satellite (including digital) households in India and according to AMAP connectivity data, Neo

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Cricket reached a peak connectivity of 87% of the total cable and satellite households on a particular day in 2010 in India. Within a short period of time, Neo Cricket has become the most viewed sports channel in India according to the TAM ratings for 2008 and 2009.

Recognizing the vast demand for cricket among South Asian community in the USA, we are in the process of launching Neo Cricket across all leading cable and satellite platforms in the USA. In this regard, we have recently incorporated a company called ‘Neo Broadcast America, Inc.’ as subsidiary of Neo Broadcast Limited (formerly known as Nirvana Adzone Limited). The company was incorporated under the laws of Delaware and undertakes sales and marketing operations from the state of New Jersey to carry Neo Cricket across all cable and satellite platforms in the USA. We have also recruited a whole time business and distribution head in the USA and plan to recruit more employees in the coming months. We are in the process of launching of Neo Cricket in Canada and in Caribbean by first quarter of 2012.

• Neo Sports. Neo Sports was launched in October 2006, and is a dedicated sports channel focused on the

sports-entertainment genre and broadcasts a number of sports events such as golf, football, tennis, badminton and motor racing. Neo Sports has the right to exclusively broadcast the German Bundesliga football league matches in the Indian sub-continent for the period July 1, 2009 until June 30, 2012. Neo Sports has exclusive rights for the US PGA Tour Golf for the period January 2010 to December 2015 and the rights for the WTA Tour Women’s tennis for the period January 2008 to December 2011, the ITF Davis Cup and Fed Cup events for the period January 2008 to December 2011, and the NASCAR series for the period January 2008 to December 2011 among others. Neo Sports broadcasts cricket events selectively, in case of scheduling conflicts or to provide an alternate language feed if needed.

Content production We believe that our in-house production capabilities provide a competitive advantage to our sports television broadcasting business. These capabilities ensure consistent supply of high quality programming to Neo Cricket and Neo Sports. We also obtain content for Neo Cricket and Neo Sports under certain licensing arrangements with other commercial right holders and sports federations. Some of our in-house productions for Neo Cricket include programmes such as “Dial C for Cricket”, “Cricket Central”, “Sportszone” and “Cricket Tadka Marke”. Subscription Neo Sports Broadcast generates subscription revenues from subscribers of its channels in cable and DTH segments both in India and outside India. Neo Cricket is broadcasted to over 25 countries through various distribution platforms. Neo Sports Broadcast has entered into agreements with DTH operators, multisystem operators (“MSOs”) and/or local cable operators (“LCOs”) in each of the countries in which its channels are distributed. The agreements are generally for fixed periods of time that vary from region to region. Under these agreements, Neo Sports Broadcast generally receives subscription revenues from operators in the form of fixed fees and/or per subscriber fees, and/or minimum guarantees and/or revenue shares. Further, on July 19, 2010, Neo Sports Broadcast entered into a distribution agreement with MSM Discovery Private Limited for the pan-India distribution of its two channels - Neo Sports and Neo Cricket through ‘The OneAlliance’, which is a bouquet of channels. This will primarily focus on managing the distribution on cable networks (analog and digital) for both the channels along with the CAS markets and hotels and commercial establishments segments. The TRAI has fixed the price at which broadcasters provide content to MSOs at Rs.41.45 for the Neo channel bouquet (comprising of Neo Cricket and Neo Sports), Rs. 35.45 for the Neo Cricket channel and Rs 26.60 for the Neo Sports channel per month in non-CAS areas. Advertisement Neo Sports Broadcast’s revenues are significantly dependent on advertisement revenue. Advertisers generally allocate television marketing budgets among channels on the basis of national or regional audience market shares, ratings, reach, demographic audience profile and advertising rates. In order to maximize its advertisement revenue, Neo Sports Broadcast endeavours to meet the advertisers’ expectations on each of the above parameters through acquisition of suitable content. Since its commercial launch in October 2006, Neo Sports Broadcast has had a significant number of advertisers and brands advertise on Neo Cricket and Neo Sports.

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Advertisement Sales and Marketing Our experienced and dedicated marketing and advertising sales team is responsible for advertising sales, broadcast sponsorship sales, campaign planning, after-sales analysis, market research, product development and client development. The market research team of Neo Sports Broadcast obtains television audience ratings data on a regular basis. In addition, market research and advertising sales department conducts a wide range of market analysis, focusing on various sectors of the Indian economy and key target audiences. The advertising sales team endeavors to attract quality advertisers to Neo Sports Broadcast's channels, which it believes offer long-term growth prospects and adequately complements the brand image of the channels. The current focus of the advertising sales team includes:

• Maintaining and enhancing the relationships with the current base of advertisers; • Focusing on attracting new advertisers to the channels; • Optimizing the effective rate of advertisements on the channels; and • Offering innovative advertising and sponsorship properties for the programmes to advertisers to

enhance overall revenue. Filmed Entertainment Business Our focus on filmed entertainment stems from our core philosophy and business model of concentrating on businesses, viz. cricket and films, that appeal to Indian audiences in India and globally. Our association with cricket (in particular Indian cricket) has provided us brand recognition in India and with the Indian audiences which serves as a platform for us to market our offerings in the filmed entertainment space. We classify our filmed entertainment business into the following sub-segments:

• Distribution rights management; • Content generation; and • Home video rental.

Distribution rights management Since December 2005, we have primarily operated in the Indian film distribution market and distributed ten films in certain parts of India. Initially, many of the films that we distributed were in the Mumbai and Delhi-Uttar Pradesh circuits. However, since Fiscal 2008, the Indian film production and distribution market saw a sharp increase in costs. In our view, these prices were unsustainable and were not supported by suitable growth in revenues from the market. Consequently, we decided to scale down our involvement in this segment considerably till prices returned to more realistic levels in our view. In Fiscal 2009 and Fiscal 2010, we did not distribute any feature films. Since then, we believe that the film production and distribution costs have corrected to more realistic levels. Our revenues from the film distribution business relate primarily to four basic sources: (i) distribution of feature films for theatrical exhibition in India and markets outside of India; (ii) distribution of feature films in various home video formats; (iii) distribution of feature films for exhibition on television; and (iv) distribution of feature films for exhibition on new media platforms. We do not always purchase distribution rights for a film on all the four media platforms mentioned above. The primary territories in which we have established our distribution infrastructure are the Mumbai and Delhi-Uttar Pradesh circuits. We have also established working relationships with distributors and screen owners in other Indian states, and are positioned for the future expansion of our film distribution business. Content generation Content generation activities within our filmed entertainment business primarily consist of film production. Film production is done under any of the following models:

• Home productions, wherein the production of the feature film as well as the intellectual property rights in the same vest in us.

• Commissioned productions, wherein we authorise a third party to produce the feature film by way of an agreement, while the intellectual property rights with respect to that feature film vest in us.

• Co-productions, wherein we share both the production of the feature film and the intellectual property rights with a third party in accordance with our agreement in this regard.

Our intended focus area in this segment is Hindi films and international co-productions that would appeal to the

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Indian diaspora. Due to increased competition and costs associated with film production, we constantly evaluate the risks and rewards of production and adhere to a conservative business strategy in our film production business. We generally enter into co-production arrangements to diversify the risks associated with the production of particular film projects. To date we have produced three films: Ek Hoti Wadi (Marathi film), Idhi….Ma Ashokgadi – Love Story (Telugu film) and Sarhad Paar (Hindi film). Home video rental We intend to concentrate on the home video rental business under the brand “Showtime Video”. The movie rental market in India is currently fragmented and is dominated by local single stores that would not be able to gain from scale and supply-chain benefits that an integrated industry participant would be able to obtain. Our home video business operates on a "brick and click" model. Under this model, we operate retail outlets in Mumbai and also offer bookings through our website www.showtimevideo.co.in for home delivery in Mumbai. Our stores in Mumbai serve as stocking points and hubs for product delivery in addition to being points for walk-in customers. We are currently in the pilot phase of this business segment and operate four stores which are located in Bandra, Andheri, Kandivali and Mulund in Mumbai. OTHER BUSINESSES Television programming We currently have four television programmes on air, out of which, we currently have subsisting contractual arrangements for two, and for the remaining two, we are in the process of renewing the same as of the date of this Draft Red Herring Prospectus. The following table sets forth certain information about our current television programmes on air for which we have subsisting contractual arrangements: Name of the show Name of the channel on

which the show is broadcasted

Genre

Magal Sun TV Drama Chandralekha Gemini TV Drama CricketNirvana We believe www.CricketNirvana.com was one of the first few cricket websites to offer a flash-based interactive scorecard with live streaming, live commentary, player profile and match analysis in interactive graph format and video clips. The site won the PCWorld award for best design in its category in 2008. CricketNirvana is being utilised as a platform to webcast all the matches for which we have the internet rights. We also operate a wireless application protocol (“WAP”) site, wap.cricketnirvana.com, for mobile usage with features like match coverage, live commentary, cricket news and features, scorecards and match reports. EMPLOYEES As on September 15, 2010, we had 245 (two hundred and forty five) employees. In addition, we also use a significant number of outsourced personnel for film and television production. We believe that our wages and benefits are generally in accordance with market practices and applicable labour laws, and that our relationship with our employees is generally good. We have not experienced any strike or work stoppages in the past, and have also not experienced any significant problems with our employees. COMPETITION We face competition from a broad range of companies in the media, sports and filmed entertainment industry.

The acquisition of media and associated rights relating to cricket and other popular sports events typically involves a competitive bidding process based on several criteria, including, the competitiveness of the bid, past experience, distribution capabilities, financial strength, technical capabilities, reputation and ability to do financial closure in time, i.e. providing bank guarantee as required under the sports rights management contracts. Some of our competitors may have greater financial resources. They may also benefit from greater economies of scale and operating efficiencies.

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As part of the Objects of the Issue, we are in the process of setting up two new television channels, Neo Cinema and Neo Zindagi targeting a range of viewer preferences. The success of any new channel that we launch will depend on our ability to develop attractive programming that generates adequate viewership and enables us to sell advertising time at profitable rates.

The film industry is highly competitive and at times may create supply imbalances of films in the market which could result in the reduction of box office receipts and/or margins. The home video market in India is currently fragmented and concentrates only on rentals of DVDs; the market is dominated by local stores who operate on a standalone basis.

INTELLECTUAL PROPERTY Our business involves the ownership and distribution of intellectual property. Such intellectual property includes copyrights, trademarks in names and logos, patents or patent applications for inventions related to our products and services, and licenses of intellectual property rights of various kinds. Our trademark “Nimbus” and its logo “N” are registered and owned by Nirvana Television Limited (erstwhile Nimbus Online Private Limited). We have entered into a trademark assignment agreement dated March 29, 2010 with Nirvana Television Limited, through which we are entitled to use the aforesaid trademarks along with our group exclusively and in perpetuity. The trademark “Neo Sports” is owned and registered by our joint venture, Neo Sports Broadcast. For further details on our trademarks, domain names and other intellectual property, see section titled “Government and Other Approvals” on page 194 of this Draft Red Herring Prospectus. INSURANCE Our principal types of insurance coverage include all risk insurance policies, property insurance, fire insurance, personal accident coverage insurance, money insurance, and event cancellation insurance. Our insurance policies may not be sufficient to cover our economic losses. For further details, see the section entitled “Risk Factors” on page xii of this Draft Red Herring Prospectus. Our operations are subject to hazards such as risk of equipment failure, work accidents, fire, earthquake, flood and other force majeure events. This includes hazards that may cause injury and loss of life or damage to property or equipment. In addition to the policies mentioned above, some of our Group Companies carry health and travel insurance policies as well. We believe that the amount of insurance presently maintained by us and our Group Companies represents an appropriate level of coverage required to insure our business and operations, and is in accordance with industry standards. Further, sports broadcasters typically become liable to pay the requisite license fee for a cricketing event when the first ball of the match is bowled and also in the circumstance when the participating teams are at the venue and are ready to play and there is a disruption due to natural causes, including rainfall. Such a disruption in the cricketing event exposes sports broadcasters to losses. However, such losses are generally insured against by procuring the requisite insurance policies. Neo Sports Broadcast has also procured similar insurance policies. The insurance coverage includes cover for any loss of revenues on account of abandonment or curtailment of events due to any reason in the case of one-day international matches and T-20 matches involving the Indian national team. The quantum of cover and the events to be covered is decided on a case-to-case basis depending on the time of year, likely perception of risk, quantum of revenues at stake, etc. PROPERTIES The registered office of our Company as recorded with the RoC, Maharashtra is Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India. We own and occupy only 26,540 square feet of our registered office and do not own and occupy certain other premises forming part of the aforesaid registered office. Besides the same, we also own certain office space in Bandra (Mumbai) and in Bengaluru admeasuring 1,119 square feet and 345 square feet respectively. The Company has entered into lease arrangements for offices, located in New Delhi and Chennai admeasuring 2,500 square feet and 1,000 square feet respectively.

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LITIGATION Other than as described in the section titled “Outstanding Litigation and Material Developments” on page 178 of this Draft Red Herring Prospectus, we are not involved in any legal proceedings and no proceedings are threatened, which may have, or have had during the 12 months preceding the date of the Draft Red Herring Prospectus, a material adverse effect on our business, properties, financial conditions or operations or prospects. For the risks arising out of our litigations, see section titled “Risk Factors” on page xii of this Draft Red Herring Prospectus.

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Regulations and Policies

Media and Entertainment Industry

Acts/Regulations Governing Television Broadcasting Television broadcasting in India is governed by regulations which apply to the various stages of gathering, processing, uplinking, down linking and accessing the television programming. The Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 The Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007 (“Mandatory Signal Sharing Act”), provides for access to the largest number of listeners and viewers, on a free to air basis, of sporting events of national importance through mandatory sharing of sports broadcasting signals with Prasar Bharati. Under this enactment, no content rights owner or holder and no television or radio broadcasting service provider can carry a live television broadcast on any cable or Direct-to-Home network or radio commentary broadcast in India of “sporting events of national importance”, unless it simultaneously shares the live broadcasting signal, without advertisements, with Prasar Bharati, to enable Prasar Bharati to re-transmit the signal on its terrestrial networks and Direct-to-Home networks. “Sporting events of national importance” are defined in the Mandatory Signal Sharing Act as any national or international sporting event, whether held in India or abroad, as may be notified by the central government to be one of national importance. With respect to cricket events, sporting events of national importance include all matches featuring India, including all official one day internationals, Twenty-20 matches, such test matches as are considered to be of high public interest by the central government, and the finals and semi-finals of international competitions. The Mandatory Signal Sharing Act further provides that Prasar Bharati’s advertisement revenues from the broadcast of the shared signals shall be shared with the content rights owner or holder in the ratio of not less than 75:25 in case of television coverage and not less than 50:50 in case of radio coverage. The Telecom Regulatory Authority Act, 1997 (the “TRAI Act”) The TRAI Act established the Telecom Regulatory Authority of India (“TRAI”) and the Telecom Disputes Settlement and Appellate Tribunal (“TDSAT”). The TRAI and TDSAT are the regulatory and appellate bodies in India which regulate telecommunication services and adjudicate disputes in relation thereto, respectively. Under the TRAI Act, the TRAI is empowered to make recommendations to the Central Government or the entity empowered under the Telegraph Act, to issue licenses in connection with matters such as the need and timing for introduction of new service providers, terms and conditions of licenses issued to service providers and the revocation of licenses for non-compliance with terms and conditions. The functions to be discharged by the TRAI include ensuring compliance with the terms and conditions of licenses, regulate revenue sharing arrangements among service providers and specifying the standards of quality of service to be provided by service providers. The TRAI is empowered to call upon any service provider at any time to furnish in writing such information or explanation as is required or to conduct an investigation into the affairs of any service provider or issue directions in respect thereof. Regulation by the TRAI Television broadcasting was brought under the ambit of the TRAI by classifying broadcasting and cable services as “telecommunications” on January 9, 2004. The TRAI has been mandated to review policies governing broadcasting and cable services and has made significant recommendations and interventions in relation to the Conditional Access System (“CAS”) Regime. Cable Television Network (Regulation) Act, 1995 This statute regulates cable television networks. A person wishing to operate a cable television network is required to register under this Act. Conditional Access System “Conditional Access System” (“CAS”) refers to the hardware devices and connected software (including a set top box) used at different stages of distribution of a television channel through which pay channels are transmitted in encrypted form. The subscriber is given an authorization depending upon his or her request to view one or more such Pay Channels on payment of a fee. The authorization is given and controlled by a “Multi System Operator” (“MSO”)

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which owns the CAS in a cable television network. In this, the MSO may be assisted by the local cable operator. CAS (also termed “Addressable System”) is being implemented by notification of different areas in India under the Cable Television Network (Regulation) Act, 1995. It is currently in force in the Chennai Metropolitan Area and certain parts of Delhi, Mumbai, and Kolkata. A complete list of the areas notified for mandatory CAS is available on TRAI’s website: http://www.trai.gov.in/. Tariff for Areas with Mandatory CAS Free to Air Channel, Pay channel, Basic Service Tier Tariff under the CAS system “Pay Channel” means a channel for which fees is to be paid to the broadcaster and which would require the use of an addressable system (or “set top box”) attached with the television set of a subscriber, in areas where mandatory CAS has been notified. “Free To Air Channel” (FTA Channel) means a channel for which no fees is to be paid to the broadcaster and which would not require the use of Set Top Box for viewing such channels. Since the channels are carried through the distribution chain using the infrastructure created for transmission, a charge has to be paid for the same to the cable operator which is known as ‘Basic Service Tier Charges’. “Basic Service Tier” means a package of free-to-air channels provided by an MSO or cable operator which can be viewed without any set top box attached to the television set and the Basic Service Tier Charge is a single price payable by the subscribers to the local cable operator for such package consisting of Free to Air channels. The TRAI pursuant to its order dated 31 August 2006 (“Tariff Order”) has ruled that the maximum amount that an MSO or cable operator can demand for receiving programmes transmitted in the Basic Service Tier cannot exceed Rs.77/- per month (excluding taxes) for a minimum of 30 Free To Air channels. If additional FTA Channels are offered over and above the 30 minimum FTA Channels, no additional amount will be chargeable for such additional FTA Channels. The amount of taxes will depend upon the tax notifications issued by the Government of India or concerned State Governments from time to time. The amount of Rs. 77/- per month (excluding taxes) for a minimum of 30 Free To Air channels has, by way of TRAI’s amendment order dated 26 December, 2008 (“Tariff Amendment Order”) has been increased to Rs. 82/- per month (excluding taxes). The Tariff Order issued by TRAI mandates that the pay channels will be offered on “a-la-carte basis” by the broadcasters, MSOs and cable operators. “A-la-carte basis” means that the Pay Channels will be offered individually with a maximum retail price for each channel fixed by the broadcasters within the ceiling of Rs. 5 per channel per month. Bouquets of pay channels can also be offered only in addition to the a-la-carte offer and not otherwise, and the right to choose will remain with the subscriber. By way of the Tariff Amendment Order, the ceiling of Rs. 5 per channel per month has been replaced by a ceiling of Rs. 5.35 per channel per month. Non-Conditional Access System Under a Non-Conditional Access System (“Non-CAS”, also known as a “Non-Addressable System”), Pay Channels are transmitted in unencrypted form and the subscriber will not have any option to choose amongst Pay Channels and pay only for the Pay Channel so chosen. Under this system, which for the moment is prevalent all over India excepting in Chennai and in parts of Mumbai, Delhi, and Kolkata, subscribers have to pay for all the channels they receive from the local cable operator. Tariff for Non-CAS Areas Tariff Order of October 2004 Regulation of tariff for channels in areas where mandatory CAS has not been notified (“Non-CAS Areas”) is governed principally by the provisions of a tariff order dated 1 October 2004 issued by the TRAI (“2004 Tariff Order”). The main provisions of the 2004 Tariff Order are the following:- (i) Cable charges prevailing as on 26 December 2003 in respect of channels and bouquets of channels that existed

on that date shall be the ceiling on such charges. In other words the payments by a subscriber to the cable operator, by a cable operator paying to the MSO and by the MSO to the broadcaster shall be governed by the rate applicable as on 26 December 2003.

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(ii) In the case of a Pay Channel launched after 26 December 2003, or in the event of an existing FTA Channel converting to a Pay Channel, the ceiling shall be increased to the extent of the charges of the new Pay Channel or the converted FTA Channel to Pay Channel. In the event of a reduction in the number of existing Pay Channels as existing on 26 December 2003 the ceiling shall stand reduced similarly.

(iii) The rates of new Pay Channels shall be similar to the rates of similar channels that existed as on 26 December

2003 and the new Pay Channels or the converted FTA Channels to Pay Channels shall be offered on a stand-alone basis and not form part of the bouquets that existed as on 26 December 2003.

Tariff Amendment Order of July 2006 On July 31, 2006, the Authority issued a tariff amendment order clarifying the factors that would be reckoned in determining the similarity of rates of similar channels. These are: (i) the genre and language of the channel in question; (ii) the range of prices ascribed to the channel of similar genre and language that existed as on December 26,

2003; and (iii) the range of prices of the individual channel of similar genre and language as existing in the cities where

CAS is in existence. Tariff Amendment Order of November 2006 On November 21, 2006, the Authority further amended the 2004 Tariff Order to provide tariff dispensation for commercial cable subscribers on the following terms: (i) for the purpose of tariff regulation, there will be two categories of commercial subscribers. One category

consisting of hotels with a grading of 3-stars and above and heritage hotels. This category would also include any other hotels, motels, inns and such other commercial establishments providing board and lodging and having 50 or more rooms. In the second category would fall all other commercial establishments;

(ii) in respect of the first category, the tariff has been left to mutual agreements and market forces. But commercial subscribers in non-CAS areas having their own head-ends and other facilities to receive signals directly from the broadcasters will get the choice of individual channels as well as bouquets. The bouquet offering will be subject to restrictions on maximum bouquet price in relation to the sum of individual channel prices; and

(iii) in respect of second category, the tariff will be the same as that of ordinary cable subscribers. The relevant date for reckoning the ceiling on tariffs is December 26, 2003.

Policy guidelines for downlinking of television channels Ministry of Information and Broadcasting, Government of India, has formulated policy guidelines for downlinking all satellite television channels downlinked / received / transmitted and re-transmitted in India for public viewing. Consequently, no person/entity shall downlink a channel, which has not been registered by the Ministry of Information and Broadcasting under these guidelines. Henceforth, all persons/ entities providing Television Satellite Broadcasting Services (TV Channels) uplinked from other countries to viewers in India as well as any entity desirous of providing such a Television Satellite Broadcasting Service (TV Channel), receivable in India for public viewership, shall be required to obtain permission from Ministry of Information and Broadcasting, in accordance with the terms and conditions prescribed under these guidelines. Guidelines for Provisioning of Internet Protocol Television (IPTV) Services The Ministry of Information and Broadcasting, Government of India, has, in 2008, formulated the guidelines for the operation of IPTV services in India, which are in consonance with the recommendations of TRAI, for the purpose of establishing cogent principles relating to various platforms capable of providing IPTV services and to encourage various stake holders to launch IPTV services in Indian markets. IPTV is a system where a digital television service is delivered using Internet Protocol over a network infrastructure, which generally includes delivery by a broadband connection. A general definition of IPTV is television content that, instead of being delivered through traditional broadcast and cable formats, is received by the viewer through the technologies used for computer networks. By way of these guidelines, broadcasters are permitted to share their content with IPTV service providers. The policy guidelines for downlinking of television channels have also been amended to include authorized IPTV service providers.

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Guidelines for providing Headend-in-the-Sky (HITS) Broadcasting Service in India These guidelines have been formulated by the Ministry of Information and Broadcasting, Government of India in November 2009 for the grant of permission to establish and operate HITS broadcasting service from India. HITS is a digital content transmission technology where multiple cable channels are multiplexed into a signal and uplinked by the HITS operator to its satellite. This signal is then downlinked to many MSOs and LCOs who in turn forward the channels to the end customers or subscribers of their networks for viewing cable TV. The policy guidelines for downlinking of television channels have also been amended to include authorized HITS operators. Regulations for Uplinking The gathering, uplinking and broadcasting of television based content in India was governed by a series of guidelines promulgated by the MIB. These included the “Guidelines for uplinking from India”, the “Guidelines for Uplinking of News and Current Affairs TV Channels from India” and the “Guidelines for use of SNG/DSNGs”. On December 2, 2005, the above guidelines were consolidated into the “Guidelines for Uplinking from India” (“Uplinking Guidelines”) which relate to: (i) Permission for setting up of Uplinking Hub/Teleports; (ii) Permission for Uplinking a Non-News and Current Affairs TV Channel; (iii) Permission for Uplinking a News and Current Affairs TV Channel; (iv) Permission for Uplinking by Indian News Agency; (v) Permission for use of SNG/DSNG Equipment in C Band and KU Band; and (vi) Permission for Temporary Uplinking. Permission for Setting up of Uplinking Hub/ Teleports Companies making applications to establish uplinking hubs or teleports in India are required to satisfy certain capital adequacy requirements based on the number of channels being broadcast, for example a company with teleport with single channel capacity is required to maintain a net worth of Rs. 10 million and a company with teleport with 15 channel capacity is required to maintain a net worth of Rs. 30 million. Further, foreign equity holding including NRI/OCB/PIO investment is not permitted to exceed 49%. Licenses granted are valid for a period of ten years. A one-time license fee is payable for every teleport licensed under the above system and uplinking is permitted only for channels which are approved for uplinking by the MIB. Permission for Uplinking Non-News &Non Current Affairs TV Channel This permission enables the uplinking of channels which do not include elements of news & current affairs in their programme content. Applicants with one channel are required to maintain net worth of Rs. 15 million for one channel and Rs. 10 million for every additional TV channel. Licenses granted are valid for a period of ten years. The company is also required to comply with the procedure laid down in the downlinking guidelines notified by the Ministry of Information and Broadcasting (“MIB”). Under these guidelines sports channels and sports management companies having TV broadcasting rights are required to share their feed with Prasar Bharati for national and international sporting events of national importance, held in India or abroad, for terrestrial transmission and DTH broadcasting subject to certain conditions. Revenue sharing in such conditions is prescribed in the ratio of 75:25 in favour of the company holding the license. The Telecommunication (Broadcasting And Cable Services) Interconnection (Third Amendment) Regulation, 2006 The Telecommunications (Broadcasting and Cable Services) Interconnection (Third Amendment) Regulation, 2006 came into effect on 4th September, 2006 by a notification in the Official Gazette. This regulation was implemented by TRAI to regulate the distribution cable TV in India. Thus the regulation expands the scope of Interconnect Regulations so as to minimize the doubts and disputes/ litigation. This regulation governs all service providers including cable operators, multi system operators and broadcasters. It controls and regulates inter connection agreements entered into by multi system operators, cable operators and broadcasters. It contains various provisions for the protection of the interests of the broadcasters, multi system operators, distributors of TV channels as well as the consumers.

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Copyrights

The Copyright Act, 1957 (“Copyright Act”) protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorized uses. Unlike the case with patents, copyright protects the expressions and not the ideas. There is no copyright in an idea. The object of copyright law is to encourage authors, artists and composers to create original works by rewarding them with exclusive right for a fixed period to reproduce the works for commercial exploitation. Copyrights subsist in following class of works:

a) Original literary, musical, dramatic and artistic works b) Cinematograph films c) Sound recordings

Under the copyright law the creator of the original expression in a work is its author who is vested with a set of exclusive rights with respect to the use and exploitation of the work. The author is also the owner of the copyright, unless there is a written agreement by which the author assigns the copyright to another person or entity, such as a publisher. Where a work is done under a work for hire agreement, the copyright vests with the hirer i.e. the person providing work. The owner of copyright in a work can assign or license his copyright to any person, such as publisher, under a written agreement. Copyright subsists in a work since the time it comes into being. Therefore, registration of copyright neither creates any rights nor precludes enforcement of the existing ones. However, owing to its evidentiary value, a registered copyright is easier to establish in the court of law. The term of copyright varies across different types of works. In the case of broadcasts, the Act grants “broadcast reproduction rights” to broadcasting organizations which subsist for 25 years.

India is a member of both Berne and Universal Conventions and Indian law extends protection to all copyrighted works originating from any of the convention countries. Foreign works first published in a country which is a member of either of the Conventions would be accorded the same copyright protection in India as Indian works without undergoing any formalities, on the assumption that the home country accords reciprocity to Indian works.

Trade Marks

The Indian law of trademarks is enshrined in the Trade Marks Act, 1999. The Act seeks to provide for the registration of trademarks relating to goods and services in India. A trade mark means a mark used in relation to goods for the purpose of indicating a connection in the course of trade between the goods and the proprietor. While registration of a trademark is not compulsory it offers better legal protection. Any person can apply for registration of a trademark to the Trademark Registry under whose jurisdiction the principal place of the business of the applicant in India falls. The term of a trademark registration is for a period of ten years. The renewal is possible for further period of 10 years each.

There is no system as yet wherein a single trademark application is sufficient to protect the trademark right internationally. However, Paris convention to which India is a party provides certain privileges to member countries in trademark registration. A party that files their first trademark application in a member state of the Convention, such as India, can within six months of that filing date file applications in other member countries claiming the priority of the first application. If such a trademark is accepted for registration it will be deemed to have registered from the same date on which the application is made in the home country.

Cinematograph Act, 1952 Cinematograph Act, 1952 sets out the law in relation to the certification of cinematograph films for exhibition and for regulating exhibitions by means of cinematographs. Under the Act the Central Government has constituted the Board of Film Certification (Board), commonly known as the Censor Board, for the purpose of sanctioning films for public exhibition. The Board may direct the applicant to carry out such excisions or modifications in the film as it thinks necessary before sanctioning the film for public exhibition or refuse to sanction the film for public exhibition. Bombay Cinemas (Regulation) Act 1953 This act is for regulating exhibitions by means of cinematographs and licensing of places in which cinematograph films are exhibited in the State of Maharashtra. Under this Act a State licensing authority has been established, for exhibiting cinematograph films. Special Welfare Laws for Employees

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The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981, regulates the conditions of employment of certain classes of workers in the film industry. Two other enactments, the Cine Workers Welfare Cess Act, 1981, and the Cine Worker Welfare Fund Act 1981, create schemes for the promotion of welfare of such workers. Policy for the Import of Cinematographic Films and other Films Under this policy, import of cinematograph feature films and other films (including film on video tape, compact video disc, laser video disc or digital video disc) is allowed without a license. The importer of the film has to comply with the provisions of all applicable Indian laws governing the distribution and exhibition of films, including the requirement of obtaining a certificate of public exhibition prescribed under the Cinematograph Act, 1952.The import of any unauthorized/pirated films is also prohibited. The Indian Wireless Telegraphy Act, 1933 (the “Wireless Act”) The Wireless Act governs all forms of “wireless communication”, i.e., transmission and reception without the use of wires or other continuous electrical conductors between the transmitting and the receiving apparatus. It stipulates that no person shall possess wireless telegraphy apparatus without obtaining a license in respect thereof. Applications under the Wireless Act are made to the Wireless Planning & Coordination Wing (“WPC”). The WPC is the national radio regulatory authority responsible for frequency spectrum management, including licensing to wireless users (government and private) in India. It exercises the statutory functions of the Central Government and issues licenses to establish, maintain and operate wireless stations. The WPC is divided into major sections like licensing, new technology group and Standing Advisory Committee on Radio Frequency Allocation (the “SACFA”). It is also involved in formulation of the frequency allocation plan, making recommendations to the International Telecom Union and clearance of all wireless installations in the country. Clearance from the WPC is required for the usage of certain equipment for television broadcasting including Satellite News Gathering (“SNG”) and Digital Satellite News Gathering (“DSNG”) equipment and teleports. Codes of Conduct All Satellite television channels have to adhere to the Advertising Code and the Programme Code prescribed under the Cable Television Networks Rules, 1994 and rules framed thereunder. Rule 6 of the Cable Television Networks Rules, 1994 discusses the Programme Code. Programme means any television broadcast. No programme shall be carried in the cable service, which is as specified under the Programme Code. Under the Advertising Code, advertisement carried in the cable service shall be so designed as to conform to the laws of the country and should not offend morality, decency and religious susceptibilities of the subscribers. LAWS RELATING TO EMPLOYMENT The Contract Labour (Regulation and Abolition) Act, 1970 The Contract Labour (Regulation and Abolition) Act, 1970 (“CLRA”) has been enacted to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances. The CLRA applies to every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour. The CLRA vests the responsibility on the principal employer of an establishment to make an application to the registered officer in the prescribed manner for registration of the establishment. Likewise, every contractor to whom the CLRA applies is required to obtain a license and is not permitted to undertake or execute any work through contract labour except under and in accordance with the license issued. To ensure the welfare and health of the contract labour, the CLRA imposes certain obligations on the contractor in relation to establishment of canteens, rest rooms, drinking water, washing facilities, first aid, other facilities and payment of wages. However, in the event the contractor fails to provide these amenities, the principal employer is under an obligation to provide these facilities within a prescribed time period. The Payment of Wages Act, 1936 The object of the Payment of Wages Act, 1936 (“PWA”) is to regulate the payment of wages to certain classes of employed persons. The PWA makes every employer responsible for the payment of wages to persons employed by him/it. No deductions can be made from the wages nor can any fine be levied on the wages earned by a person employed except as provided under the PWA.

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The Minimum Wages Act, 1948 The Minimum Wages Act, 1948 (“MWA”) came into force with the objective to provide for the fixation of a minimum wage payable by the employer to the employee. Under the MWA, every employer is mandated to pay not less than the minimum wages to all employees engaged to do any work whether skilled, unskilled, manual or clerical (including out-workers) in any employment listed in the schedule to the MWA, in respect of which minimum rates of wages have been fixed or revised under the MWA. The Payment of Gratuity Act, 1972 The Payment of Gratuity Act, 1972 (“PGA”) was enacted with the objective to entitle the payment of gratuity to an employee who has rendered continuous service for not less than five years at the time of retirement or termination of such employee’s services, or upon such employee’s death or disablement due to accident or disease (in which case the minimum requirement of five years does not apply). The Payment of Bonus Act, 1965 The Payment of Bonus Act, 1965 (“PBA”) was enacted with the objective of providing of payment of bonus to employees on the basis of profit or on the basis of productivity. The provisions of the PBA ensure that a minimum annual bonus is payable to every employee regardless of whether the employer has made a profit or a loss in the accounting year in which the bonus is payable. Under the PBA every employer is bound to pay to every employee, in respect of the accounting year, a minimum bonus which is 8.33% of the salary or wage earned by the employee during the accounting year or Rs.100, whichever is higher. The Employee State Insurance Act, 1948 The Employee State Insurance Act, 1948 (“ESIA”) aims to provide benefits for employees or their beneficiaries in the event of sickness, maternity, disablement and employment injury and to make provisions for the same. Every factory or establishment to which the ESIA applies is required to be registered in the manner prescribed under the ESIA. Under the ESIA every employee (including casual and temporary employees), whether employed directly or through a contractor, who is in receipt of wages upto Rs.7,500 per month is entitled to be insured. The ESIA contemplates a contribution payable by the principal employer in the first instance and a contribution payable by the employee in respect of an employee to the Employee State Insurance Corporation. The ESIA further states that a principal employer, who has paid a contribution in respect of an employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer. The Industrial Employment (Standing Orders) Act, 1946 The Industrial Employment (Standing Orders) Act, 1946 (“Standing Orders Act”) requires employers in industrial establishments, which employ 100 or more workmen to define with sufficient precision the conditions of employment of workmen employed and to make them known to such workmen. The Standing Orders Act requires every employer to which the Standing Orders Act applies to certify and register the draft standing order proposed by him in the prescribed manner. However until the draft standing orders are certified, the prescribed standing orders given in the Standing Orders Act must be followed. The Workmen’s Compensation Act, 1923 The Workmen’s Compensation Act, 1923 (“WCA”) has been enacted with the objective to provide for the payment of compensation by certain classes of employers to their workmen or their survivors for industrial accidents and occupational diseases resulting in the death or disablement of such workmen. The WCA makes every employer liable to pay compensation in accordance with the WCA if a personal injury/disablement/loss of life is caused to a workman (including those employed through a contractor) by an accident arising out of and in the course of his employment. In case the employer fails to pay compensation due under the WCA within one month from the date it falls due, the Commissioner may direct the employer to pay the compensation amount along with interest and may also impose a penalty. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (“EPFA”) was introduced with the objective of institution a provident fund for the benefit of employees in factories and other establishments. The EPFA empowers

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the Central Government to frame the “Employee’s Provident Fund Scheme”, “Employee’s Deposit-linked Insurance Scheme’ and the “Employees’ Family Pension Scheme” for the establishment of provident funds under the EPFA for the employees. The EPFA also prescribes that contributions to the provident fund are to be made by both the employer and the employee.

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History and Certain Corporate Matters Brief Corporate History of Our Company Our Company was originally incorporated as ‘Nimbus Communications Private Limited’ on June 30, 1987 under the Companies Act as a private limited company with the RoC, Maharashtra. Our Company became a deemed public company under Section 43A of the Companies Act and its name was consequently changed to ‘Nimbus Communications Limited’ with effect from July 1, 1994. The Company’s corporate identification number as allotted by the RoC is U99999MH1987PLC043940. In an extraordinary general meeting of our Company held on January 4, 2000, our Company’s shareholders passed a resolution converting our Company from a deemed public company to a public company. The current Promoters of our Company are Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount Corporation Limited. We own the global media rights for all international cricket matches organised by the BCCI in India until March 2014 and have licensed the broadcast rights with respect to such matches in India to Neo Sports Broadcast. In addition to the rights that we have acquired from the BCCI, we have acquired and manage certain rights with respect to other sports federations, including Bangladesh Cricket Board, Asian Cricket Council, Cricket Kenya and Singapore Cricket Association. For further details in relation to our business including description of our activities, see section titled “Business” on page 78 of this Draft Red Herring Prospectus. Our Company filed a draft red herring prospectus with SEBI on March 3, 2000. However, we did not proceed with the initial public offer process due to general market conditions and withdrew the draft red herring prospectus. Our Main Object Our main objects, as contained in our Memorandum of Association are:

1. To undertake the business of advertising and publicity, marketing and marketing/other consultancy, entertainment through music/dance/drama/movie/TV/other media, mass communication, consumer research, industrial and sociological research, market research to undertake public poll, to ascertain views and reactions of the public at large on any products or problems and issues, graphics designing including product package and exhibition designing.

2. To carry on the business of consultants and contractor, promoters or organizers of agents for all kinds of advertising or publicity schemes or methods, new-agents, press agents, news paper cutting agents, billposters, commission agents, news paper reporters, printers, engravers, lithographers, stereotypes, electrotypers, photographers, photo etchers, photographic printers, designers, draughts men and type founders.

3. To carry on the business of preparation, production, distribution exploitation, and screening of cinematograph films, animation (cartoon films) in all gauges and in particular audio and/or video cassettes, disc, video films and /or any other contrivances, tapes of all gauges, form and contrivances multification of films and cassettes including resorting to any new method or process that may be developed technically and/or technologically in future relating to the above activity and short films.

4. To purchase, sell, franchise, share, rent or lease the rights to any material in the fields of publishing, literature,

television, cinema, video, theatre, sports or any other field. Change in our registered office The registered office of our Company at the time of incorporation was at 14, Jeevan Dhara, Dr. Ambedkar Road, Mumbai 400 050. The table below provides the details of the change in registered office of our Company since its incorporation: Resolution date Change in the address of our Registered Office June 29, 1990 The registered office of the Company was changed from 14, Jeevan Dhara, Dr. Ambedkar Road, Mumbai 400

050 to 6, Geeta Niketan, 264 Linking Road, Bandra, Mumbai 400 050.

July 15, 1993 The registered office of the Company was changed from 6, Geeta Niketan, 264 Linking Road, Bandra, Mumbai 400 050 to 101 B, Vidyanand, 107, 24th Road, Bandra, Mumbai 400 050.

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Resolution date Change in the address of our Registered Office March 20, 2001 The registered office of the Company was changed from 101 B, Vidyanand, 107, 24th Road, Bandra, Mumbai

400 050 to Oberoi Trade Centre, Oberoi Complex, New Link Road, Andheri (W), Mumbai 400 053. W.e.f August 14, 2007 name of the building ‘Oberoi Trade Centre’ has been changed to ‘Nimbus Center’. Our Company has made necessary filings with RoC, Maharashtra to record the change in name of the building.

Changes in the registered office mentioned above were made mainly due to operational reasons. Key Events and Milestones Year/ Date Events

1988-1989 We marketed air time for advertisements on Doordarshan for the television serials Nukkad, Wagle Ki Dunya and Sunil Gavaskar Presents.

1990 We produced our first sports program called ‘Football Fever’ for the 1990 Football World Cup in Italy. 1993 Production and marketing of the music-based entertainment television series ‘Superhit Muqabla’ on Doordarshan

by us. 2002 Nimbus Sport International Pte. Limited was appointed by Prasar Bharati Corporation Limited as the exclusive

television production company to produce live television feed for international cricket played in India from 2002-2004. Nimbus Sport International Pte. Limited was appointed by Global Cricket Corporation Pte. Limited as the marketing agents of Global Cricket Corporation Pte. Limited for the media and sponsorship rights for ICC events from 2002 to 2007.

2005 Nimbus Sport International Pte. Limited acquired title sponsorship, co-sponsorship and in-stadia advertisement rights in Pakistan from the Pakistan Cricket Board for certain international matches in Pakistan for the period January 2006 to March 2008.

2006 Our Company acquired exclusive worldwide media rights, including broadcast on television as well as on radio, for the period March 2006 to March 2010, for all international matches and series organised by the BCCI in India, including 72 days of domestic cricket matches. Our Subsidiary, Nimbus Sports International Pte. Limited, by virtue of its agreement with the BCCI has acquired rights in India to produce the live feed for television for matches played in India, until March 2010.

2006 Neo Sports Broadcast launched the channels Neo Sports and Neo Sports+ which has been renamed as Neo Sports and Neo Cricket respectively on April 30, 2008.

2006 Nimbus Sport International Pte. Limited was appointed as the exclusive worldwide media rights marketing company (excluding television and radio rights in Bangladesh) for television, radio and internet broadband from the BCB for all cricket matches organised by the BCB in Bangladesh in the period November 2006 to March 2012. Nimbus Sport International Pte. Limited was also made in charge of the television production for all cricket matches organised by the BCB in Bangladesh in the period November 2006 to March 2012.

2008 Launched internet operations through www.cricketnirvana.com.2009 Our Company acquired exclusive worldwide media rights, including broadcast on television as well as on

radio, for the period April 2010 to March 2014, for all international matches and series organised by the BCCI in India, including 78 days of domestic cricket matches.

2010 Our Company acquired all commercial rights for three editions of the quadrangular Asia Cup to be held between the national teams of India, Pakistan, Sri Lanka and Bangladesh in the years 2010, 2012 and 2014.

Changes in the activities of our Company during the last five years Except as stated in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations as Reflected in the Financial Statements” on page 143, there have been no changes in the activities of our Company during the last five years, preceding the date of the Draft Red Herring Prospectus. Changes in our Memorandum of Association Since our incorporation, the following changes have been made to our Memorandum of Association: Date Nature of amendment April 4, 1994 Increase in authorized share capital of our Company from Rs. 100,000 to Rs. 60,000,000 divided into

6,000,000 Equity Shares of Rs. 10 each. July 1, 1994 Deletion of word “Private” from the name of our Company consequent to its becoming a deemed public

company under Section 43A of the Companies Act; taken on record by our Company in Board meeting dated July 21, 1995.

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Date Nature of amendment January 4, 2000 Increase in authorized share capital of our Company from Rs. 60,000,000 to Rs. 300,000,000 divided into

30,000,000 Equity Shares of Rs. 10. August 9, 2000 Splitting of each Equity Share of our Company of Rs. 10 each into 2 Equity Shares of Rs. 5 each. June 29, 2005 Increase in authorized share capital of our Company from Rs. 300,000,000 to Rs. 500,000,000 divided into

100,000,000 Equity Shares of Rs. 5 each. June 26, 2007 Consolidation of authorized share capital of our Company as follows: every two Equity Shares of Rs. 5 each

consolidated into one Equity Share of Rs. 10 each. Increase in authorised share capital of our Company from Rs. 500,000,000 to Rs. 650,000,000 divided into 65,000,000 Equity Shares of Rs. 10 each.

February 11, 2008

Increase in authorised share capital from Rs. 650,000,000 to Rs.1,000,000,000 divided into 100,000,000 Equity shares of Rs. 10 each.

April 20, 2009 Reclassification of authorised share capital into Rs.1,000,000,000 divided into 100,000,000 shares of Rs. 10 each whether Equity Share or preference shares with such rights as may be determined by the Board.

February 11, 2010

Reclassification of authorised share capital into Rs.1,000,000,000 divided into 95,000,000 Equity Shares of Rs.10 each and 5,000,000 non cumulative preference shares of Rs.10 each.

March 29, 2010 Alteration of the main objects clause of our Company. Members As of September 29, 2010, we have 89 members in our Company. Injunctions or restraining orders Our Company is not operating under any injunction or restraining order. Acquisition of business/undertakings, mergers, amalgamation, revaluation of assets Acquisition of business/undertakings, mergers, amalgamation Except for acquisition of business of Paramount in 1999 pursuant to an agreement entered into between our Company and Paramount in September 1999 and acquisition of 50 percent stake by Nimbus Communications Limited BVI in Nimbus Sport International Pte. Ltd. from The World Sport Group Limited in 2005, there has been no acquisition of business/undertakings or any merger and amalgamation. Revaluation of assets Except for the revaluation of assets in August, 1994 and March, 2008, there has been no revaluation of asset. For further details please refer section titled “Capital Structure” on page 23 of this Draft Red Herring Prospectus. Defaults or rescheduling of borrowings with financial institutions/banks There have been no defaults or rescheduling of borrowings with financial institutions/banks except for the following:

1. The Company availed a short term loan of Rs. 2,250 million from Punjab National Bank. The repayment of the same was due on June 30, 2010. Approximately Rs. 1,400 million was outstanding as on Septemebr 24, 2010. Punjab National Bank vide its letter dated September 24, 2010 has rolled over the outstanding amounts for a period of three months ending December 23, 2010. The interest payable on the outstanding amount shall be charged at base rate plus 6.75% while the interest payable under the said loan was BPLR plus 1%. All the other terms of the said loan (including security) apply mutatis mutandis to the roll over facility granted by Punjab National Bank on September 24, 2010.

2. As required under the New BCCI Agreement, our Company provided a bank guarantee of Rs. 20,000 million

to the BCCI on January 18, 2010 from Punjab National Bank, Indian Bank and Union Bank of India. As per the sanction letters from Punjab National Bank and Union Bank of India dated January 14, 2010, our Company was required to provide to the said banks additional margin money aggregating to Rs. 600 million (Rs 300 million each) by April 30, 2010. At present, the amount of additional cash margin to be paid to the banks stands outstanding. However, Union Bank of India vide letter dated September 29, 2010 has extended the time for providing additional margin of 4% on Rs. 7,500 million bank guarantee from April 30, 2010 to December 31, 2010.

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Subsidiaries and joint ventures of our Company Our Subsidiaries Our Company has the following seven Subsidiaries (directly or indirectly): Sr. No. Name of the Subsidiary Indian Subsidiaries

1. Nimbus Home Entertainment Private Limited 2. Nimbus Motion Pictures (AP) Private Limited3. Nirvana Television Limited

Foreign Subsidiaries 4. Nimbus Communications Limited BVI (incorporated in the British Virgin Islands) 5. Nimbus Communications Worldwide Limited (incorporated in Mauritius) 6. Nimbus Media Pte. Ltd. (incorporated in Singapore) 7. Nimbus Sport International Pte. Ltd (incorporated in Singapore)

Details of the Indian Subsidiaries

1. Nimbus Home Entertainment Private Limited

Nimbus Home Entertainment Private Limited (“Nimbus Home”) was incorporated on November 22, 2002 in the name and style of Nirvana Music Private Limited under the Companies Act. The name of the company was changed from Nirvana Music Private Limited to Nimbus Home Entertainment Private Limited on August 30, 2007. Its main object is to undertake the business of audio, video and multimedia transmissions on radio channels and other channels on the internet, setting up broadcasting stations and broadcast through cable, wireless and satellite and to deal in cinematographic films and other visual media for viewing through the internet, physical delivery, mobile phones and other transmission devices and to deal in entertainment related products of all kinds in relation to films, sports, concerts and events. Registered office Nimbus Centre, Oberoi Complex, Andheri (West), Mumbai 400 053, India. Board of directors The board of directors of Nimbus Home as comprises: 1. Mr. Harish Kanayalal Thawani; 2. Ms. Shobha Harish Thawani; and 3. Dr. Akash Chandra Khurana. Capital structure The capital structure of Nimbus Home is as follows:

Particulars Aggregate nominal value

(In Rs. million) A. Authorised capital 50,000 equity shares of Rs.10 each 0.5 B. Issued, subscribed and paid-up capital 50,000 equity shares of Rs.10 each 0.5

Shareholding pattern The shareholding pattern of Nimbus Home was as follows:

Name of the shareholder Number of equity shares % of issued capital

Nimbus Communications Limited 49,895 99.80 Mr. Harish Kanayalal Thawani* 100 0.20 Dr. Akash Chandra Khurana* 1 0.002 Mr. Sunil Manocha* 1 0.002

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Mr. Sanjay Sharma* 1 0.002 Mr. James Rego* 1 0.002 Mr. Raju Jayaram Udupa* 1 0.002 Total 50,000 100.0

* Nominee of Nimbus Communications Limited Nimbus Home is an unlisted company. It has not made any public or rights issue in the preceding three years. Nimbus Home is not a sick company within the meaning of SICA. It is not subject to a winding-up order or petition.

2. Nimbus Motion Pictures (AP) Private Limited Nimbus Motion Pictures (AP) Private Limited (“Nimbus Motion”) was incorporated on October 30, 2002 under the Companies Act. Its main object is to carry on the business of motion pictures, audio, video, internet and multimedia including management, production, distribution, transmission, marketing, event and celebrity management, merchandising of stars and celebrity memorabilia, acquisition of cinematographic films, motion pictures, teleserials, documentaries and tele-dramas. Registered office Plot No. A35, Road No.6, Jubilee Hills, Hyderabad – 500 033. Board of directors The board of directors of Nimbus Motion as comprises: 1. Mr. Harish Kanayalal Thawani; 2. Ms. Shobha Harish Thawani; and

3. Dr. Akash Chandra Khurana.

Capital structure The capital structure of Nimbus Motion is as follows:

Particulars Aggregate nominal value (In Rs. million)

A. Authorised capital 50,000 equity shares of Rs.10/-each 0.5 B. Issued, subscribed and paid-up capital 50,000 equity shares of Rs.10/-each fully paid-up 0.5

Shareholding pattern

The shareholding pattern of Nimbus Motion was:


Nimbus Communications Limited 49,900 99.80 Mr. Harish Kanayalal Thawani (nominee of Nimbus Communications Limited)

100 0.20

Total 50,000 100.00 Nimbus Motion is an unlisted company. It has not made any public or rights issue in the preceding three years. Nimbus Motion is not a sick company within the meaning of SICA. It is not subject to a winding-up order or petition.

3. Nirvana Television Limited Nirvana Television Limited (“Nirvana Television”) was incorporated on October 27, 1997 as ‘Nimbus Broadcast Private Limited’. With effect from September 24, 1998, the name of the company was changed to ‘Nimbus Online Private Ltd.’. With effect from January 10, 2000 it became a deemed public company under Section 43A of the Companies Act, consequent to which the word ‘Private’ was deleted from its name, to become ‘Nimbus Online Limited’. With effect from September 26, 2003, the company’s name was changed to ‘Nirvana Television Limited’.

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Its main object is producing, distributing, broadcasting and narrow casting television and radio programmes, motion pictures and multimedia products; to offer satellite uplinking and downlinking services; to offer broadcasting channels and own; and operate television stations, radio stations and other broadcasting equipment. Registered office Nimbus Centre, Oberoi Complex, Andheri (West), Mumbai – 400 053. Board of directors The board of directors of Nirvana Television comprises: 1. Mr. Harish Kanayalal Thawani; 2. Ms. Shobha Harish Thawani; and 3. Dr. Akash Chandra Khurana. Capital structure The capital structure of Nirvana Television is as follows:


(In Rs. million) A. Authorised capital 10,000,000 equity shares of Rs.10 each 100.00 B. Issued, subscribed and paid-up capital 4,400,000 equity shares of Rs 10 each, fully paid-up 44.00

Shareholding pattern The shareholding pattern of Nirvana Television is as follows:

Name of the shareholder No. of equity shares Percentage of total equity

holding Nimbus Communications Limited 4,399,400 99.988 Dr. Akash Chandra Khurana* 100 0.002 Mr. Sunil Manocha* 100 0.002 Ms. Sunita Alphanso* 100 0.002 Mr. James Rego* 100 0.002 Mr. Harish Kanayalal Thawani* 100 0.002 Ms. Shobha Thawani* 100 0.002 Total 44,00,000 100.00

* Nominee of Nimbus Communications Limited

Nirvana Television is an unlisted company. It has not made any public or rights issue in the preceding three years. Nimbus Television is not a sick company within the meaning of SICA. It is not subject to a winding-up order or petition. Details of the foreign Subsidiaries 1. Nimbus Communications Limited BVI Nimbus Communications Limited BVI was incorporated on October 7, 2004 in the British Virgin Islands under the International Business Companies Act, Cap. 291 and was re-registered under the BVI Business Companies Act, 2004 in the British Virgin Islands as a BVI Business Company on January 1, 2007. Its object is to engage in any act or activity that is not prohibited under the law for the time being in force in the British Virgin Islands. Registered office Mill Mall, Suite 6, Wickhams Cay 1, P O Box 3085, Road Town, Tortola, British Virgin Islands. Board of directors The board of directors of Nimbus Communications Limited BVI comprises:

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1. Mr. Harish Kanayalal Thawani; and 2. Mr. Darshan Shantanu Desai. Capital structure The capital structure of Nimbus Communications Limited BVI is as follows:


(In USD) A. Authorised capital 50,000 equity shares of Rs. USD 1.00 per equity share 50,000 B. Issued, subscribed and paid-up capital 1,000 equity shares of Rs. USD 1.00 per equity share 1,000

Shareholding pattern The shareholding pattern of Nimbus Communications Limited BVI was as follows:

Name of the shareholder Number of equity shares % of issued capital Nimbus Communications Limited 1,000 100.00 Total 1,000 100.00

Nimbus Communications Limited BVI is an unlisted company and it has not made any public or rights issue in the preceding three years. Since it is a foreign-incorporated company, Nimbus Communications Limited BVI does not come within the jurisdiction of SICA. It is not subject to a winding-up order or petition.

2. Nimbus Communications Worldwide Limited Nimbus Communications Worldwide Limited was incorporated on September 6, 2000 under the laws of Republic of Mauritius. Its main object is to carry on business as an investment holding company to acquire telecasting/broadcasting/media rights of various cricket matches. Registered office C/o International Management (Mauritius) Limited, Les Cascades Building, Edith Cavell Street, Port Louis, Republic of Mauritius. Board of directors The board of directors of Nimbus Communications Worldwide Limited comprises: 1. Mr. Harish Kanayalal Thawani; 2. Dr. Akash Chandra Khurana; 3. Mr. Ashraf Ramtoola; and 4. Ms. Rooksana Shahabally. Capital structure The capital structure of Nimbus Communications Worldwide Limited is as follows: Particulars Aggregate nominal value

(In USD million) A. Authorised capital 2,000,000 ordinary shares of USD 1 each 2.00 B. Issued, subscribed and paid-up capital 1,500,000 ordinary shares of USD 1 each 1.50

Shareholding pattern The shareholding pattern of Nimbus Communications Worldwide Limited is as follows:

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Name of the shareholder Number of equity shares % of issued capital Nimbus Communications Limited 1,500,000 100.00 Total 1,500,000 100.00

Nimbus Communications Worldwide Limited is an unlisted company and it has not made any public or rights issue in the preceding three years. Since it is a foreign-incorporated company, Nimbus Communications Worldwide Limited does not come within the jurisdiction of SICA. It is not subject to a winding-up order or petition. 3. Nimbus Media Pte. Limited Nimbus Media Pte. Limited was incorporated on September 15, 2004 under the laws of Republic of Singapore. Its main objects are television programme production and wholesale trading. Registered office 10 Anson Road, #24-16A, International Plaza, Singapore 079 903. Board of directors The board of directors of Nimbus Media Pte. Limited comprises: 1. Mr. Kunwar Digvijay Singh; and 2. Mr. Harish K. Thawani. Capital structure The capital structure of Nimbus Media Pte. Limited is as follows:


(In SGD) Issued, subscribed and paid-up capital 1,000 equity shares of SGD 1 each 1,000

Shareholding pattern The shareholding pattern of Nimbus Media Pte. Limited is as follows:

Name of the shareholder Number of equity shares % of issued

capital Nimbus Communications Limited 1,000 100.0 Total 1,000 100.0

Nimbus Media Pte. Limited is an unlisted company and it has not made any public or rights issue in the preceding three years. Since it is a foreign-incorporated company, Nimbus Media Pte. Limited does not come within the jurisdiction of SICA. It is not subject to a winding-up order or petition. 4. Nimbus Sport International Pte. Ltd Nimbus Sport International Pte. Ltd. was incorporated on March 21, 2000 as “Rebeiro Pte. Ltd.” under the laws of Republic of Singapore. Its name was changed to “WSG Nimbus Pte. Ltd.” in September 2000; to “World Sport Nimbus Pte. Ltd.” in December, 2001 and to its present name, “Nimbus Sport International Pte. Ltd.” in July 2005. It was established with the main object of engaging in the business of television programme production and whole sale trading. Registered office 10 Anson Road, #24-16A, International Plaza, Singapore 079 903. Board of directors The board of directors of Nimbus Sport International Pte. Ltd. comprises:

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1. Mr. Harish K. Thawani; 2. Mr. Richard Dorfman; 3. Mr. Darshan Shantanu Desai; and 4. Mr. Kunwar Digvijay Singh. Capital structure The capital structure of Nimbus Sport International Pte. Ltd. as on is as follows: Particulars Aggregate nominal value

(In SGD) Issued, subscribed and paid-up capital 300,300 equity shares of 1SGD each 300,300 Shareholding pattern The shareholding pattern of Nimbus Sport International Pte. Ltd. was as follows:

Name of the Shareholder Number of equity shares % of issued capital Nimbus Communications Worldwide Limited. 150,150 50 Nimbus Communications Limited (BVI ) 150,150 50 Total 300,300 100

Nimbus Sport International Pte. Ltd. is an unlisted company. It has not made any public or rights issue in the preceding three years. Since it is a foreign-incorporated company, Nimbus Sport International Pte. Ltd. is not subject to SICA. Further, it is not subject to a winding-up order or petition. Shareholders Agreements and Other Material Contracts 1. Shareholders’ agreement dated September 18, 2002 between our Company, Transatlantic Corporation

Limited (“TCL”), Mr. Harish Kanayalal Thawani, Ms. Shobha Thawani and Paramount (then known as ‘Nimbus Creative Corporation Limited’).

On September 18, 2002, TCL entered into a shareholders’ agreement with our Company and Mr. Harish Kanayalal Thawani pursuant to acquiring 4,285,714 Equity Shares of our Company. TCL under the aforesaid agreement acquired certain rights including the right to nominate one director on the Board of our Company and also certain veto rights, as long as TCL holds at least 7.5% of the issued, subscribed and paid up share capital of our Company, against any alteration in shareholder rights; or merger; or change of control; or consolidation with any other entity (excepting a merger with a listed company); or change in our Company’s auditors.

2. Addendum shareholders’ agreement dated February 28, 2005 between our Company, Americorp

Ventures Limited (“AVL”), Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount (then known as ‘Nimbus Creative Corporation Limited’) and Transatlantic Corporation Limited (“TCL”).

On February 28, 2005, AVL entered into an agreement with our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount and TCL pursuant to AVL acquiring 4,285,714 Equity Shares of our Company from TCL to assume certain shareholder rights from TCL as provided to TCL under the shareholders’ agreement dated September 18, 2002 between the Company, TCL, Mr. Harish Kanayalal Thawani, Ms. Shobha Thawani and Paramount (then known as ‘Nimbus Creative Corporation Limited’). These shareholder rights include the right to nominate one director on the Board of our Company until AVL holds 7.5% of the paid up and subscribed equity capital of our Company. This agreement also gives AVL veto rights, as long as it holds at least 7.5% of the issued, subscribed and paid up share capital of our Company, against any alteration in shareholder rights; or merger; or change of control; or consolidation with any other entity (excepting a merger with a listed company); or change in our Company’s auditors. Our Company has entered into a termination agreement dated March 29, 2010 for the termination of aforesaid agreement. Accordingly all rights of AVL under the shareholders agreement, except the right to nominate a director on the Board, now stands cancelled. The rights under the said addendum agreement dated February 28, 2005 shall be re-instated in case the initial public offer does not take place before December 31, 2010.

3. Share subscription and shareholders’ agreement dated August 4, 2005 between 3i Sports Media

(Mauritius) Limited (then known as 3i (Mauritius) Investments 2 Technology Limited) (“3i”), our

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Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount (then known as “Nimbus Creative Corporation Limited”).

On August 4, 2005, 3i entered into a share subscription and shareholders’ agreement with our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount for subscription to 24,389,888 Equity Shares of our Company at a price of Rs. 80.85 per Equity Share. Under this agreement, so long as 3i holds atleast 20% of the issued share capital of our Company, it has the right to nominate two directors to the Board of our Company. This agreement was later superceded by the restated and amended subscription and shareholders agreement between our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani, Paramount, Funderburk, 3i and CSI dated March 6, 2009 whereby save certain clauses all other provisions of the agreement were terminated.

4. The Restated and Amended Subscription and Shareholders’ Agreement between our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani, Paramount, Funderburk Enterprises Limited, 3i Sports Media (Mauritius) Limited and CSI BD (Mauritius) dated March 6, 2009 (“Restated Agreement”) and Supplemental Restated and Amended Subscription and Shareholders (“Supplemental Agreement”) dated May 22, 2009.

The Restated Agreement supersedes the earlier subscription and shareholders agreement between our Company, Harish Kanayalal Thawani, Shobha Harish Thawani, Paramount, Funderburk Enterprises Limited, 3i Sports Media (Mauritius) Limited and CSI BD (Mauritius) dated January 18, 2007 whereunder Funderburk Enterprises Limited, 3i Sports Media (Mauritius) Limited and CSI BD (Mauritius) (collectively referred to as “Investors”) had subscribed to Equity Shares and CCDs for an aggregate value of Rs. 5,520,081,838. Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Limited further subscribed to the CCPS under the Restated Agreement. Thereafter, CSI BD (Mauritius) later invested into CCPS through the Supplemental Agreement. The details of the aforementioned investment by the Investors are given below:

Investor No of Equity Shares* No. of CCPS No. of CCDs

Minimum no. of Equity Shares to be

allotted on ‘as converted basis’**

Funderburk Enterprises Limited 88,540 1,340,318 17,530,979 11,975,016

3i 29,513 817,370 5,843,660 3,991,673 CSI 23,610 338,620 4,674,928 3,193,281

Mr. Harish Kanayalal Thawani - 217,965 - -

Total 141,663 2,714,273 28,049,567 19,159,970 * 283,329 equity shares of Rs. 5 each were allotted. **For information on the actual number of Equity Shares allotted post conversion of CCPS and CCDs, see section titled “Capital Structure” on page 23 of this Draft Red Herring Prospectus.

Some of the important rights and obligations under the Restated Agreement and the Supplemental Agreement are as follows:

1. As long as Funderburk holds more than 20% on an “as converted basis” of the total Equity Shares of our

Company, Funderburk has the right, to nominate two directors on Board and one nominee director in case Funderburk holds less than 20% but atleast 5% on an “as converted basis”.

2. As long as 3i holds more than 20% on an “as converted basis” of the total Equity Shares of our Company, 3i has the right, to nominate two directors on Board and one nominee director in case 3i holds less than 20% but atleast 5% on an “as converted basis”.

3. As long as CSI holds atleast 4.5% on an “as converted basis” of the total Equity Shares of our Company (but less than 20%), CSI has the right, to nominate one director on Board.

4. Americorp shall have the right to appoint one director as long as it holds at least 5% of the paid-up equity share capital of our Company.

5. Any party transferring shares has to give a right of first offer to the other continuing parties. 6. In the event the Promoters transfer more than 2% of the total share capital of our Company per calendar year

and not more than 4.975% of the total share capital of our Company in the aggregate, the investors will have a tag along right.

7. In the event that parties holding more than 20% of the ownership in our Company (on an “as converted” basis) propose to transfer shares all the other parties shall be required to sell their shares in such a

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transaction. 8. Further, the Investors also have veto rights in certain matters. Also the investor nominee directors shall have

veto right in certain matters. 9. The aforesaid Restated Agreement automatically terminates upon the occurrence of an IPO.

The Company has entered into a termination agreement dated March 31, 2010 for the termination of aforesaid Restated Agreement and the Supplemental Agreement. Accordingly all rights of the Investors under the Restated Agreement and the Supplemental Agreement, except the right to nominate director(s) on the Board of our Company, now stands suspended till listing of our Company’s Equity Shares and all the rights under the Restated Agreement and the Supplemental Agreement other than the aforesaid rights terminate once the Equity Shares are listed. According to the termination agreement, the rights under the said Restated Agreement and the Supplemental Agreement shall be re-instated in case the initial public offer does not take place before September 30, 2010. This period for re-instatement of the rights under the said Restated Agreement and the Supplemental Agreement was further extended to March 31, 2011 by entering into an amendment termination agreement dated September 29, 2010. Accordingly the rights under the said Restated Agreement and the Supplemental Agreement would be re-instated in case the initial public offer does not take place before March 31, 2011.

5. Loan Note Subscription Agreement dated January 11, 2010 (“Loan Note Agreement”) entered into

between Nimbus Communications Worldwide Limited, Funderburk and 3i. Nimbus Communications Worldwide Limited has issued Loan Notes for USD 50 Million to Funderburk and 3i, for the purpose of making payment of advance consideration to our Company for the acquisition of international media rights under the current BCCI Agreement. Under the Loan Note Agreement, Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Ltd have a right to appoint majority of the directors of the board of Nimbus Communications Worldwide Limited. The interest payable under the Loan Note Agreement is at the rate of 20% per annum and a default interest of 30% per annum is applicable. As required under the Loan Note Agreement, our Company has provided a corporate guarantee to Funderburk Enterprises Limited and 3i in respect of loan taken by Nimbus Communications Worldwide Limited for USD 75 million. The initial tenure of the aforesaid Loan Notes was July 15, 2010 which was further extended upto December 31, 2010 by Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Ltd vide Amendment Agreement dated September 25, 2010. In furtherance to the same, the corporate guarantee provided by our Company in favour of Nimbus Communications Worldwide Limited was also extended upto December 31, 2010.

6. Ancillary agreement dated January 11, 2010 between our Company, Harish Kanayalal Thawani, Shobha

Thawani, Paramount, Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Limited. Our Company entered into an ancillary agreement on January 11, 2010 with our Promoters, Funderburk and 3i for subscription to loan notes in Nimbus Communications Worldwide Limited. The parties under the ancillary agreement agree that at any time after June 30, 2010, if both of Funderburk Enterprises Limited and 3i jointly propose to transfer all the securities held by them in our Company to a third party, then Funderburk and 3i may require Harish Kanayalal Thawani, Shobha Thawani and Paramount (“Founders”) to transfer upto all the securities of our Company held by the Founders (including without limitation, upto all the Equity Shares and CCPS of our Company held by the Founders) to the purchaser on the same terms and conditions as Funderburk Enterprises Limited and 3i.

The parties also agreed that within 30 days from the date of the ancillary agreement, our Company shall offer the other shareholders of the Company (i.e., other than 3i and Funderburk), the right to participate, pro rata to their shareholding in our Company (on a fully diluted and as converted basis), in the loan provided to Nimbus Communications Worldwide Limited by way of issuance of loan note to 3i and Funderburk under the terms of the Loan Note Subscription Agreement dated January 11, 2010 (the “Loan Note Subscription Agreement”). If any shareholder chooses to so participate within the aforesaid period of 30 days, then the loan provided by such shareholder shall be used to return to 3i and Funderburk, an equal amount of the debt outstanding to them under the terms of the Loan Note Subscription Agreement. To the extent that any shareholder of the Company provides such loan, such shareholder shall be entitled to the right to participate in any secondary offering forming part of the IPO.

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In the event that our Company makes an IPO, then our Company shall use their endeavors to ensure that each of the shareholders (other than the Founders) who participates in the loan provided under the Loan Note Subscription Agreement (“Participating Shareholders”) shall be entitled to sell their shareholding in our Company in such public offer through an offer for sale, provided that such offer for sale shall not be lower than an aggregate amount of Rs. 3,000,000,000 and the Participating Shareholders shall be entitled to a prior right over the Founders and any other shareholders of our Company in offering their shares for sale in such IPO. Inter se such shareholders, their right to participate in the offer for sale shall be proportionate to their shareholding in our Company (on an as converted basis). The ancillary agreement shall supersede the provisions of the Restated and Amended Subscription and Shareholders’ Agreement dated March 6, 2009 between our Company, Harish Kanayalal Thawani, Shobha Harish Thawani, Paramount, Funderburk, 3i and CSI. The Company has entered into a termination agreement dated March 31, 2010 for the termination/suspension of aforesaid ancillary agreement. Accordingly all rights of Funderburk and 3i under the ancillary agreement except clause 6 of the ancillary agreement with respect to the alteration of the terms of the MOU entered between the Company and Nimbus Communications Worldwide Limited now stands suspended till the listing of our Equity Shares and the all the rights shall terminate on listing of our Equity Shares. The rights under the said Ancillary Agreement shall be re-instated in case the initial public offer does not take place before September 30, 2010. This period for re-instatement of the rights under the said Ancillary Agreement was further extended to March 31, 2011 by entering into an amendment termination agreement dated September 29, 2010. Accordingly the rights under the said Restated Agreement and the Supplemental Agreement shall be re-instated in case the initial public offer does not take place before March 31, 2011.

7. Subscription and shareholders’ agreement between Neo Sports Broadcast, Harish Kanayalal Thawani,

Shobha Thawani, Paramount, Funderburk Enterprises Limited (“Funderburk”), Zenith Sports Private Limited and our Company dated April 14, 2009 (“Investment Agreement”).

Pursuant to the Investment Agreement, Funderburk invested an aggregate amount of Rs.633.68million towards subscription to the compulsorily convertible preference shares (“Neo CCPS”) and equity shares of Neo Sports Broadcast. The details of investment by Funderburk as per the Investment Agreement are as follows: *For information on the actual number of Neo CCPS issued and allotted, see section titled “Promoter and Group Companies” on page 128 of this Draft Red Herring Prospectus. The Neo CCPS shall be convertible into equity shares in full but not in part such that Funderburk shall, upon conversion of the Neo CCPS, hold the following equity shares in the paid-up share capital of Neo Broadcast on an “as converted basis” subject however to adjustments as stated in the Investment Agreement.

The Neo CCPS shall be converted into at least such number of equity shares (and in any event not less than (i) the minimum shareholding provided in the table above or (ii) (if applicable) the adjusted minimum shareholding in case of dilution) so that the Funderburk shall achieve the Neo CCPS minimum return. Neo CCPS conversion will occur upon any of the following four events, subject conditions therein:

- In the event of an IPO; - In the event of a sale of Neo Sports Broadcast; - Any time after December 31, 2011 till December 31, 2019; and - On December 31, 2019.

Type of security Number of security*

Amounts (Rs. in million)

Aggregate percentage shareholding on as

converted basis Neo CCPS 342,998 627.34 10.35% Equity Shares 3,465 6.34

Total 633.68

Entity Number of converted chares (not including the Subscription Shares)

Funderburk 342,998.00

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Neo CCPS minimum return shall mean a minimum annual compound internal rate of return of 30% on the investment amount of the investor. For the purposes of calculating the Neo CCPS minimum return, the dividends (net of all at source tax including dividend tax), if any, received by the investor, as the case may be, on its holding of Neo CCPS shall be included.

Some of the important provisions of the agreement are as follows: • The equity shares shall carry voting rights equivalent to the voting rights that would have been available to

Funderburk on its minimum shareholding (i.e. on as converted basis) subject to adjustment of in case of dilution.

• Prior to the conversion of the Neo CCPS, if Neo Sports Broadcast declares any dividend or distributes

profits or issues bonus shares to the holders of equity shares, Neo CCPS shall carry the right to receive dividends or distribution of profits or bonus shares as if Funderburk held the Neo CCPS on an “as converted basis”.

• If Funderburk holds more than 10% on an “as converted basis” of the total equity shares, Funderburk shall

have the right to appoint one director on board. As long as Zenith holds atleast 51% on an “as converted basis” of the total equity shares they shall have the right to appoint four directors on board.

• As long as Funderburk holds at least 10% of the capital of Neo Sports Broadcast on “as converted” basis

neither Neo Sports Broadcast nor the shareholders can approve or otherwise ratify certain actions, deeds, matters or things without the prior written consent of Funderburk.

• Funderburk to give a right of first offer to Zenith in the event that Funderburk proposes to transfer securities

held by it in Neo Sports Broadcast. • Funderburk has the right to tag along in the following cases in the event that Harish Kanayalal Thawani,

Shobha Harish Thawani, Paramount, Zenith and our Company are proposing to transfer more than 5% of the securities held by them in Neo Sports Broadcast, Funderburk shall have the right to require the purchaser to purchase from Funderburk such number of security then held by Funderburk as bears proportion to the ratio of shareholding between Funderburk and the selling parties, for the same consideration per security and upon the same terms and conditions as to be paid to and given to the selling parties. In addition Funderburk shall have the right to approve the transferee (such approval not to be unreasonably withheld).

• Prior to a liquidity event, in the event that parties holding more than 20% of the ownership in Neo Sports

Broadcast (on an “as converted” basis) accept an offer to sell all of their securities to a third party, with such sale being conditional upon the sale of all of the securities in our Company to such third party, all the other parties shall be required to sell their shares in such a transaction on the same terms and conditions, provided the sale price provided to Funderburk is able to obtain at least the minimum return on the Neo CCPS and for this purpose the Neo CCPS shall be converted into equity shares in such manner and in such proportion so that the Neo CCPS minimum return is met. Provided however that the drag right of the parties shall expire on December 31, 2011.

• Investment Agreement to terminate on Funderburk ceasing to hold any securities in Neo Sports Broadcast or

in the event that Neo Sports Broadcast goes for an IPO. 8. Put option agreement between Funderburk Enterprises Limited (“Investor”) and our Company dated

April 14, 2009 (“Agreement”) In consideration of the subscription by the Investor of the CCPS and the equity shares (collectively referred to as the “Investor Securities”) in Neo Sports Broadcast, our Company has granted to the Investor the option to sell all or any of the Investor Securities to our Company in one tranche in accordance with the provisions of this Agreement (“Put Option”). The Investor may at any time after the date of this Agreement, deliver to our Company a Put Option Notice in respect of all or any of the Investor Securities. The Investor shall be entitled to exercise this Put Option only once. The price payable per Investor Security by our Company on exercise of the Put Option (“Put Option Exercise Price”) shall be as follows: for the originally issued Investor Securities, a price which gives the Investor a return of 30% per annum on the subscription price for such securities and for any shares received on conversion the fair market value of such shares. Our Company is obliged to pay to the Investor, the Put Option Exercise Price in Indian Rupees by 6.00 p.m. on the put settlement date.

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Our Company is required to make the registrations, obtain all authorizations and comply with other applicable requirements of law for the purpose of completing the transaction contemplated under this Agreement.

Our Company is obligated to pay liquidated damages for breach of the provisions of this Agreement. Our Company also waives any objection for any suit for specific performance brought forth by the Investor.

All payments to be made by our Company under this Agreement shall be calculated and be made without (and free and clear of any deduction for) set-off or counter claim.

Each party agrees to indemnify the other party to the fullest extent permissible under law from and against any losses, claims, damages, liabilities arising out of the breach of the indemnifying party’s representations, warranties and covenants under this Agreement. The aforesaid Put Option was exercisable in the event of our Company undertaking an IPO. The Investor vide letter date September 22, 2010 has conveyed to our Company its decision not to exercise the Put Option.

9. Further Subscription Agreement between our Company, Harish Kanayalal Thawani, Shobha Harish Thawani, Paramount and Funderburk Enterprises Limited (“Investor”) dated April 14, 2009. The Investor agrees to invest the subscription amount in our Company based on an equity valuation of our Company. The subscription amount shall mean the ‘put option exercise price’ as determined by our Company and the Investor under a separate put option agreement dated April 14, 2009. The Equity Shares allotted to the Investor shall carry the right to receive proportionately the dividends and other distributions declared in respect of the equity share capital of our Company. Put option exercise price shall mean the total required amount (“Total Required Amount”) (calculated as of the Put Settlement Date) divided by the aggregate of equity shares and CCPS subscribed to by the Investor in Neo Sports Broadcast. “Total Required Amount” means the aggregate of the amount invested in Neo Sports Broadcast by the Investor and the amounts that gives the Investor a rate of return of 30% (thirty percent) per annum on the investment amount as on the put settlement date.

The put option agreement dated April 14, 2009 is to terminate on the on the earlier of the following: (i) The receipt of the put option exercise price by the investor upon exercise of the put option; (ii) The occurrence of a liquidity event of Neo Sports; or (iii) The occurrence of a liquidity event of our Company (which includes an IPO).

10. Agreement dated March 27, 2006 between our Company, Paramount and Zenith Sports Private Limited

for conduct of broadcasting business through Nimbus Sports Broadcast Private Limited (now known as ’Neo Sports Broadcast Private Limited’) (“Zenith Agreement”). Our Company, Paramount and Zenith entered into an agreement dated March 27, 2006 for the purposes of engaging in the business of sports television broadcasting in India through Zenith’s subsidiary, Neo Sports Broadcast. Our Company agreed to license its Indian television and Indian internet broadband rights acquired from BCCI for the period March 2006 to March 2010 to Neo Sports Broadcast. It was also agreed that, after one year from the date of the agreement, our Company shall have the right to call the entire 51% shareholding of Paramount in Zenith at a price to be mutually agreed, subject to a minimum assured return to Paramount on the capital invested in Zenith at a rate of 11% per annum. The parties further agreed that our Company shall hold 49% of the equity shareholding in Zenith and that Paramount shall hold 51%.

11. Subscription agreement entered into between our Company, Promoters and Brand Equity Treaties Ltd. (“BETL”) dated March 9, 2010.

Our Company entered into a subscription agreement with BETL by virtue of which BETL subscribed to 268,934 Equity Shares, at a price per share of Rs.446.20 (Rupees four hundred and forty six and paise twenty only) per Equity Share (the “Subscription Price”), aggregating to Rs.119.99 million ..

• Information Rights: BETL has the right to receive the following financial information : (i) audited financials

(ii) unaudited quarterly profit and loss account statements of our Company (iii) all details pertaining to the shareholding structure of the Company as on 31st of March every year, (iv) any clarification pertaining to the aforesaid as may be reasonably requested

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• Sale to a competitor: BETL cannot sell the Equity Shares to a competitor knowingly.

• Right of First Refusal: Right of first refusal by BETL in favour of the Promoters in the event BETL desires

to sell its securities.

• Lock-in: Equity Shares issued are subject to lock in till December 31, 2010 or till required under the SEBI ICDR Regulations.

• Termination Clause: This agreement terminates upon our Company completing an initial public offering.

12. Subscription agreement entered into between Neo Sports Broadcast, Promoters and Bennett Coleman &

Co. Ltd (“BCCL”) dated March 8, 2010.

BCCL subscribed to two equity shares, for an aggregate consideration of Rs. 11,351 and five warrants, for a consideration of Rs. 1.33 million per warrant aggregating to Rs.6.66 million. The warrants are convertible into at least 11,752 shares of Neo Sports Broadcast upon payment of warrant exercise price. • Warrant terms:

o Warrants issued are convertible into equity shares at any time within five years of them being issues upon payment of warrant exercise price.

o Warrant exercise price subject to adjustments in the event certain corporate actions are committed.

o Securities allotted are subject to lock-in for a period of three years with one third of the securities being release every year.

• Sale to a competitor: BCCL cannot sell to a competitor knowingly. • Right of first refusal: Right of first refusal by BCCL in favour of the promoters in the event BCCL desires to

sell its securities • Financial information: BCCL has the right to receive the following financial information : (i) audited

financials (ii) unaudited quarterly profit and loss account statements of the Neo Sports Broadcast (iii) all details pertaining to the shareholding structure of the Neo Sports Broadcast as on 31st of March every year, (iv) Any clarification pertaining to the aforesaid as may be reasonably requested.

• Other rights: The rights granted to the BCCL are as follows:

o Put option right granted to BCCL by the promoters in the event BCCL is not provided with an exit opportunity within five years (defined to mean any opportunity provided by the Neo Sports Broadcast and/or the promoter to BCCL to exit from the Neo Sports Broadcast viz. listing of the shares of the Neo Sports Broadcast on stock exchanges or merger with a listed Neo Sports Broadcast or trade sale at a price per share being not less than the subscription price). The put option price is the subscription price and a return of 18% per annum.

Termination Clause: This agreement terminates upon the Neo Sports Broadcast completing an initial public offer which as per the provisions of the agreement BCCL is required to complete within a period of five years from the date of the agreement.

Except as disclosed in this Draft Red Herring Prospectus, there is no material agreements, apart from those entered into in the ordinary course of business carried on or intended to be carried on by us and there are no material agreements entered into more than two years before the date of this Draft Red Herring Prospectus. Collaborations Our Company has not entered into any collaboration with any third party as per Regulation (VIII) (B) (1) (c) of Part A, Schedule VIII of the SEBI ICDR Regulations.

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Strategic partners Our Company has not entered into any arrangements with any strategic partners within the meaning of the SEBI ICDR Regulations. Financial partners Apart from our various arrangements with our lenders and bankers, which we undertake in the ordinary course of our business, our Company does not have any other financial partners within the meaning of the SEBI ICDR Regulations.

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Management

Our Articles of Association require us to have not less than three and not more than 12 Directors. We presently have eight Directors, of which five are independent Directors and three are non independent Directors.

The following table sets out the current details regarding our Board as on the date of the filing of this Draft Red Herring Prospectus:

Name, father’s/ husband’s name, designation, DIN, occupation and

term Age Address Other directorships

Mr. Harish Kanayalal Thawani S/o Mr. Kanayalal Mohandas Thawani Designation: Executive Chairman and whole-time Director DIN: 01082908 Date of appointment: June 30, 1987 Nationality: Indian Term: Non-retiring Occupation: Service

51 701, Rendezvous, 120-121, Perry Road, Bandra (West), Mumbai 400 050, Maharashtra, India.

Public companies: • Neo Broadcast Limited; • Nirvana Television Limited; and • Paramount. Private companies:

• Carnival Entertainment Private Limited;

• Neo Sports Broadcast; • Nimbus Home Entertainment

Private Limited; • Nimbus Motion Pictures (AP)

Private Limited; and • Zenith Sports Private Limited.

Foreign companies:

• Neo Broadcast America Inc.; • Nimbus Communications Limited,

BVI; • Nimbus Communications

Worldwide Limited; • Nimbus Media Pte. Limited; and • Nimbus Sport International Pte.

Limited. Ms. Shobha Harish Thawani W/o Mr. Harish Kanayalal Thawani Designation: Non-Executive and Non-Independent DIN: 00156100 Date of appointment: June 30, 1987 Nationality: Indian Term: Retirement by rotation Occupation: Business

55 701, Rendezvous, 120, Perry Road, Bandra (West) Mumbai 400 050, Maharashtra, India.

Public companies:

• Neo Broadcast Limited; • Nirvana Television Limited; and • Paramount.

Private companies:

• Carnival Entertainment Private

Limited; • Nimbus Home Entertainment


Private Limited; and • Zenith Sports Private Limited.

Dr. Akash Chandra Khurana S/o Mr. Abnash Khurana Designation: Executive Vice Chairman and whole time Director DIN: 01220599 Date of appointment: June 5, 2003 Nationality: Indian Term: Non-Retiring

57 19, Dunhill, Dr. Ambedkar Road, Khar (West), Mumbai - 400 052, Maharashtra, India.

Public companies: • Neo Broadcast Limited; • Nirvana Television Limited; and • Paramount. Private companies

• Carnival Entertainment Private

Limited; • Neo Sports Broadcast; • Nimbus Home Entertainment


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Occupation: Service

Private Limited; and • Zenith Sports Private Limited. Foreign companies:

• Nimbus Communications

Worldwide Limited.

Mr. Supratim Subimal Basu S/o Mr. Subimal Basu Designation: Non-Executive and Independent Director DIN:01910081 Date of appointment: September 6, 2007 Nationality: Indian Term : Retirement by rotation Occupation: Service

40 302, Laxmi Gopal Building, 3rd Floor, Hatiskar Marg, Prabhadevi, Mumbai, 400 025, Maharashtra, India.

Public companies: • Alfa Transformers Limited. Private companies:

• Frontline Ventures Services

Private Limited; and • Shriram SEPL Composites Private

Limited.

Mr. Kishore Manohar Musale S/o Mr. Manohar Laxman Musale Designation: Non Executive and Independent Director DIN: 00144029 Date of appointment: September 6, 2007 Nationality: Indian Term: Retirement by rotation Occupation: Business

56 601, Kubelisque, Dr. Ambedkar Road, Palihill, Bandra (West), Mumbai – 400 050, Maharashtra, India.

Public Companies:

• Classic Stripes Limited. Private companies: • Astarc Air Ports Private Limited; • Astarc Coal Energy Private

Limited; • Astarc Dairy Private Limited; • Astarc Power Private Limited; • Durabuild Technologies Private

Limited; • Elder Agro Private Limited; • Essence Enterprises Private

Limited; • Exactus Corporation Private

Limited; • Forma Sports Private Limited; • Hyper Agro Private Limited; • Kromo Helmets Private Limited; • Metagraphs Private Limited; • Mist Agro Private Limited; • Musale Enterprises Private

Limited; • Perfect Mining Company Private

Limited; • Protech Sports and Safety Products

Private Limited; • Real Stone House Properties

Private Limited; • Sabre Helmets Private Limited;

and • Selection Agro Private Limited.

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Mr. Peter Robin Paxton S/o Mr. Richard Paxton Designation: Non Executive and Independent Director DIN: 01874298 Date of appointment: September 6, 2007 Nationality: UK Citizen Term: Retirement by rotation Occupation: Service

59 23 Lonsdale Road, Barnes, London, United Kingdom - SW13 9JP.

Foreign companies: • Headlong Theatre Company Ltd; • The Tourettes Syndrome (UK)

Association; and • YOYO Media Ltd.

Mr. Richard Dorfman S/o Mr. Jack Dorfman Designation: Non Executive and Independent Director DIN: 01787931 Date of appointment: September 6, 2007 Nationality: UK Citizen Term: Retirement by rotation Occupation: Service

58 10 Evelyn Gardens, London, United Kingdom - SW73BG.

Foreign companies: • Nimbus Sport International Pte.

Limited.

Mr. Ranjan Kapur S/o Late Mr. Mohanlal Kapur Designation: Non Executive and Independent Director DIN: 00035113 Date of appointment: September 6, 2007 Nationality: Indian Term: Retirement by rotation Occupation: Service

67 B – 281, Twin Towers, Veer Savarkar Marg, Prabhadevi, Mumbai – 400 025, Maharashtra, India.

Public companies: • Abbott India Limited; • Pidilite Industries Limited; • MIRC Electronics Limited; • Hitech Plast Limited; and • MIC Electronics Limited. Private companies: • Annik Technology Services

Private Limited; • Bates India Private Limited; • Eon Premedia Private Limited; • Group M Media India Private

Limited; • Quasar Media Private Limited; • Ray & Keshavan Design

Associates Private Limited; • Sercon India Private Limited; and • Tagit (India) Private Limited.

Foreign companies: • Elucido Media Networks.

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Brief profile of our Directors Mr. Harish Kanayalal Thawani Mr. Harish Kanayalal Thawani, aged 51 years, is executive chairman and whole time Director of our Company and also the promoter of our Company. He has obtained a Bachelor of Arts degree with a major in Economics from KC College, University of Mumbai. Prior to promoting Nimbus Communications Limited, he was trainee executive with the advertising agency Lintas India Limited and a supervisor with the advertising agency Chaitra Advertising Private Limited. Mr. Harish Kanayalal Thawani has over 20 years of experience in the media and entertainment industry. He has also been an industry spokesperson on several national committees such as the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry as member of the Media Entertainment Committee from time to time, and has been invited to speak at global conferences such as the National Association of Television Programmes Executive in the USA and the Asian Info Communications Council. For the Fiscal 2010, the gross remuneration paid by our Company to Mr. Harish Kanayalal Thawani was Rs.6.5 million. Ms. Shobha Harish Thawani Ms. Shobha Harish Thawani, aged 55 years, is non-executive and non-independent Director of our Company. Ms. Shobha Harish Thawani co-promoted Nimbus Communications Limited in the year 1987. Prior to that, she has worked in various positions in the international banking and finance sector as administrator with European Asian Bank (now known as Deutsche Bank) and administrator with Credit Capital Finance Corporation Limited. Ms. Shobha Harish Thawani holds a Diploma in Secretarial Practice. Dr. Akash Chandra Khurana Dr. Akash Chandra Khurana, aged 57 years, is executive vice chairman and whole time Director of our Company. He joined our Company at the time of its incorporation in 1987 as Director and resigned on March 31, 1990. He re-joined on November 1, 1999 as chief executive officer and was appointed as director on June 5, 2003. Dr. Akash Chandra Khurana has over 20 years experience in the media and entertainment industry. He is a Mechanical Engineering Graduate from the Regional Engineering College, Rourkela and a Post Graduate in Business Management from XLRI (Xaviers Labour Relations Institute), Jamshedpur. He has also obtained an M. Phil and a Ph.D. in Social Sciences from the Tata Institute of Social Sciences, Mumbai. Dr. Akash Chandra Khurana began his management career in 1977 as an executive with Tata Engineering and Locomotive Company Limited (now known as Tata Motors Limited). He took up a parallel career in the media and entertainment industry in the late 1980s. Before that he was already involved in the theatre and is also the founder of the theatre magazine ‘Ovation’. Having directed and acted in many successful theatre and TV productions, Dr. Akash Chandra Khurana made his first screen appearance in Shyam Benegal's ‘Kalyug’ and went on to play character roles in over 50 films such as ‘Saaransh’, ‘Naam’, ‘Sarfarosh’, and ‘Company’. He won the Nandi Award of Andhra Pradesh for playing the lead in the Telugu film ‘Dr. Ambedkar’. 'Swayam' directed by Mr. Mahesh Bhatt marked his debut as a screenwriter. He has written over 20 film scripts, including his best-known work 'Baazigar' for which he won the Filmfare Award for Best Screenplay. He has been a visiting faculty member at the Tata Institute of Social Sciences since 1995. For the Fiscal 2010, the gross remuneration paid by our Company to Dr. Akash Chandra Khurana was Rs. 1.6 million. Mr. Supratim Subimal Basu Mr. Supratim Subimal Basu, aged 40 years, is a non-executive and independent Director of our Company. He joined our Board in September 2007. He has over 14 years experience in equity research with leading Indian brokerage firms such as Deutsche Equities India Private Limited, ICICI Securities Limited, Indosuez WI Carr Securities (India) Private Limited and ABN Amro Asia Equities (India) Private Limited. He holds a Masters of Management Studies (Finance) from the Jamnalal Bajaj Institute of Management Studies, Mumbai University and a Bachelor of Sciences (Statistics and Operations Research) degree from R. Ruia College, Mumbai University. He was also Vice President, Technology Research in Deutsche Equities India Private Limited from 2004 to 2006; Vice President, Technology Research in ICICI Securities Limited in Mumbai from 2002 to 2004 and Assistant Director, ABN Amro Asia Equities (India) Private Limited. Mr. Kishore Manohar Musale Mr. Kishore Manohar Musale, aged 56 years, is a non-executive and independent Director of our Company. Mr. Kishore Musale joined our Board in September 2007. Mr. Kishore Musale completed his graduation in Commerce, from University of Manitoba, Canada in 1975. Mr. Kishore Musale has 20 years of experience in the line of audio/video Industry. He has technical expertise in the nature of distribution of electronic equipments in India and Middle East. Mr. Musale was partner in R&S Electronics which is the distributors for DOLBY Laboratories and other sound audio/video equipment in India. Recently, Mr. Musale was awarded as "Emerging Business Man" by

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Maharashtra Times in the year 2007. Mr. Peter Robin Paxton Mr. Peter Robin Paxton, aged 59 years, is a non executive and independent Director of our Company. Mr. Robin Paxton joined our Board in 2007. Mr. Robin Paxton has 30 years of experience in the line of Broadcasting, both free-to-air and pay, TV production, Airtime sales and sponsorship. Mr. Robin Paxton has particular expertise in leadership and management of international television broadcasting businesses and media organisations, including TV production, distribution, marketing, and airtime sales. Mr. Robin Paxton completed his BA (Hons.) in International Politics and German Language from the University of Sussex in 1974, and M.Sc. (Econ.) in Politics & Government from the London School of Economics (LSE) in 1975, and pursued doctoral research in Political History at the University of Oxford from 1975-1977. Mr. Robin Paxton was Managing Director Discovery Networks Europe, London, UK/EMEA division of Discovery Communications Inc., Managing Director Walt Disney Television Intl. of Asia-Pacific, Hong Kong, Managing Director Broadcasting and Production, Walt Disney Television Intl. Asia Pacific, Hong Kong, Managing Director Carlton Television India, New Delhi, Managing Director London Weekend Television Broadcasting Ltd. Other Memberships includes Governor of National Film & Television School (NFTS), Member of The Royal Television Society (RTS), member of Planning Committee for RTS annual conferences and Director of The Movie Network (Australia). During the Fiscal 2008, our Company granted 25,000 stock options under ESOP, 2007 to Mr. Peter Paxton. Mr. Richard Dorfman Mr. Richard Dorfman, aged 58 years is a non executive Director of our Company, and is also a Director of Nimbus Sports International Pte. Ltd. Mr. Richard Dorfman joined our Board in 2007 and is responsible for consultation on various media related issues. Mr. Richard Dorfman is also a Non-Executive Director of Energem, South Africa. Mr. Richard Dorfman has 25 years of experience in the line of the entertainment and media industry. Mr. Richard Dorfman has particular expertise in the acquisition and sale of sports and other entertainment rights and companies. Mr. Richard Dorfman completed his BA degree in Business and Communications from American University, Washington D.C in 1974. Mr. Richard Dorfman was a Director of A1GP and has held positions previously at IMG/TWI, Saatchi & Saatchi and NBA. During the Fiscal 2008, our Company granted 25,000 stock options under ESOP, 2007 to Mr. Richard Dorfman. Mr. Ranjan Kapur Mr. Ranjan Kapur, aged 67 years is a non executive and independent Director of our Company. He joined our Board in September, 2007. Mr. Ranjan Kapur has 40 years of experience in the advertising and communication business. Mr. Ranjan Kapur has particular expertise in below-the-line communications, particularly that related to out-of-home communications, direct marketing, events and promotions. Mr. Ranjan Kapur completed his Masters Degree in English St. Stephens College, Delhi in 1964. Mr. Ranjan Kapur was Executive Chairman of Ogilvy & Mather Private Ltd., creative agency. He was nominated to the Worldwide Board in 1998. He is currently Country Head, India, WPP Group, the parent company of O&M. During the Fiscal 2008, our Company granted 25,000 stock options under ESOP, 2007 to Mr. Ranjan Kapur. Relationship between the Directors None of our Directors are related to one another, except for Ms. Shobha Harish Thawani, who is the wife of Mr. Harish Kanayalal Thawani. Borrowing powers of our Directors Our Articles of Association, subject to the provisions of the Companies Act, authorize the Board to raise or borrow or secure the payment of any sum or sums of money for the purposes of our Company. Our shareholders have, pursuant to a resolution passed at the extraordinary general meeting dated February 11, 2010, authorised the Board to borrow monies together with monies already borrowed by us, in excess of the aggregate of the paid up capital of our Company and its free reserves not exceeding Rs. 15,000 million at any time. Details of remuneration of our Directors Executive Directors The following table sets forth the details of the gross remuneration for our whole time Directors for the period between April 1, 2009 and March 31, 2010:

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Sr. No.

Name Basic salary (Rs.) Perquisite (Rs.) Other benefit (Rs.)

Provident fund contribution

Gross total (Rs.)

March 31, 2010 1 Mr. Harish

Kanayalal* Thawani

5,824,104 - 15,000 698,892 6,537,996

2 Dr. Akash Chandra Khurana

1,084,400 542,196 15,000 - 1,641,596

*The remuneration paid to the Directors for the year ended March 31, 2009 has exceeded the overall remuneration prescribed under section 309 of the Companies Act by Rs. 2.76 million. Similarly, the remuneration paid to a Director during six month ended September 30, 2009 has exceeded the remuneration prescribed under Part II of Schedule XIII of the Companies Act by Rs. 1.71 million. In this regard, our Company made an application with the Central Government by filing e-form 25A with the Ministry of Corporate Affairs for waiver of excess remuneration paid to the whole time Director, Mr. Harish Kanayalal Thawani on April 13, 2010. Terms and conditions of the remuneration paid to the whole time Directors: Pursuant to Board resolution dated June 16, 2008 and shareholders resolution dated September 29, 2008, Mr. Harish Kanayalal Thawani as a whole time Director and also designated as the Executive Chairman of our Company for a period of five years with effect from June 1, 2008 on the following terms:

Basic Salary Rs. 5,824,107 p.a. Medical Reimbursement Rs. 15,000 p.a. Leave Travel Allowance Rs. 24,000 p.a. Other allowances Rs. 1,136,893 p.a. Total Rs. 7,000,000

Pursuant to Board resolution dated June 16, 2008 and shareholders resolution dated September 29, 2008, Dr. Akash Chandra Khurana was appointed as a whole time Director and also designated as the Vice-Chairman of our Company for a period of five years with effect from July 3, 2008 on the following terms:

Basic Salary Rs. 1,084,400 p.a. House Rent Allowance (“HRA”) Rs. 542,200 p.a. Medical reimbursement Rs. 15,000 p.a. Leave Travel Allowance Rs. 24,000 p.a. Provident fund contribution Rs. 99,550 p.a. Other allowances Rs. 630,850 p.a. Total Rs. 2,400,000

Non-executive Directors Non-executive Directors are not entitled to any compensation. Bonus or profit sharing plan for our Directors Except for the employee stock options granted pursuant to ESOP 2007 of our Company, there is no bonus or profit sharing plan for our Directors. For further details on employee stock options granted pursuant to ESOP 2007, please refer section titled “Capital Structure” on page 23 of this Draft Red Herring Prospectus. Corporate governance At present, we have five independent Directors on our Board. We are currently in compliance with the requirements of corporate governance set forth in terms of clause 49 of the equity listing agreement, particularly those relating to the composition of the Board of Directors, constitution of committees including the Audit Committee and Shareholder/Investor Grievance Committee. The Board functions either as a full Board or through various committees constituted to oversee specific operational areas. Our Company undertakes to take all necessary steps to continue to comply with all the requirements of clause 49 of the listing agreement to be entered into with the Stock Exchanges. Currently, our Board has eight Directors, of which the Chairman of the Board is an executive Director and more than half of the Board consists of independent Directors in compliance with the requirements of clause 49 of the listing agreement.

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Our Company has constituted inter alia the following committees: a. Audit Committee; b. Shareholders’ Grievance Committee; c. Remuneration Committee; and d. Capital Committee. Audit Committee The Audit Committee was re-constituted by our Directors at their Board meeting held on December 22, 2009. The constitution of the Audit Committee is as follows:

S. No. Name of the Director Executive/Non-Executive/Independent 1. Mr. Supratim Basu (Chairman) Non-Executive and Independent 2. Mr. Kishore Musale (Member) Non-Executive and Independent 3. Dr. Akash Chandra Khurana (Member) Whole-time Director

The terms of reference of the Audit Committee are as follows: • Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure

that the financial statements are correct, sufficient and credible. • Recommending to the Board the appointment, re-appointment and, if required, the replacement or removal of the

statutory auditor and the audit fees. • Approving payment to statutory auditors for any other services rendered by the statutory auditors. • Reviewing, with the management, the annual financial statements before submission to the Board for approval,

with particular reference to: 1. matters required to be included in the Director’s Responsibility Statement to be included in the Board’s

report under the Companies Act; 2. changes, if any, in accounting policies and practices and the reasons for such change; 3. major accounting entries involving estimates based on the exercise of judgment by management; 4. significant adjustments made in the financial statements arising out of audit findings; 5. compliance with listing and other legal requirements relating to financial statements; 6. disclosure of any related party transactions; and 7. qualifications in the draft audit report.

• Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. • Reviewing, with the management, the performance of the statutory and internal auditors, and adequacy of

internal controls. • Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department,

staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

• Discussing with the internal auditors any significant findings and follow up thereto. • Reviewing the findings of any internal investigation by the internal auditors into matters where there is suspected

fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

• Discussing with the statutory auditors, before the audit commences, the nature and scope of audit as well as post-audit discussion to ascertain any areas of concern.

• Looking into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

• Reviewing the functioning of a whistle blower mechanism, if any. • Carrying out any other function as specified in the terms of reference of the Audit Committee. • Mandatory review of the management discussion and analysis of financial condition and results of operation,

statement of significant related party transactions, management letters of internal control weaknesses, internal audit reports and the appointment, removal and terms or remuneration of the chief internal auditor.

Shareholders and Investors Grievance Committee The Shareholders and Investors Grievance Committee was constituted by our Directors at their Board meeting held on September 6, 2007. The Shareholders and Investors Grievance Committee is responsible for the redressal of investor grievances. The constitution of the Shareholders and Investors Grievance Committee is as follows:

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S. No. Name of the Director Executive/Non-Executive/Independent 1. Mr. Supratim Basu (Chairman) Non-Executive and Independent 2. Mr. Harish Kanayalal Thawani (Member) Non-Independent and Executive 3. Dr. Akash Chandra Khurana (Member) Non-Independent and Executive

The terms of reference of the Shareholders and Investors Grievance Committee are as follows: • Supervising investor relations and redressal of investors’ grievance in general including non-receipt of dividends

and interest. • Such other matters as may from time to time be required under any statutory, contractual or other regulatory

requirement. Remuneration Committee The Remuneration Committee was constituted by our Directors at their Board meeting held on September 6, 2007. The constitution of the Remuneration Committee is as follows:

S. No. Name of the Director Executive/Non-Executive/Independent

1. Mr. Ranjan Kapur (Chairman) Non-Executive and Independent 2. Mr. Kishore Musale (Member) Non-Executive and Independent 3. Mr. Supratim Basu (Member) Non-Executive and Independent

Responsibilities of Remuneration Committee shall be to determine on behalf of the Board of directors and on behalf of the shareholders with agreed terms of reference, the Company’s policy on specific remuneration packages for executive directors and other employees including pension rights and any compensation payment including all proposals concerning the granting of Equity Shares options shall be referred to and approved by the Remuneration Committee from time to time. Capital Committee The Board has re-constituted a Capital Committee (“Capital Committee”) by a Board resolution dated February 9, 2010. The composition of the Capital Committee is as follows:

S. No. Name of the Director Executive/Non-Executive/Independent

1. Mr. Supratim Basu (Chairman) Independent 2. Mr. Harish Kanayalal Thawani (Member) Non-Independent and Executive 3. Dr. Akash Chandra Khurana (Member) Non-Independent and Executive

The Capital Committee shall inter alia be responsible for handling the following matters:

(a) to decide on the timing, pricing and all the terms and conditions of the issue of the shares for the Public Issue / IPO, including the price, and to accept any amendments, modifications, variations or alterations thereto.

(b) to appoint and enter into arrangements with the book running lead managers, underwriters, syndicate members, brokers, escrow collection banks, registrars, legal advisors or any other agencies or persons or intermediaries to the IPO and to negotiate, settle and finalise the terms of their appointment, including but not limited to execution of relevant papers, engagement letters, mandate letter, memorandum of understanding, tripartite agreements, stabilization agreement and all other documents, deeds and instruments as may be required or desirable in relation to initial public issue / IPO.

(c) to finalise and settle and to execute and deliver or arrange the delivery of the draft red herring prospectus, the red herring prospectus, the final prospectus as may be required or desirable in relation to the Public Issue / IPO;

(d) to make applications to the Foreign Investment Promotion Board, RBI and such other authorities as may be required for the purpose of allotment of shares to non-resident investors and other matters.

(e) to approve and validate the offer for sale from the selling shareholder and to take on record their consent as required by SEBI ICDR Regulations.

(f) to open with the bankers to the IPO/Public Issue such accounts as are required by the regulations issued by SEBI;

(g) to authorize and approve the incurring of expenditure and payment of fees in connection with the IPO/Public Issue;

(h) to do all such acts, deeds and things as may be required to dematerialise the equity shares of the Company and to sign agreements and/or such other documents as may be required with the National

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Securities Depository Limited, the Central Depository Services (India) limited and such other agencies, authorities or bodies as may be required in this connection;

(i) to make applications for listing of the shares in one or more stock exchange(s) for listing of the equity shares of the Company and to execute and to deliver or arrange the delivery of listing agreements and all other documents, deeds and instruments as may be required or desirable in relation to public issue; and

(j) to settle all questions, difficulties or doubts that may arise in regard to such issues or allotment as it may, in its absolute discretion deem fit.

(k) to raise funds as per Company’s requirements; (l) to approach various banks, FIs, private investors for funding; (m) to receive & evaluate proposals for funding; (n) to negotiate the terms & conditions related to such proposals; (o) to authorize Company’s representatives to sign the facility documents, and (p) to do all such things, acts and deeds in relation to funding and capital restructuring. (q) to enter and execute agreements with Intermediaries and CDSL and NSDL.

Changes in our Board of Directors in last three years The changes in the Board of Directors in the last three years are as follows:

Shareholding of Directors in our Company Our Articles of Association do not require our Directors to hold any Equity Shares. The following are the details of the shareholding of our Directors in our Company as on the date of filing of this Draft Red Herring Prospectus: Name of Directors Number of Equity Shares

Mr. Harish Kanayalal Thawani 4,766,731 Ms. Shobha Harish Thawani 10,57,952 Dr. Akash Chandra Khurana 72,800 Except as disclosed above and as disclosed in relation to the options granted under the ESOP-2007 in the section “Capital Structure” on page 23 of this Draft Red Herring Prospectus, as of the date of this Draft Red Herring Prospectus, none of the Directors of the Company hold any Equity Shares in the Company. Shareholders’ arrangements with our Company for appointment of Directors Except as disclosed in section titled “History and Certain Corporate Matters” on page 100 of this Draft Red Herring Prospectus, there are no shareholders’ arrangements with our Company for appointment of Directors. Interest of our Directors All of our Directors may be deemed to be interested to the extent of fees payable to them, if any, for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration and reimbursement of expenses payable to them, if any under our Articles of Association. Mr. Harish Kanayalal Thawani and Dr. Akash Chandra Khurana, as executive directors, may be deemed to be interested to the extent of remuneration paid to them for services rendered as an officer or employee of our Company. Other than as disclosed in this Draft Red Herring Prospectus, none of the Directors are entitled to receive remuneration from our Company. Except as disclosed herein, there are no service contracts entered into between the Directors and our Company providing the Directors benefits upon termination of their employment with our Company. Our Company is promoted by Mr. Harish Kanayalal Thawani and Ms. Shobha Harish Thawani who are also Directors of our Company. Therefore, they are also interested in the promotion of our Company. Our Directors may also be regarded as interested in the Equity Shares, if any, held by them or by the companies/ firms/ventures promoted by them or that may be subscribed by or allotted to the companies, firms, trusts, in which they are interested as Directors, members, partners, trustees and Promoters, pursuant to this Issue. Except as stated in the section “Related Party Transactions” and to the extent of the options granted to them under the ESOP-2007, the Directors do not have any other interest in our business. All of our Directors may also be deemed to be interested to

Name Date of appointment Date of termination Reason Mr. Anil Ahuja August 5, 2005 February 9, 2010 Resignation Mr. Sethuraman September 6, 2007 September 23, 2010 Resignation Mr. Gerard Amal Wahab March 25, 2010 September 23, 2010 Resignation

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the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. Interest in the property of our Company Our Directors have no interest in any property acquired by our Company within two years of the date of this Draft Red Herring Prospectus. Management Organisational Structure

Key Managerial Personnel Brief profile of the key managerial personnel is as follows: Mr. Bimal Desai Mr. Bimal Desai, aged 47 years is the senior vice president - finance and accounts of our Company. Prior to joining our Company, he worked with INOX Leisure Ltd as Senior General Manger – Finance. He has also worked with Indoco Remedies Limited and Crompton Greaves Limited. He is a chartered accountant and an associate member with the Institute of Chartered Accountants of India and has more than 20 years of experience. He joined our Company on January 15, 2010. The gross remuneration paid by our Company to Mr. Bimal Desai in the year ended March 31, 2010 was Rs. 0.54 million. Mr. Yannick Colaco Mr. Yannick Colaco, aged 31 years, is the chief operating officer – sports of our Company. He joined our Company in the year 2002 and is focused on acquisition, management and marketing of commercial rights of sports. Mr. Colaco has nine years of experience in the sports industry with special expertise in sports management and marketing. He completed his Bachelor of Arts degree from SP Chowgule College in 1999 & did his Post Graduation in Business Administration from the Department of Management Studies, Goa University in 2001. He joined our Company on September 7, 2007. Prior to joining us, he was with IMG. For the Fiscal 2010, the gross remuneration paid by our Company to Mr. Yannick Colaco was Rs.3.76 million. Mr. Subbarathnam K R (Kumar) Mr. Kumar, aged 42 years is the vice president – marketing (south) of our Company. He has more than two decades of experience in the entertainment & media industry. He joined our Company in the year 2005. Prior to joining our Company, he worked with Saregama India Ltd - Television software division (October 2002), HMV- RPG Group, Sahara TV, Times of India, Home TV, Gujarat Ambuja Cements, Lupin laboratories. Mr. Kumar is Bachelor of Science and has done his Masters in Marketing Management from Narsee Monjee Institute of Management Studies, Mumbai. He joined our Company on October 17, 2005. For the Fiscal 2010, the gross remuneration paid by our Company to Mr. Kumar was Rs. 2.24 million.

Board of Directors

Chief Operating Officer - Sports

Senior Vice President - Finance & Accounts

Vice President - Marketing

(South)

Vice President-New Media

Executive Chairman

Vice Chairman

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Mr. Jose Felix Mr. Jose Felix, aged 37 years is the vice president- new media of our Company. Mr. Felix has over 12 years of International leadership experience in internet based business models. Prior to joining our Company, he worked with companies like ConnectFilm Media, Consim Info and Info Edge. Mr. Felix has done his Masters in Business Administration in Marketing & Finance from Bharathiar University, Coimbatore (1997). He is also a Gold Medalist in Bachelor of Science - Philosophy from Calicut University in the (1995). Mr. Felix joined our Company on October 26, 2009. The gross remuneration paid by our Company to Mr. Jose Felix in the year ended March 31, 2010 was Rs.0.88 million. At present, other key functions of our Company including film entertainment, home video and new media are also monitored and supervised by Mr. Harish Kanayalal Thawani. All the key managerial personnel mentioned above are permanent employees of our Company. Interest of our key managerial personnel The key managerial personnel of our Company do not have any interest in our Company other than to the extent of the remuneration or benefits to which they are entitled as per the terms of their appointment, the reimbursement of expenses incurred by them during the ordinary course of business and to the extent of options granted under the ESOP-2007. Shareholding of the key managerial personnel Except for options to purchase Equity Shares pursuant to the ESOP-2007, as of the date of this Draft Red Herring Prospectus, none of the key managerial personnel of our Company hold any Equity Shares in our Company. For details regarding the ESOP-2007, see the section “Capital Structure” on page 23 of this Draft Red Herring Prospectus. Relationship between the key managerial personnel None of our key managerial personnel are related to one another. Bonus or profit sharing plan for the key managerial personnel Our Company has instituted policy such as Sales Performance Incentive Policy (“SPIP”) in June 2009 to reward executives directly involved in the sales and/or business development function based on their sales performance during the period April 1, 2009 to March 31, 2011. Changes in the key managerial personnel during the last three years The following are the changes in the key managerial personnel of our Company during the last three years preceding the date of filing this Draft Red Herring Prospectus.

Name Date of appointment Date of termination Reason Mr. James Rego November 7, 1996 February 15, 2009 Resignation Mr. Raju Jayaram Udupa July 15, 2000 March 31, 2009 Moved to NEO Sports

Broadcast Private Limited Mr. Sanjay Sharma September 10, 2006 June 30, 2008 Resignation Mr. Sonal Chandra Gupta March 21, 2007 June 30, 2008 Resignation Mr. Sumit Luthra September 17, 2007 November 30, 2009 Resignation Mr. Digvijay Singh April 1, 2008 June 30, 2009 Moved to Nimbus Sports

International Pte Ltd. Mr. Sanjeet Mehta August 25, 2008 August 20, 2010 Resignation Mr. Saurav Banerjee July 27, 2009 November 30, 2009 Resignation Mr. Jose Felix October 26, 2009 - Appointment Mr. Bimal Desai January 15, 2010 - Appointment

Payment or Benefit to Officers of our Company

Except as disclosed in this Draft Red Herring Prospectus and any statutory payments made by our Company, in the

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last two years our Company has not paid any sum to its employees in connection with superannuation payments and ex-gratia/rewards and has not paid any non-salary amount or benefit to any of its officers. None of the beneficiaries of loans and advances and sundry debtors are related to the Directors / officers of our Company. Change in Auditors Our Company changed its auditors to Deloitte Haskins and Sells, Mumbai in the AGM held on September 30, 2005, upon resignation of its previous auditors, M/s. Anil Masand & Company due to unwillingness to be reappointed as statutory auditors. Further, Deloitte Haskins and Sells, Ahmedabad, Chartered Accountants was appointed as the auditors, in the AGM held on September 29, 2008 upon resignation of its previous auditors Deloitte Haskins and Sells, Mumbai. Post then, Deloitte Haskins and Sells Ahmedabad, Chartered Accountants have continued to be the statutory auditors of our Company. Loans taken by Directors / key managerial personnel There are no loans taken by Directors / key managerial personnel.

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Promoters and Group Companies Our Promoters are as follows:

1. Mr. Harish Kanayalal Thawani; 2. Ms. Shobha Harish Thawani; and 3. Paramount Corporation Limited.

The details of our Promoters are as follows: 1. Mr. Harish Kanayalal Thawani

Identification

PAN AABPT 2434J Passport No. Z2024886 Voter Identity No. ROL0778067 Driving License No. MH0220070053744

Mr. Harish Kanayalal Thawani, aged 51 years, is executive chairman and whole time Director of our Company. He holds a Bachelor of Arts degree with a major in Economics from KC College, University of Mumbai. He has over 20 years of experience in media and entertainment industry. He provides strategic guidance and is in-charge of Nimbus group. For further details including his directorships, see the section titled “Management” on page 116 of this Draft Red Herring Prospectus. We confirm that the permanent account number, bank account number, passport number will be submitted to the BSE and the NSE, at the time of filing the Draft Red Herring Prospectus.

2. Ms. Shobha Harish Thawani

Identification

Identification

PAN AAFPT7625P Passport No. E2426923 Voter Identity No. ROL0778057 Driving License No. MH02/789/1141

Ms. Shobha Harish Thawani, aged 55 years, is non-executive Director of our Company. She holds a Diploma in secretarial practice. Ms. Shobha Harish Thawani co-promoted our Company in the year 1987. For further details including her directorships, see the section titled “Management” on page 116 of this Draft Red Herring Prospectus. We confirm that the permanent account number, bank account number, passport number will be submitted to the BSE and the NSE, at the time of filing the Draft Red Herring Prospectus.

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3. Paramount Corporation Limited

Paramount Corporation Limited (“Paramount”) was first established as an unregistered partnership constituted as on October 12, 1992 pursuant to a partnership deed which was last modified on July 1, 1997 with the name ‘Nimbus Creative Corporation’. It was converted to a public company incorporated under the Companies Act on January 29, 1999 with the name ‘Nimbus Creative Corporation Limited’. With effect from August 22, 2005, the name of the company was changed to ‘Paramount Corporation Limited’. A fresh certificate of incorporation pursuant to change of name was granted on August 22, 2005 by RoC, Maharashtra. Paramount is under the jurisdiction of the RoC, Maharashtra, having its office at Everest, 100 Marine Drive, Mumbai 400 002, Maharashtra, India. The main object clause of Paramount enables it to engage in the business of production and distribution of television serials, films and audio products. Identification

Registered office address Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, India. PAN AAECP1187A

Board of directors The board of directors of Paramount comprises:

1. Mr. Harish Kanayalal Thawani; 2. Ms. Shobha Harish Thawani; and 3. Dr. Akash Chandra Khurana.

Shareholding pattern

The shareholding pattern of Paramount is as follows:

Name of the shareholder Number of equity shares % of issued capital Mr. Harish Kanayalal Thawani 7,996,000 66.63 Ms. Shobha Harish Thawani 3,998,000 33.32 Mr. Kanayalal Thawani 1,200 0.01 Ms. Kamla Thawani 1,200 0.01 Mr. Dilip Thawani 1,200 0.01 Ms. Kiran Thawani 1,200 0.01 Mr. Mavis Monterio 1,200 0.01 Total 12,000,000 100.00

Details of the promoters of Paramount The promoters of Paramount are Mr. Harish Kanayalal Thawani and Ms. Shobha Harish Thawani. For their details, see sections titled “Management” on page 116 of this Draft Red Herring Prospectus. Financial performance The summary of audited financials of Paramount for the Fiscal 2010, 2009 and 2008 are set below:

(Rs. in million, unless otherwise stated)

(1) Net of miscellaneous expenditure not written off. (2) Face value of each equity share is Rs.10.

Particulars For the period ended March 31, 2010 2009 2008

Income/Sales 3.12 2.23 2.11

Profit (Loss) after Tax 1.93 1.42 (13.51)

Equity share capital 120.00 120.00 120.00

Reserves and surplus (excluding revaluation reserves)(1) 60.48 58.55 57.13

Earnings per share(2) 0.16 0.12 (1.13)

Net asset value or book value per share 15.04 14.88 14.76

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Change in the management of Paramount

There has been no change in the management of Paramount since incorporation as a public company.

We confirm that the permanent account number, bank account number company’s registration number and the address of RoC where the company is registered will be submitted to the BSE and the NSE, at the time of filing the Draft Red Herring Prospectus with them.

Interest of the Promoters Interest as member of the Company The Promoters of our Company are interested to the extent of their shareholding in our Company and the dividend declared, if any, by our Company Interest in the property of our Company Except as disclosed in the section titled “History and Certain Corporate Matters” on page 100 and “Business” on page 78, our Promoters do not have any interest in any property acquired by, or proposed to be acquired by, our Company in last two years. .Interest in transactions for acquisition of land, construction of building and supply of machinery None of our Promoters have any interest in any transactions for acquisition of land, construction of building and supply of machinery by our Company since last two years. Interest other than as Promoter Our Promoters who are also the Directors of our Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, reimbursement of expenses payable to them. Further, our individual Promoters are also directors on the boards of or members of certain Group Companies and they may be deemed to be interested to the extent of the payments made by our Company, if any, to these Group Companies. For further details, please see the section titled “Promoters and Group Companies – Group Companies” on page 131 of this Draft Red Herring Prospectus. For the payments that are made by our Company to certain Group Companies, please see the section titled “Related Party Transactions” on page 140 of this Draft Red Herring Prospectus. Related party transactions For details on related party transactions, see the section “Related Party Transactions” on page 140 of this Draft Red Herring Prospectus Common pursuits

Except as disclosed in the DRHP, there are no other common pursuits among the Promoters. Payment of benefits to our Promoters during the last two years There is no payment of benefits to our Promoters during the last two years. Promoter Group In addition to the Promoters named above, the following natural persons and companies are part of our Promoter Group. a. Relatives of Promoters

The natural persons who are part of our Promoter group (due to their relationship with our Promoters), other than the Promoters named above are as follows: 1. Mr. Kanayalal Thawani, father of Harish Thawani;

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2. Ms. Kamla Thawani, mother of Harish Thawani; 3. Mr. Dilip Thawani, brother of Harish Thawani; 4. Mr. Anil Thawani, brother of Harish Thawani; 5. Ms. Mavis Monteiro, mother of Shobha Thawani; and 6. Mr. Ignatius Monteiro, brother of Shobha Thawani.

b. Companies and partnership firms forming part of the Promoter Group

The following entities form part of the Promoter Group: Companies other than Subsidiaries forming part of the Promoter Group 1. Joint Ventures of our Company.

a. Neo Sports Broadcast Private Limited; and

b. Zenith Sports Private Limited

2. Carnival Entertainment Private Limited.

Partnership firms forming part of the Promoter Group

1. Aquarius Transnational (partnership)

Except as stated in the section titled “Capital Structure” on page 23 of this Draft Red Herring Prospectus, none of the members of the our Promoter Group held any Equity Shares as on the date of filing of this Draft Red Herring Prospectus. List of companies forming part of the Promoter Group for Mr. Anil Thawani Mr. Anil Thawani, the brother of Harish Thawani, holds substantial equity interest in Orion Holdings Limited. The Promoters of our Company do not have any ownership interest in such venture promoted by Mr. Anil Thawani. List of companies forming part of the Promoter Group for Mr. Dilip Thawani Mr. Dilip Thawani, the brother of Harish Thawani, apart from holding 1,200 equity shares in Paramount and 1,000 Equity Shares of our Company, does not hold any interest, equity or otherwise, in the business, properties, companies or firms of Mr. Harish Kanayalal Thawani or Ms. Shobha Harish Thawani or Paramount. In addition Promoters of our Company and the ventures promoted by them do not have any ownership interest in ventures of Mr. Dilip Thawani. Promoter Group of Paramount Except Zenith Sports Private Limited, there are no other companies forming a part of the Promoter Group of Paramount.

c. Our Group Companies

Our Group Companies are as follows: Companies forming part of the Group Companies 1. Joint Ventures of our Company.

a. Neo Sports Broadcast Private Limited including its subsidiaries namely Neo Broadcast Limited and Neo Broadcast America Inc.; and

b. Zenith Sports Private Limited

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2. Carnival Entertainment Private Limited. Partnership firms forming part of the Group Companies

1. Aquarius Transnational.

Joint ventures 1. Neo Sports Broadcast Private Limited

Neo Sports Broadcast was incorporated on March 17, 2006 as ‘Nimbus Sports Broadcast Private Limited’. With effect from October 30, 2006, the name of the company was changed to ‘Neo Sports Broadcast Private Limited’. Neo Sports Broadcast is treated as a joint venture company under the terms of the Zenith Agreement for the purposes of consolidating the financial statements as per AS-27 issued by ICAI. Its main object inter alia include carrying on, the business of sports coverage / production, distribution, event management, sponsorship, sports broadcasting in any form of media whether available presently or invented hereinafter in all the parts of the world. Registered office Its registered office is located at Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai 400 053.

Board of directors The board of directors of Neo Sports Broadcast comprises: 1. Mr. Harish Kanayalal Thawani; and 2. Dr. Akash Chandra Khurana. Capital Structure The capital structure of Neo Sports Broadcast is as follows:


(In Rs. million) A. Authorised capital 5,000,000 equity shares of Rs.10 each 50.00 44,700,000 non convertible, redeemable, non cumulative preference shares of Rs.10 each

447.00

500,000 compulsorily convertible, non cumulative preference shares of Rs.10 each 5.00

Total 502.00 B. Issued, subscribed and paid-up capital 3,003,478 equity shares of Rs.10 each 30.03

44,700,000 preference shares of Rs.10 each 447.00

344,098 compulsorily convertible, non cumulative preference shares of Rs.10 each 3.44

Total 480.47

Shareholding pattern The shareholding pattern of Neo Sports Broadcast was as follows:

A. Equity shares

Sr. No.

Name of shareholder No. of equity shares

% of issued equity share

capital 1 Zenith Sports Private Limited 2,999,900 99.88 2 Mr. Harish Kanayalal Thawani, as nominee of Zenith Sports Private

Limited 100 -

3 Nimbus Communication Limited 1 -

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4 Funderburk Enterprises Limited 3,475 0.11 5 Bennett Coleman & Co. Ltd. 2 -

Total 3,003,478 100.00

B. Preference shares

Sr. No.

Name of shareholder No. of preference shares

% of issued preference

share capital 1 Nimbus Communications Limited 44,700,000 100.00

Total 44,700,000 100.00

C. Compulsorily convertible, non cumulative preference shares

Sr. No.

Name of compulsorily convertible, non cumulative preference shareholder

No. of compulsorily

convertible, non cumulative

preference shares

% of issued preference

share capital

1 Funderburk Enterprises Limited 344,098 100.00 Total 344,098 100.00

D. Warrants

Sr. No.

Name of warrant holder No. of warrants

1 Bennett Coleman & Co. Ltd. 5

Total 5 Financial performance The restated and audited financial results of Neo Sports Broadcast for the Fiscal 2010, 2009 and 2008 is summarised below:



For detailed disclosure relating to the financial performance of Neo Sports Broadcast, see section titled “Financial Statements” on page 142 of this Draft Red Herring Prospectus. Neo Sports Broadcast is an unlisted company and it has not made any public or rights issue in the preceding three years. Neo Sports Broadcast has negative net worth, however, since it is not an industrial company as defined under SICA, it is not a sick company within the meaning that enactment. It is not subject to a winding-up order or petition. Neo Broadcast Limited (subsidiary of Neo Sports Broadcast) Neo Broadcast Limited was incorporated on September 17, 2003 as ‘Nirvana TVC Company Limited’. With effect from October 22, 2003, the name of the company was changed to ‘Nirvana Adzone Limited’ and later changed to ‘Neo Broadcast Limited’ on August 5, 2010. Neo Broadcast was previously a subsidiary of our Company. On June 11, 2010, 4,750,000 equity shares were issued to Neo Sports Broadcast by virtue of which,

Particulars For the period ended March 31,

2010 2009 2008 Income/Sales 4,089.27 3,528.22 2,820.35 Profit (Loss) after Tax (3,426.91) (2,876.69) (2,474.62) Equity share capital 36.70 30.00 30.00 Reserves and surplus (excluding revaluation reserves)(1) (7,757.42) (4,761.96) (1,684.52) Earnings per share(2) (1141.06) (958.90) (824.87) Net asset value or book value per share (2570.75) (1577.32) (551.51)

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Neo Broadcast became a subsidiary of Neo Sports Broadcast. Its main object is to undertake the business of advertising films, television commercials, corporate films, audio, video, internet and multimedia and production, purchase and distribution of advertising films, video films, documentaries and magazines and animation products on audio, video, internet and multimedia. Registered office Nimbus Centre, Oberoi Complex, New Link Road, Andheri (West), Mumbai. Board of directors The board of directors of Neo Broadcast Limited comprises: 1. Mr. Harish Kanayalal Thawani; 2. Dr. Akash Chandra Khurana; and 3. Ms. Shobha Harish Thawani. Capital structure The capital structure of Neo Broadcast Limited is as follows:


(In Rs. million) A. Authorised capital 5,000,000 equity shares of Rs.10 each 50.00 B. Issued, subscribed and paid-up capital 4,850,000 equity shares of Rs.10 each 48.50

Shareholding pattern The shareholding pattern of Neo Broadcast Limited is as follows:

Name of the shareholder Number of equity shares % of issued

capital Neo Sports Broadcast 4,750,000 97.94 Nimbus Communications Limited 50,500 1.04 Mr. Harish Kanayalal Thawani* 49,000 1.02 Ms. Shobha Thawani* 100 - Dr. Akash Chandra Khurana* 100 - Mr. Sunil Manocha* 100 - Ms. Sunita Alphonso* 100 - Mr. James Rego* 100 - Total 4,850,000 100.00

* Nominee of Nimbus Communications Limited

Financial performance The summary of audited financials of Neo Broadcast Limited for the Fiscals 2010, 2009 and 2008 are set below:

(In Rs. million, except share data) Particulars For the period ended March 31

2010 2009 2008 Income/Sales 0.00 0.03 -

Profit (Loss) after Tax (0.16) (0.06) (0.27) Equity share capital 1.00 1.00 1.00 Reserves and surplus (excluding revaluation reserves) (1) 0.26 0.42 0.48 Earnings per share (2) (1.55) (0.64) (2.74) Net asset value or book value per share 12.64 14.20 14.84


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Neo Broadcast Limited is an unlisted company. It has not made any public or rights issue in the preceding three years. Since Neo Broadcast Limited is not an industrial company as defined in SICA, this enactment does not apply to it. It is not subject to a winding-up order or petition. It does not have a negative net worth.

Neo Broadcast America Inc. (subsidiary of Neo Broadcast) Neo Broadcast America Inc. was incorporated on June 24, 2010 under the laws of the State of Delaware. Its object is to engage in any lawful act or activity for which corporations are organised under the General Corporation Law of Delaware. Neo Broadcast America Inc. is a subsidiary of Neo Broadcast Limited. Registered office 1811 Silverside Road, City of Wilmington, New Castle, 19810-4345. Board of directors The board of directors of Neo Broadcast America Inc. comprises: 1. Mr. Harish Kanayalal Thawani; and 2. Mr. Prasana Krishnan. Capital structure The capital structure of Neo Broadcast America Inc. is as follows:


(In USD) A. Authorised capital 10,000,000 shares of USD 0.00001 each 100

Shareholding pattern No shares are issued and subscribed. Neo Broadcast America Inc. is an unlisted company. It has not made any public or rights issue since incorporation. Since Neo Broadcast America Inc. is not an industrial company as defined in SICA, this enactment does not apply to it. It is not subject to a winding-up order or petition. It does not have a negative net worth.

2. Zenith Sports Private Limited

Zenith Sports Private Limited was incorporated on September 28, 2004 as ‘Juniper Holdings Private Limited’. With effect from September 29, 2005, the name of the company was changed to ‘Zenith Sports Private Limited’. Zenith is treated as a joint venture company under the terms of the Zenith Agreement for the purposes of consolidating the financial statements as per AS-27 issued by ICAI. Its main object is to carry on directly or through the setting up of a joint venture, the business of sports coverage/production, distribution, event management, sponsorship, sports broadcasting in any form of media whether available presently or invented herein after in all parts of the world

Registered office Its registered office is located at Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai 400 053, Maharashtra, India. Board of directors The board of directors of Zenith Sports Private Limited comprises: 1. Mr. Harish Thawani; 2. Dr. Akash Chandra Khurana; and 3. Ms. Shobha Harish Thawani. Capital structure

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The capital structure of Zenith Sports Private Limited is as follows:

Particulars Aggregate nominal value (In Rs. million)

A. Authorised capital 50,000 equity shares of Rs. 10 each 0.5 B. Issued, subscribed and paid-up capital 50,000 equity shares of Rs. 10 each 0.5 Shareholding pattern The shareholding pattern of Zenith Sports Private Limited was as follows:


Nimbus Communications Limited 24,400 48.80

Mr. Harish Kanayalal Thawani as nominee of Nimbus Communications Limited

100 0.20

Paramount 25,500 51.00

Total 50,000 100.00

Financial performance The summary of audited financials of Zenith Sports Private Limited for the Fiscal 2010, 2009 and 2008 are set below:


(1) Net of miscellaneous expenditure not written off. (2) Face value of each equity share is Rs. 10.

Significant Notes for Fiscal 2010 The auditors have without qualifying their opinion, drawn attention to: Note II – 6 of Schedule 9. Although the accumulated losses of the Company have far exceeded its net worth, the financial statements have been prepared on a going concern basis for the reason stated in the said Note. Note II – 7 of Schedule 9. As explained in the said Note, the Company has made long term investment in Neo Sports Broadcast Private Limited (“Neo”) Rs. 30,000,000. Further, it has granted a loan of Rs. 49,520,000 to Neo. The recoverability of these amounts is dependent upon Neo being able to realise its business plans and projections. For the reasons stated in the said Note, the management of the Company is of the view that there is no diminution, other than temporary, in the value of investment in Neo and the loan given to Neo is good and fully recoverable and hence, no provision has been considered necessary by the Company. Significant Notes for Fiscal 2009 The auditors have without qualifying their opinion, drawn attention to: Note II – 6 of Schedule 9. Although the accumulated losses of the Company have far exceeded its net worth, the


2010 2009 2008 Income/Sales - - - Profit (Loss) after Tax (6.54) (6.03) (5.61) Equity share capital 0.50 0.50 0.50 Reserves and surplus (excluding revaluation reserves)(1) (22.73) (16.19) (10.16) Earnings per share(2) (130.81) (120.55) (112.19) Net asset value or book value per share (444.64) (313.84) (193.29)

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financial statements have been prepared on a going concern basis for the reason stated in the said Note. Note II – 7 of Schedule 9. For the reasons stated in the said Note, the loan of Rs.51,520,000 given to Neo Sports Broadcast Private Limited (NEO) has been considered as good and fully recoverable and there is no diminution other than temporary in the value of investment of Rs.30,000,000 in NEO. Zenith Sports Private Limited is an unlisted company. It has not made any public or rights issue in the preceding three years. Zenith Sports Private Limited has negative net worth, however, since it is not an industrial company as defined under SICA, it is not a sick company within the meaning that enactment. It is not subject to a winding-up order or petition.

3. Carnival Entertainment Private Limited

Carnival Entertainment Private Limited was incorporated on November 8, 2007. The company is engaged in the business of offering, buying, selling, dealing or otherwise offering for viewing cinematographic films, tele-serials, talk shows etc. Registered office Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, India. Board of directors The board of directors of Carnival Entertainment Private Limited comprises: 1. Mr. Harish Kanayalal Thawani; 2. Dr. Akash Chandra Khurana; and 3. Ms. Shobha Harish Thawani.

Shareholding pattern The shareholding pattern of Carnival Entertainment was as follows:

Sr. No. Name of Member No. of Shares % of issued capital

1. Mr. Harish Kanayalal Thawani 4,998 49.48 2. Ms. Shobha Harish Thawani 4,998 49.48 3. Dr. Akash Chandra Khurana 2 00.02 4. Mr. Sanjay Sharma 1 00.01 5. Mr. Sonal Gupta 1 00.01 Total 10,000 100.00

Financial performance The audited financial results of Carnival Entertainment Private Limited for Fiscal 2010, 2009 and 2008 is summarised below: (Rs. in million)

(1) Net of miscellaneous expenditure not written off. (2) Face value of each equity share is Rs.10. (3) Excluding share application monies received

Carnival Entertainment Private Limited is an unlisted company and it has not made any public or rights issue in the

Particulars For the period ended March 31, 2010 2009 2008

Income/Sales 0.24 2.31 1.63 Profit (Loss) after Tax (0.97) (0.83) (0.27) Equity share capital 0.10 0.10 0.10 Reserves and surplus (excluding revaluation reserves)(1) (2.07) (1.10) (0.27) Earnings per share(2) (96.93) (82.53) (27.37) Net asset value or book value per share(3) (196.84) (99.90) (17.37)

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preceding three years. Carnival Entertainment Private Limited does not have a negative net worth. Further, it is not a sick company within the meaning of SICA. It is not subject to a winding-up order or petition.

Partnerships forming part of the Group companies 1. Aquarius Transnational

Aquarius Transnational is a partnership firm established by a deed of partnership dated October 28, 1994 between Mr. Harish Kanayalal Thawani as 66.67% partner and Ms. Shobha Thawani as 33.33% partner. Its principal office is located at 701 Rendezvous, 120-121, Perry Road, Bandra (W), Mumbai – 400 050, India. The main business of the partnership is the production, distribution and screening of cinematographic films. Financial performance(1) The summary of financials of Aquarius Transnational for Fiscals 2010, 2009 and 2008 are as follows:

(Rs. in million)


2010 2009 2008 Income/Sales 0 NIL NIL Profit (Loss) after Tax (0.37) (0.36) (0.38)

(1) As per section 44AB of Income Tax Act, 1961, firm is not required to audit its financial statements. Aquarius Transnational has been running at a loss for the last three Financial Years. None of the companies forming part of our Group Companies is a sick company under the meaning of SICA and none of them are under winding up. Except as stated in the section titled “Risk Factors” on page xii of this Draft Red Herring Prospectus, there are no adverse factors related to our Group Companies in relation to losses incurred by them in the immediately preceding three years prior to the filing of this Draft Red Herring Prospectus. Further, all our Group Companies are unlisted companies and they have not made any public issue (including rights issue) of securities in the preceding three years.

Defunct Group Companies Except for World Sports Nimbus SA (Pty) Ltd which was deregistered with effect from July 25, 2008 with Companies and IP Registration Office, South Africa as company under the laws of South Africa, none of our Group Companies remain defunct or made application to the Registrar of Companies for striking off the name of the company, during the five years preceding the date of filing the Draft Red Herring Prospectus with SEBI. None of our Group Companies fall under the definition of sick companies and no applications have been made in this regard. Companies with which the Promoters have disassociated in the last three years The Promoters have not disassociated themselves from any company/ firm during preceding three years, except for Nirvana Television Limited and Nimbus Home Entertainment Private Limited on account of corporate restructuring within the group. These aforesaid companies are now the Subsidiaries. Conflict of Interest Most of our Promoter Group entities and Group Companies as enlisted in the section above are engaged in the business of media and entertainment. We have not entered into a non-compete agreement with our Promoters, and certain of our Promoter Group entities and Group Companies which are involved in media and entertainment activities. Business Interests Our Company is promoted by our Promoters in order to pursue media and entertainment business. Our Promoters are interested in our Company to the extent of their shareholding in our Company and the dividend declared, if any, by our Company. We have not entered into a non-compete agreement with our Promoters and certain of our Promoter Group entities and Group Companies which are involved in media and entertainment activities

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Confirmations by the Promoters Our Promoters including members of Promoter Group and our Group Companies have confirmed that they have not been detained as willful defaulters by the RBI or any other Governmental authority and there are no violations of securities laws committed by them in the past or are pending against them and none of our Promoters including Promoter Group and our Group Companies have been restricted from accessing the capital markets for any reasons, by SEBI or any other authorities. Nature and Extent of Interest of Group Companies (a) In the promotion of the Company None of our Group Companies have any interest in the promotion of our Company. (b) In the properties acquired or proposed to be acquired by the Company in the past two years before filing the Draft Red Herring Prospectus with SEBI None of our Group Companies have any interest in the properties acquired or proposed to be acquired by the Company in the past two years before filing the Draft Red Herring Prospectus with SEBI. (c) In transactions for acquisition of land, construction of building and supply of machinery None of our Group Companies have any interest for acquisition of land, construction of building and supply of machinery. Common Pursuits amongst the Group Companies, Subsidiaries and joint ventures with our Company Several of our Group Companies and associates are engaged in media and entertainment sector. Business Interest of Group Companies, Subsidiaries and joint ventures in our Company None of our Group Companies, Subsidiaries and joint ventures has any business interest in our Company. Shareholding of Group Companies, Subsidiaries and joint ventures in our Company None of our Group Companies, Subsidiaries and joint ventures holds any Equity Shares in our Company. Sale/Purchase between Group Companies, Subsidiaries and joint ventures For details see section titled “Related Party Transactions” on page 140 of this Draft Red Herring Prospectus. Payment of benefits to our Group Companies, Subsidiaries and joint ventures during the last two years Except as stated in the section “Related Party Transactions” on page 140 of this Draft Red Herring Prospectus, there has been no payment of benefits to Group Companies since the date of incorporation of our Company. Related Party Transactions within the Group Companies, Subsidiaries and joint ventures and Significance on the Financial Performance of our Company For details see section titled “Related Party Transactions” on page 140 of this Draft Red Herring Prospectus.

140

Related Party Transactions

For details on related party transactions of our Company on an unconsolidated and consolidated basis, see section titled “Financial Statements” beginning on page 142 of this Draft Red Herring Prospectus.

141

Dividend Policy

The declaration and payment of dividend on our Equity Shares will be recommended by the Board of Directors and approved by the shareholders of our Company and in accordance with the provisions of the Companies Act. Generally, the factors that may be considered by the Board before making any recommendations for the dividend include the results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions, applicable Indian legal restrictions, applicable taxes on dividend in hands of recipients including dividend distribution tax payable by our Company and other factors considered relevant by our Board. Our Company has no stated dividend policy. Further, pursuant to the terms of the term loans obtained by our Company, prior written consent of the lenders of our Company is required to pay any dividends. The Board may also from time to time pay interim dividend. All dividend payments are made in cash to the shareholders of our Company.

The dividends declared by our Company in fiscals 2006, 2005, 2004, 2003 and 2002 are specified below:

Particulars Year ended March 31,

2006 2005 2004 2003 2002

Number of Equity Shares of face value of Rs.10 64,929,55

2 40,623,61

4 40,566,41

4 40,479,11

4 40,380,81

4 Rate of Dividend on Equity Shares (%) Interim - - - - -Final 7.5 7.5 7.5 7.5 5 Amount of Dividend on Equity Shares (Rs. in million) Interim - - - - - Final 21.19 15.21 15.20 15.15 9.46

Our Company has not paid any dividend after 2006. Future dividends will depend upon our revenues, cash flows, fiscal conditions and other factors. The amounts paid as dividends in the past are not necessarily indicative of the Company’s dividend policy in the future. See also Risk Factor titled “We have not paid dividends since Fiscal 2006 and any material adverse effect on our future earnings, financial condition, cash flows will affect our ability to pay dividends in the future” on page xxvi of this Draft Red Herring Prospectus.

142

SECTION V - FINANCIAL INFORMATION

Financial Statements

DETAILS PAGE NOS.

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS OF OUR COMPANY

F-1 TO F-56

AUDITORS’ REPORT ON STANDALONE FINANCIAL STATEMENTS OF OUR COMPANY F- 57 TO F-101

AUDIT REPORT ON THE RESTATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION OF NEO SPORTS BROADCAST PRIVATE LIMITED

F-102 TO F-129

F-1

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS OF OUR COMPANY

To,

The Board of Directors Nimbus Communications Limited

Nimbus Centre, Oberoi Complex

Andheri West

Mumbai 400 053 India

Dear Sirs,

1. In connection with the proposed Initial Public Offer (the “IPO”) of Equity Shares of Nimbus Communications

Limited (the “Company”) and in terms of our engagement letter dated August 27, 2010, we have examined the

Restated Consolidated Summary Statements (as defined in paragraph 4 below) of the Company, its subsidiaries, and its jointly controlled entities (the Company, its subsidiaries and jointly controlled entities collectively referred to herein as the “Group”) as at and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006

annexed to this report and initiated by us for the purpose of identification.

2. The Restated Consolidated Summary Statements is the responsibility of the Company and has been prepared in

accordance with the requirement of :

a. Paragraph B of Part II of Schedule II of the Companies Act, 1956, (the “Act”);and

b. the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations

2009 (the “ICDR Regulations”), notified by Securities and Exchange Board of India (“SEBI”) on August 26, 2009 and amendments thereto, in pursuance of section 11A (1) (a) of the Securities and Exchange Board of India Act, 1992.

3. Our examination was conducted in accordance with the applicable generally accepted auditing standards

(“GAAS”) framework in India prescribed by the Institute of Chartered Accountants of India (“ICAI”).

Restated Consolidated Summary Statements:

4. In accordance with requirements of Part II (B) of Schedule II of the Act and the ICDR Regulations and terms of

our engagement agreed with you, we have examined:

i. the “Statement of Restated Consolidated Assets and Liabilities” of the Group as at March 31, 2010, 2009,

2008, 2007 and 2006 (Annexure I); ii. the “Statement of Restated Consolidated Profits and Losses” of the Group for each of the years ended

March 31, 2010, 2009, 2008, 2007 and 2006 (Annexure II); and

iii. the “Statement of Restated Consolidated Cash Flows” of the Group for each of the years ended March 31,

2010, 2009, 2008, 2007 and 2006 (Annexure III).

together referred to as “Restated Consolidated Summary Statements”

5. These Restated Consolidated Summary Statements have been extracted from audited consolidated financial statements of the Group as at and for each of the year ended March 31, 2010, 2009, 2008, 2007 and 2006, which

have been approved by the Board of Directors, and audited by us.

We further state that in the Restated Consolidated Summary Statements:

a. We did not audit the financial statements of the Company for the years ended March 31, 2008, 2007 and

2006, which have been audited by M/s Deloitte Haskins & Sells, Mumbai, Chartered Accountants (Registration No.117366W), being the auditors of the Company in those years.

F-2

b. We did not audit the restated financial statements of Nimbus Sport International Pte. Ltd. (NSI), Singapore,

the wholly owned step down subsidiary of the Company, and the financial statements of three subsidiaries viz. Nimbus Communications Ltd. -British Virgin Island (for the years ended March 31, 2010, 2009 and

2008), Nimbus Media Pte. Ltd., Singapore, and Nimbus Communications Worldwide Ltd., Mauritius.

These financial statements restated or otherwise have been audited by other auditors, whose reports have

been furnished to us and, our opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors. These financial statements restated or

otherwise reflect the following information as considered in the Restated Consolidated Summary

Statements:

(Rs.in Million)

c. We did not audit the financial statements for the years ended March 31, 2007 and 2006 of the subsidiary Nimbus Communications Ltd. -British Virgin Island. These financial statements have been reviewed by

other auditor, whose reports have been furnished to us and, our opinion, in so far as it relates to the amounts

included in respect of this subsidiary, is based solely on the report of the other auditor. These financial statements reflect the following information as considered in the Restated Consolidated Summary Statements:

(Rs. in Million)

As at and for the financial years ended March 31, Particulars

2007 2006

Total assets (net of current liabilities

and provisions) (0.08) 0.17

Total Revenues Nil Nil

Net cash inflow / (outflow) 0.30 0.49

d. We did not audit the restated financial statements of Neo Sports Broadcast Private Limited (Neo)

(incorporated on March 17, 2006 as a wholly owned subsidiary of Zenith Sports Pvt. Ltd. and became a

jointly controlled entity effective March 27, 2006). These restated financial statements have been audited by other auditor, whose reports have been furnished to us and, our opinion, in so far as it relates to the

amounts included in respect of this subsidiary / jointly controlled entity, is based solely on the report of the

other auditor. These restated financial statements reflect the following information as considered in the Restated Consolidated Summary Statements:

(Rs. in Million)


2010 2009 2008 2007 2006

Total assets (net of current

liabilities and provisions) 876.14 695.41 860.70 874.45 21.48

Total Revenues 1979.84 1252.54 1819.23 756.37 315.60

Net cash inflow / (outflow) (271.86) 326.27 (478.33) 502.58 0.05

e. The auditors of Nimbus Sport International Pte. Ltd. (NSI), Singapore and Neo Sports Broadcast Private Limited (Neo) referred to in paragraph 5.b and 5.d above, have also confirmed that the restated financial

statements have been made after incorporating;


2010 2009 2008 2007 2006

Total assets (net of current liabilities and provisions) 415.60 158.43 374.53 506.00 (109.36)

Total Revenues 2,078.56 2139.43 1901.85 1232.07 1093.16

Net cash inflow / (outflow) 88.64 (79.19) (71.19) 162.12 42.39

F-3

(a) adjustments, if any, for the changes in accounting policies to reflect the same accounting treatment as

per changed accounting policy for all the reporting periods;

(b) adjustments of the material amounts in the financial year to which they relate;

(c) adjustments for qualifications where amounts are ascertainable;

and there are no extraordinary items that need to be disclosed separately.

6. Based on our examination of these Restated Consolidated Summary Statements and also as per the reliance

placed on the report submitted by the auditors of the subsidiaries / jointly controlled entity referred to in

paragraph 5.b to 5.d above, we state that:

A. The “Restated Consolidated Summary Statements” have to be read in conjunction with the “Principles of

Consolidation, Significant Accounting Policies and Notes to the Restated Consolidated Summary

Statements” (Annexure IV); B. The “Restated Consolidated Summary Statements” reflect the retrospective effect of significant accounting

policies adopted by the Group as at and for the year ended March 31, 2010;

C. The restated profits / losses have been arrived at after charging all expenses including depreciation and

after making such adjustments and regroupings, as in our opinion are appropriate, in the year to which they

relate;

D. There are no extraordinary items that need to be disclosed separately in the Restated Consolidated

Summary Statements.

E. The qualifications in the Auditors’ Report requiring adjustment have been given effect to in the “Restated

Consolidated Summary Statements”.

F. (a) The Auditors of the Company have without qualifying their opinion drawn attention to the following

matters in the Auditors Report for the respective years:-

(i) For the years ended March 31, 2010, 2009, 2008 and 2007:

Refer Note III.B of Annexure IV. As explained in the said Note, the Company has made long term investment in Neo Sports Broadcast Private Limited (“Neo”) of Rs. 2279.70 million (net of the

Group’s share). Further, the Company has also granted loan (net of the Group’s share) of Rs.

51.69 million as at March 31, 2010, Rs. 48.94 million as at March 31, 2009, Rs. 46.52 million as at March 31, 2008 and Rs. 43.29 million as at March 31, 2007 to Zenith Sports Pvt. Ltd and Rs. 3,025.43 million (net of subsequent realisations and net of the Group’s share) is due as at March

31, 2010 from Neo. The recoverability of these amounts is dependent upon Neo being able to

realise its business plans and projection. For the reasons stated in the said Note, the management

of the Company is of the view that there is no diminution, other than temporary, in the value of investment in Neo and the loan given to ZSPL is good and fully recoverable and the amount due

from Neo towards Media Rights Fees will be realised in due course and hence, no provision has

been considered necessary by the Company

(ii) For the years ended March 31, 2010 and 2009: Refer Note III.G.2 of Annexure IV. As stated in the Note, the remuneration paid to directors for

the year ended March 31, 2009 had exceeded the limit prescribed under Section 309 of the

Companies Act, 1956 by Rs. 2.76 million. The Company’s application for its waiver is pending

with the Central Government.

F-4

(b) The Auditors of Nimbus Sports International Pte. Ltd (NSI) have without qualifying their opinion

drawn attention to the following matters in the Auditors Report on the restated financial statements of NSI referred to in 5(b) above:-

(i) Refer Note III.A.1 of Annexure IV, regarding exposure to income taxes in different jurisdictions.

Significant judgment is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the

ordinary course of business. The NSI recognizes liabilities for expected tax issues based on

estimates of whether additional taxes will be due. Where the final tax outcome of these matters is

different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

(ii) Refer Note III.A.2 of Annexure IV, there are outstanding tax queries from the Singapore Tax Authorities on the rights fees expense in the income statement and NSI’s compliance with the

withholding tax provisions of the Income Tax Act. In addition, there are also tax queries on the

NSI's income recognition and residency status. Up to the date of the Auditors' Report (i.e. July 30,

2010), IRAS has neither responded to the NSI's replies, nor made any assessment. Accordingly, the quantum of withholding tax provisions and/or income tax provision, if any, cannot be reliably estimated.

(iii) For the years ended March 31, 2010 and 2009:

Refer Note III.C.2 of Annexure IV, relating to cases where debts as at March 31, 2010 aggregating

Rs. 33.43 million (As at March 31, 2009 Rs. 31.23 million), are due and NSI has filed Notice of arbitration.

(iv) For the year ended March 31, 2010 :

Refer Note III.D.3 of Annexure IV, relating to negotiation of material reduction of right costs by

Rs. 684.13 million for matches conducted during the year, which has been confirmed by a letter

from the Acting Chief Executive Officer of the sports federation subject to the signing of an addendum agreement, which is pending as on the date of the Auditors’ Report (i.e. July 30, 2010).

Consolidated Other Financial Information:

7. We have also examined the following Consolidated Other Financial Information (restated) of the Company for each

of the years ended March 31, 2010, 2009, 2008, 2007 and 2006, which is proposed to be included in the Draft Red Herring Prospectus (DRHP), as approved by the Board of Directors of the Company and annexed to this report:-

(i) Principles of Consolidation, Significant Accounting Policies and Notes to the Restated Consolidated Summary Statements for each of the years ended March 31, 2010, 2009, 2008, 2007,and 2006 (Annexure IV);

(ii) Details of Consolidated Secured Loans and Unsecured Loans as at March 31, 2010, 2009, 2008, 2007, and

2006 (Annexure V);

(iii) Details of Consolidated Sundry Debtors as at March 31, 2010, 2009, 2008, 2007, and 2006 (Annexure VI); (iv) Details of Consolidated Loans and Advances as at March 31, 2010, 2009, 2008, 2007, and 2006 (Annexure

VII);

(v) Details of Consolidated Investments as at March 31, 2010, 2009, 2008, 2007, and 2006 (Annexure VIII); (vi) Details of Consolidated Current Liabilities & Provisions as at March 31, 2010, 2009, 2008, 2007, and 2006

(Annexure IX);

(vii) Details of Consolidated Dividend and Other Income for each of the years ended March 31, 2010, 2009, 2008, 2007,and 2006 (Annexure X);

(viii) Details of Consolidated Dividend paid for each of the years ended March 31, 2010, 2009, 2008, 2007,and

2006 (Annexure XI);

(ix) Consolidated Statement of Accounting Ratios for each of the years ended March 31, 2010, 2009, 2008, 2007,and 2006 (Annexure XII);

F-5

(x) Capitalisation Statement as at March 31, 2010 (Annexure XIII);

(xi) Statement of Reconciliation of Consolidated Profits / Losses for each of the years ended March 31, 2010, 2009, 2008, 2007,and 2006 (Annexure XIV);

(xii) Consolidated Statement of Contingent Liabilities and Capital Commitment as at March 31, 2010, 2009,

2008, 2007, and 2006 (Annexure XV);

(xiii) Details of Related Party Disclosure for each of the years ended March 31, 2010, 2009, 2008, 2007,and 2006 (Annexure XVI);

together referred to as “Consolidated Other Financial Information”

8. In our opinion, the Restated Consolidated Summary Statements and Consolidated Other Financial Information

(restated) mentioned in paragraph (4) & (7) above, read with significant accounting policies and notes as annexed to

this report, and after making such adjustments as are considered appropriate, and read with our comments in paragraph 6(F) above have been prepared in accordance with Part II (B) of Schedule II of the Act and the ICDR

Regulations.

9. This report should not, in any way, be construed as a reissuance or re-dating of any of the previous audit reports nor should this be construed as a new opinion on any of the financial statements referred to herein.

10. This report is intended solely for your information and for inclusion in the DRHP in connection with the proposed IPO of Company and is not to be used, referred to or distributed for any other purpose without our prior written

consent.

For Deloitte Haskins & Sells Chartered Accountants

(Registration No. 117365W)

U.M.Neogi Partner

Membership No. 30235

Place: Mumbai Date: September 27, 2010

F-6

NIMBUS COMMUNICATIONS LIMITED

ANNEXURE I : STATEMENT OF RESTATED CONSOLIDATED ASSETS AND LIABILITIES (Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A Fixed Assets

Gross Block 911.21 1,077.16 2,617.67 2,665.19 1,405.52

Less : Depreciation/ Amortisation 718.09 836.35 1,700.27 1,901.05 800.34

Net Block 193.12 240.81 917.40 764.14 605.18

Less : Revaluation Reserve 6.72 6.38 472.89 445.79 420.24

Net Block After Adjustment for Revaluation Reserve 186.40 234.43 444.51 318.35 184.94

Capital Work in Progress 98.36 34.91 15.89 0.59 0.94

284.76 269.34 460.40 318.94 185.88

B Goodwill on Consolidation 12.77 12.77 12.77 12.77 12.77

C Investments 1.68 2,415.05 2,281.38 2,281.38 2,788.95

D Deferred Tax Assets (Net) 4.31 17.65 - 2.14 29.76

E Current Assets, Loans and Advances

Inventories 25.96 34.65 6.50 9.65 9.11

Sundry Debtors 1,567.42 1,249.54 2,296.82 3,397.70 5,372.72

Cash and Bank Balances 1,077.49 4,500.64 1,536.95 2,618.52 4,472.72

Loans and Advances 440.24 873.09 1,297.88 656.93 989.47

Other Current Assets 1.89 16.12 2.04 32.19 84.16

Total 3,113.00 6,674.04 5,140.19 6,714.99 10,928.18

3,416.52 9,388.85 7,894.74 9,330.22 13,945.54

F Liabilities and Provisions

Secured Loans 399.89 1,541.50 780.84 2,585.91 3,316.52

Unsecured Loans 91.05 5,517.97 5,788.64 6,527.08 2,477.21

Deferred Tax Liabilities (net) - - 6.24 - -

Current Liabilities 857.83 1,157.65 1,263.56 1,252.11 3,503.47

Provisions 88.14 58.63 57.26 60.78 174.83

Total 1,436.91 8,275.75 7,896.54 10,425.88 9,472.03

G Preference Shares issued by Jointly Controlled Entity - - - - 1.69

H Equity warrants issued by Jointly Controlled Entity - - - - 3.27

Net Worth (A+B+C+D+E-F-G-H) 1,979.61 1,113.10 (1.80) (1,095.66) 4,468.55

I Represented by

Share Capital

- Equity Shares 324.65 326.06 326.06 326.06 615.02

- Preference Shares - - - 2.18 -

Stock Option Outstanding - - 5.65 4.27 4.24

324.65 326.06 331.71 332.51 619.26

Reserves and Surplus

- Securities Premium 2,008.31 1,948.49 1,948.49 2,040.87 8,786.61

- Capital Redemption Reserve 0.55 0.55 0.55 0.55 0.55

- Capital Reserve On Consolidation 7.35 7.35 7.35 7.35 7.35

- Foreign Exchange Reserve On Consolidation 1.24 (9.75) (48.57) 81.48 34.01

- General Reserve 0.80 0.80 1.03 1.03 1.03

- Revaluation Reserve 6.72 6.38 472.89 445.79 420.24

- Profit and Loss Account (363.29) (1,160.40) (2,242.36) (3,559.45) (4,980.26)

Less: Revaluation Reserve 6.72 6.38 472.89 445.79 420.24

Reserves and Surplus (Net of Revaluation Reserve) 1,654.96 787.04 (333.51) (1,428.17) 3,849.29

Net Worth 1,979.61 1,113.10 (1.80) (1,095.66) 4,468.55

Note:

The above statement should be read together with Principles of Consolidation, Significant Accounting Policies and Notes to the

Restated Consolidated Summary Statements- Annexure IV.

F-7

ANNEXURE II : STATEMENT OF RESTATED CONSOLIDATED PROFITS AND LOSSES (Rupees in Million)

Year ended

Particulars March 31, 2006 March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010

Income

Sales and Services

Airtime Sales (net) 612.77 973.19 820.09 392.41 347.94

Income from Sports Rights 1,248.97 2,083.16 3,808.29 3,833.52 4,421.50 Ad Sales Broadcasting - 389.23 1,092.24 775.62 1,345.06

Distribution Revenue Broadcasting - 335.50 239.92 459.58 495.36

Production Fees 231.25 375.26 545.33 421.42 666.90

Sports Services Income 58.29 272.96 164.16 25.46 49.29

Income from Film Rights (Acquired) 11.09 74.29 69.41 - -

Income from Motion Picture Produced - 12.11 14.10 - -

Income from assignment of Television Programme Rights 5.46 1.95 0.94 0.32 4.61

Disks Sales/ Rental Income - - 0.55 1.44 2.43

Total 2,167.83 4,517.65 6,755.03 5,909.77 7,333.09

Other Income 339.45 234.02 295.81 697.50 354.65

Increase/(Decrease) in Air Time Inventory 2.52 10.84 (7.68) 3.16 (0.54)

Total Income 2,509.80 4,762.51 7,043.16 6,610.43 7,687.20

Expenditure

Cost of Sports Rights 1,903.10 3,272.77 5,642.03 5,252.54 6,834.24

Marketing Rights and Telecast Costs 322.97 907.40 677.98 238.38 330.52

Production Expenses 188.01 405.30 559.57 498.43 526.46

Marketing Expenses 23.52 111.34 86.65 59.01 37.34 Payments to and Provision for Employees 44.84 97.91 154.41 187.67 160.85

Interest and Other Financial Charges 37.76 186.63 204.43 432.53 583.12

Administrative and Other Expenses 143.19 351.21 341.33 577.88 314.23

Depreciation/Amortisation (Net) 84.17 133.11 803.98 242.56 428.40

2,747.56 5,465.67 8,470.38 7,489.00 9,215.16

(Loss) before Tax and Restatement Adjustments (237.76) (703.16) (1,427.22) (878.57) (1,527.96)

Provision for Tax

- Current Tax (* Net of MAT Credit) 3.15 18.21 22.50 * 45.49 165.47

- Deferred Tax 16.10 22.97 60.93 (22.35) (113.42)

- Fringe Benefit Tax 1.77 1.20 1.88 2.37 -

- Wealth Tax 0.01 - - - -

- Short provision for Income Taxin respect

of earlier years - 12.25 28.39 1.39 24.97

- Short provision for Fringe Benefit Tax for

an earlier year - - - 0.25 0.21

- Deferred tax relating to Short provision for tax for

an earlier year - - (26.49) - - -

(Loss) After Tax before Restatement Adjustments (a) (258.79) (757.79) (1,514.43) (905.72) (1,605.19)

Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of Part A of

Schedule VIII of the ICDR Regulations

- Restatement Adjustments (b) (86.16) (56.09) 389.84 (378.05) 248.72

- Restatement Adjustments relating to Current Tax / Fringe

Benefit Tax/ Deferred Tax (c) (20.56) 6.66 5.18 (19.65) 17.74

- Deferred Tax Impact of Restatement Adjustments(d) (12.54) (10.11) (37.45) 13.67 85.20

Net Profit / (Loss) After Restatement Adjustments (a+b+c-d) (352.97) (797.11) (1,081.96) (1,317.09) (1,423.93)

Balance Brought Forward from Previous Year 14.39 (363.29) (1,160.40) (2,242.36) (3,559.45)

Minority Contribution on dilution of Group Interest - - - - 3.12

Balance Available for Appropriations (338.58) (1,160.40) (2,242.36) (3,559.45) (4,980.26)

Appropriations

Dividend 21.19 - - - -

Dividend Tax 2.97 - - - -

Transfer to Capital Redemption Reserve 0.55 - - - -

Balance carried forward (363.29) (1,160.40) (2,242.36) (3,559.45) (4,980.26)

Note:

The above statement should be read together with Principles of Consolidation, Significant Accounting Policies and Notes to the Restated Consolidated

Summary Statements- Annexure IV.

F-8

ANNEXURE III : CONSOLIDATED RESTATED STATEMENT OF CASH FLOWS (Rupees in Million)


March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A. Cash Flow from Operating Activities :

Net Loss before Taxation after restatement adjustments (759.25) (1,037.38) (1,256.62) (1,279.24)

Adjustments for :

Depreciation / Amortisation (net) 144.77 864.90 182.39 134.19

Interest Income (44.21) (169.90) (127.13) (102.88)

Dividend Income (59.93) (4.07) (6.99) (3.50)

Credit balances no longer payable, written back (0.01) (0.32) (58.65) (3.06)

Interest expense 147.43 105.00 309.45 309.79

Employee compensation expenses - 1.95 1.00 0.89

(Profit)/Loss on redemption of Mutual Fund held as current investments - 0.32 - (0.04)

Bad Debts written off 99.61 17.55 23.44 3.02

Advances/ Deposits written off 7.81 2.81 14.98 2.37

Provision for Doubtful Debts (net) (7.24) 8.65 32.54 57.76

Provision for Doubtful Advances - 3.51 - 13.55

Air Time Inventory written Off 2.15 20.48 - -

Capital Work in Progress relating to Television Programmes and Motion Pictures, written off 4.36 5.40 3.21 -

(Profit)/Loss on sale/write off of Fixed Assets (net) - (49.79) 1.86 (1.75)

Unrealised foreign Exchange (gain)/loss (net) 0.46 1.14 (0.96) 10.40

Operating Loss before Working Capital Changes (464.05) (229.75) (881.48) (858.50)


Inventories (10.84) 7.67 (3.15) 0.54

Sundry Debtors 221.88 (1,087.03) (1,113.94) (2,061.72)

Loans and Advances (414.15) (327.85) 690.36 (345.90)

Current Liabilities 257.71 93.88 97.68 2,233.51

Provisions 3.30 2.17 3.83 1.60

Compensated Absences/ Gratuity transitional liability adjusted in General Reserve - 0.35 - -

Cash used in operations (406.15) (1,540.56) (1,206.70) (1,030.47)

Less : Income Taxes (including Fringe Benefit Tax ) paid (net) (90.24) (136.57) (92.61) (79.56)

Net Cash used in Operating Activities (A) (496.39) (1,677.13) (1,299.31) (1,110.03)

B. Cash Flow from Investing Activities

Payments for acquisition of Fixed Assets(after adjustment of Increase/decrease in Capital work in

progress and advances for capital expenditure) (133.93) (1,074.47) (47.57) (42.55)

Sale of Fixed Assets - 62.89 1.38 43.37

Purchase of Current Investments in Mutual Funds (6,500.02) (1,083.38) (1,957.43) (4,007.09)

Sale of Current Investments in Mutual Funds 6,366.35 1,216.73 1,957.43 3,499.56

Investments in Joint Venture ! (2,279.70) - - -

Interest Received 29.98 183.98 96.98 50.91

Dividend Received 59.93 4.07 6.99 3.50

Net Cash from / (used in) Investing Activities(B) (2,457.39) (690.18) 57.78 (452.30)

C. Cash Flow from Financing Activities

Proceeds from issue of shares(including Securities Premium) 55.20 @ *- $1,262.98

Preference Shares and Equity warrants issued by Jointly Controlled Entity - - - 311.65

Minority Contribution on dilution of Group Interest - - - 3.12

Expenses relating to issue of shares (82.61) - (2.84) (2.05)

Repayments of Vehicle Loans (1.60) (1.51) (1.25) (0.17)

Repayment of Short Term Loans from Banks (252.34) (1,362.78) (740.48) (2,526.37)

Proceeds from Short Term Loans from Banks 1,350.00 620.57 2,526.37 3,282.92

Proceeds from /(Repayment) of Working Capital Loan (Net) 45.55 (16.94) 20.43 (25.77)

Proceeds from Unsecured Loans 5,464.90 272.42 935.76 2,317.00

Repayment of Unsecured Loans (37.98) (1.75) (99.92) (996.01)

Dividend Paid (21.19) - - -

Dividend Tax paid (2.97) - - -

Interest paid (140.03) (106.39) (314.97) (210.77)

Net Cash from / (used in) Financing Activities (C) 6,376.93 (596.38) 2,323.10 3,416.53

Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 3,423.15 (2,963.69) 1,081.57 1,854.20

Cash and Cash Equivalents as at the beginning of the year 1,077.49 4,500.64 1,536.95 2,618.52

Cash and Cash Equivalents as at the end of the year 4,500.64 1,536.95 2,618.52 4,472.72

F-9

Notes:

1. The Cash flow has been prepared under the "Indirect Method" as set out in Accounting Standard 3 - Cash Flow Statements.

2. The above statement should be read together with Significant Accounting Policies and Notes to Consolidated Restated Summary Statements.

3. ! The entire purchase consideration is discharged by means of cash.

4 (i) * Excludes 217,965 preference shares of Rs. 10 each issued at a premium of Rs. 436.86 to the founder director by adjustment of the part of the loan Rs. 97.40

million being a non cash transaction.

(ii) $ Excludes 28,626,495 equity shares of Rs. 10 each issued on conversion of the Compulsorily Convertible Preference Shares and Compulsorily Convertible

Debentures being non cash transactions.

5. The Company has prepared the consolidated financial statements for the first time for the year ended March 31, 2006. Accordingly in the absence of consolidated

financial statements for the year ended March 31, 2005, it is not practicable for the Company to prepare the consolidated cash flow for the previous year ended March

31, 2006and consequently the Company has not prepared and presented the Consolidated Restated Statement of Cash Flows for the year ended March 31, 2006.

6. Cash and cash equivalents include:

(Rupees in Million)

As at


2007

March 31,

2008

March 31,

2009

March 31,

2010

Cash on Hand 0.31 0.14 1.43 1.51 Balances with Scheduled Banks

- On Current Accounts # 616.77 901.58 1,147.01 699.63

- In Margin Accounts - - - 392.50

- In Deposit Accounts £ 3,883.56 635.23 1,470.08 3379.08

Total cash and cash equivalents 4,500.64 1,536.95 2,618.52 4472.72

# Including balances in escrow accounts 242.41 47.66 504.98 457.89

£ Includes Deposits kept as margin for bank guarantees 3,522.35 596.67 1,418.09 3,257.67

F-10

ANNEXURE IV: PRINCIPLES OF CONSOLIDATION, SIGNIFICANT ACCOUNTING POLICIES AND

NOTES TO THE RESTATED CONSOLIDATED SUMMARY STATEMENTS

1. Principles of Consolidation and Significant Accounting Policies

1 Basis of Consolidation:

(a) The Restated Consolidated Summary Statements (“Restated CSS”) relate to Nimbus Communications Limited

(“the Company”), its subsidiary companies and joint ventures. The Company and its subsidiaries constitute “the

Group”.

(b) The Restated CSS have been prepared under the historical cost convention except for the revalued fixed assets

as stated in Note I.3.B below, on an accrual basis in accordance with the generally accepted accounting principles (“GAAP”) in India as adopted by the Company and the applicable Accounting Standards, and in the

manner provided under the Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations 2009.

(c) The preparation of the Restated CSS requires the management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such

estimates and assumptions are based on management’s evaluation of relevant facts and circumstances as on the date of respective Restated CSS. The differences between the actual results and the estimates are recognised in

the period in which the results are known / materialize.

2 Principles of Consolidation:

The Restated CSS have been prepared in accordance with Accounting Standard (AS) 21 on “Consolidated Financial

Statements” and AS 27 on “Financial Reporting of Interests in Joint Ventures”. The Restated CSS have been

prepared on the following basis: (a) The financial statements of the Company and its subsidiary companies have been combined on a line-by-line

basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions and resulting unrealised profits or losses.

(b) In case of foreign subsidiary companies, being non integral foreign operations, revenue items are consolidated

at the average rate of foreign exchange prevailing during the year. All assets and liabilities are translated at the exchange rates prevailing at the end of the year. Exchange gains/losses arising on translation are recognised

under Foreign Currency Translation Reserve.

(c) Interests in jointly controlled entities have been accounted by using the proportionate consolidation method as

per AS 27 on “Financial Reporting of Interests in Joint Ventures”. The intra-group balances and intra-group

transactions and resulting unrealised profits or losses are eliminated to the extent of the Group’s proportionate share.

(d) The Restated CSS have been prepared after making disclosures and adjustments required to be made in

accordance with the provisions of Paragraph IX (B)(9)(a) to (d) of Part A of Schedule VIII of the Securities and

Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(e) The financial statements of the subsidiary companies and jointly controlled entities used in the consolidation are

drawn up to the same reporting date as that of the Company except for certain subsidiaries and jointly controlled entities as indicated in Table 1A and 1B respectively. Effect has been given to significant transactions between

the two reporting dates, as indicated in the tables referred above, which have been certified by the management

of the Company and relied upon by the auditors.

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(f) The excess of cost of investment in subsidiary companies / jointly controlled entities over the parent’s /

venturer’s portion of equity on acquisition date is recognised in the Restated CSS as Goodwill. The excess of parent’s / venturer’s portion of equity of the subsidiary companies / jointly controlled entities on the acquisition

date over its cost of investment is treated as Capital Reserve.

(g) Minority interest in the net assets of the consolidated subsidiary companies consists of:

(i) the amount of equity attributable to minorities at the date on which investment in a subsidiary is made; and

(ii) the minorities’ share of movements in equity since the date the Parent-Subsidiary relationship came into existence.

Minority interest’s share of results for the year of the consolidated subsidiaries is identified and adjusted against the profit after tax of the Restated CSS. The share of losses applicable to the minority if exceeds the minority

interest in the equity of the subsidiary company, the excess and any further losses are adjusted against the

majority interest except to the extent that the minority has a binding obligation to, and is able to, make good the

losses.

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Table 1A. List of subsidiary companies which are included in the Restated CSS

Percentage of ownership interest (%)

Name of the subsidiary Country of

Incorporation As at

March 31,

2010

As at

March 31,

2009

As at

March 31,

2008

As at

March 31,

2007

As at

March 31,

2006

Subsidiaries held directly

Nirvana Television Limited (‘NTL’) India 100.00 100.00 100.00 100.00 100.00

Nimbus Motion Pictures (A.P.) Private Limited (‘NMPAPL’) India 100.00 100.00 100.00 100.00 100.00

Nimbus Home Entertainment Private Limited (formerly

known as Nirvana Music Private Limited) (‘NHEPL’) India 100.00 100.00 100.00 100.00 100.00

Nirvana Adzone Limited (‘NAL’) India 100.00 100.00 100.00 100.00 100.00

Nimbus Communications Worldwide Limited, Mauritius

(‘NCWL’) Mauritius 100.00 100.00 100.00* 100.00^^ 100.00^^

Nimbus Media Pte Ltd, Singapore (‘NMPL’) Singapore 100.00 100.00 100.00 100.00 * 100.00 ^^

Nimbus Communications Ltd -British Virgin Islands

(‘NCL – BVI’) British Virgin Islands 100.00 100.00 100.00 100.00 * + 100.00 ^^ +

Zenith Sports Private Limited (‘ZSPL’) (formerly known as

Juniper Holdings Private Limited) India - - - - - #

Nimbus Sports Broadcast Private Limited

(now known as Neo Sports Broadcast Private Limited)

(‘Neo’) (Incorporated on 17.03.2006)

India - - - - - #

Subsidiary held indirectly

Nimbus Sport International Pte Ltd., Singapore (formerly

known as World Sport Nimbus Pte. Ltd.) (‘NSI’) $ Singapore 100.00 100.00 100.00 100.00 100.00*

World Sport Nimbus SA (Pty) Ltd. (‘WSNS’) $$ South Africa - - 100.00 100.00 100.00*

^^ Financial year ends on December 31. However, effect has been given for material transactions or other events that occurred between the reporting date of the

subsidiaries’ financial statements and the date of the Company’s financial statements.

* Financial year extended up to 15 months to end on March 31. However, necessary effect has been given for material transactions or other events occurred during

January 01 to March 31, of the preceding year.

# Ceased to be a subsidiary and became a jointly controlled entity w.e.f. March 27, 2006.

+ Reviewed financial statements used for these years.

$ Became a subsidiary from joint venture w.e.f June 02, 2005.

$$ Became a subsidiary w.e.f. June 02, 2005. WSNS was primarily involved in servicing of sponsors and broadcasters in connection with ICC Cricket World Cup held

in South Africa. The event has since taken place and having served its purpose WSNS has discontinued its operations post Cricket World Cup 2003 and was in the

process of being liquidated during the year ended March 31, 2006, 2007 and 2008. WSNS was deregistered w.e.f. July 25, 2008.

Table 1B. Interest in Joint Ventures

The interest of the Group in jointly controlled entities:

Percentage of ownership interest (%)

Name of the Company Country of

Incorporation As at

March 31,

2010

As at

March 31,

2009

As at

March 31,

2008

As at

March 31,

2007

As at

March 31,

2006

World Sport Pte. Ltd., Singapore

(Now known as Nimbus Sport International Pte. Ltd., Singapore)

(‘NSI’) Singapore - - - - - #

World Sport Nimbus SA (Pty) Ltd.

(100% subsidiary of World Sport Pte. Ltd., Singapore, now known as

Nimbus Sport International Pte. Ltd., Singapore) (‘WSNS’) South Africa - - - - - **

Zenith Sports Private Limited (formerly known as Juniper Holdings

Private Limited) (‘ZSPL’) + India 49.00 49.00 49.00 49.00 49.00

Neo Sports Broadcast Private Limited (formerly known as Nimbus

Sports Broadcast Private Limited) (‘Neo’) +

[Subsidiary (100% up to April 13,2009, thereafter 99.88%) of ZSPL] India 48.94 49.00 49.00 49.00 49.00

# Became a subsidiary from joint venture w.e.f. June 02, 2005.

+ Became a joint venture from subsidiary w.e.f. March 27, 2006.

** Became a subsidiary w.e.f. June 02, 2005.

F-13

3. Significant Accounting Policies

A Revenue Recognition

(i) Revenue from sale of airtime or free commercial time available on various channels for television programmes is

recognised when the related advertisement or commercial is telecast.

(ii) In respect of film distribution, revenue accruing from the licensing of various rights is recognised on the basis of terms and conditions of licensing and delivery of the film. In case of assignment of exhibition and distribution rights on Minimum Guarantee and Outright basis, the revenue is accounted for contracted Minimum Guarantee /

Outright amount and Overflow due, if any.

(iii) The revenue from the licensing of various rights in respect of Television/ Entertainment programme is recognised on the basis of terms and conditions of licensing.

(iv) The revenue from licensing / marketing of media rights is recognised on the happening of events in terms of agreements at the values determined in accordance with the norms specified in those agreements.

(v) Advertising income in respect of broadcasting business is recognised when the related advertisement or commercial is telecast. Further, Distribution revenue (subscription revenue) is recognised on accrual basis in

accordance with terms of the respective distribution agreements.

(vi) In respect of income from services, the Group recognises the revenue after the services are rendered.

(vii) Dividend Income is accounted as and when right to receive dividend is established.

(viii) Interest income is accounted on time proportion basis.

(ix) Revenue is recognised only when it is reasonably certain that the ultimate collection will be made.

B Fixed Assets and Depreciation/ Amortisation

Fixed Assets are stated at cost of acquisition or production or at revalued amounts less accumulated depreciation/ amortisation and impairment loss, if any. Cost comprises purchase/ acquisition price/ production cost, import duties, taxes

and any directly attributed cost of bringing the asset to its working condition for its intended use.

The Movie Rights comprise negative rights and distribution rights of movies and are for a contractually specified mode of

exploitation, period and territory. In case where multiple rights are acquired for a consolidated amount, cost is allocated to

each right based on estimates made by the management.

Assessment of indication of impairment of an asset is made at the balance sheet date and impairment loss, if any, is

recognised.

Depreciation/ Amortisation:

(a) Tangible Assets:

Depreciation on fixed assets is provided on written down value method at the rates and in the manner specified in

Schedule XIV to the Companies Act, 1956.

In case of revalued assets depreciation is provided on the amount added on revaluation on written down value

method at the rate arrived on the basis of the estimate of the remaining useful lives of such assets or at the rates

prescribed in Schedule XIV to the Companies Act, 1956, whichever is higher and is transferred from Revaluation Reserve to the Profit and Loss Account.

F-14

Leasehold improvements have been amortised over the period of the respective lease agreements.

Disks procured for the purpose of rental activities are amortised over its estimated useful life of 36 months.

(b) Intangible Assets:

(i) The cost of Television / Entertainment programmes produced is fully amortised in the year of first telecast.

(ii) The cost of Movie Rights / Television / Entertainment programmes acquired is fully amortised in the year of acquisition if the period of rights does not exceed one year. In other cases 80 % of the cost is amortised in the year of acquisition and the balance over the remaining period of rights, not exceeding two years.

(iii) The cost of Movies produced is amortised 80% in the year of first release and the balance equally over the

next two years.

(iv) The cost of Sports Rights acquired from Board of Control for Cricket in India (BCCI) for three years (re-telecast rights - 1st year exclusive and 2nd/3rd year non exclusive) is amortised @ 80% in the year of first

telecast and the balance 20% in equal instalments over the remaining term of the contract.

(v) In respect of music software produced, the cost of such software is amortised over a period of 3 years from

the year in which it is first capitalised.

(vi) Computer Software is amortised on written down value at the rate of 33.33%

In case of certain subsidiaries and a jointly controlled entity, the depreciation / amortisation policy for certain tangible

fixed assets and intangible assets is different from that followed on similar assets by the Group, the impact thereof on the Restated CSS is not likely to be material.

C Valuation of Inventory

Inventory of airtime available on various channels for the Television / Entertainment programmes already telecast, to the

extent of unused airtime, has been carried as Airtime Inventory and has been valued at cost or net realisable value,

whichever is lower. Cost is arrived at on weighted average basis.

D Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary, in the value of

investment.

Current investments are stated at the lower of cost and fair value.

E Employee Benefits

(i) Defined contribution plan:

The contribution to the Provident Fund is charged to the Profit and Loss Account.

(ii) Defined Benefit Plan / Long Term Compensated absences:

The liability towards gratuity and compensated absences is determined on the basis of the actuarial valuation done

by an independent actuary as at the Balance Sheet date. The actuarial gains or losses determined by the actuary are

recognised in the Profit and Loss Account as income or expense.

F Share Issue Expenses

Share issue expenses are adjusted against Securities Premium Account.

F-15

G Taxes on Income

Current tax is determined as the amount of tax payable in respect of estimated taxable income for the period.

The tax effect of the timing differences between taxable income and accounting income which are capable of reversal in

one or more subsequent periods is recorded as deferred tax asset subject to the consideration of prudence or deferred tax liability. They are measured using the enacted or substantively enacted tax rates and tax laws by the Balance Sheet date.

Deferred Tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised, only if there is virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other

timing differences are recognised only to the extent there is reasonable certainty of its realisation. The carrying amount of

deferred tax asset is reviewed at each Balance Sheet date.

H Provision and Contingent Liabilities:

Provision is recognised when the Group has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can

be made. Provisions are not discounted to its present value and are determined based on best estimates of the expenditure

required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed, unless the possibility of an outflow of resources

embodying economic benefits is remote.

I Segment Accounting Policies

(a) Segment assets and liabilities:

All Segment assets and liabilities are directly attributable to the segment.

Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories, sundry debtors and loans and advances. Segment liabilities do not include share capital, reserves and

surplus, borrowings and income tax (both current and deferred).

(b) Segment revenue and expenses:

Segment revenue and expenses are directly attributable to segment. It does not include interest income, interest

expense and income tax.

J Foreign Currency Transactions

Foreign currency transactions during the year are recorded at the rates of exchange prevailing at the date of transaction.

Exchange gains or losses realised and arising due to translation of the foreign currency monetary items outstanding at the

Balance Sheet date are accounted in the Profit and Loss Account. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

K Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition /

construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and all

other borrowing costs are recognised as an expense in the period in which they are incurred.

F-16

L Leases

(a) Assets acquired under lease where the Group has substantially all the risks and rewards incidental to ownership are

classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value and

the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental

paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

(b) Assets acquired on leases where significant portions of the risks and rewards incidental to ownership are retained by the lessors, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account over the lease

period.

II Note on Restatement Adjustments:

(i) The Statement of Restated Consolidated Profits and Losses for the financial year(s) ended on March 31, 2010,

2009, 2008, 2007 and 2006 and the Statement of Restated Consolidated Assets and Liabilities as at March 31, 2010, 2009, 2008, 2007 and 2006 reflect the Profits and Losses and the assets and liabilities for each of the

relevant years indicated above. These statements have been extracted from the audited consolidated financial

statements for the aforesaid years after making therein the disclosures and adjustments required to be made in

accordance with the provisions of Paragraph IX (B) (9)(a) to (d) of Part A of Schedule VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(ii) The effect of restated adjustments relating to financial years ended prior to March 31, 2006 aggregating net debit

of Rs. 247.01 million (net of deferred tax) (including impact of change in accounting policy by the Company

during the year ended March 31, 2010 of amortisation of Television/Entertainment programmes produced/acquired

– Rs. 252.16 million) has been adjusted by debiting Rs. 247.81 million to balance in the Profit and Loss Account

brought forward as at April 01, 2005 and crediting Rs.0.8 million to General Reserve as at April 01, 2005.

(iii) In respect of the following matter no restatement adjustment has been made to the Consolidated Financial Information for the relevant years for the reason stated below:

Until the year ended March 31, 2005, the Company accounted for the leave encashment liability on actual payment basis. For the years ended March 31, 2007 and March 31, 2006 liability for leave encashment was

provided on the basis of the leave available to the credit of the employees at the end of the respective years within

limits determined by the management. The additional charge of Rs. 2.34 million on account of change in the policy w.e.f. April 01, 2005 was recognised in the accounts for the year ended March 31, 2006. Further, consequent to the Accounting Standard Employee Benefits AS – 15 becoming applicable to the Company from

April 01, 2007, the Company has followed the policy stated in Note I.3.E.(ii) above to recognise liability for

compensated absences and gratuity, and in terms of the transitional provisions of the said Standard has adjusted as

stated in Note III.G.5, the increase in the liability for compensated absences and reduction in the liability for gratuity up to March 31, 2007 amounting to Rs.0.24 million (net of deferred tax of Rs. 0.12 million) and Rs.0.47

million (net of deferred tax of Rs. 0.24 million) respectively against the opening balance of the general reserve as

on April 01, 2007.

No adjustment has been made to the Consolidated Financial Information for the years ended March 31, 2007 and

2006 and in the balance in the Profit and Loss Account brought forward as at April 01, 2005 to reflect the effect

had the policy, stated in Note I.3.E.(ii) above for recognising the Company’s liability towards compensated absences and gratuity, been followed in each of the two years ended March 31, 2007 and March 31,2006 as the effect thereof is not material.

F-17

III. Notes to the Restated Summary Statements

A. Common significant notes for the years ended March 31, 2010, 2009, 2008, 2007 and 2006

1. NSI has exposure to income taxes in different jurisdictions. Significant judgment is involved in determining the

provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. NSI recognizes liabilities for expected tax

issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

In most of these financial periods, NSI has unabsorbed tax losses available for set off against future taxable

income subject to the agreement by the Income Tax Authority. The deferred tax assets have not been recognised due to uncertainty in its realization.

2. There are outstanding tax queries from the Singapore Tax Authorities on the rights fees expense in the income statement and NSI’s compliance with the withholding tax provisions of the Income Tax Act. In addition, there

are also tax queries on the NSI's income recognition and residency status. Till date, Inland Revenue Authority of

Singapore (IRAS) has neither responded to the NSI’s replies, nor made any assessment. Accordingly, the

quantum of withholding tax provisions and/or income tax provision, if any, cannot be reliably estimated.

3. Sundry Debtors include relating to the Company and to NMPAPL of Rs. 35.67 million and Rs 21.20 million

respectively due from a party outstanding for several years. The director/s of the Company and NMPAPL have

consented to indemnify the Company and NMPAPL respectively for any loss on account of partial or non-recovery on this account and have placed with the Company unsecured loan/s of an equivalent amount to be

utilized for any shortfall in recovery.

B. Common significant note for the years ended March 31, 2010, 2009, 2008 and 2007

Advances recoverable in cash or in kind or for value to be received include loan net of the Group’s share Rs. 51.69

million granted by the Company to ZSPL, a jointly controlled entity, which is outstanding as at March 31, 2010 (Rs.

48.94 million, Rs. 46.52 million, Rs. 43.29 million outstanding as at March 31, 2009, March 31, 2008 and March 31,

2007 respectively).

The Company has also made an investment net of the Group’s share of Rs. 2,279.70 million in Non-Cumulative

Redeemable Preference Shares of Neo, a jointly controlled entity (subsidiary of ZSPL). Further, Rs. 3,025.43 million (net of subsequent realization and net of the Group’s share) included under Sundry Debtors is due as at March 31,

2010 from Neo towards Media Rights Fees.

The recoverability of the loan in the books of the Company referred to above is dependent upon the success of the operations of Neo.

Neo is a leading sports television channel in India. Neo commenced commercial operations in the month of October

2006. The Audited accounts of Neo for the year ended March 31, 2008 reflected an accumulated loss of Rs. 6,302.63 million as against the paid up capital and reserves of Rs. 4,500.00 million. Thus there is total erosion of Net worth of Neo. However in view of the management Neo will make sufficient profits in future and hence no adjustment

required as at March 31, 2008 and March 31, 2007 in the carrying value of the investments and loan as aforesaid in the books of the Company.

As per the audited accounts of Neo for the year ended March 31, 2010, the accumulated losses of Rs. 11,587.41

million (as at March 31, 2009 of Rs. 8,209.48 million) of Neo have far exceeded the Shareholders’ equity (before adjustment of accumulated losses) of Rs. 5,131.39 million (as at March 31, 2009 of Rs. 4,478.00 million), which in

the opinion of the management is due to the long gestation period involved in the case of new television channel and

also on account of the recent economic slowdown. Neo was holding Media Rights from the Company for telecast in India of Cricket Matches organized by Board of Control for Cricket in India (BCCI), under the existing arrangement

up to March 31, 2010. Further, during the year ended March 31, 2010 BCCI has re-awarded the Global Media Rights to the Company for another four years for the period from 2010 to 2014 and the rights to telecast in India have been

F-18

sub-licensed by the Company to Neo. In terms of the Media Rights Agreement the Company has been granted an

exclusive negotiating period which shall commence prior to March 31, 2014 during which the Company shall require to confirm in writing its best offer for the renewal of this Media Rights Agreement for the further period of four years

up to March 31, 2018. On such renewal of its Media Rights Agreement the Company intends to sub-license the

Media Rights to Neo for another four years up to March 31, 2018. Based on the revised business plans of Neo and

projections available with the Company, Neo is expected to make profits from the year 2011 and also expected to generate sufficient profits to eliminate accumulated losses in next seven years. Accordingly, in the opinion of the

management of the Company the loan given to ZSPL and outstanding as at March 31, 2010 and as at March 31, 2009

is good and fully recoverable and the amount due as at March 31, 2010 from Neo towards Media Rights Fees will be

realised in due course.

The tenure of the Non-Cumulative Redeemable Preference Shares of Neo is a period not exceeding 20 years from

March 29, 2007 being the date of issue. Further as per terms of redemption, the redemption shall be at the premium which shall not be less than Rs. 90 per share. Having regard to the long term and strategic nature of investment, the

business plans and projections of Neo referred to above and the valuation of the Equity and Preference Share Capital

of Neo carried out subsequent to the year ended March 31, 2010 by the independent reputed financial advisor, the

management of the Company is of the view that there is no diminution, other than temporary, in the value of investment in Neo as at March 31, 2010 and March 31, 2009.

C. Common significant notes for the years ended March 31, 2010 and March 31, 2009

1. Sundry Debtors include Rs. 26.39 million in respect of the Company due from a party which is outstanding for

more than 3 years. During the year ended March 31, 2009, the Company has filed a civil suit for recovery of the

amount with interest. The Company is confident of ultimate recovery of the amount and accordingly no

provision is considered necessary in respect of this.

2. Sundry Debtors includes an amount of Rs. 33.43 million (as at March 31, 2009 Rs. 31.23 million) in respect of

which NSI has filed Notice of Arbitration. The management of NSI has assessed the collection of the amount to be probable, based on the legal advice obtained.

3. Sundry Creditors includes Rs. 58.48 million in respect of NMPL being a portion of the funds received from a customer for services rendered, which is in dispute. The customer is claiming against NMPL for an amount of Rs. 81.23 million. The management of NMPL has assessed the potential exposure from the claim to be Rs. 58.48

million, based on the legal advice obtained.

D. Other significant notes for the year ended March 31, 2010

1. Compulsorily Convertible Non Cumulative Preference Shares (CCPS) were to be convertible in full but not in

part in to such number of Equity Shares of Rs. 10 each, so as to provide a minimum annual compound internal

rate of return on the investment amount (CCPS Minimum Return) and number of equity shares to be issued to be

determined as specified in the Restated and Amended Subscription and Shareholders Agreement dated March 06, 2009 (the Agreement) between the Company, the Founder and the Investors as amended by the Supplemental Restated and Amended Subscription and Shareholders Agreement dated May 22, 2009 (the Supplemental

Agreement). CCPS conversion was to occur upon any of the following three events:

1. In the event of an IPO

2. In the event of the Sale of the Company

3. Any other event after December 31, 2010 as specified in the Agreement.

On December 31, 2019 if any CCPS still remain unconverted those were to be converted as provided in the

Agreement.

In view of the IPO then proposed by March 2010, 2,775,741 CCPS of Rs. 10 each with the aggregate premium

of Rs. 1,212.61 million (i.e. Rs 436.86 per preference share) and after considering CCPS Minimum Return

referred to above, were converted into 3,826,265 equity shares of Rs. 10 each fully paid up and allotted vide Board resolution passed on February 09, 2010. However subsequently it was noted that the number of equity

F-19

shares was stated as 3,826,265 instead of 3,494,145 determined in accordance with the Agreement, referred to

above. Accordingly vide resolution dated July 20, 2010 the Board of Directors rectified the error in number of equity shares and correct number of 3,494,145 equity shares of Rs. 10 each fully paid up with the aggregate

premium of Rs.1,205.43 million were deemed to have been allotted from February 09, 2010 pursuant to the

provisions of the Agreement. The aggregate premium of Rs.1,212.61 million on conversion of Preference Shares

has been debited to, and the aggregate premium of Rs. 1,205.43 million on issue and allotment of equity shares has been credited to, the Securities Premium Account.

2. In terms of the Subscription and Shareholders Agreement dated January 18, 2007 entered into between the Company, the Founder Promoters and the Investors [as amended by the Restated and Amended Subscription and

Shareholders Agreement dated March 06, 2009 (the Agreement)], 28,049,567 Zero Coupon Convertible

Debentures (Debentures) of Rs.194.83 each, were to be convertible in full but not in part into Equity Shares of

Rs.10 each, so as to provide a minimum annual compound internal rate of return on the subscription amount (Agreed Minimum Return) and number of equity shares to be issued to be determined as specified in the

Agreement. Debentures conversion was to occur upon any of the following three events:




Upon demand of an investor in its sole discretion prior to or upon the happening of a liquidation event in relation

to the Company, the Debentures were convertible into redeemable preference shares at the Liquidation

Conversion Ratio as defined in the Agreement.

In view of the IPO then proposed by March 2010, 28,049,567 Debentures of Rs. 194.83 each, after considering

Agreed Minimum Return referred to above, were converted into 29,231,967 equity shares of Rs. 10 each fully

paid up and allotted vide Board resolution passed on February 09, 2010. However subsequently it was noted that the number of equity shares was stated as 29,231,967 instead of 25,132,350 determined in accordance with the

Agreement, referred to above. Accordingly vide resolution dated July 20, 2010 the Board of Directors rectified

the error in number of equity shares and correct number of 25,132,350 equity shares of Rs. 10 each fully paid up

with the aggregate premium of Rs. 5,213.57 million were deemed to have been allotted from February 09, 2010 pursuant to the provisions of the Agreement. The aforesaid aggregate premium on issue and allotment of equity

shares has been credited to the Securities Premium Account.

3. NSI has negotiated with a sports federation for reduction of right costs to the extent of Rs. 684.13 million for

matches conducted during the financial year 2009-10 which has been confirmed by a letter from the Acting Chief

Executive Officer of the sports federation subject to the signing of an addendum agreement, which is pending as

on the date of report of NSI Auditor (i.e. July 30,2010).

4. Tax payments less provisions include Rs. 14.04 million of tax deducted at source (TDS) by third parties, the TDS

certificates for which have not been received by the Company. The Company is in the process of collecting the TDS certificates from the parties and would be filing the revised return for the respective assessment years after

its collection in due course. As the pending TDS certificates referred to above relate to the assessment years for

which assessment proceedings have not been initiated or completed, the Company is confident of ultimate recovery of these amounts and accordingly no provision is considered necessary in this respect.

5 The Company has entered into an Agreement dated March 26, 2006 with Paramount Corporation Limited (PCL)

and Zenith Sports Private Limited (ZSPL) under which at any time after one year the Company shall have a call option to purchase any and all present and /or future remaining shareholdings (as on March 31, 2010 51% of the

share capital of ZSPL of Rs. 0.50 million is held by PCL) and / or rights held by PCL in ZSPL at a price to be

mutually agreed but which shall provide for a minimum return on the capital invested in ZSPL at the rate of

11%. Similarly under the same Agreement PCL has a put option to sell shareholdings and / or rights referred to above at a price to be mutually agreed but which shall provide for a minimum return on the capital invested in

ZSPL at the rate of 11%. In case the price cannot be mutually agreed, the price shall be determined by an

independent international reputed firm of Accountants jointly appointed by both the parties to undertake the said

valuation.

F-20

During the year, the Company decided to purchase the balance 51% of the share capital of ZSPL held by PCL at

an aggregate price of Rs 0.36 million, subject to the approval of Foreign Investment Promotion Board (FIPB). Subsequent to the year end, the Company has received approval from FIPB and the Company would be

acquiring the shares in due course.

6. The Company, the Founders of the Company, Neo Sports Broadcast Private Limited (Neo), the Investor in Neo (the Investor) and Zenith Sports Private Limited (the holding company of Neo) have entered into a Share Subscription and Shareholders Agreement dated April 14, 2009 (the Investment Agreement) pursuant to which

the Investor has invested an amount of Rs. 635.71 million in Neo by subscribing to 3,475 Equity Shares and 344,098 Compulsorily Convertible Non-Cumulative Preference Shares (both together “Investor Securities”).

Further, the Company has entered into ‘Put Option Agreement’ (Agreement) dated April 14, 2009 with the

Investor under which in consideration of the subscription of the Investor Securities by the Investor, the Company

has granted, an option to the Investor to sell , at any time after the date of the Agreement, all or any of the Investor Securities held by the Investor in Neo to the Company at a Target Price (Put Option Exercise Price) to

be determined in accordance with the provisions contained in the said Agreement. The Target Price shall be

mutually agreed and will be based on the aggregate amount of the Investment in the Investor Securities and the

amount which give the Investor the rate of return of 30% p.a. as on the Put Settlement date. In case all or any of Compulsorily Convertible Non-Cumulative Preference Shares are converted into equity shares then in relation to

such Converted Shares the Target Price would be the fair market value of such Converted Shares prescribed in the Valuation Certificate to be obtained in terms of the Agreement or in accordance with the valuation principles prescribed in the Agreement, as applicable.

CCPS conversion will occur upon any of the following three events:

1. In the event of an IPO.

2. In the event of the Sale of Neo

3. Any other event after December 31, 2010 as specified in the Investment Agreement.

On December 31, 2019 if any CCPS is still unconverted it shall be converted as provided in the Investment

Agreement.

In terms of the “Further Subscription Agreement” dated April 14, 2009 entered into by the Company with the Founders of the Company and the Investor, the Investor has agreed that, upon the Investor exercising the Put

Option, the Investor shall, on being called upon by the Company, invest the amount equal to the Put Option Exercise Price and subscribe to Equity Shares of the Company in accordance with the terms mentioned in the

Further Subscription Agreement.

7. As per the Agreement entered into during the year between Neo, Promoters and Bennett Coleman & Co. Ltd, Neo has issued 2 Equity Shares of Rs.10 each at premium of Rs.5,665.50, and 5 Warrant at a subscription price

of Rs.1,333,9693.60 per warrant. As per terms of the said Agreement, these Warrants can be converted to 11,752

Equity Shares with an aggregate value of Rs. 66.70 million within a period of 5 years from the date of payment of the Warrant Exercise Amount.

8. Television/Entertainment Programme (Acquired) and certain Television/Entertainment programmes (produced)

of aggregate cost of Rs.163.46 million and Rs.305.68 million respectively and having no carrying value, have been derecognised as no future economic benefits are expected from its use.

E. Other significant note for the year ended March 31, 2007

The Company had transferred the Radio rights forming part of the Media Rights Agreement with the Board of Control

for Cricket in India (BCCI) to Paramount Corporation Limited (PCL), during the previous year. However, due to certain changes in regulatory environment, the exploitation of the Radio rights by PCL was rendered unviable and

hence, by mutual consent the Radio rights agreement has been terminated during the year. Consequently an amount of

Rs. 79.00 million due from PCL under the above contract has been written off to the Profit and Loss Account for the

year. With the termination of this agreement the Radio rights have reverted back to the Company.

F-21

F Other significant notes for the year ended March 31, 2006

1. The Company has bought back 110,150 equity shares of Rs. 5 each at an average price of Rs. 80.85 per share

during the year, and accordingly:

i. The face value of shares has been reduced from the paid up Equity Share Capital.

ii. The balance of Rs. 75.85 per share paid on these shares aggregating to Rs. 8.35 million has been adjusted

to the Share Premium Account; and

iii. As required under the provisions of the Companies Act, 1956, Rs. 0.55 million has been transferred to the

Capital Redemption Reserve from the Profit and Loss Account.

2. Pursuant to the issue by the Company of 24,389,888 shares of Rs. 5/- each on private placement basis to 3i

(Mauritius) Investments 2 Technology Limited (now known as 3i Sports Media (Mauritius) Limited), the

Company has ceased to be a subsidiary of Nimbus Creative Corporation Limited (now known as Paramount Corporation Limited) w.e.f. August 05, 2005.

3. Until the year ended March 31, 2005, the Company was accounting for leave encashment liability to employees on actual payment basis. In the current year, liability for leave encashment has been provided for on the basis of

leave available to the credit of the employees at the end of the year within limits determined by the management.

Had such change in the accounting policy not been made, profit for the year would have been higher by Rs.2.34

million.

4. Consequent to sale by the Company of the investment of 51% in the equity share capital of the wholly owned subsidiary Zenith Sports Private Limited (ZSPL) to Paramount Corporation Limited (PCL) under the agreement entered into on March 27, 2006, ZSPL and Neo Sports Broadcast Private Limited (incorporated on March 17,

2006 as 100% subsidiary of ZSPL) ceased to be the subsidiaries of the Company with effect from that date. In

terms of the above referred agreement, ZSPL and Neo have become jointly controlled entities of the Company

and PCL. The profit of Rs. 268.02 million on sale of 51% of the interest in ZSPL has been recognized in the Statement of Restated Consolidated Profits and Losses which is included in Annexure X ‘Details of Consolidated

Dividend and Other Income’.

F-22

G. Other notes

1. Employee Stock Option Plan (ESOP)

On August 01, 2007, the Company has granted Stock Options to its eligible employees at a price of Rs. 161.66 per

option in terms of Employees Stock Option Scheme 2007 of the Company as approved by the Shareholders at the Extra Ordinary General Meeting held on January 08, 2007.

(a) The particulars of the Options distributed under ESOP 2007 are as follows:

Particulars ESOP 2007

Eligibility A permanent employee or full time consultant of the Company, a director of the

Company (including of subsidiaries where the Company holds at least 75% equity

capital or has irrevocable options to acquire at least 75% equity capital) but excluding (a) an employee who is a promoter or belongs to the promoter group; (b) a

director who either by himself or through his relatives or through any body

corporate, directly or indirectly holds more than 10% of the issued and subscribed

Shares of the Company; (c) Part time consultants or other associates who may be covered under a separate stock option plan.

(Group companies, affiliates, etc. may have their individual schemes and employees

of any such affiliate which has its own scheme would not be covered by this plan.)

Vesting period for options

granted

All options granted would vest over a period of four years from the date of grant, viz.

10% on January 31, 2008, 20% on January 31, 2009, 30% on January 31, 2010 and

40% on January 31, 2011. During the year ended March 31, 2010, the Company has

extended the exercise period for the first vesting schedule up to the end of exercise period for the second vesting schedule, i.e. up to January 31, 2011.

Exercise Period

Within 6 months from the date of public issue in the event of the Company going in for an Initial Public Offer (IPO) or 2 years from the date of vesting whichever is

earlier.

Method of Settlement

Equity Shares

Exercise Price Rs. 161.66

No. of Options Granted 1.54 million

F-23

(b) The particulars of number of options granted and lapsed and the Price of Stock Options for ESOP 2007 are as follows:

Particulars March 2010

Quantity March 2009

Quantity March 2008

Quantity

Authorised to be Granted 1,623,239 1,623,239 1,623,239

Granted during the year -- -- 1,545,000

Forfeited during the year -- -- --

Exercised during the year -- -- --

Lapsed/Cancelled during the year 8,500 375,500 --

Granted and outstanding at the end of the year 1,161,000 1,169,500 1,545,000

Fair value of the ESOP on the date of Grant Rs. 3.655 Rs. 3.655 Rs. 3.655

(c) The Company has followed the fair value based method of accounting for stock options granted based on Guidance Note on Accounting on Employee Share-based Payments, issued by the Institute of Chartered Accountants of India.

The Fair Value of the Share has been calculated by an independent valuer on the basis of Weighted Average of “Discounted Cash Flow Method”, “PE Multiple Methods”, “Future Maintainable Profits” and “Net Asset Value”.

Fair value of Options calculated by independent valuer using Adjusted Black-Scholes Option Pricing Model is higher than the exercise price and hence these options are considered to be dilutive in nature and the effect of this is

considered in calculating diluted earnings per share in accordance with Accounting Standard 20 viz. Earnings Per

Share.

Compensation expenses (net) recognised during the year ended March 31, 2010, 2009 and 2008 is Rs. 0.89 million,

Rs. 1.00 million and Rs. 1.95 million respectively.

(d) Method and significant assumptions used to estimate the Fair Value of the Options are as under:

The Fair value of Options has been calculated by an independent valuer. The valuation has been done using the Adjusted Black-Scholes Option Pricing Model based on the assumptions given by the management, which are as under:

(i) Expected Life of the Options:

These stock options will vest in the following proportion from the date of grant and can be exercised within 6

months from the date of IPO in the event of the Company going for an IPO or two years from the vesting date whichever is earlier.

F-24

Year 1 from the date of Grant - 10% of the Options Granted;

Year 2 from the date of Grant - 20% of the Options Granted; Year 3 from the date of Grant - 30% of the Options Granted;

Year 4 from the date of Grant - 40% of the Options Granted.

(ii) Risk free interest rate:

This rate has been assumed at 8.09% for all the four years.

(iii) Share price: (Strike Rate) Rs. 161.66

(iv) Volatility:

As the shares of the Company are unlisted, the volatility is considered as 1 % for all the four years

(v) Expected dividend yield:

Expected Dividend per share on the Grant Date is 7.50% for all the four years.

2. Managerial Remuneration

(Rupees in Million)

Particulars

Year Ended

March 31, 2010

Year Ended

March 31, 2009

Year Ended

March 31, 2008

Year Ended

March 31, 2007

Year Ended

March 31, 2006

Salaries and

allowances 7.45 7.18 6.91 7.55 8.16

Contribution to provident fund 0.70 0.67 0.63 0.73 0.73

Perquisites in cash or in kind 0.03 0.08 0.05 0.77 0.41

Total 8.18 *7.93 *7.59 9.05 9.30

The above remuneration excludes provision for gratuity and compensated absences, which are determined on overall

basis for the Company.

The remuneration paid to directors for the years ended March 31, 2010, 2009, and 2008 excludes compensation cost for Employee Stock Options, as the options are not exercised as at the respective year end.

* Includes Rs.0.41 million and Rs.0.22 million for the years ended March 31, 2009 and March 31, 2008 respectively in respect of the period where a director was holding an office/place of profit under Section 314 of the Companies Act,

1956.

Note:

The remuneration paid to directors for the year ended March 31, 2009 had exceeded the overall remuneration prescribed

under Section 309 of the Companies Act, 1956 (the Act ) by Rs.2.76 million for which the Company has applied on April 10, 2010 to the Central Government for its waiver.

F-25

3. Derivatives Disclosure:

The Group has not taken any derivative instrument during the years ended March 31, 2010, 2009, 2008 and 2007 and there

is no derivative instrument outstanding as at the respective year end. The year end foreign currency exposures that are not

hedged by derivative instruments or otherwise are as follows:

(Amount in Million)

As at March 31, 2010




Particulars Foreign

Currency Rs.

Foreign

Currency Rs.

Foreign

Currency Rs.

Foreign

Currency Rs.

Sundry Debtors USD

0.004 0.16 USD 0.21 10.88 USD 0.37 14.72 USD 0.22 9.55

SGD - - SGD - - SGD - - SGD 0.01 0.17

USD 0.44 19.30 USD 0.38 19.04 USD 0.20 7.95 USD 0.08 3.67

GBP - - GBP - - GBP 0.06 4.71 GBP 0.01 0.49

Sundry Creditors

EURO 0.03 1.53 EURO 0.05 3.24 EURO 0.02 1.11 EURO 0.01 0.28

SGD - - SGD 0.02 0.66 SGD 0.02 0.66 - - - Loans and Advances USD 0.04 1.86 USD 0.10 3.96 USD 0.10 3.96 USD 0.03 1.37

4. Earnings Per Share (EPS) :

(Rupees in Million)

Year ended


2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Net Profit/(Loss) After Restatement Adjustments (1,423.93) (1,317.09) (1,081.96) (797.11) (352.97)

Add: Employee Compensation expenses relating to ESOP * 0.59 0.66 1.73 - -

Net Profit/(Loss) after restatement adjustments for diluted EPS (1,423.34) (1,316.43) (1,080.23) (797.11) (352.97)

Weighted average number of shares outstanding during the

period/year

For basic EPS (Refer Foot Note 3 below) 60,861,798 32,606,441 32,606,441 32,488,096 28,254,352

For diluted EPS(Refer Foot Note 1 and 3 below)* 60,861,798 32,606,441 32,606,441 32,488,096 28,254,352

Earnings per share

Basic (Refer Foot Note 3 below) (23.40) (40.39) (33.18) (24.54) (12.49)

Diluted (Refer Foot Note 3 below)* (23.40) (40.39) (33.18) (24.54) (12.49)

Nominal value per share (Refer Foot Note 3 below) 10 10 10 10 10

* The potential equity shares arising out of issue of ESOP and conversion of Zero Coupon fully Convertible Debentures and Compulsorily Convertible Preference

Shares have an anti – dilutive effect and hence the same is ignored for calculating diluted EPS.

Foot Notes :

1. Weighted average number of shares outstanding during the year- for Diluted EPS:

Year ended


2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Weighted average number of shares outstanding during the year – for

calculating basic EPS (numbers)

(Refer Foot Note 3 below)

60,861,798 32,606,441 32,606,441 32,488,096 28,254,352

Add: Diluted effect of weighted average number of potential equity shares

that could arise on conversion of 28,049,567 Zero Coupon fully

Convertible Debentures into equity shares (Refer Foot Note 2 below)

- 25,132,350 25,132,350 5,026,470 -

Add: Diluted effect of weighted average number of potential equity shares

that could arise on conversion of 2,775,741 (as at March 31, 2009 :

217,965) Compulsorily Convertible Preference Shares into equity shares

(Refer Foot Note 2 below)

- 19,915 - - -

Add: Potential equity shares that would be issued at fair value in respect of

employee stock options

25,669 25,669 17,160 - -

Total 60,887,467 57,784,375 57,755,951 37,514,566 28,254,352

F-26

2.During the year ended March 31, 2010, Zero Coupon Convertible Debentures and Compulsorily Convertible Preference Shares have been converted in to equity

shares. Accordingly for the purpose of calculation of Diluted EPS, actual number of equity shares issued on conversion have been considered.

3.As two equity shares of Rs. 5/- each were consolidated into one equity share of Rs. 10/- each during the year ended March 31, 2008, earnings per share for the year

ended March 31, 2007 and 2006 have been restated by adjusting weighted average number of equity shares outstanding during the respective years, as required by

Accounting Standard 20 "Earnings Per Share".

5. Employee Benefits

Consequent to the Accounting Standard on Employee Benefits (AS-15) becoming applicable to the Company w.e.f. April 01, 2007, the Company has accounted for, the expected cost of long term employee benefits in the form of vesting and

non vesting compensated absences in respect of leave outstanding to the credit of its employees and liability in respect of

gratuity based on an actuarial valuation. The increase in liability for compensated absences up to March 31, 2007 amounting to Rs. 0.24 million (net of deferred tax of Rs. 0.12 million) and reduction in liability for gratuity amounting to Rs. 0.47 million (net of deferred tax of Rs. 0.24 million) has been adjusted against the opening balance of General

Reserve as on April 01, 2007 in accordance with the transitional provisions contained in the said standard.

Accordingly the details of Employee Benefits in respect of the Group as required by the Accounting Standard-15

"Employee Benefits" for the years ended March 31, 2010, 2009 and 2008 are given below:-

(Rupees in Million)

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2008

Defined Contribution Plans The Group has recognised the following amount in the Profit and Loss

Account:

1

Contribution to Provident Fund and Family Pension Fund 7.75 7.81 6.91

Defined Benefit Plan (Funded)

a. A general description of the Employees Benefit Plan:

The Group has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides

for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount

equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon

completion of five years of service.

b. Details of defined benefit plan

Particulars

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2008

I Components of employer expense

1 Current Service cost 1.56 1.85 1.12

2 Interest Cost 0.51 0.31 0.19

3 Expected return on Plan Assets (0.25) (0.17) (0.11)

4 Actuarial Losses / (Gains) (0.85) 0.51 (0.17)

5 Past Service Cost 1.86 - @

6 Total expense recognised in the

Profit and Loss Account 2.83 2.50 1.03

II Actual Contribution and Benefits Payments for the year

1 Actual Benefits Payments (0.70) (0.53) -

2

2 Actual Contributions (0.70) (0.74) (0.64)

III Net asset/ (liability) recognised in the Balance Sheet.

1 Present Value of Defined Benefit Obligation 8.14 5.82 3.74

2 Fair Value of Plan Assets 2.70 2.51 2.19

3 Funded Status [Surplus/(Deficit)] (5.44) (3.31) (1.55)

4 Net asset/(liability) recognised in the Balance Sheet (5.44) (3.31) (1.55)

IV Change in Defined Benefit Obligation during the year

1

Present value of Defined Benefit Obligation as at the

beginning of the year 5.82 3.74 2.62

2 Current Service Cost 1.56 1.85 1.12


4 Past Service Cost 1.86 - -

5 Actuarial Losses/ (Gains) (0.91) 0.45 (0.18)

6 Benefits paid (0.70) (0.53) -

7 Present value of Defined Benefit Obligations as at the end

of the year 8.14 5.82 3.74

F-27

V Change in Fair Value of Plan Assets during the year

1 Plan Assets as at the beginning of the year 2.51 2.19 1.45

2 Expected return on Plan Assets 0.25 0.17 0.11

3 Actuarial Gains/ (Losses) (0.06) (0.06) (0.01)

4 Actual Contributions 0.70 0.74 (0.64)

5 Benefits paid (0.70) (0.53) -

6 Plan Assets as at the end of the year 2.70 2.51 2.19

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2008

VI Actuarial Assumptions

The Group

Jointly Controlled

Entity The Group

Jointly Controlled

Entity The Group

Jointly Controlled

Entity

1 Discount Rate

8.15%

p.a.

8.00%

p.a.

7.00%

p.a.

7.50%

p.a.

7.50%

p.a.

7.50%

p.a.

2 Expected rate of Return on plan assets

7.50%

p.a.

7.50%

p.a.

7.50%

p.a.

7.50%

p.a.

8.00%

p.a. N.A

3 Salary escalation Rate

7.00%

p.a.

7.00%

p.a.

7.00%

p.a.

5.00%

p.a.

5.00%

p.a.

5.00%

p.a.

VII The expected rate of return on the plan assets is based on the average long term rate of return expected on investments of the Fund

during the estimated term of the obligations. The actual return on plan assets for the years ended March 31, 2010, March 31, 2009 &

March 31, 2008 is Rs. 0.19 million, Rs.0.11 million and Rs. 0.10 million respectively.

VIII The assumption of the future salary increases, considered in actuarial valuation, takes into account the inflation, seniority, promotion and

other relevant factors.

IX The major categories of Plan Assets as a percentage of the total plan assets

Insurer Managed Funds 100% 100% 100%

Note: The details of investment made by the Insurer is not readily available with the Group

X Experience Adjustments

Year ended March

31, 2010

Year ended March

31, 2009

Year ended March

31, 2008

1

Present value of Defined Benefit Obligation as at the end

of the year 8.14 5.82 3.74

2 Fair Value of Plan Assets as at the end of the year 2.70 2.51 2.19


4 Experience adjustment on Plan Liabilities (0.46) 0.05 (0.37)

5 Experience adjustment on Plan Assets (0.06) (0.06) (0.01)

XI Contribution expected to be paid to the Plan during the year ending March 31, 2011 - Rs. 2.98 million.

6. Segment Reporting:

Segmental Information in respect of Primary Segments (Business Segments):

The Group is organised into 5 business segments namely - Television Production & Marketing, Filmed Entertainment,

Digital and Mobile Content, Sports Marketing and Broadcasting.

The Television Production & Marketing segment creates programs for Broadcasters in Hindi and regional languages. The

segment also sells/market Airtime on Time- Barter Channels.

The Filmed Entertainment segment is involved in Content Generation including Film Production, Rights Management

including Films Rights acquisition and distribution.

The Digital and Mobile Content segment is involved in Mobile/ Internet Content Creation and Mobile Content Products.

The Sports Marketing segment is involved in Commercial Rights Management, Sponsorship and In Stadia Signage,

Sponsor Representation, Sports TV Production and Event Management.

The Broadcasting segment consists of procuring television rights and delivering via satellites, thereby earning revenues by

way of advertisement and subscription.

Segments have been identified and reported taking into account the nature of products and services, the differing risks and

returns and the internal financial reporting system.

F-28

Inter Segment Sales:

Inter segment sales are made at prices which are negotiated at arm’s length.

Segment Information for the year ended March 31, 2010

Rupees in Million

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

Broadcasting Others TOTAL

Revenue

Total 369.57 0.35 11.69 8,302.20 1,970.53 2.44 10,656.78

Less: Inter Segment Revenue 3,164.00 3,164.00 External 369.57 0.35 11.69 5,138.20 1,970.53 2.44 7,492.78

Result

Segment Result (17.44) (23.71) (21.95) 899.67 (1,680.60) (14.46) (858.49)

Add : Unallocated Income 3.98

Less: Unallocated Expenses 221.32

Operating Profit/ (Loss) (1,075.83)

Interest expenses 309.79

Interest/ Dividend Income 106.38

Profit/ (Loss) before Taxation (1,279.24)

Taxation 144.69

Profit/ (Loss) after Taxation (1,423.93)

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing


Carrying Amount of Segment Assets 386.12 28.87 13.16 8,690.29 1,070.49 8.06 10,196.99

Less: Inter Segment Assets 4,020.83

6,176.16

Unallocated Corporate Assets 7,769.38

Total Assets 13,945.54

Carrying Amount of Segment Liabilities 272.28 0.89 18.18 2,983.59 4,215.19 1.70 7,491.83 Less: Inter Segment Liabilities - - - 4,020.83

272.28 0.89 18.18 2,983.59 4,215.19 1.70 3,471.00

Unallocated Corporate Liabilities 6,001.03

Total Liabilities 9,472.03

Capital Expenditure:

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing


Tangible Assets 0.06 - - 0.21 0.61 0.78 1.66

Unallocated Tangible Assets 0.06

Intangible Assets 19.80 - 0.68 - 19.88 - 40.36

Unallocated Intangible Assets 0.47

Depreciation & Amortisation 20.76 18.66 1.95 42.23 34.03 3.84 121.46

Unallocated Depreciation / Amortisation

(Including on Revaluation) 38.27

F-29

Segment Information for the year ended March 31, 2009 Rupees in Million

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing


Revenue

Total Revenue 451.61 3.45 7.20 6,526.50 1,240.87 1.58 8,231.21

Less: Inter Segment Revenue 2199.76 2,199.76

External 451.61 3.45 7.20 4,326.74 1,240.87 1.58 6,031.45

Segment Result 51.07 (33.85) (40.92) 739.71 (1,415.33) (35.77) (735.09)



Operating Profit/ (Loss) (1,081.29)



Profit/ (Loss) before Taxation (1,256.62)

Taxation 60.47

Profit /(Loss) after Taxation (1,317.09)

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing


Carrying Amount of Segment Assets 297.20 48.41 11.29 5,670.60 888.23 13.47 6,929.20

Less: Inter Segment Assets 2,474.70

4,454.50



Carrying Amount of Segment Liabilities 234.28 1.80 14.69 784.74 2,667.52 3.10 3,706.13

Less: Inter Segment Liabilities - - - (2,769.80) 2,474.70

1,231.42 1,231.42 1,231.42 1,231.42 (102.28) 1,231.42 1,231.43




Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing


Tangible Assets - - 0.46 2.56 10.21 1.12 14.35


Intangible Assets 26.58 - 2.70 - 30.40



Unallocated Depreciation / Amortisation (Including on Revaluation) 42.74

F-30

Segment Information for the year ended March 31, 2008

Rupees in Million

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing


Revenue

Total Revenue 737.18 133.92 17.78 7,202.44 1,802.20 0.66 9,894.18

Less: Inter Segment Revenue 2,621.80 2,621.80

External 737.18 133.92 17.78 4,580.64 1,802.20 0.66 7,272.38

Result

Segment Result 17.22 (47.77) 12.96 281.61 (1,228.30) (17.89) (982.17)



Operating Profit/(Loss) (1,106.35)



Profit/(Loss) before Taxation (1,037.38)

Taxation 44.58

Profit/(Loss) after Taxation (1,081.96)

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing


Carrying Amount of Segment Assets 841.43 (116.97) 40.67 1,647.94 1,052.16 22.78 3,488.01

Less: Inter Segment Assets - - - (39.30) 1,309.01

841.43 (116.97) 40.67 1,647.94 1,012.86 22.78 2,179.00



Carrying Amount of Segment Liabilities 291.88 6.12 0.36 808.58 1,461.17 4.18 2,572.29

Less: Inter Segment Liabilities - - - - (1,466.45) 1,309.01

291.88 6.12 0.36 808.58 (5.28) 4.18 1,263.28




Television

Production & Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing


Tangible Assets 0.01 0.02 - 1.03 4.90 14.23 20.19

Unallocated Tangible Assets - 3.25

Intangible Assets 20.09 198.58 - 820.12 - 1,038.79

Unallocated Intangible Assets - 12.24



(Including on Revaluation) - 7.95

F-31


Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing


Revenue

Total Revenue 1,014.13 86.42 18.51 4,120.38 755.01 - 5,994.45


External 1,014.13 86.42 18.51 2,692.21 755.01 - 4,566.28

Result

Segment Result 87.60 (79.41) 12.95 204.78 (921.84) (2.06) (697.98)


- - - - -


Operating Profit/(Loss) - - - - (715.96)



Profit/(Loss) before Taxation - - - - (759.25)

- - - - - Taxation 37.86

- - - -

Profit/(Loss) after Taxation - - - - (797.11)

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing


Carrying Amount of Segment Assets 1,993.22 (53.41) 30.96 995.59 979.91 2.63 3,948.90

Less: Inter Segment Assets 31.59

3,917.31


Total Assets - - - - 9,388.85

- - - - -

Carrying Amount of Segment Liabilities 725.67 14.12 1.39 303.87 137.00 0.54 1,182.59

Less: Inter Segment Liabilities - - - (129.96) 31.59

725.67 14.12 1.39 303.87 7.04 0.54 1,151.00

- - - - - Unallocated Corporate Liabilities 7,124.75

- - - - -

Total Liabilities - - - - 8,275.75


Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing


Tangible Assets 0.12 - 0.01 0.97 53.52 - 54.62

Unallocated tangible Assets - - - - 9.74

Intangible Assets 21.24 46.43 - - 1.87 69.54

Unallocated Intangible Assets - - - - 0.03


Unallocated Depreciation / Amortisation (Including on Revaluation) 7.25

F-32


Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing

Others TOTAL

Revenue

Total Revenue 680.20 14.30 13.35 2,489.88 0.43 3,198.16


External 680.20 14.30 13.35 1,477.08 0.43 2,185.36

Result

Segment Result (793.63) (3.37) 8.53 187.42 0.10 (600.95)



Operating Profit/(Loss) (365.17)



Profit/(Loss) before Taxation (323.92)

Taxation 29.05

Profit/(Loss) after Taxation (352.97)

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing

Others TOTAL

Carrying Amount of Segment Assets 83.49 22.75 17.63 1,452.97 3.89 1,580.72

Less: Inter Segment Assets 483.19

1,097.53



Carrying Amount of Segment Liabilities 698.61 10.53 0.21 821.22 0.09 1,530.66

Less: Inter Segment Liabilities (483.19) - - 483.19

215.42 10.53 0.21 821.22 0.09 1,047.47

Unallocated Corporate Liabilities 389.44



Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing

Others TOTAL

Tangible Assets 1.77 - 0.28 1.90 - 3.95


Intangible Assets 36.86 10.52 0.06 2.01 49.45

Unallocated Intangible Assets -

Depreciation & Amortisation 48.85 4.91 0.46 0.52 1.14 55.88



F-33

II. Secondary - Geographical Segments:

(Rs. in Million)

India Outside India Total

Revenue

March 31, 2006 1,093.35 1,092.01 2,185.36 March 31, 2007 3,335.70 1,230.58 4,566.28

March 31, 2008 5,372.02 1,900.36 7,272.38 March 31, 2009 3,898.01 2,133.44 6,031.45

March 31, 2010 5,415.70 2,077.08 7,492.78

Segment Assets

March 31, 2006 1,068.05 512.67 1,580.72

March 31, 2007 3,399.74 549.16 3,948.90 March 31, 2008 2,563.55 924.46 3,488.01

March 31, 2009 6,207.30 721.90 6,929.20

March 31, 2010 9,123.33 1,073.66 10,196.99

Capital Expenditure

March 31, 2006 52.29 1.11 53.40 March 31, 2007 123.23 0.93 124.16

March 31, 2008 1,058.27 0.71 1,058.98

March 31, 2009 42.16 2.59 44.75 March 31, 2010 41.85 0.17 42.02

F-34

Notes: 1 Reconciliation between Segment Revenue and Statement of Restated Consolidated Profits and Losses :

Rupees in Million

Year ended

March 31,

2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Total Segment Revenue 7,492.78 6,031.45 7,272.38 4,566.28 2,185.36 Add:Unallocated Income 3.98 8.64 8.93 7.76 271.39

Add:Interest / Dividend Income 106.38 134.12 173.97 104.14 47.83 Total Income 7,603.14 6,174.21 7,455.28 4,678.18 2,504.58

Sales 7,333.09 5,909.77 6,755.03 4,517.65 2,167.83 Other Income 354.65 697.50 295.81 234.02 339.45 Increase/(Decrease) in Air Time Inventory (0.54) 3.16 (7.68) 10.84 2.52

Total Income before Restatement Adjustments 7,687.20 6,610.43 7,043.16 4,762.51 2,509.80

Less: Restatement Adjustments 84.05 436.22 (412.12) 84.33 5.22 Total Income after Restatement Adjustments 7,603.15 6,174.21 7,455.28 4,678.18 2,504.58

2 The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the preparation of financial statements as

disclosed.

3 Upto the year ended March 31, 2008 having regard to the financial accounting structure followed by the Company, operating cash and bank balances

were considered as part of the respective segment assets and consequently inter segment receivables and payables resulting therefrom were considered

as part of the respective segment assets and liabilities. During the year ended March 31, 2009 the Company has changed the financial accounting

structure and accordingly all cash and bank balances have been considered as a part of Unallocated Corporate Assets. The effect of this on the segment

assets and liabilities and the Unallocated Corporate Assets and liabilities as on March 31, 2009 and 2010 is not reasonably determinable.

4 The information regarding total amount of significant non - cash expenses, other than depreciation and amortisation in respect of segment assets, that

are included in segment expenses for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 has not been ascertained and accordingly the

disclosure of significant non - cash expenses, as required by Accounting Standard 17 "Segment Reporting" has not been made by the Group.

F-35

7. The specified disclosures for Operating Leases as required by Accounting Standard 19 - "Leases" are given

below:

(Rupees in Million)

Particulars

Year Ended

March 31,

2010

Year Ended

March 31,

2009

Year Ended

March 31,

2008

Year Ended

March 31,

2007

Year Ended

March 31,

2006

(a) Disclosures in respect of agreements for Office Premises taken on

cancellable lease:

(i) Lease payments recognised in the Profit and Loss Account for the

year 11.49 16.52 13.07 4.75 0.74

(ii) Significant leasing arrangements

1. Under certain agreements, refundable interest free deposits / advance rent have been given.

2. The agreement contain provision for increase in rent during the tenure of the agreements.

3. The agreements generally contain provision for renewal.

(b) Disclosures in respect of agreement for non cancellable operating

lease for office premises:

(i) Lease payment recognised in the Profit and Loss Account 6.15 6.04 2.78 2.68 1.79

(ii) Future Lease rentals

- Payable within 1 year 2.45 5.56 4.86 2.90 2.58

- Payable after 1 year but within 5 years - 1.85 6.48 - 2.83

- Payable after 5 years - - - - -

(iii) Significant leasing arrangements

1. The agreement does not contain any restrictive covenants.

2. The agreement does not contain provision for renewal.

3. The agreement provides for change in rental if the taxes leviable on such rentals change.

(c) Disclosures in respect of agreements for office premises given on

lease :

(i) Gross carrying amount ( including amount added on revaluation) as

at the year end 300.83 149.89 286.73 80.13 48.24

(ii) Accumulated depreciation as at the year end 54.47 15.51 17.45 18.06 12.96

(iii) Depreciation recognised in the Profit and Loss Account for the

period for which the office premises were given on lease 9.36 9.51 2.95 2.50 1.38

(iv) Future minimum lease payments under non – cancellable operating

lease :

- Not later than one year 1.05 - - - -

- later than one year but not later than five years - - - - -

- Later than five years - - - - -

(v) Significant leasing arrangements


2. The period of agreements ranges between 11 months to 33 months.

3. Certain agreements prohibited sub leasing.

4. Under one of the agreements only the licensee can terminate the agreement after a specified period.

(vi) The initial direct costs are recognised as an expense in the Profit and Loss Account in the year in which they are incurred.

F-36

8. Components of Deferred Tax Assets / (Liabilities) (Net) are as follows:

(Rupees in Million)

Particulars As at

March 31,

2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Deferred Tax Assets

Fixed Assets / Depreciation - - - 6.61 -

Auditors Qualification 6.12 17.64 17.65 17.48 17.47

Provision for Compensated Absences and Gratuity 3.19 3.31 2.43 1.92 0.79

Provision for Doubtful Debts / Advances 31.64 - 1.19 - 3.33

Professional fees disallowed on account of non payment of TDS - - - 0.68 -

Miscellaneous Expenditure - 0.59 0.89 1.17 1.47

Total (A) 40.95 21.54 22.16 27.86 23.06

Deferred Tax Liabilities

Fixed Assets / Depreciation 11.19 16.93 26.47 - 9.99

Excess provision for expenses, written back - 2.47 1.93 8.97 7.52

Bad debts written off earlier, recovered - - - 0.84 0.84

Write back of provision of doubtful debts - - - 0.40 0.40

Total (B) 11.19 19.40 28.40 10.21 18.75

Net Deferred Tax Assets / (Liabilities) (Net) (A-B) 29.76 2.14 (6.24) 17.65 4.31

Note:

The above includes deferred tax impact of Restatement Adjustments.

F-37

9. The proportionate share (without elimination of intra group balances and inter group transactions) in Assets, Liabilities, Income and Expenditure in respect of jointly

controlled entities, based on their Restated Financial Statements, which are considered in the Restated Consolidated Summary Statements are given below:

(Rupees in Million)

Particulars As at March 31,

2010

As at March 31,

2009

As at March

31, 2008

As at March

31, 2007

As at March

31, 2006

(a) Aggregate amount of assets, liabilities, income and expenditure

related to the company's interests in jointly controlled entities:

(i) Assets:

Fixed Assets 31.92 45.26 48.87 52.98 -

Investment 34.34 - - 0.11 -

Sundry Debtors 716.30 411.75 382.76 350.00 -

Cash and Bank Balance 78.74 350.59 24.45 502.80 0.10

Loans and Advances 209.23 80.64 596.24 73.78 21.43

Total 1,070.53 888.24 1,052.32 979.67 21.53

(ii) Liabilities:

Unsecured Loans 49.67 47.03 44.69 41.59 @

Current Liabilities 4,212.05 2,666.81 1,421.34 137.50 483.26

Provisions 396.84 296.42 197.40 98.37 -

Total 4,658.56 3,010.26 1,663.43 277.46 483.26

(iii) Income:

Ad Sales Broadcasting 1,345.06 780.32 1,092.24 389.23 77.71

Distribution Revenue 495.36 459.58 239.92 335.50 -

Other Income 163.31 493.25 49.81 31.64 -

Total 2,003.73 1,733.15 1,381.97 756.37 77.71

(iv) Expenditure:

Cost of Sports Rights 3,166.99 2,216.90 2,625.65 1,411.15 249.38

Production Expenses 121.83 105.93 107.52 103.65 -

Marketing expenses 28.75 44.95 87.92 66.35 -

Payments to and Provision for Employees 67.54 68.39 57.15 22.40 -

Interest and Financial Charges 145.59 65.45 53.45 24.09 3.10


Depreciation/Amortisations 34.03 12.99 9.00 2.41 -

Total 3,660.29 2,663.89 3,068.98 1,711.78 258.95

(v) Share of Restatement Adjustments (23.90) (480.61) 472.66 31.85 -

(b) The Group's share of contingent liabilities of jointly controlled entities 65.35 5.35 4.20 4.57 -

(c) The Group's share of capital commitment of jointly controlled entities - - - 1.14 -

H. The figures for the years ended March 31, 2009, 2008, 2007 and 2006 have been regrouped, rearranged, reclassified and re-

casted wherever necessary, to conform to the year ended March 31, 2010’s classification.

I. @ denotes amounts less than five thousand rupees.

F-38

ANNEXURE VA: DETAILS OF CONSOLIDATED SECURED LOANS AND UNSECURED LOANS

SECURED LOANS

(Rupees in Million)

Particulars As at

March 31, 2006 March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010

From Banks

Vehicle Loans 4.67 3.07 1.56 0.31 0.14

Working Capital - Oriental Bank of Commerce - 51.27 38.80 59.23 33.46

Cash Credit - UTI Bank Limited 10.19 4.47 - - -

Axis Bank Limited - - 620.57 - -

Punjab National Bank - - - 2,424.47 2,272.94

Union Bank of India - - - - 1,009.98

ABN Amro Bank - - - 101.90 -

UTI Bank Limited 84.26 - - - -

Deutsche Bank A.G. - 1,350.00 - - -

State Bank of India 161.07 - - - -

ICICI Bank UK Ltd. 135.20 132.69 119.91 - -

From Financial Institution 4.50 - - - -

Total 399.89 1,541.50 780.84 2,585.91 3,316.52

UNSECURED LOANS

(Rupees in Million)

Particulars As at


Short Term :

- Bank Overdraft per books 37.98 - - 2.01 -

- Others :

SREI Infrastructure Finance Limited - - - 400.00 -

Loan Notes - Funderburk Enterprise Limited (FEL) (FEL

has significant influence over the Company w.e.f

February, 09, 2010) - - - 382.12 1,175.52

Loan Notes - 3i Sports Media (Mauritius) Limited (3i) (3i

has significant influence over the Company w.e.f. August

05, 2005) - - - 127.38 1,175.52

Other Loans :

Promoter Directors 53.07 53.07 291.07 126.17 126.17

Promoter Company- Paramount Corporation Limited - - 32.42 24.17 -

Loan from Neo Sports Broadcast Pvt. Ltd. (A Jointly

Controlled Entity, also a Company under the same

management) - - 0.25 0.33 -

Zero Coupon Convertible Debentures

- 3i Sports Media (Mauritius) Limited (3i has significant influence over the

Company w.e.f. August 05, 2005) - 1,138.52 1,138.52 1,138.52 -

- Others - 4,326.38 4,326.38 4,326.38 -

Total 91.05 5,517.97 5,788.64 6,527.08 2,477.21

F-39

ANNEXURE VB : DETAILS OF CONSOLIDATED SECURED LOANS AS AT MARCH 31, 2010 (Rupees in Million)

Name of the

Lender

Nature of

Loan

Loan

Sanctioned

(Amount)

Loan

Outstandi

ng as at

March 31,

2010

Rate of

Interest as at

March 31,

2010

Repayment Schedule Security offered Sr.No.

(Amount)

1 ICICI Bank

Ltd.

Vehicle

Loan

0.75 0.14 7.57% p.a. Equated Monthly Installment Secured against hypothecation of

a vehicle

2 Oriental Bank

of Commerce

Working

Capital

Loan(Cash

Credit)

60.00 33.46 13% p.a. Repayable on Demand Secured by first pari passu charge

by way of hypothecation of the

stocks and book debts and

collaterally secured by pari passu

equitable mortgage on the

Company’s flats at Mumbai and

Bangalore, exclusive / first

exclusive equitable mortgage on

flats of Paramount Corporation

Limited (PCL) at Mumbai and

Bangalore.

Further, secured by second

charge on the present and future

fixed assets of the Company and

second pari passu charge on the

Company’s office premises,

Nimbus Centre.

Also guaranteed by the two

directors of the Company and

exclusive pledge of 3 lacs equity

shares of the Company held by a

Director.

3 Punjab

National Bank

Short Term

Loan

2,250.00 2,272.94

[including

interest

accrued

and due

Rs. 22.94

Million]

12% p.a. Bullet payment after 9 months from

the date of first disbursement i.e

September 25, 2009 but before June

30, 2010 [Rs. 372.94 Million

(including interest accrued and due as

on March 31, 2010)repaid by June,

2010 and the Company has vide its

letter dated June 21, 2010 requested

for rollover of the balance amount for

a period of 90 days].

Secured by first charge by way of

hypothecation of receivables of

certain series of cricket matches,

and second charge by way of

hypothecation on other current

assets.

Further, secured by first pari

passu charge by way of extension

of equitable mortgage of the


Nimbus Centre. Also guaranteed

by a director of the Company.

Also secured by first pari passu

charge by way of extension of

pledge on 18 lacs shares held by

Zenith Sports Private Limited in

Neo Sports Broadcast Private

Limited and collaterally secured

by equitable mortgage on office

premise of Nirvana Television

Ltd. Further, to be secured by

pledge of 17,245,102 shares in

aggregate of the Company held

by Paramount Corporation

Limited and two directors of the

Company.

4 Union Bank

of India

Short Term

Loan

1,000.00 1,009.98

[including

interest

accrued

and due

Rs. 9.98

Million]

11.75% p.a. 4 monthly installments commencing

from 7th month from the first month

of disbursement i.e. September,

2009. Full repayment by June 30,

2010, however with an option to pre-

repay prior to maturity without any

prepayment penalty (Fully repaid

subsequent to March 31, 2010).

Secured by first charge by way of

hypothecation of receivables of

certain series of cricket matches,

and collaterally secured by first

pari passu charge on the


Nimbus Centre.

Also guaranteed by a director of

the Company.

Total 3316.52

F-40

Annexure VB : DETAILS OF CONSOLIDATED UNSECURED LOANS AS ON MARCH 31, 2010

1. Loans from Promoter Directors

Rate of Interest Nil

Repayment Schedule Not stipulated.

Security / Collateral Nil

Other details The loan amounts can be utilised by the Company for any loss incurred on account of partial or non recovery of

the debt of the Company of Rs. 35.67 Million and of one of its subsidiary companies of Rs. 21.20 Million due

from a party and outstanding for several years.

Amount Outstanding as on March 31, 2010 Rs. 126.17 Million

2. Loan Notes issued by Nimbus Communications Worldwide Ltd., Mauritius (Issuer) to Funderburk Enterprise Limited (FEL) and 3i Sports Media

(Mauritius) Limited (3i)

Rate of Interest 20% per annum, compounded quarterly, on the Loan Amounts, shall accrue and become payable on the Final

Maturity Date of the respective Loan Notes referred to below. If the Loan Notes are not repaid and/or redeemed

on the Final Maturity Date, then interest of 30% per annum for the period of default, compounded quarterly.

Repayment Schedule Final Maturity Date for Loan Notes issued to FEL - July 12, 2010 being the date which falls 6 months from the

date of the issuance of the first Loan Note.

Final Maturity Date for Loan Notes issued to 3i - Repayable on July 11, 2010 being the date which falls 6

months from the date of the issuance of the first Loan Note.

Security / Collateral Guaranteed by NCL

Other details The terms of issuance of Loan Notes provides for mandatory prepayments in the following circumstances

referred in 1 to 7 (both inclusive) to the extent of lower of outstanding and loan raised/ repayment of margin

deposits, disposal of proceeds of shares, etc. as applicable. In the circumstances as stated in 1 to 6 below, the

mandatory prepayments shall in the minimum aggregate reduce the Outstanding across all Loan Notes by a sum

of USD 500,000 (USD Five Hundred Thousand) and thereafter in integral multiples of USD 250,000 (USD Two

Hundred and Fifty Thousand). To the extent that any proceeds in 1 to 6 (both inclusive) below are lower than

the aforesaid amounts, such amounts shall be placed in an interest bearing account of the Issuer to be applied

solely towards repayment/redemption of the Outstanding at the earlier of the minimum amounts required for the

Mandatory Prepayment being aggregated or the Final Maturity Date.

(1) Upon any member of the Nimbus Group raising any fresh loan or loans of a tenure of 2 years or more

{provided that in the case of the Issuer (Nimbus Communications Worldwide Limited),the period of 2 years or

more shall not be applicable and all loans borrowed shall be used as per this clause}.

(2) Upon the Company receiving repayment of all or any margin deposits placed with banks for the issuance of

the bank guarantee for acquisition of the broadcast rights granted by the BCCI for broadcast rights for cricket to

be played in India.

(3) Upon any member of the Nimbus Group disposing of any shares in another company.

(4) Upon the Company completing an IPO of its securities, whereby any of the securities of the Company are

listed on any stock exchange or quotation system, (5) In the event of any member of the Nimbus Group receiving any monetary compensation from any third

party,

(6) In the event of any member of the Nimbus Group making any issuance of securities to any other person.

(7) If other shareholders in the Company elect to subscribe for Loan Notes in accordance with the Side

Agreement.

All amounts of mandatory prepayments shall be applied proportionately across all Loan Notes.

The Issuer shall not be liable to pay any pre-payment premium, in the event the repayment is made as per

mandatory prepayments payable under 1 to 6 above.

The Issuer may with 2 (two) Business Days notice to the Noteholders, prepay in whole or in part, the

Outstanding then existing, provided that any part prepayment should reduce the Outstanding by a sum of USD

500,000 (USD Five Hundred Thousand) and thereafter in integral multiples of USD 250,000 (USD Two

Hundred and Fifty Thousand).

Amount Outstanding (including interest

accrued) as on March 31, 2010

Rs. 2,351.04 Million

F-41

ANNEXURE VI: DETAILS OF CONSOLIDATED SUNDRY DEBTORS (Rupees in Million)

Particulars As at


Debts outstanding for a period exceeding six months

- Considered Good 217.75 180.17 548.36 957.42 219.55

- Considered Doubtful 76.08 65.39 77.49 110.03 167.79

Less: Provision for Doubtful Debts 76.08 65.39 77.49 110.03 167.79

217.75 180.17 548.36 957.42 219.55 Other Debts

- Considered Good 1,349.67 1,069.37 1,748.46 2,440.28 5,153.17

- Considered Doubtful 3.45 - - -

Less: Provision for Doubtful Debts 3.45 - - -

1,349.67 1,069.37 1,748.46 2,440.28 5,153.17

Total 1,567.42 1,249.54 2,296.82 3,397.70 5,372.72

2296824256 3397698865 5372718844

Above includes dues from :

- Neo Sports Broadcast Private Limited (NSBPL)

(formerly known as Nimbus Sports Broadcast

Private Limited) :- A Jointly Controlled Entity (also

a Company under same management) 502.55 31.46 1321.24 2509.67 3977.87

- Paramount Corporation Limited (PCL) :-PCL had

significant influence over the Company upto

February 08, 2010. Further a Key Management

Personnel (KMP) of the Company and his relative

(KMP and his relative are also promoter directors

of the Company) have significant influence over

PCL. 79.00 - - - -

F-42

ANNEXURE – VII: DETAILS OF CONSOLIDATED LOANS AND ADVANCES (Rupees in Million)

As at Particulars


(Unsecured, Considered Good)

Advances recoverable in cash or in kind or for value to be

received (Refer Note 1 below)

-Considered Good 403.23 789.38 1,095.40 434.06 717.81

-Considered Doubtful - - 3.51 - 13.55

Less: Provision for Doubtful Advances - - 3.51 - 13.55

403.23 789.38 1,095.40 434.06 717.81 Deposits

-Considered Good 32.56 49.58 57.76 49.76 78.77

-Considered Doubtful 18.00 18.00 18.00 18.00 18.00

Less: Provision for Doubtful Deposits (18.00) (18.00) (18.00) (18.00) (18.00)

32.56 49.58 57.76 49.76 78.77

Tax Payments less Provisions 4.45 34.13 136.75 173.11 192.89

MAT credit entitlement - - 7.97 - -

Total 440.24 873.09 1,297.88 656.93 989.47

Note 1 :Advances recoverable in cash or in kind or for

value to be received includes dues from:

- Jointly Controlled Entities

Neo Sports Broadcast Private Limited (a Company under

the same management) - 1.43 0.55 66.36 207.38

Zenith Sports Private Limited (a Company under the same

management) @ 43.29 46.52 48.94 51.69

- Paramount Corporation Limited (PCL) - PCL had

significant influence over the Company upto February 08,

2010. Further, a Key Management Personnel (KMP) of the

Company and his relative (KMP and his relative are also

promoter directors of the Company) have significant

influence over PCL. - - 0.01 @ @

F-43

ANNEXURE VIII: DETAILS OF CONSOLIDATED INVESTMENTS

(Rupees in Million)

Particulars As at

March 31,

2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

LONG TERM INVESTMENTS

- Quoted - - - - -

- Unquoted (Trade, unless otherwise stated)

i) In Fully Paid up Equity Shares

UCL Plastics Limited (Non- Trade ) 0.05 0.05 0.05 0.05 0.05

Zuari Crefin Limited (Non- Trade ) 0.03 0.03 0.03 0.03 0.03

ii) In Fully Paid up Preference Shares of Other Company

Neo Sports Broadcast Private Limited

(a Jointly Controlled Entity and also a Company under same

management) N.A. 2,279.70 2,279.70 2,279.70 2,279.70

(Refer Note below)

CURRENT INVESTMENTS

- Quoted - - - - -

- Unquoted (Non-Trade)

Units of Mutual Fund 1.60 135.27 1.60 1.60 509.17

Grand Total 1.68 2,415.05 2,281.38 2,281.38 2,788.95

N.A. - Not Applicable

Note:

Net of the Group's share

F-44

ANNEXURE IX: DETAILS OF CONSOLIDATED CURRENT LIABILITIES & PROVISIONS

CURRENT LIABILITES:

(Rupees in Million)

Particulars As at


Sundry Creditors 799.76 971.86 834.57 1,048.47 3,085.16

Advances from Customers 2.77 38.75 92.98 57.63 39.48

Unpaid Dividend 0.01 0.02 0.13 0.13 0.13

Investor Education and Protection Fund - Unpaid Dividend - - @ @ @

Other Current Liabilities 55.29 147.02 335.88 145.88 378.70

Total 857.83 1,157.65 1,263.56 1,252.11 3,503.47

PROVISIONS:

(Rupees in Million)

Particulars As at


Provision for Compensated Absences 2.34 3.77 6.26 8.33 7.80

Provision for Gratuity - 1.87 1.55 3.31 5.44

Proposed Dividend 21.19 - - - -

Tax on Dividend 2.97 - - - -

Tax provisions less payments 61.64 52.99 49.45 49.14 161.59

Total 88.14 58.63 57.26 60.78 174.83

F-45

ANNEXURE X: DETAILS OF CONSOLIDATED DIVIDEND AND OTHER INCOME

(Rupees in Million)

Particulars Year ended

March 31,

2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31, 2010 Nature

License Fee from Office Premises 3.37 7.77 8.93 6.28 3.90 Recurring

Interest on fixed deposits with banks and Loans 6.58 44.21 169.90 127.13 102.88 Recurring

(Refer Note 1 below)

Credit Balances no longer payable, written back 0.57 0.01 0.32 22.28 3.06 Recurring

Profit on assignment of Satellite Television

Broadcasting, Terrestrial Television, etc.rights of a

Movie (acquired) (Refer Note 2 below) - - 50.10 - - Recurring

Profit on Sale of Fixed Assets (Net) - - - 1.75 Recurring

Foreign Exchange Fluctuation Gain (Net) - - - - 13.63 Recurring

Miscellaneous Income 4.17 7.96 5.86 9.73 23.99 Recurring

Insurance Claim - 29.40 31.50 - 117.85 Non Recurring

Compensation for Consent Award - - 424.26 - - Non Recurring

Refund of tax deducted at source - - 12.99 - - Non Recurring

Compensation from a cricket board - - - 52.50 - Non Recurring

Dividend from units of Mutual Funds (Refer Note 3) 41.25 59.93 4.07 6.99 3.50 Non Recurring

Credit Balances of customers no longer required,

written back - - - 36.37 -

Non Recurring

Discounts and Incentives Received 10.27 0.41 - - - Non Recurring

Profit on redemption of Mutual Fund - - - - 0.04 Non Recurring

Profit on sale of 51 % interest in a subsidiary (Refer

Note III-F(4) of Annexure IV) 268.02 - - - -

Non Recurring

Total 334.23 149.69 707.93 261.28 270.60

Notes:

1)Net of reduction in Interest accrued in the Previous Year ended March 31, 2009 on account of premature withdrawals of Fixed Deposits - Rs. 16.55 Million.

2) Related to business activities of the Group.

3) The dividend income is earned from temporary deployment of surplus fund, accordingly considered as Non recurring.

Reconciliation

Year ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Other Income before restatement 339.45 234.02 295.81 697.50 354.65

Less: Restatement Adjustments 5.22 84.33 (412.12) 436.22 84.05

Other Income as restated 334.23 149.69 707.93 261.28 270.60

F-46

ANNEXURE XI: DETAILS OF CONSOLIDATED DIVIDEND PAID

Particulars For the Year Ended


Class of Shares Equity Equity Equity Equity Equity

- Equity Share Capital (Rs. in Million) 324.65 326.06 326.06 326.06 615.02

Face Value - (Rs.) 5 5 10 10 10

Rate of Dividend (%) 7.50 - - - -

Total Dividend Paid (Rs in Million) 21.19 - - - -

Tax on Dividend (Rs in Million) 2.97 - - - -

Class of Shares Preference Preference

Preference Share Capital (Rs in Million) 2.18 *

Face Value per share(Rs.) 10 10

Rate of Dividend (%) - -

Total Dividend Paid (Rs in Million) - -

Tax on Dividend (Rs in Million) - -

* During the year Compulsorily Convertible Preference Shares of the Company have been converted in to Equity Shares (Refer Note III- D (1) of Annexure IV).

F-47

ANNEXURE XII: CONSOLIDATED STATEMENT OF ACCOUNTING RATIOS (Rupees in million)



Face Value per Equity share(Rs.) 5.00 5.00 10.00 10.00 10.00

Restated Face value per Equity Share (Rs.) (Refer note 3 (ii) below) 10.00 10.00 N.A. N.A. N.A.

Earning per Equity share

'-Basic -(C/D) (Refer note 3 (ii) below) (12.49) (24.54) (33.18) (40.39) (23.40)

-Diluted -(C/E) (Refer note 3 (ii) below) * (12.49) (24.54) (33.18) (40.39) (23.40)

Return on Net Worth (%) (C/A) (17.83%) (71.61%) # # (31.87%)

Net Asset Value per equity share (Rs.) (B/F) 30.49 17.07 (0.06) (33.67) 72.66

Net Worth excluding Revaluation Reserves (A) 1,979.61 1,113.10 (1.80) (1,095.66) 4,468.55

Net Worth excluding Revaluation Reserves 1,979.61 1,113.10 (1.80) (1,097.84) 4,468.55

and Preference Share Capital (B)

Net Profit After Restatement Adjustments (C) (352.97) (797.11) (1,081.96) (1,317.09) (1,423.93)

Weighted Average Number of Equity Shares - Basic (D) (Refer note 3 (ii) below) 28,254,352 32,488,096 32,606,441 32,606,441 60,861,798

Weighted Average Number of Equity Shares - Diluted (E) (Refer note 3 (ii) below) * 28,254,352 32,488,096 32,606,441 32,606,441 60,861,798

Total Number of Equity Shares outstanding at the end of the year (F) 64,929,552 65,212,881 32,606,441 32,606,441 61,501,870

# Not calculated in view of net worth being negative

Notes:

1) The ratios have been computed as per the following formulae :

Basic Earnings Per Share (Rs.) Net profit after restatement adjustments attributable to equity shares

Weighted average number of equity shares

Diluted Earning Per Share (Rs.) Net profit after restatement adjustments and adjustments related to dilutive potential equity shares

Weighted average number of equity shares plus weighted average number of dilutive potential equity

shares

Return on Net worth (%) Net profit after restatement adjustments

Net worth excluding revaluation reserve

Net Asset Value per Equity Share (Rs.) Net worth excluding revaluation reserve and preference share capital

Total number of equity shares outstanding at end of the year

2) The above ratios have been computed on the basis of the Restated Consolidated Financial Information as per Annexure I and II

3)(i) Earnings Per Share has been calculated in accordance with Accounting Standard 20 - "Earnings Per Share".

* The potential equity shares arising out of the issue of ESOP and conversion of Zero Coupon fully Convertible Debentures and Compulsorily

Convertible Preference Shares have an anti-dilutive effect and hence the same is ignored for calculating diluted EPS.

(ii) As two equity shares of Rs. 5/- each were consolidated into one equity share of Rs. 10/- each during the year ended March 31, 2008, earnings per share for the

year ended March 31, 2006 and 2007 have been restated by adjusting weighted average number of equity shares outstanding during the respective years,

as required by Accounting Standard 20 "Earnings Per Share".

4) Accounting ratios after giving impact of conversion during the year ended March 31, 2010 of Zero Coupon Convertible Debentures issued during the year

ended March 31, 2007 and of Compulsorily Convertible Preference Shares issued during year ended March 31, 2009 and March 31, 2010, are given below:

Particulars


Earnings per Equity Share (Rs.) N.A. As reflected in the diluted earnings per share N.A.

disclosed above

Return on Net Worth (%) (C/G) N.A. (12.12%) (19.80%) (30.14%) N.A.

Net Asset value per Equity Share (Rs.) (G/H) N.A. 56.96 94.62 75.31 N.A.

Net worth after conversion(excluding Revaluation Reserve) (G) N.A. 6,578.00 5,463.10 4,369.24 N.A.

Total Number of Equity Shares after conversion outstanding at the end of the year (H) N.A. ** 115,477,581 57,738,791 58,018,372 N.A.

N.A. = Not Applicable

** Since the face value per equity share as at March 31, 2007 was Rs. 5 the number of converted equity shares of Rs. 10 each have been adjusted to arrive at the total

no. of equity shares after conversion outstanding as at March 31,2007.

F-48

ANNEXURE XIII:CAPITALISATION STATEMENT (Rupees in Million)

Particulars Pre-Issue as at March 31, 2010 Adjusted for Issue (Refer Note 3 below)

Short Term Debts (Refer Note 1 below) 5,667.56

Long Term Debts 126.17

Total Debts 5,793.73

Shareholders’ Funds (Equity) :

Equity Share Capital 615.02 Stock Option Outstanding 4.24

Reserves and Surplus (net of Revaluation reserve) 3,849.29

Total 4,468.55

Long Term Debts/ Equity 0.03: 1

Notes:

(1) Short Term debts represents debts which are due for repayment within twelve months from March 31, 2010 and includes current portion

of long term debts, if any.

(2) The Pre-Issue figures considered above are as per the Statement of Restated Consolidated Assets and Liabilities.

(3) Post Issue figures can be ascertained only after the conclusion of the book building process.

ANNEXURE XIV: STATEMENT OF RECONCILIATION OF CONSOLIDATED PROFITS/LOSSES

(Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A Profit/ (Loss) After Tax before Restatement Adjustments (258.79) (757.79) (1,514.43) (905.72) (1,605.19) B Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of Part A

of Schedule VIII of the ICDR Regulations

B1 Restatement Adjustments relating to:

(a) Advertisement expenses 0.20 - - - -

(b) Revaluation reserve written back (2.44) - - - -

(c) Excess provision for expenses, written back 13.20 3.85 (10.17) (5.49) (18.55)

(d) Bad debts written off earlier, recovered - - (2.50) - -

(e) Write back of provision of doubtful debts - 31.85 23.32 (56.35) -

(f) Miscellaneous Expenditure Written off 0.87 0.87 0.87 0.87 1.74

(g) Change in Depreciation/ Amortisation policy 20.62 (11.66) (60.92) 60.17 294.21

(h) Refund of tax deducted at source - - 12.99 - (12.99)

(i) Gain on settlement with a Cricket Board - (81.40) - - -

(j) Compensation from a Cricket Board - - - 52.50 (52.50)

(k) Compensation for consent Award - - 424.26 (424.26) -

(l) Prior period Items (0.07) (0.11) 0.18 - -

(m) Auditors' Qualifications (118.54) 0.51 1.81 (5.49) 36.81

Sub Total (86.16) (56.09) 389.84 (378.05) 248.72

B2 Restatement adjustments relating to Current Tax / Fringe Benefit

Tax/ Deferred Tax (20.56) 6.66 5.18 (19.65) 17.74

(a) Auditors' Qualification (5.22) (4.08) (4.13) (11.82) (6.86)

(b) Others (15.34) 10.74 9.31 (7.83) 24.60

Sub Total (20.56) 6.66 5.18 (19.65) 17.74

C Deferred Tax Impact of Restatement Adjustments where applicable (12.54) (10.11) (37.45) 13.67 85.20

Net Profit/ (Loss) After Restatement Adjustments (A+B1+B2-C) (352.97) (797.11) (1,081.96) (1,317.09) (1,423.93)

F-49

ANNEXURE XV

A : CONSOLIDATED STATEMENT OF CONTINGENT LIABILITIES (Amount in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March

31, 2010

i) Claim on the Company on account of alleged breach of contract relating to a

television program 1.13 1.13 1.13 1.13 1.13

ii) In respect of arbitration award dated July 5, 2002 passed relating to claim of

Doordarshan / Prasar Bharti ( Broadcasting Corporation of India ) and upheld

by the Bombay High Court vide its order dated November 29, 2004 against

which the Company has appealed before the Division Bench of the Bombay

High Court. The Division Bench has stayed the operation of the award on the

Company depositing Rs. 30.00 Million and furnishing the bank guarantee of

Rs. 40.00 Million in favour of the Prothonotary & Senior Master of the High

Court. 76.24 76.24 76.24 76.24 76.24

Amount of interest included under (ii) above 13.44 13.44 13.44 13.44 13.44

iii)

(a) In respect of the suit filed against the Company in the Bombay High Court

relating to a contract for Television logo to be designed for the Company

(excluding interest claimed @ 18% per annum) - - 4.38 4.38 4.38

(b) The Company has filed the counter claim in the Bombay High Court against

(iii) (a) above (excluding interest claimed @ 9% per annum by the Company) - - 8.51 8.51 8.51

iv) Claim by a party on account of a dispute relating to scope of a contract for IT

related services provided to the Company. - - - - 11.41

v) Claim by Board of Control for Cricket in India under the Media Rights

Agreement for full consideration for an ODI played during the year ended

March 31, 2010 which was abandoned after certain number of overs due to an

unplayable pitch. The Company contends that consideration is payable pro-

rata based on the number of overs played. The differential amount disputed by

the Company is Rs. 157.30 Million . However, the full consideration has been

paid subsequent to the year end under protest. Out of abundant caution, the

Company has made full provision except to the extent of - - - - 39.47

vi) In respect of disputed demands of income tax of the Company 9.37 9.37 9.37 62.81 17.84

vii) In respect of assignment of receivables with recourse under factoring

agreement with the third party - - - - 103.38

viii) Liability to compensate to another party by NSI in respect of pending legal

dispute pursued by that party towards recovery of their outstanding debts 26.77 - - - -

ix) Group's share in respect of letter of credit obtained in favour of third party by

Neo - 4.57 4.20 5.35 -

x) In respect of income tax matter of NSI Refer Note III.A.2 of Annexure IV

Foot Note :

Future ultimate outflow of resources embodying economic benefits in respect of these matters is uncertain as it depends on the final outcome of the

matters involved.

B: CONSOLIDATED CAPITAL COMMITMENT

Estimated amount of contracts remaining to be executed on capital account

(net of advances ) and not provided for - 1.14 1.01 - 0.41

Amount in respect of Intangible Assets included above - - 1.00 - 0.41

F-50

ANNEXURE XVI- DETAILS OF RELATED PARTY DISCLOSURE

A . Names of Related Parties and Description of Relationship :

For the year ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A. Enterprise which control the Company:

Holding Company*(upto August 04, 2005)

Nimbus Creative Corporation Limited ( now known as Paramount

Corporation Limited)

*√ X X X X

B. Joint Ventures

World Sport Nimbus Pte. Ltd., Singapore (now known as Nimbus Sport

International Pte Ltd., Singapore) *(status changed to subsidiary w.e.f.

June 02, 2005 )

*√ X X X X

Zenith Sports Pvt. Limited (formerly known as Juniper Holdings Pvt. Ltd.)

*(status changed from subsidiary w.e.f. March 27, 2006)

*√ √ √ √ √

Neo Sports Broadcast Pvt. Limited (formerly known as Nimbus Sports

Broadcast Pvt. Limited) *(status changed from subsidiary w.e.f. March 27, 2006)

*√ √ √ √ √

C. Venturers in respect of which the reporting enterprise is an

associate (Associates)

3i (Mauritius) Investments 2 Technology Limited (now known as 3i Sports

Media (Mauritius) Limited) * (w.e.f. August 05, 2005)

*√ √ √ √ √

Funderburk Enterprises Limited * (w.e.f. February 09, 2010) X X X X *√

Paramount Corporation Limited (formerly known as Nimbus Creative

Corporation Limited) *( for the period August 05, 2005 to February 08,

2010)

*√ √ √ √ *√

D. Key Management Personnel

Mr. Harish Thawani [Executive Chairman (who has ability to exercise

'Significant influence' on the Company)]

√ √ √ √ √

Dr. Akash Khurana (Vice Chairman/ Managing Director) √ √ √ √ √

Mr. Sunil Manocha (Director) * (uptoOctober 31, 2005) *√ X X X X

E. Relative of Key management personnel

Mrs. Shobha Thawani (also a director in the Company) √ √ √ √ √

F.Enterprises in which Key Management Personnel and relatives have

significant influence



(upto August 04, 2005, the Company was subsidiary and for the period

August 05, 2005 to February 08, 2010, the Company was an Associate)

√ √ √ √ √

F-51

(B) Related Parties Transactions :

(i) (a) Transactions with the related parties during the year ended March 31, 2006 Rupees in Million

Transactions Joint Ventures Associates Key

Management

Personnel

Relative of

Key

Management

Personnel

Total

Sales & Services 257.34 79.00 - - 336.34 Paramount Corporation Limited - 79.00 - - 79.00

Nimbus Sports Broadcast Pvt. Limited 257.34 - - - 257.34

Salary & Perks paid - - 9.30 - 9.30 Mr. Harish Thawani - - 3.95 - 3.95

Dr. Akash Khurana - - 3.26 - 3.26

Mr. Sunil Manocha - - 2.09 - 2.09

Buyback - - 6.16 - 6.16


Payments made on behalf of the related party 0.02 - - - 0.02

Nimbus Sports Broadcast Pvt. Limited 0.02 - - - 0.02

Zenith Sports Private Limited @ - - - @

Unsecured Loan Repaid - 21.10 27.32 33.81 82.23

Mrs. Shobha Thawani - - - 33.81 33.81

Mr. Harish Thawani - - 27.32 - 27.32

Paramount Corporation Limited - 21.10 - - 21.10

Shares Issued - 1,971.92 - - 1,971.92 3i Sports Media (Mauritius) Limited - 1,971.92 - - 1,971.92

Sale of Investments in Zenith Sports Pvt.Ltd. - 0.05 - - 0.05


Purchase of Shares in Nirvana Television Ltd. - - 5.00 1.25 6.25



Purchase of Shares in Nirvana Music Pvt.Ltd. - - @ @ @

Mr. Harish Thawani - - @ - @

Mrs. Shobha Thawani - - - @ @

Dr. Akash Khurana - - @ - @

Mr. Sunil Manocha - - @ - @

(i) (b) Balances outstanding as at March 31, 2006 Rupees in Million

Joint Ventures Associates Key

Management

Personnel

Relative of

Key

Management

Personnel

Total

Amount receivable/ ( payable) 502.55 79.00 (53.07) - 528.48 Nimbus Sports Broadcast Pvt. Limited 502.55 - - - 502.55

Zenith Sports Private Limited @ - - - @


Mr. Harish Thawani - - (53.07) - (53.07)

Foot Note :- In case of Joint Ventures, the amount of transactions accounted in the Profit and Loss Account and balances disclosed above are net of the Group's share therein.

F-52

(ii) (a) Transactions with the related parties during the year ended March 31, 2007 Rupees in Million

Transactions Joint

Ventures

Associates Key

Management

Personnel

Total

Sales & Services 1,487.64 - - 1,487.64 Neo Sports Broadcast Pvt. Limited 1,487.64 - - 1,487.64

Rent Income 0.62 - - 0.62 Neo Sports Broadcast Pvt. Limited 0.62 - - 0.62

Interest and Other Income Received /Receivable 1.76 - - 1.76

Zenith Sports Pvt. Limited 1.76 - - 1.76

Salary & Perks paid - - 9.06 9.06

Mr. Harish Thawani - - 6.37 6.37

Dr. Akash Khurana - - 2.69 2.69

Revenue Share paid/ payable to related party 13.06 - - 13.06

Neo Sports Broadcast Pvt. Limited 13.06 - - 13.06

Payments made on behalf of the related party 104.54 - - 104.54 Neo Sports Broadcast Pvt. Limited 104.54 - - 104.54

Advance / Loan Given 81.42 - - 81.42 Zenith Sports Pvt. Limited 81.42 - - 81.42

Advance Received - 10.00 - 10.00

Paramount Corporation Limited - 10.00 - 10.00

Loans / Advances received back 29.42 - - 29.42


Issue of Compulsorily Convertible Debentures - 1,138.52 - 1,138.52 3i Sports Media (Mauritius) Limited - 1,138.52 - 1,138.52

Shares Issued - 11.50 - 11.50 3i Sports Media (Mauritius) Limited - 11.50 - 11.50

Investments made 4,470.20 - - 4,470.20

Neo Sports Broadcast Pvt. Limited 4,470.00 - - 4,470.00

Zenith Sports Pvt. Limited 0.20 - - 0.20

Bad Debts written off - 79.00 - 79.00

Paramount Corporation Limited - 79.00 - 79.00

(ii) (b) Balances outstanding as at March 31, 2007 Rupees in Million

Joint

Ventures

Associates Key

Management

Personnel

Total

Net receivable/ ( payable) 76.18 (10.00) (53.26) 12.92 Zenith Sports Pvt. Limited 43.29 - - 43.29


Paramount Corporation Limited - (10.00) - (10.00)

Dr. Akash Khurana - - (0.09) (0.09)

Mr. Harish Thawani - - (53.17) (53.17)

Debentures - 1,138.52 - 1,138.52

3i Sports Media (Mauritius) Limited - 1,138.52 - 1,138.52

Investments 2,279.70 - - 2,279.70 Neo Sports Broadcast Pvt. Limited 2,279.70 - - 2,279.70

Foot Note :-

In case of Joint Ventures, the amount of transactions accounted in the Profit and Loss Account and balances disclosed above are net of the Group's share therein.

F-53

(iii) (a) Transactions with the related parties during the year ended March 31, 2008 Rupees in Million

Transactions Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Sales & Services 2,724.54 - - - 2,724.54 Neo Sports Broadcast Pvt. Limited 2,724.54 - - - 2,724.54

Rent Income 1.45 - - - 1.45 Neo Sports Broadcast Pvt. Limited 1.45 - - - 1.45

Interest Received / Receivable 2.82 - - - 2.82

Zenith Sports Pvt. Limited 2.82 - - - 2.82

Miscellaneous Income 0.01 - - - 0.01

Neo Sports Broadcast Pvt. Limited 0.01 - - - 0.01

Purchases & Services 149.61 - - - 149.61 Neo Sports Broadcast Pvt. Limited 149.61 - - - 149.61

Salary & Perks paid - - 7.59 - 7.59 Mr. Harish Thawani - - 5.93 - 5.93


Interest Payable / Paid ( Gross) - 1.19 - - 1.19 Paramount Corporation Limited - 1.19 - - 1.19

Revenue Share paid/ payable to related party 149.61 - - - 149.61


Payments made on behalf of the related party 124.36 0.01 - - 124.37




Payments made by the related party on behalf of the Company 2.92 - - - 2.92 Neo Sports Broadcast Pvt. Limited 2.92 - - - 2.92

Advance / Loan Taken - 23.22 80.50 157.50 261.22




Loan Repaid - 1.75 - - 1.75 Paramount Corporation Limited - 1.75 - - 1.75

Shares Issued - - - @ @

Mrs. Shobha Thawani - - - @ @

(iii) (b) Balances outstanding as at March 31, 2008 Rupees in Million

Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Net receivable/ ( payable) 1,327.15 (32.41) (133.57) (157.50) 1,003.67


Neo Sports Broadcast Pvt. Limited 1,280.63 - - - 1,280.63

Paramount Corporation Limited - (32.41) - - (32.41)


Mrs. Shobha Thawani - - - (157.50) (157.50)

Debentures - 1,138.52 - - 1,138.52

3i Sports Media (Mauritius) Limited - 1,138.52 - - 1,138.52

Investments 2,279.70 - - - 2,279.70


Foot Note :-

In case of Joint Ventures, the amount of transactions accounted in the Profit and Loss Account and balances disclosed above are net of the Group's share therein.

F-54

(iv) (a) Transactions with the related parties during the year ended March 31, 2009 Rupees in Million

Transactions Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Sales & Services 2,289.88 - - - 2,289.89 Neo Sports Broadcast Pvt. Limited 2,289.88 - - - 2,289.88

Rent Income 1.53 - - - 1.53 Neo Sports Broadcast Pvt. Limited 1.53 - - - 1.53

Interest Received / Receivable 3.02 - - - 3.02 Zenith Sports Pvt. Limited 3.02 - - - 3.02

Media Rights and Signage Fees 151.04 - - - 151.04


Technical and other Production Costs 4.89 - - - 4.89


Salary & Perks paid - - 7.93 - 7.93



Interest Payable / Paid ( Gross) - 24.19 - - 24.19

3i Sports Media (Mauritius) Limited - 23.00 - - 23.00


Sale of Fixed Assets - - 0.12 - 0.12


Revenue Share paid/ payable to related party 151.04 - - - 151.04


Payments made on behalf of the related party 2.18 @ - - 2.18

Paramount Corporation Limited - @ - - @



Payments made by the related party on behalf of the Company 0.03 - - - 0.03 Neo Sports Broadcast Pvt. Limited 0.03 - - - 0.03

Advance / Loan Taken - 138.98 - - 138.98

3i Sports Media (Mauritius) Limited - 114.98 - - 114.98


Loan Repaid - 32.42 97.40 67.50 197.32


Mr. Harish Thawani ( Refer Foot Note 1 ) - - 97.40 - 97.40


Issue of Compulsorily Convertible Preference Shares - - 97.40 - 97.40 Mr. Harish Thawani ( Refer Foot Note 1 ) - - 97.40 - 97.40

(iv) (b) Balances outstanding as at March 31, 2009 Rupees in Million

Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Amount receivable/ ( payable) 2,624.64 (151.55) (36.17) (90.00) 2,346.92



Paramount Corporation Limited:

- Receivable - @ - - @

- Payable - (24.17) - - (24.17)

3i Sports Media (Mauritius) Limited - (127.38) - - (127.38)


Mrs. Shobha Thawani - - - (90.00) (90.00)

Debentures - (1,138.52) - - (1,138.52)

3i Sports Media (Mauritius) Limited - (1,138.52) - - (1,138.52)

Investments 2,279.70 - - - 2,279.70


Foot Notes: 1. The Preference Shares are issued as fully paid-up by adjustment of part of the loan. 2. In case of Joint Ventures, the amount of transactions accounted in the Profit and Loss Account and balances disclosed above are net of the Group's share therein.

F-55

(v) (a) Transactions with the related parties during the year ended March 31, 2010 Rupees in Million

Transactions Joint

Ventures

Associates Enterprises

in which Key

Management

Personnel

and relatives

have

significant

influence

Key

Management

Personnel

Relative of

Key

Management

Personnel

Total

Sales & Services 3,288.48 - - - - 3,288.48 Neo Sports Broadcast Pvt. Ltd. 3,288.48 - - - - 3,288.48

Rent Income 1.50 - - - - 1.50 Neo Sports Broadcast Pvt. Ltd. 1.50 - - - - 1.50

InterestReceived /Receivable 3.18 - - - - 3.18

Zenith Sports Private Limited 3.18 - - - - 3.18

Technical and other Production Costs 0.03 - - - 0.03

Neo Sports Broadcast Pvt. Ltd. 0.03 - - - - 0.03

Salary & Perks paid - - - 8.18 - 8.18 Mr. Harish Thawani - - - 6.54 - 6.54

Dr. Akash Khurana - - - 1.64 - 1.64

Trademark Usage Charges - - - - - @ Nirvana Television Ltd. - - - - - @

Interest Payable / Paid ( Gross) - 84.41 0.09 - - 84.50 3i Sports Media (Mauritius) Limited - 49.42 - - - 49.42

Funderburk Enterprises Limited - 33.61 - - - 33.61

Paramount Corporation Ltd. - 1.38 0.09 - - 1.47

Sale of Fixed Assets 45.00 - - - - 45.00 Neo Sports Broadcast Pvt. Ltd. 45.00 - - - - 45.00

Revenue Share paid/ payable to related party 142.99 - - - - 142.99 Neo Sports Broadcast Pvt. Limited 142.99 - - - - 142.99

Payments made on behalf of the related party 1.18 @ - - - 1.18 Paramount Corporation Ltd. - @ - - - @

Zenith Sports Pvt. Ltd. @ - - - - @


Recovery of bank guarantee charges 316.81 - - - - 316.81 Neo Sports Broadcast Pvt. Ltd. 316.81 - - - - 316.81

Payments made by the related party on behalf of the

Company 0.13 - - - - 0.13 Neo Sports Broadcast Pvt. Ltd. 0.13 - - - - 0.13

Advance / LoanGiven 0.10 - - - - 0.10 Zenith Sports Pvt. Ltd. 0.10 - - - - 0.10

Advance / Loan Taken - 1,138.50 - - 50.00 1,188.50 3i Sports Media (Mauritius) Limited - 1,128.50 - - - 1,128.50

Paramount Corporation Ltd. - 10.00 - - - 10.00

Mrs. Shobha Thawani - - - - 50.00 50.00

Loan Repaid - 128.70 24.07 - 50.00 202.77 Mrs. Shobha Thawani - - - - 50.00 50.00

3i Sports Media (Mauritius) Limited - 118.60 - - - 118.60

Paramount Corporation Ltd. - 10.10 24.07 - - 34.17

Issue of Compulsorily Convertible Preference Shares - 373.57 - - - 373.57


Issue of Equity Shares on conversion of Compulsorily

Convertible Preference Shares - 989.93 - 97.40 - 1,087.33

Mr. Harish Thawani - - - 97.40 - 97.40


Funderburk Enterprises Ltd. - 616.35 - - - 616.35

Issue of Equity Shares on conversion of Compulsorily

Convertible Debentures - 4,554.08 - - - 4,554.08

3i Sports Media (Mauritius) Limited - 1,138.52 - - - 1,138.52

Funderburk Enterprises Limited - 3,415.56 - - - 3,415.56

Amount written off 0.67 - - - - 0.67


F-56

(v) (b) Balances outstanding as at March 31, 2010 Rupees in Million

Joint Ventures

Associates Enterprises in which Key

Management

Personnel

and relatives

have

significant

influence

Key Management

Personnel

Relative of Key

Management

Personnel

Total

Amount receivable/ ( payable) 4,236.65 (2,351.04) @ (36.17) (90.00) 1,759.44 Zenith Sports Pvt. Ltd. 51.69 - - - - 51.69

Neo Sports Broadcast Pvt. Ltd. 4,184.96 - - - - 4,184.96

3i Sports Media (Mauritius) Limited - (1,175.52) - - - (1,175.52)

Funderburk Enterprises Limited - (1,175.52) - - - (1,175.52)

Paramount Corporation Ltd. - - @ - - @

Mr. Harish Thawani - - - (36.17) - (36.17)

Mrs. Shobha Thawani - - - - (90.00) (90.00)

Investments 2,279.70 - - - - 2,279.70 Neo Sports Broadcast Pvt. Ltd. 2,279.70 - - - - 2,279.70

Foot Note : In case of Joint Ventures, the amount of transactions accounted in the Profit and Loss Account and balances disclosed above are net of the Group's share therein.

F-57

FINANCIAL STATEMENTS

AUDITORS’ REPORT ON STANDALONE FINANCIAL STATEMENTS OF OUR COMPANY

To,

The Board of Directors

Nimbus Communications Limited

Nimbus Centre, Oberoi Complex

Andheri West

Mumbai 400 053

India

Dear Sirs,

1. In connection with the proposed Initial Public Offer (the “IPO”) of Equity Shares of Nimbus

Communications Limited (the “Company”) and in terms of our engagement letter dated August 27, 2010,

we have examined the Restated Summary Statements (as defined in paragraph 4 below) of the Company

as at and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 annexed to this report and

initialed by us for the purpose of identification.

2. The Restated Summary Statements is the responsibility of the Company and has been prepared in

accordance with the requirement of :

a. paragraph B of Part II of Schedule II of the Companies Act, 1956, (the “Act”); and

b. the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations 2009 (the “ICDR Regulations”), notified by Securities and Exchange Board of India

(“SEBI”) on August 26, 2009 and amendments thereto, in pursuance of section 11A (1) (a) of the

Securities and Exchange Board of India Act, 1992.

3. Our examination was conducted in accordance with the applicable generally accepted auditing standards

(“GAAS”) framework in India prescribed by the Institute of Chartered Accountants of India (“ICAI”).

Restated Summary Statements of the Company

4. In accordance with requirements of Part II (B) of Schedule II of the Act and the ICDR Regulations and in

terms of our engagement agreed with you, we have examined:

i. the “Restated Statement of Assets and Liabilities” as at March 31, 2010, 2009, 2008, 2007 and 2006

(Annexure I);

ii. the “Restated Statement of Profits and Losses” for each of the years ended March 31, 2010, 2009,

2008, 2007, 2006 (Annexure II); and

iii. the “Restated Statement of Cash Flows” for each of the years ended March 31, 2010, 2009, 2008,

2007 and 2006 (Annexure III).

together referred to as “Restated Summary Statements”

5. These Restated Summary Statements have been extracted by the Management of the Company from the

audited unconsolidated financial statements:

a) for the years ended March 31, 2008, 2007 and 2006, which have been audited by M/s Deloitte Haskins

& Sells, Mumbai, Chartered Accountants (Registration No.117366W), being the auditors of the

Company in those years, in terms of their reports dated June 16, 2008, July 16, 2007 and September 6,

2006 respectively; and

b) for the years ended March 31, 2010 and 2009, audited by us, in terms of our reports dated September 15,

2010 and October 6, 2009 respectively.

All the unconsolidated financial statements, as aforesaid, have been approved by the Board of Directors and,

except for the unconsolidated financial statements as at and for the year ended March 31, 2010, adopted by the

Shareholders at their annual general meetings.

F-58

6. Based on our examination of these Restated Summary Statements, we state that:

A. The “Restated Summary Statements” have to be read in conjunction with the “Significant Accounting

Policies and Notes to the Restated Summary Statements” of the Company (Annexure IV);

B. The “Restated Summary Statements” reflect the retrospective effect of significant accounting policies

adopted by the Company as at and for the year ended March 31, 2010;

C. The restated profits/losses have been arrived at after charging all expenses including depreciation and

after making such adjustments and regroupings, as in our opinion are appropriate, in the year to which

they relate.

D. There are no extraordinary items that need to be disclosed separately in the Restated Summary

Statements.

E. The qualifications in the Auditors’ Report requiring adjustment have been given effect to in the “Restated

Summary Statements”.

F. The Auditors have without qualifying their opinion drawn attention to the following matters in the

Auditors Report for the respective years:-

(i) For the years ended March 31, 2010, 2009, 2008 and 2007:

Refer Note III.B of Annexure IV. As explained in the said Note, the Company has made long term

investments in Zenith Sports Pvt. Ltd. (“ZSPL”) of Rs. 0.25 million and in Neo Sports Broadcast

Private Limited (“Neo”) of Rs. 4,470.00 million. Further, the Company has also granted loan of Rs.

101.36 million as at March 31, 2010, Rs. 95.97 million as at March 31, 2009, Rs. 91.21 million as

at March 31, 2008 and Rs. 84.88 million as at March 31, 2007 to Zenith Sports Pvt. Ltd and Rs. 5,932.21 million (net of subsequent realisations) is due as at March 31, 2010 from Neo. The

recoverability of these amounts is dependent upon Neo being able to realise its business plans and

projection. For the reasons stated in the said Note, the management of the Company is of the view

that there is no diminution, other than temporary, in the value of investment in Neo and as well as

investment in ZSPL and the loan given to ZSPL is good and fully recoverable and the amount due

from Neo towards Media Rights Fees will be realised in due course and hence, no provision has

been considered necessary by the Company

(ii) For the years ended March 31, 2010 and 2009:

Refer Note III.G.3 of Annexure IV. As stated in the Note, the remuneration paid to directors for the

year ended March 31, 2009 had exceeded the limit prescribed under Section 309 of the Companies Act, 1956 by Rs. 2.76 million. The Company’s application for its waiver is pending with the Central

Government.

Other Financial Information of the Company

7. We have also examined the following Unconsolidated Other Financial Information (restated) of the Company

for each of the years ended March 31, 2010, 2009, 2008, 2007, and 2006,which is proposed to be included in

the Draft Red Herring Prospectus (DRHP), as approved by the Board of Directors of the Company and

annexed to this report.:-

(i) Significant Accounting Policies adopted by the Company and Notes to the Restated Summary

Statements of the Company for each of the years ended March 31, 2010, 2009, 2008, 2007 and

2006(Annexure IV) ;

(ii) Details of Secured and Unsecured Loans as at March 31, 2010, 2009, 2008, 2007 and 2006

(Annexure V) ;

(iii) Details of Sundry Debtors as at March 31, 2010, 2009, 2008, 2007 and 2006 (Annexure VI);

(iv) Details of Loans and Advances as at March 31, 2010, 2009, 2008, 2007 and 2006 (Annexure VII);

(v) Details of Investments as at March 31, 2010, 2009, 2008, 2007 and 2006 (Annexure VIII);

(vi) Details of Current Liabilities and Provisions as at March 31, 2010, 2009, 2008, 2007 and 2006

(Annexure IX);

(vii) Details of Dividend and Other Income for each of the years ended March 31, 2010, 2009, 2008, 2007 and 2006 (Annexure X);

F-59

(viii) Details of Dividend paid by the Company for each of the years ended March 31, 2010, 2009, 2008,

2007 and 2006 (Annexure XI);

(ix) Statement of Tax Shelter for each of the years ended March 31, 2010, 2009, 2008, 2007 and 2006

(Annexure XII);

(x) Statement of Accounting Ratios for each of the years ended March 31, 2010, 2009, 2008, 2007 and

2006 (Annexure XIII); (xi) Capitalisation Statement as at March 31, 2010 (Annexure XIV);

(xii) Statement of Reconciliation of Profits / Losses for each of the years ended March 31, 2010, 2009,

2008, 2007 and 2006 (Annexure XV);

(xiii) Statement of Contingent Liabilities and Capital Commitment as at March 31, 2010, 2009, 2008, 2007

and 2006 (Annexure XVI);

(xiv) Details of Related Party Disclosure for each of the years ended March 31, 2010, 2009, 2008, 2007

and 2006 (Annexure XVII);

together referred to as “Unconsolidated Other Financial Information”

8. In our opinion, the Restated Summary Statements and the Unconsolidated Other Financial Information (restated) mentioned in paragraph (4) & (7) above, read with significant accounting policies and notes as

annexed to this report, and after making such adjustments as are considered appropriate, and read with our

comments in paragraph 6(F) above, have been prepared in accordance with Part II (B) of Schedule II of the

Act and the ICDR Regulations.

9. This report should not, in any way, be construed as a reissuance or re-dating of any of the previous audit

reports nor should this be construed as a new opinion on any of the financial statements referred to herein.

10. This report is intended solely for your information and for inclusion in the DRHP in connection with the

proposed IPO of the Company and is not to be used, referred to or distributed for any other purpose without

our prior written consent.

For Deloitte Haskins & Sells

Chartered Accountants

(Registration No. 117365W)

U.M.Neogi

Partner Membership No. 30235

Place: Mumbai

Date: September 27, 2010

F-60

ANNEXURE I : RESTATED STATEMENT OF ASSETS AND LIABILITIES (Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A Fixed Assets

Gross Block 821.98 981.05 2,427.84 2,459.98 1,212.03

Less : Depreciation/ Amortisation 643.27 783.69 1,635.62 1,812.24 701.96

Net Block 178.71 197.36 792.22 647.74 510.07


Net block after adjustment for Revaluation

Reserve 171.99 190.98 370.87 250.66 135.86

Capital work in progress 91.34 5.37 11.12 0.59 0.94

263.33 196.35 381.99 251.25 136.80

B Investments 113.55 4,718.11 4,584.55 4,584.55 5,057.77

C Deferred Tax Assets (Net) 4.31 26.81 11.06 25.60 29.76

D Current Assets, Loans and Advances

Inventories 25.95 34.65 6.50 9.65 9.11

Sundry Debtors 1,756.32 763.72 2,555.20 4,783.02 7,648.16

Cash and Bank Balances 1,018.22 3,775.27 1,357.67 2,193.68 4,227.34


Other Current Assets 1.89 16.12 2.04 32.19 84.16

Total 3,130.00 5,115.22 4,492.07 7,488.43 12,832.40

3,511.19 10,056.49 9,469.67 12,349.83 18,056.73

E Liabilities and Provisions

Secured Loans 254.50 1,404.35 660.93 2,484.01 3,316.52

Unsecured Loans 53.07 5,517.97 5,788.39 6,017.25 126.17

Current Liabilities 889.41 838.22 671.35 1,356.28 4,996.06

Provisions 49.34 14.67 7.15 9.72 115.44

Total 1,246.32 7,775.21 7,127.82 9,867.26 8,554.19

F Net Worth (A+B+C+D-E) 2,264.87 2,281.28 2,341.85 2,482.57 9,502.54

G Represented by

Share Capital

- Equity Shares 324.65 326.06 326.06 326.06 615.02

- Preference Shares - - - 2.18 -

Stock Option Outstanding - - 5.65 4.27 4.24

324.65 326.06 331.71 332.51 619.26


- Securities Premium 2,008.31 1,948.49 1,948.49 2,040.87 8,479.92

- Capital Redemption Reserve 0.55 0.55 0.55 0.55 0.55

- General Reserve 0.80 0.80 1.03 1.03 1.03

- Revaluation Reserve 6.72 6.38 421.35 397.08 374.21

- Profit and Loss Account (69.44) 5.38 60.07 107.61 401.78


Reserves and Surplus (Net of Revaluation Reserve) 1,940.22 1,955.22 2,010.14 2,150.06 8,883.28

Net worth 2,264.87 2,281.28 2,341.85 2,482.57 9,502.54

Note: The above statement should be read together with Significant Accounting Policies and Notes to the Restated Summary Statements- Annexure IV

F-61

ANNEXURE II : RESTATED STATEMENT OF PROFITS AND LOSSES

(Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Income

Sales and Services

Airtime Sales (net) 297.17 973.19 820.09 392.41 347.94

Income from Sports Rights 1,640.42 3,432.03 5,886.91 5,175.05 6,925.27

Production Fees 66.97 44.66 42.41 30.25 43.44

Sports Services Income 38.22 74.95 99.91 29.34 51.52

Income from Film Rights (Acquired) 11.09 74.29 69.41 - -

Income from Motion Picture Produced - 12.11 14.10 - -

Income from assignment of Television Programme Rights 7.82 1.95 0.94 0.32 4.61

Total 2,061.69 4,613.18 6,933.77 5,627.37 7,372.78

Other Income 66.92 111.58 241.11 194.09 123.38

Increase/(Decrease) in Air Time Inventory 2.52 10.84 (7.68) 3.16 (0.54)

2,131.13 4,735.60 7,167.20 5,824.62 7,495.62

Expenditure

Cost of Sports Rights 1,569.60 3,253.28 5,164.78 4,597.52 6,039.87

Marketing Rights and Telecast Costs 248.04 789.27 611.10 238.38 330.51


Marketing Expenses 16.03 28.34 14.51 10.05 3.27

Payments to and Provision for Employees 32.27 37.03 69.41 81.86 60.43



Depreciation/Amortisation (Net) 77.63 124.04 786.83 217.51 376.03

2,080.07 4,607.83 6,968.73 5,779.65 7,420.97

Profit Before Tax and Restatement Adjustments 51.06 127.77 198.47 44.97 74.65

Provision for Taxation

- Current Tax (* Net of MAT credit) 3.15 10.00 22.18 * 44.03 163.25

- Deferred Tax 12.49 22.97 60.93 (22.35) (113.42)

- Fringe Benefit Tax 1.77 0.85 0.92 1.04 -

- Wealth Tax 0.01 - - - -

- Short provision for Income Tax in respect of earlier years - 11.70 27.67 - 22.71

- Short provision for Fringe Benefit Tax for an earlier year - - - 0.26 0.21

- Deferred tax relating to Short provision for tax for an earlier

year - - (26.49) - -

Profit After Tax before Restatement Adjustments (a) 33.64 82.25 113.26 21.99 1.90

Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of

Part A of Schedule VIII of the ICDR Regulations

- Restatement Adjustments (b) (28.78) (38.12) (112.75) 41.29 378.59

- Restatement Adjustments relating to Current Tax / Fringe

Benefit Tax / Deferred Tax (c) (15.01) 11.41 8.59 (8.22) 22.33

- Deferred Tax Impact of Restatement Adjustments (d) (12.54) (19.28) (45.59) 7.52 108.65

Net Profit After Restatement Adjustments [(a) + (b) + (c) -

(d)] 2.39 74.82 54.69 47.54 294.17 Balance Brought Forward from Previous Year (47.12) (69.44) 5.38 60.07 107.61

Balance Available for Appropriations (44.73) 5.38 60.07 107.61 401.78

Appropriations

Dividend 21.19 - - - -

Dividend Tax 2.97 - - - -

Transfer to Capital Redemption Reserve 0.55 - - - -

Balance carried forward (69.44) 5.38 60.07 107.61 401.78

Note: The above statement should be read together with Significant Accounting Policies and Notes to the Restated Summary Statements- Annexure IV.

F-62

ANNEXURE III : RESTATED STATEMENT OF CASH FLOWS (Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A. Cash Flow from Operating Activities :

Net Profit before Taxation after restatement adjustments 22.28 89.65 85.72 86.26 453.24

Adjustments for :

Depreciation / Amortisation (net) 61.39 140.08 852.13 160.59 94.82

Interest Income (5.45) (44.12) (155.69) (128.74) (104.13)

Dividend Income (41.19) (59.24) (2.79) (0.72) (2.43)

Credit balances no longer payable, written back - - (0.32) (57.72) (0.78)

Interest expense 14.62 134.85 92.04 200.99 209.47

Employee compensation expenses - - 1.95 1.00 0.89

(Profit) / Loss on redemption of Mutual Fund held as

current investments - - 0.31 - (0.04)

Bad Debt written off 4.87 87.71 10.15 5.71 -

Debit Balances / Advances written off 30.24 3.50 1.28 14.96 1.43

Provision for Doubtful Debts 8.71 - - - 17.74

Provision for Doubtful Advances/Deposits 18.00 27.24 27.18 18.09 6.36

Air Time Inventory written Off 5.79 2.15 20.48 - -

Capital Work in Progress relating to Television

Programmes and Motion Pictures, written off 9.40 4.36 4.78 0.13 -

(Profit) / Loss on sale/write off of Fixed Assets (net) 0.27 - (50.12) 1.80 (4.00)

Unrealised foreign Exchange (gain)/loss (net) - - 1.15 (0.96) 10.40

Operating Profit before Working Capital Changes 128.93 386.18 888.25 301.39 682.97


Inventories (2.03) (10.85) 7.67 (3.15) 0.54

Sundry Debtors (1,620.29) 904.89 (1,802.37) (2,233.53) (2,893.13)

Loans and Advances (191.28) (208.30) 22.10 92.45 (388.28)

Current Liabilities 602.94 (89.59) (165.74) 748.74 3,635.97

Provisions 2.34 3.30 1.51 2.57 (0.32)

Compensated Absences/ Gratuity transitional liability

adjusted in General Reserve - - 0.35 - -

Cash Generated from / (used in) operations (net) (1,079.39) 985.63 (1,048.23) (1,091.53) 1,037.75

Less : Income Taxes (including Fringe Benefit Tax ) paid (net) (16.83) (72.01) (117.44) (79.40) (71.90)

Net Cash from / (used in) Operating Activities (A) (1,096.22) 913.62 (1,165.67) (1,170.93) 965.85

B. Cash Flow from Investing Activities Payments for acquisition of Fixed Assets(after adjustment of

Increase/decrease in Capital work in progress) (57.25) (77.46) (1,054.63) (32.34) (21.37)

Sale of Fixed Assets 47.70 - 62.20 0.55 45.00

Purchase of Current Investments in Mutual Funds (2,207.98) (6,363.78) (672.21) (40.72) (3,641.73)

Sale of Current Investments in Mutual Funds 2,207.98 6,230.22 805.46 40.72 3,168.55

Investments in Subsidiaries $ (6.25) (0.80) - - -

Investments in Joint Venture $ - (4,470.20) - - -

Sale of Investments in Subsidiary $ 0.05 - - - -

Interest Received 3.56 29.89 169.77 98.59 52.16

Dividend Received 41.19 59.24 2.79 0.72 2.43

Net Cash from / (used in) Investing Activities(B) 29.00 (4,592.89) (686.62) 67.52 (394.96)

F-63

(Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

C. Cash Flow from Financing Activities

Proceeds from issue of Share Capital (including Securities

Premium) 1,972.11 55.20 @ *- # 1,262.98

Buyback of Shares (8.91) - - - -

Expenses relating to issue of shares (112.14) (82.61) - (2.84) (2.05)

Repayments of Vehicle Loans (0.32) (1.60) (1.51) (1.25) (0.17)

Repayment of Short Term Loans from banks (10.53) (249.83) (1,350.00) (620.57) (2,424.47)

Proceeds from Short Term Loans from Banks 165.57 1,350.00 620.57 2,424.47 3,282.92

Proceeds from /(Repayment) of Working Capital Loan (Net) - 51.28 (12.48) 20.43 (25.77)

Proceeds from Unsecured Loans - 5,464.90 272.17 426.18 60.00

Repayment of Unsecured Loans (80.03) - (1.75) (99.92) (486.18)

Dividend Paid (15.21) (21.19) - - -

Dividend Tax paid (2.13) (2.38) - - -

Interest Paid (14.62) (127.45) (92.31) (207.08) (204.49)

Net Cash from / (used in) Financing Activities (C) 1,893.79 6,436.32 (565.31) 1,939.42 1,462.77

Net Increase / (Decrease) in Cash and

Cash Equivalents (A+B+C) 826.57 2,757.05 (2,417.60) 836.01 2,033.66

Cash and Cash Equivalents as at the beginning of the year 191.65 1,018.22 3,775.27 1,357.67 2,193.68

Cash and Cash Equivalents as at the end of the year 1,018.22 3,775.27 1,357.67 2,193.68 4,227.34

Notes:

1. The Cash flow has been prepared under the "Indirect Method" as set out in Accounting Standard 3 - Cash Flow Statements.

2. The above statement should be read together with Significant Accounting Policies and Notes to Restated Summary Statements

3. $ The entire purchase and disposal consideration is discharged by means of cash.

4. * Excludes 217,965 preference shares of Rs. 10 each issued at a premium of Rs. 436.86 to the founder director by adjustment of the part of the loan Rs. 97.40

million being a non cash transaction.

5. # Excludes 28,626,495 equity shares of Rs. 10 each issued on conversion of Compulsorily Convertible Preference Shares and Compulsorily Convertible

Debentures being non cash transactions.

6. Cash and Cash Equivalents include:

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Cash on Hand 0.65 0.11 0.08 1.10 1.25

Balances with Scheduled Banks

- On Current Accounts # 322.19 386.97 741.88 748.87 472.79

- In Margin Accounts - - - - 392.50

- In Deposit Accounts + 695.38 3,388.19 615.71 1,443.71 3,360.80

Total Cash and Cash Equivalents 1,018.22 3,775.27 1,357.67 2,193.68 4,227.34

# Including balances in escrow accounts 40.71 242.41 47.66 504.98 457.89

+ Includes Deposits held by the banks as margin. 419.27 3,027.50 591.82 1,413.24 3,257.67

F-64

ANNEXURE IV: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE

RESTATED SUMMARY STATEMENTS

I. Significant Accounting Policies

A Basis of Accounting

The financial statements have been prepared on historical cost convention, except for the revalued fixed assets

as stated in Note C below. The Company follows the accrual basis of accounting. The financial statements are

prepared in accordance with the generally accepted accounting principles in India and the applicable

Accounting Standards.

B Revenue Recognition

(i) Revenue from sale of airtime or free commercial time available on various channels for television

programmes is recognised when the related advertisement or commercial is telecast.

(ii) In respect of film distribution, the Company recognises revenue accruing from the licensing of

various rights on the basis of terms and conditions of licensing and delivery of the film. In case of

assignment of exhibition and distribution rights on Minimum Guarantee and Outright basis, the revenue is accounted for contracted Minimum Guarantee / Outright amount and Overflow due, if

any.

(iii) The revenue from the licensing of various rights in respect of Television/ Entertainment

programme is recognised on the basis of terms and conditions of licensing.

(iv) The revenue from licensing/marketing of media rights is recognised on the happening of events in

terms of agreements at the values determined in accordance with the norms specified in those

agreements.

(v) In respect of income from services, the Company recognises the revenue after the services are

rendered.

(vi) Dividend Income is accounted as and when right to receive dividend is established.

(vii) Interest income is accounted on time proportion basis.

(viii) Revenue is recognised only when it is reasonably certain that the ultimate collection will be made.

C Fixed Assets and Depreciation/ Amortisation

Fixed Assets are stated at cost of acquisition or production or at revalued amounts less accumulated

depreciation/amortisation and impairment loss, if any. Cost comprises purchase/ acquisition price/ production

cost, import duties, taxes and any directly attributed cost of bringing the asset to its working condition for its

intended use.

The Movie Rights comprise negative rights and distribution rights of movies and are for a contractually

specified mode of exploitation, period and territory. In case where multiple rights are acquired for a

consolidated amount, cost is allocated to each right based on estimates made by the management.

Assessment of indication of impairment of an asset is made at the balance sheet date and impairment loss, if

any, is recognised.

Depreciation/ Amortisation:

(a) Tangible Assets:

Depreciation on fixed assets is provided on written down value method at the rates and in the

manner specified in Schedule XIV to the Companies Act, 1956.

F-65

In case of revalued assets depreciation is provided on the amount added on revaluation on written

down value method at the rate arrived on the basis of the estimate of the remaining useful lives of

such assets or at the rates prescribed in Schedule XIV to the Companies Act, 1956, whichever is

higher and is transferred from Revaluation Reserve to the Profit and Loss Account.

(b) Intangible Assets:

(i) The cost of Television / Entertainment programmes produced by the Company is fully

amortised in the year of first telecast.

(ii) The cost of Movie Rights / Television / Entertainment programmes acquired by the Company

is fully amortised in the year of acquisition if the period of rights does not exceed one year. In

other cases 80 % of the cost is amortised in the year of acquisition and the balance over the

remaining period of rights, not exceeding two years.

(iii) The cost of Movies produced by the Company is amortised 80% in the year of first release

and the balance equally over the next two years.

(iv) The cost of Sports Rights acquired from BCCI for three years (re-telecast rights - 1st year

exclusive and 2nd/3rd year non exclusive) is amortised @ 80% in the year of first telecast

and the balance 20% in equal instalments over the remaining term of the contract.

(v) Computer Software is amortised on written down value at the rate of 33.33%

D Valuation of Inventory

Inventory of airtime available on various channels for the Television / Entertainment programmes already

telecast, to the extent of unused airtime, has been carried as Airtime Inventory and has been valued at cost or

net realisable value, whichever is lower. Cost is arrived at on weighted average basis.

E Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary, in the

value of investment.


F Employee Benefits

(i) Defined contribution plan:

The Company’s contribution to the Provident Fund is charged to the Profit and Loss Account.

(ii) Defined Benefit Plan / Long Term Compensated absences:

The Company’s liability towards gratuity and compensated absences is determined on the basis of

the actuarial valuation done by an independent actuary as at the balance sheet date. The actuarial

gains or losses determined by the actuary are recognised in the Profit and Loss Account as income

or expense.

G Share Issue Expenses

Share issue expenses are adjusted against Securities Premium Account.

H Taxes on Income

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with

the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences between taxable income and accounting income which are capable of

reversal in one or more subsequent periods is recorded as deferred tax asset subject to the consideration of

F-66

prudence or deferred tax liability. They are measured using the enacted or substantively enacted tax rates and

tax laws by the Balance Sheet date.

Deferred Tax assets arising on account of brought forward losses are recognised, only if there is virtual

certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing

differences are recognised only to the extent there is reasonable certainty of its realisation. The carrying

amount of deferred tax asset is reviewed at each balance sheet date.

I Provision and Contingent Liabilities:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that

an outflow of resources embodying economic benefit will be required to settle the obligation, in respect of

which a reliable estimate can be made. Provisions are not discounted to its present value and are determined

based on best estimates of the expenditure required to settle the obligation at the Balance Sheet date. These

are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A contingent

liability is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote.

J Segment Accounting Policies



Segment assets include all operating assets used by the segment and consist principally of fixed assets,

inventories, sundry debtors and loans and advances. Segment liabilities do not include share capital, reserves and surplus, borrowings and income tax (both current and deferred).


Segment revenue and expenses are directly attributable to segment. It does not include interest income,

interest expense and income tax.

K Foreign Currency Transactions

Foreign currency transactions during the year are recorded at the rates of exchange prevailing at the date of

transaction. Exchange gains or losses realised and arising due to translation of the foreign currency monetary

items outstanding at the balance sheet date are accounted in the Profit and Loss Account. Non-monetary items

which are carried in terms of historical cost denominated in a foreign currency are reported using the

exchange rate at the date of the transaction.

L Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the

acquisition / construction of qualifying fixed assets are capitalised up to the date when such assets are ready

for its intended use and all other borrowing costs are recognised as an expense in the period in which they are

incurred.

M Leases

(a) Assets acquired under lease where the Company has substantially all the risks and rewards incidental to

ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the

lower of the fair value and the present value of minimum lease payments and a liability is created for

an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so

as to obtain a constant periodic rate of interest on the outstanding liability for each period.

(b) Assets acquired on leases where significant portions of the risks and rewards incidental to ownership

are retained by the lessors, are classified as operating leases. Lease rentals are charged to the profit and loss account over the lease period.

N Uses of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported

amount of assets and liabilities on the date of financial statements and the reported amount of revenue and

expenses during the reporting period. Difference between the actual results and estimates are recognised in the

period in which results are known / materialised.

F-67

II. Note on Restatement Adjustments:

(i) The Restated Statement of Profits and Losses for the financial year(s) ended on March 31, 2010, 2009, 2008,

2007 and 2006 and the Restated Statement of Assets and Liabilities as at March 31, 2010, 2009, 2008, 2007 and

2006 reflect the profits and losses and the assets and liabilities for each of the relevant years indicated above.

These statements have been extracted from the audited unconsolidated financial statements for the aforesaid

years after making therein the disclosures and adjustments required to be made in accordance with the provisions of Paragraph IX (B)(9)(a) to (d) of Part A of Schedule VIII of the Securities and Exchange Board of

India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(ii) The effect of restated adjustments relating to financial years ended prior to March 31, 2006 aggregating debit of

Rs. 232.48 million (net of deferred tax) (including impact of change in accounting policy of amortisation of

Television/Entertainment programmes produced/acquired, by the Company during the year ended March

31,2010 -Rs. 222.77 million) has been adjusted by debiting Rs. 233.28 million to balance in the Profit and Loss

Account brought forward as at April 01, 2005 and crediting Rs. 0.8 million to General Reserve as at April 01,

2005.

(iii) In respect of the following matter no restatement adjustment has been made to the unconsolidated financial

information for the relevant years for the reason stated below:

Until the year ended March 31, 2005, the Company accounted for the leave encashment liability on actual

payment basis. For the years ended March 31, 2007 and March 31, 2006 liability for leave encashment was provided on the basis of the leave available to the credit of the employees at the end of the respective years

within limits determined by the management. The additional charge of Rs. 2.34 million on account of change in

the policy w.e.f. April 01, 2005 was recognised in the accounts for the year ended March 31, 2006. Further,

consequent to the Accounting Standard Employee Benefits AS – 15 becoming applicable to the Company from

April 01, 2007, the Company has followed the policy stated in Note I.F.(ii) above to recognise liability for

compensated absences and gratuity, and in terms of the transitional provisions of the said Standard has adjusted

as stated in Note III.G.5, the increase in the liability for compensated absences and reduction in the liability for

gratuity up to March 31, 2007 amounting to Rs.0.24 million (net of deferred tax of Rs. 0.12 million) and Rs.

0.47 million (net of deferred tax of Rs. 0.24 million) respectively against the opening balance of the general

reserve as on April 01, 2007.

No adjustment has been made to the Unconsolidated Financial Information for the years ended March 31, 2007

and 2006 and in the balance in the Profit and Loss Account brought forward as at April 01, 2005 to reflect the

effect had the policy, stated in Note I.F.(ii) above for recognising the Company’s liability towards compensated

absences and gratuity, been followed in each of the two years ended March 31, 2007 as the effect thereof is not

material.

(iv) The following Qualifications made in Companies (Auditor’s Report) Order, 2003 (as amended) do not require

adjustment to the Unconsolidated Financial Information:

I. Year ended March 31, 2010:

(a) The records maintained showing full particulars, including quantitative details and situation of the

fixed assets are not updated and reconciled with the books of account in respect of certain tangible

fixed assets.

(b) The Company has a programme of verification which in our opinion provides for physical

verification of all the fixed assets at reasonable intervals. However, no physical verification of fixed

assets has been carried out by the Company during the year and also in the previous year.

(c) The Company did not have an internal audit system during the year.

II. Year ended March 31, 2009:

(a) The records maintained showing particulars including quantitative details and situation of fixed

assets are in the process of being updated and reconciled with the books of account in respect of

certain tangible fixed assets.

(b) The Company has a programme of verification which in our opinion provides for physical

verification of all the fixed assets at reasonable intervals. However, no physical verification of fixed

assets has been carried out by the Company during the year.

(c) The Company did not have an internal audit system during the year.

III. Year ended March 31, 2008, 2007 and 2006

The Company did not have an internal audit system during the year.

F-68

III. Notes to the Restated Summary Statements

A. Common significant notes for the years ended March 31, 2010, 2009, 2008, 2007 and 2006.

Sundry Debtors include Rs. 35.67 million due from a party outstanding for several years. Two directors

(up to March 31, 2008: A director) of the Company have consented to indemnify the Company for any

loss on account of partial or non-recovery on this account and have placed with the Company unsecured

loan/s of an equivalent amount to be utilised for any shortfall in recovery.

B. Common significant note for the years ended March 31, 2010, 2009, 2008 and 2007

The Company has an investment in equity shares of Rs. 0.25 million in Zenith Sports Pvt. Ltd.(ZSPL).

The Company has also granted a loan of Rs. 101.36 million to ZSPL which is outstanding as at March 31,

2010 (Rs. 95.97 million, Rs. 91.21 million, Rs. 84.88 million outstanding as at March 31, 2009,March 31,

2008 and March 31, 2007 respectively).

ZSPL has in turn invested an amount of Rs. 30.00 million in equity shares of Neo Sports Broadcast

Private Limited (Neo), its subsidiary and granted a loan of Rs. 49.52 million to Neo which is outstanding

as at March 31, 2010 (Rs.51.52 million outstanding as at March 31, 2009, 2008 and 2007). The Company

has also made an investment of Rs. 4,470.00 million in Non-Cumulative Redeemable Preference Shares

of Neo. Further, Rs. 5932.21 million (net of subsequent realisation) included under Sundry Debtors is due

as at March 31, 2010 from Neo towards Media Rights Fees.

The recoverability of the loan in the books of ZSPL and consequently, the recoverability of the loan in the books of the Company referred to above is dependent upon the success of the operations of Neo.

Neo is a leading sports television channel in India. Neo commenced commercial operations in the month

of October 2006. The Audited accounts of Neo for the year ended March 31, 2008 reflected an

accumulated loss of Rs. 6,302.63 million as against the paid up capital and reserves of Rs. 4,500.00

million. Thus there is total erosion of Net worth of Neo. However in view of the management Neo will

make sufficient profits in future and hence no adjustment required as at March 31, 2008 and March 31,

2007 in the carrying value of the investments and loan as aforesaid in the books of the Company.

As per the audited accounts of Neo for the year ended March 31, 2010, the accumulated losses of Rs.

11,587.41 million (as at March 31, 2009 Rs. 8209.48 million) of Neo have far exceeded the Shareholders'

equity (before adjustment of accumulated losses) of Rs. 5,131.39 million (as at March 31, 2009 Rs.

4478.00 million) which in the opinion of the management is due to the long gestation period involved in the case of new television channel and also on account of the recent economic slowdown. Neo was

holding Media Rights from the Company for telecast in India of Cricket Matches organized by Board of

Control for Cricket in India (BCCI), under the existing arrangement up to March 31, 2010. Further during

the year ended March 31, 2010 BCCI has re-awarded the Global Media Rights to the Company for

another four years for the period from 2010 to 2014 and the rights to telecast in India have been sub-

licensed by the Company to Neo. In terms of the Media Rights Agreement the Company has been granted

an exclusive negotiating period which shall commence prior to March 31, 2014 during which the

Company shall require to confirm in writing its best offer for the renewal of this Media Rights agreement

for the further period of four years up to March 31, 2018. On such renewal of its Media Rights

Agreement the Company intends to sub- license the Media Rights to Neo for another four years up to

March 31, 2018. Based on the revised business plans of Neo and projections available with the Company,

Neo is expected to make profits from the year 2011 and also expected to generate sufficient profits to eliminate accumulated losses in next seven years. Accordingly, in the opinion of the management the

loan given to ZSPL and outstanding as at March 31, 2010 and as at March 31, 2009 is good and fully

recoverable and the amount due as at March 31, 2010 from Neo towards Media Rights Fees will be

realised in due course.

The tenure of the Non-Cumulative Redeemable Preference Shares of Neo is a period not exceeding 20

years from March 29, 2007 being the date of issue. Further as per terms of redemption, the redemption

shall be at the premium which shall not be less than Rs. 90 per share. Having regard to the long term and

strategic nature of investment, the business plans and projections of Neo referred to above and the

valuation of the Equity and Preference Share Capital of Neo carried out subsequent to the year ended

March 31, 2010 by the independent reputed financial advisor, the management is of the view that there is

no diminution, other than temporary, in the value of investment in Neo as well as investment in ZSPL as at March 31, 2010 and March 31, 2009.

F-69

C. Common significant note for the years ended March 31, 2010 and March 31, 2009

Sundry Debtors include Rs. 26.39 million due from a party which is outstanding for more than 3 years.

During the year ended March 31, 2009, the Company has filed a civil suit for recovery of the amount

with interest. The Company is confident of ultimate recovery of the amount and accordingly no provision

is considered necessary in respect of this.

D. Other significant notes for the year ended March 31, 2010

1. Compulsorily Convertible Non Cumulative Preference Shares (CCPS) were to be convertible

in full but not in part in to such number of Equity Shares of Rs. 10 each, so as to provide a

minimum annual compound internal rate of return on the investment amount (CCPS

Minimum Return) and number of equity shares to be issued to be determined as specified in

the Restated and Amended Subscription and Shareholders Agreement dated March 06, 2009

(the Agreement) between the Company, the Founder and the Investors as amended by the

Supplemental Restated and Amended Subscription and Shareholders Agreement dated May

22, 2009 (the Supplemental Agreement). CCPS conversion was to occur upon any of the

following three events:


2. In the event of the Sale of the Company 3. Any other event after December 31, 2010 as specified in the Agreement.

On December 31, 2019 if any CCPS still remain unconverted those were to be converted as

provided in the Agreement.

In view of the IPO then proposed by March 2010, 2,775,741 CCPS of Rs. 10 each with the

aggregate premium of Rs. 1,212.61 million (i.e. Rs 436.86 per preference share) and after

considering CCPS Minimum Return referred to above, were converted into 3,826,265 equity

shares of Rs. 10 each fully paid up and allotted vide Board resolution passed on February 09,

2010. However subsequently it was noted that the number of equity shares was stated as

3,826,265 instead of 3,494,145 determined in accordance with the Agreement, referred to

above. Accordingly vide resolution dated July 20, 2010 the Board of Directors rectified the error in number of equity shares and correct number of 3,494,145 equity shares of Rs.10 each

fully paid up with the aggregate premium of Rs.1,205.43 million were deemed to have been

allotted from February 09, 2010 pursuant to the provisions of the Agreement. The aggregate

premium of Rs.1,212.61 million on conversion of Preference Shares has been debited to, and

the aggregate premium of Rs. 1,205.43 million on issue and allotment of equity shares has

been credited to, the Securities Premium Account.

2. In terms of the Subscription and Shareholders Agreement dated January 18, 2007 entered into

between the Company, the Founder Promoters and the Investors [as amended by the Restated

and Amended Subscription and Shareholders Agreement dated March 06, 2009 (the

Agreement)], 28,049,567 Zero Coupon Convertible Debentures (Debentures) of Rs. 194.83

each, were to be convertible in full but not in part into Equity Shares of Rs.10 each, so as to

provide a minimum annual compound internal rate of return on the subscription amount (Agreed Minimum Return) and number of equity shares to be issued to be determined as

specified in the Agreement. Debentures conversion was to occur upon any of the following

three events:




Upon demand of an investor in its sole discretion prior to or upon the happening of a

liquidation event in relation to the Company, the Debentures were convertible into

redeemable preference shares at the Liquidation Conversion Ratio as defined in the

Agreement.

F-70

In view of the IPO then proposed by March 2010, 28,049,567 Debentures of Rs. 194.83 each after considering Agreed Minimum Return referred to above, were converted into 29,231,967

equity shares of Rs. 10 each fully paid up and allotted vide Board resolution passed on

February 09, 2010. However subsequently it was noted that the number of equity shares was

stated as 29,231,967 instead of 25,132,350 determined in accordance with the Agreement,

referred to above. Accordingly vide resolution dated July 20, 2010 the Board of Directors

rectified the error in number of equity shares and correct number of 25,132,350 equity shares

of Rs. 10 each fully paid up with the aggregate premium of Rs. 5,213.57 million were

deemed to have been allotted from February 09, 2010 pursuant to the provisions of the

Agreement. The aforesaid aggregate premium on issue and allotment of equity shares has

been credited to the Securities Premium Account.

3. Tax payments less provisions include Rs. 14.04 million of tax deducted at source (TDS) by third parties, the TDS certificates for which have not been received by the Company. The

Company is in the process of collecting the TDS certificates from the parties and would be

filing the revised return for the respective assessment years after its collection in due course.

As the pending TDS certificates referred to above relate to the assessment years for which

assessment proceedings have not been initiated or completed, the Company is confident of

ultimate recovery of these amounts and accordingly no provision is considered necessary in

this respect.

4. The Company has entered into an Agreement dated March 26, 2006 with Paramount

Corporation Limited (PCL) and Zenith Sports Private Limited (ZSPL) under which at any

time after one year the Company shall have a call option to purchase any and all present and

/or future remaining shareholdings (as on March 31, 2010 51% of the share capital of ZSPL of Rs. 0.50 million is held by PCL) and / or rights held by PCL in ZSPL at a price to be mutually

agreed but which shall provide for a minimum return on the capital invested in ZSPL at the

rate of 11%. Similarly under the same Agreement PCL has a put option to sell shareholdings

and / or rights referred to above at a price to be mutually agreed but which shall provide for a

minimum return on the capital invested in ZSPL at the rate of 11%. In case the price cannot be

mutually agreed, the price shall be determined by an independent international reputed firm of

Accountants jointly appointed by both the parties to undertake the said valuation.

During the year, the Company decided to purchase the balance 51% of the share capital of

ZSPL held by PCL at an aggregate price of Rs 0.36 million, subject to the approval of Foreign

Investment Promotion Board (FIPB). Subsequent to the year end, the Company has received

approval from FIPB and the Company would be acquiring the shares in due course.

5. The Company, the Founders of the Company, Neo Sports Broadcast Private Limited (Neo), the Investor in Neo (the Investor) and Zenith Sports Private Limited (the holding company of

Neo) have entered into a Share Subscription and Shareholders Agreement dated April 14,

2009 (the Investment Agreement) pursuant to which the Investor has invested an amount of

Rs. 635.71 million in Neo by subscribing to 3,475 Equity Shares and 344,098 Compulsorily

Convertible Non-Cumulative Preference Shares (both together “Investor Securities”). Further,

the Company has entered into ‘Put Option Agreement’ (Agreement) dated April 14, 2009 with

the Investor under which in consideration of the subscription of the Investor Securities by the

Investor, the Company has granted, an option to the Investor to sell , at any time after the date

of the Agreement, all or any of the Investor Securities held by the Investor in Neo to the

Company at a Target Price (Put Option Exercise Price) to be determined in accordance with

the provisions contained in the said Agreement. The Target Price shall be mutually agreed and will be based on the aggregate amount of the Investment in the Investor Securities and the

amount which give the Investor the rate of return of 30% p.a. as on the Put Settlement date. In

case all or any of Compulsorily Convertible Non-Cumulative Preference Shares are converted

into equity shares then in relation to such Converted Shares the Target Price would be the fair

market value of such Converted Shares prescribed in the Valuation Certificate to be obtained

in terms of the Agreement or in accordance with the valuation principles prescribed in the

Agreement, as applicable.

F-71

In terms of the “Further Subscription Agreement” dated April 14, 2009 entered into by the

Company with the Founders of the Company and the Investor, the Investor has agreed that,

upon the Investor exercising the Put Option, the Investor shall, on being called upon by the

Company, invest the amount equal to the Put Option Exercise Price and subscribe to Equity

Shares of the Company in accordance with the terms mentioned in the Further Subscription

Agreement.

6. Television/Entertainment Programme (Acquired) and certain Television/ Entertainment

programmes (produced) of aggregate cost of Rs. 135.62 million and Rs. 305.68 million

respectively and having no carrying value, have been derecognised as no future economic

benefits are expected from its use.

E. Other significant note for the year ended March 31, 2007

The Company had transferred the Radio rights forming part of the Media Rights Agreement with the Board

of Control for Cricket in India (BCCI) to Paramount Corporation Limited (PCL), during the previous year.

However, due to certain changes in regulatory environment, the exploitation of the Radio rights by PCL was

rendered unviable and hence, by mutual consent the Radio rights agreement has been terminated during the

year. Consequently an amount of Rs. 79.00 million due from PCL under the above contract has been written

off to the Profit and Loss account for the year. With the termination of this agreement the Radio rights have

reverted back to the Company.

F. Other significant notes for the year ended March 31, 2006

1. The Company has bought back 110,150 equity shares of Rs. 5 each at an average price of Rs.

80.85 per share during the year, and accordingly:

i. The face value of shares has been reduced from the paid up Equity Share Capital.

ii. The balance of Rs. 75.85 per share paid on these shares aggregating to Rs. 8.35 million

has been adjusted to the Share Premium Account; and

iii. As required under the provisions of the Companies Act, 1956, Rs. 0.55 million has been

transferred to the Capital Redemption Reserve from the Profit and Loss Account.

2. Pursuant to the issue by the Company of 24,389,888 shares of Rs. 5/- each on private placement

basis to 3i (Mauritius) Investments 2 Technology Limited (now known as 3i Sports Media

(Mauritius) Limited), the Company has ceased to be a subsidiary of Nimbus Creative Corporation Limited (now known as Paramount Corporation Limited) w.e.f. August 05, 2005.

3. Until the year ended March 31, 2005, the Company was accounting for leave encashment

liability to employees on actual payment basis. In the current year, liability for leave encashment

has been provided for on the basis of leave available to the credit of the employees at the end of

the year within limits determined by the management. Had such change in the accounting policy

not been made, profit for the year would have been higher by Rs.2.34 million.

F-72

G. Other notes

1 Employee Stock Option Plan (ESOP)

On August 01, 2007, the Company has granted Stock Options to its eligible employees at a price of Rs.

161.66 per option in terms of Employees Stock Option Scheme 2007 of the Company as approved by the

Shareholders at the Extra Ordinary General Meeting held on January 08, 2007.

(a) The particulars of the Options distributed under ESOP 2007 are as follows:

Particulars ESOP 2007

Eligibility A permanent employee or full time consultant of the Company, a director of the

Company (including of subsidiaries where the Company holds at least 75% equity

capital or has irrevocable options to acquire at least 75% equity capital) but excluding (a) an employee who is a promoter or belongs to the promoter group; (b) a director

who either by himself or through his relatives or through any body corporate, directly

or indirectly holds more than 10% of the issued and subscribed Shares of the

Company; (c) Part time consultants or other associates who may be covered under a

separate stock option plan.

(Group companies, affiliates, etc. may have their individual schemes and employees

of any such affiliate which has its own scheme would not be covered by this plan.)

Vesting period for options

granted

All options granted would vest over a period of four years from the date of grant, viz.

10% on January 31, 2008, 20% on January 31, 2009, 30% on January 31, 2010 and

40% on January 31, 2011. During the year ended March 31, 2010, the Company has

extended the exercise period for the first vesting schedule up to the end of exercise

period for the second vesting schedule, i.e. up to January 31, 2011.

Exercise Period

Within 6 months from the date of public issue in the event of the Company going in

for an Initial Public Offer (IPO) or 2 years from the date of vesting whichever is earlier.

Method of Settlement

Equity Shares

Exercise Price Rs. 161.66

No. of Options Granted 1.54 million

(b) The particulars of number of options granted and lapsed and the Price of Stock Options for ESOP 2007 are as

follows:

Particulars March 2010

Quantity

March 2009

Quantity

March 2008

Quantity

Authorised to be Granted 1,623,239 1,623,239 1,623,239

Granted during the year -- -- 1,545,000

Forfeited during the year -- -- --

Exercised during the year -- -- --

Lapsed/Cancelled during the year 8,500 375,500 --

Granted and outstanding at the end of the year 1,161,000 1,169,500 1,545,000

Fair value of the ESOP on the date of Grant Rs. 3.655 Rs. 3.655 Rs. 3.655

F-73

(c) The Company has followed the fair value based method of accounting for stock options granted based on

Guidance Note on Accounting on Employee Share-based Payments, issued by the Institute of Chartered

Accountants of India. The Fair Value of the Share has been calculated by an independent valuer on the basis

of Weighted Average of “Discounted Cash Flow Method”, “PE Multiple Methods”, “Future Maintainable

Profits” and “Net Asset Value”.

Fair value of Options calculated by independent valuer using Adjusted Black-Scholes Option Pricing Model is higher than the exercise price and hence these options are considered to be dilutive in nature and the effect

of this is considered in calculating diluted earnings per share in accordance with Accounting Standard 20 viz.

Earnings Per Share.

Compensation expenses (net) recognised during the year ended March 31, 2010, 2009 and 2008 is Rs. 0.89

million, Rs. 1.00 million and Rs. 1.95 million respectively.

(d) Method and significant assumptions used to estimate the Fair Value of the Options are as under:

The Fair value of Options has been calculated by an independent valuer. The valuation has been done using

the Adjusted Black-Scholes Option Pricing Model based on the assumptions given by the management, which

are as under:

(i) Expected Life of the Options:

These stock options will vest in the following proportion from the date of grant and can be exercised within 6

months from the date of IPO in the event of the Company going for an IPO or two years from the vesting date whichever is earlier.




Year 4 from the date of Grant - 40% of the Options Granted.

(ii) Risk free interest rate:

This rate has been assumed at 8.09% for all the four years.

(iii) Share price: (Strike Rate) Rs. 161.66

(iv) Volatility:

As the shares of the Company are unlisted, the volatility is considered as 1 % for all the four years

(v) Expected dividend yield:

Expected Dividend per share on the Grant Date is 7.50% for all the four years.

2. Payment to Auditors

(Rupees in Million)


March 31,

2010

Year Ended

March 31,

2009

Year Ended

March 31,

2008

Year Ended

March 31,

2007

Year Ended

March 31,

2006

As Auditors 2.30 1.80 1.35 1.25 0.50

In any other manner (for prospectus

matters as per SEBI, Certification

work, tax audit, etc.) 6.82 0.28 4.28 0.78 0.10

Reimbursement of out of pocket

expenses 0.05 - - - -

Service Tax on above fees 0.94 0.22 0.69 0.19 0.07

Total 10.11 2.30 6.32 2.22 0.67

F-74


(Rupees in Million)

Particulars

Year Ended

March 31,

2010

Year Ended

March 31,

2009

Year Ended

March 31,

2008

Year Ended

March 31,

2007

Year Ended

March 31,

2006

Salaries and allowances 7.45 7.18 6.91 7.55 8.16

Contribution to provident fund 0.70 0.67 0.63 0.73 0.73

Perquisites in cash or in kind 0.03 0.08 0.05 0.77 0.41

Total 8.18 *7.93 *7.59 9.05 9.30

The above remuneration excludes provision for gratuity and compensated absences, which are determined on

overall basis for the Company.

The remuneration paid to directors for the years ended March 31, 2010, 2009 and 2008 excludes compensation

cost for Employee Stock Options, as the options are not exercised as at the respective year end.

*Includes Rs. 0.41 million and Rs. 0.22 million for the years ended March 31, 2009 and March 31, 2008

respectively in respect of the period where a director was holding an office/place of profit under Section 314 of

the Companies Act, 1956.

Note:

The remuneration paid to directors for the year ended March 31, 2009 had exceeded the overall remuneration prescribed under Section 309 of the Companies Act, 1956 (the Act ) by Rs.2.76 million for which the Company

has applied on April 10, 2010 to the Central Government for its waiver.


The Company has not taken any derivative instrument during the years ended March 31, 2010, 2009, 2008 and 2007

and there is no derivative instrument outstanding as at the respective year end. The year end foreign currency

exposures that are not hedged by derivative instruments or otherwise are as follows:

(Amount in Million)

As at March 31,2010 As at March 31,2009 As at March 31,2008 As at March 31,2007 Particulars

US$ INR US$ INR US$ INR US$ INR

Sundry Debtors 6.18 278.90 0.21 10.88 0.42 16.73 1.32 56.79

Sundry Creditors 0.17 7.76 0.14 6.89 0.02 0.99 0.03 1.39

Loans and Advances 0.10 4.40 0.09 4.59 0.09 3.51 0.09 3.92

5. Employee Benefits

Consequent to the Accounting Standard on Employee Benefits (AS-15) becoming applicable to the Company

w.e.f. April 01, 2007, the Company has accounted for, the expected cost of long term employee benefits in the

form of vesting and non vesting compensated absences in respect of leave outstanding to the credit of its

employees and liability in respect of gratuity based on an actuarial valuation. The increase in liability for

compensated absences up to March 31, 2007 amounting to Rs. 0.24 million (net of deferred tax of Rs. 0.12

million) and reduction in liability for gratuity amounting to Rs. 0.47 million (net of deferred tax of Rs. 0.24

million) has been adjusted against the opening balance of General Reserve as on April 01, 2007 in accordance

with the transitional provisions contained in the said standard.

F-75

Accordingly the details of Employee Benefits as required by the Accounting Standard-15 "Employee Benefits "for

the years ended March 31, 2010, 2009 and 2008 are given below:-

(Rupees in Million)

Year ended March 31,

2010


2009


2008

Defined Contribution Plans The Company has recognised the following amount in the Profit and

Loss Account:

1

Contribution to Provident Fund and Family Pension Fund 3.63 3.78 4.23

Defined Benefit Plan (Funded)


The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible

employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment

or on termination of the employment of an amount equivalent to 15 days salary payable for each completed year of

service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

b. Details of defined benefit plan – As per Actuarial Valuation are as follows:

Particulars

Year ended

March 31,

2010

Year ended

March 31,

2009

Year ended

March 31,

2008





4 Actuarial Losses / (Gains) (0.28) 0.81 (0.37)


6 Total expense recognised in the

Profit and Loss Account 2.28 1.65 0.51


1 Actual Benefits Payments (0.70) (0.53) -

2

2 Actual Contributions - - -





4 Net asset/(liability) recognised in the Balance Sheet (5.60) (3.32) (1.67)


1

Present value of Defined Benefit Obligation as at the

beginning of the year 4.25 3.05 2.43




5 Actuarial Losses/ (Gains) (0.38) 0.79 (0.36)

6 Benefits paid (0.70) (0.53) -

7 Present value of Defined Benefit Obligations as at the

end of the year 5.86 4.25 3.05




3 Actuarial Gains/ (Losses) (0.10) (0.02) 0.01

F-76

4 Actual Company Contributions - - -

5 Benefits paid (0.70) (0.53) -



Year ended

March 31,

2010

Year ended

March 31,

2009

Year ended

March 31,

2008

1 Discount Rate 8.15% p.a. 7.00% p.a. 7.50% p.a.

2 Expected rate of Return on plan assets 7.50% p.a. 7.50% p.a. 8.00% p.a.

3 Salary escalation Rate 7.00% p.a. 7.00% p.a. 5.00% p.a.

VII The expected rate of return on the plan assets is based on the average long term rate of return expected on

investments of the Fund during the estimated term of the obligations. The actual return on plan assets for the years

ended March 31, 2010, March 31, 2009 and March 31, 2008 is Rs. 0.04 million, Rs.0.08 million and Rs. 0.11

million respectively.

VIII The assumption of the future salary increases, considered in actuarial valuation, takes into account the inflation,

seniority, promotion and other relevant factors.



Note: The details of investment made by the Insurer is not readily available with the Company


Year ended

March 31,

2010

Year ended

March 31,

2009

Year ended

March 31,

2008

1

Present value of Defined Benefit Obligation as at the end of the year 5.86 4.25 3.05



4 Experience adjustment on Plan Liabilities 0.36 0.04 (0.36)

5 Experience adjustment on Plan Assets (0.10) (0.02) 0.01

XI Contribution expected to be paid to the Plan during the year ending March 31, 2011 - Rs. 2.00 million.

6. Segment Reporting:

Segmental Information in respect of Primary Segments (Business Segments):

The Company is organised into 4 business segments namely - Television Production and Marketing,

Filmed Entertainment, Digital and Mobile Content and Sports Marketing.

The Television Production and Marketing segment creates programs for Broadcasters in Hindi and

regional languages. The segment also sells/market Airtime on Time- Barter Channels.

The Filmed Entertainment segment is involved in Content Generation including Film Production, Rights

Management including Films Rights acquisition and distribution.

The Digital and Mobile Content segment is involved in Mobile/ Internet Content Creation and Mobile

Content Products.

The Sports Marketing segment is involved in Commercial Rights Management, Sponsorship and In

Stadia Signage, Sponsor Representation, Sports TV Production and Event Management.

Segments have been identified and reported taking into account the nature of products and services, the

differing risks and returns and the internal financial reporting system.

F-77

Segment Information for the year ended March 31,2010 Rupees in Million

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Revenue

External 389.89 0.35 11.69 6,975.24 7,377.17

Result - - - - -

Segment Result 4.35 (23.60) (21.95) 828.70 787.50

Add : Unallocated Income - - - - 4.63

Less: Unallocated Expenses - - - - 235.98

Operating Profit/ (Loss) - - - - 556.15

Interest expenses - - - - 209.47

Interest/ Dividend Income - - - - 106.56

Profit/ (Loss) before Taxation - - - - 453.24

Taxation - - - - 159.07

Profit/ (Loss) after Taxation - - - - 294.17

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Carrying Amount of Segment Assets 379.38 7.28 13.16 7,306.25 7,706.07



Carrying Amount of Segment Liabilities 267.63 0.79 18.18 4,617.61 4,904.21

Unallocated Corporate Liabilities - - - - 3,649.98



Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Tangible Assets 0.06 - - 0.05 0.11

Unallocated Tangible Assets - - - - 0.31

Intangible Assets 19.80 - 0.68 - 20.48

Unallocated Intangible Assets - - - - 0.47

Depreciation & Amortisation 20.71 18.66 1.95 41.32 82.64


(Including on Revaluation) - - - - 35.05


Television

Production &

Marketing

Filmed Entertainment Digital and

Mobile Content

Sports

Marketing

TOTAL

Revenue

External 455.51 3.43 7.20 5,220.40 5,686.54

Result

Segment Result 59.94 (33.80) (40.92) 522.19 507.41



Operating Profit/ (Loss) 157.79



Profit/ (Loss) before Taxation 86.26

Taxation 38.72

Profit /(Loss) after Taxation 47.54

Other Information

Television

Production &

Marketing

Filmed Entertainment Digital and

Mobile Content

Sports

Marketing

TOTAL

Carrying Amount of Segment Assets 292.21 26.76 11.29 4,686.42 5,016.68

Unallocated Corporate Assets - - - - 7,333.15


Carrying Amount of Segment Liabilities 230.94 1.74 14.69 1,037.17 1,284.54



F-78


Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing

TOTAL

Tangible Assets 0.46 0.18 0.64


Intangible Assets 26.58 2.70 29.28





Segment Information for the year ended March 31,2008

Rupees in Million

Television

Production &

Marketing

Filmed

Entertainment

Digital and Mobile

Content

Sports

Marketing

TOTAL

Revenue

External 774.18 133.92 17.78 6,051.14 6,977.02

Result

Segment Result 57.93 (47.71) 12.96 146.08 169.26



Operating Profit/(Loss) 19.28



Profit/(Loss) before Taxation 85.72

Taxation 31.03

Profit/(Loss) after Taxation 54.69

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and Mobile

Content

Sports

Marketing

TOTAL

Carrying Amount of Segment Assets 832.43 (138.63) 40.67 617.15 1,351.62



Carrying Amount of Segment Liabilities 285.73 6.05 0.36 328.82 620.96




Television

Production &

Marketing

Filmed

Entertainment

Digital and Mobile

Content

Sports

Marketing

TOTAL

Tangible Assets 0.01 0.02 0.06 0.09


Intangible Assets 20.09 198.58 820.12 1,038.79






Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile Content

Sports

Marketing

TOTAL

Revenue

External 1,024.04 86.40 18.51 3,496.73 4,625.68

Result

Segment Result 105.93 (78.58) 12.95 145.25 185.55



Operating Profit/(Loss) 121.14



Profit/(Loss) before Taxation 89.65

Taxation 14.83

Profit/(Loss) after Taxation 74.82

F-79

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Carrying Amount of Segment Assets 1,990.64 (75.07) 30.96 217.13 2,163.66



Carrying Amount of Segment Liabilities 722.13 14.07 1.39 50.04 787.63




Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Tangible Assets 0.12 0.01 0.04 0.17

Unallocated tangible Assets 9.59

Intangible Assets 21.24 46.43 67.67






Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Revenue

External 337.05 14.15 13.35 1,712.55 2,077.10

Result -

Segment Result (33.80) (3.37) 8.53 53.37 24.73

Add : Unallocated Income - - - - 2.17

Less: Unallocated Expenses - - - - 36.64

Operating Profit/(Loss) (9.74)


Interest/ Dividend Income - - - - 46.64

Profit/(Loss) before Taxation - - - - 22.28

Taxation 19.89

Profit/(Loss) after Taxation - - - - 2.39

Other Information

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Carrying Amount of Segment Assets 38.17 0.62 17.63 971.56 1,027.98

Unallocated Corporate Assets - - - - 2,483.21

Total Assets - 3,511.19

Carrying Amount of Segment Liabilities 212.90 10.39 0.21 816.73 1,040.23

Unallocated Corporate Liabilities - - - - 206.09


Capital Expenditure

Television

Production &

Marketing

Filmed

Entertainment

Digital and

Mobile

Content

Sports

Marketing

TOTAL

Tangible Assets 1.77 - 0.28 0.79 2.84

Unallocated Tangible Assets - - - - 4.96

Intangible Assets 36.86 10.52 0.06 2.01 49.45

Unallocated Intangible Assets - - - -




F-80

Notes:

1 Reconciliation between Segment Revenue and Restated Statement of Profits and Losses :

Rupees in Millions

Year ended

March 31,

2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Total Segment Revenue 7,377.17 5,686.54 6,977.02 4,625.68 2,077.10

Add: Unallocated Income 4.63 7.57 6.67 5.00 2.17

Add: Interest / Dividend Income 106.56 129.46 158.48 103.36 46.64

Total Income 7,488.36 5,823.57 7,142.17 4,734.04 2,125.91

Sales 7,372.78 5,627.37 6,933.77 4,613.18 2,061.69

Other Income 123.38 194.09 241.11 111.58 66.92

Increase/(Decrease) in Air Time Inventory (0.54) 3.16 (7.68) 10.84 2.52

Total Income before Restatement Adjustments 7,495.62 5,824.62 7,167.20 4,735.60 2,131.13

Less: Restatement Adjustments 7.26 1.05 25.03 1.56 5.22

Total Income after Restatement Adjustments 7,488.36 5,823.57 7,142.17 4,734.04 2,125.91

2 Having regard to the nature of the Company’s operations, the Company does not have more than one

Geographical Segment.

3 The accounting policies adopted for segment reporting are in line with the accounting policies adopted for the

preparation of financial statements as disclosed.

4 Upto the year ended March 31, 2008 having regard to the financial accounting structure followed by the

Company, operating cash and bank balances were considered as part of the respective segment assets and

consequently inter segment receivables and payables resulting therefrom were considered as part of the

respective segment assets and liabilities. During the year ended March 31, 2009 the Company has changed the

financial accounting structure and accordingly all cash and bank balances have been considered as a part of

Unallocated Corporate Assets as a result there are no inter segment receivables and payables. The effect of this on the segment assets and liabilities and the Unallocated Corporate Assets and liabilities as on March 31, 2009

and 2010 is not reasonably determinable.

5 The information regarding total amount of significant non - cash expenses, other than depreciation and

amortisation in respect of segment assets, that are included in segment expenses for the year ended March 31,

2008, 2007 and 2006 has not been ascertained and accordingly the disclosure of significant non - cash expenses,

as required by Accounting Standard 17 "Segment Reporting" has not been made by the Company.

7. The specified disclosures for Operating Leases as required by Accounting Standard 19 - "Leases" are given below:

(Rupees in Million)


March 31,

2010

Year Ended

March 31,

2009

Year Ended

March 31,

2008

Year Ended

March 31,

2007

Year Ended

March 31,

2006

(a) Disclosures in respect of agreement for office

premises taken on lease:

(i) Lease payments recognised in the Profit and

Loss Account 0.26 0.97 2.24 1.64 0.74


1. Under certain agreement, refundable interest free deposits / advance rent have been given.

2. Some of the agreements provide for increase in rent during the tenure of the agreement.


(b) Disclosures in respect of agreement for office

premises given on lease:

(i) Gross carrying amount ( including amount added

on revaluation) as at the year end 232.46 149.89 218.37 63.31 31.43

(ii) Accumulated depreciation as at the year end 42.29 15.51 11.89 13.09 8.62

(iii) Depreciation recognised in the Profit and Loss

Account for the period for which the office

premises were given on lease 8.57 7.35 2.35 1.87 0.72

iv) Significant leasing arrangements


2. The period of agreement ranges between 11 months to 33 months.

The initial direct costs are recognised as an expense in the Profit and Loss Account in the year in which they are incurred.

F-81

8. Earnings Per Share (EPS):

(Rupees in Million)

Year ended


2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Net Profit After Restatement Adjustments 294.17 47.54 54.69 74.82 2.39

Add: Employee Compensation expenses relating to ESOP

* 0.59 0.66 1.73 - -

Net Profit after restatement adjustments for diluted EPS 294.76 48.20 56.42 74.82 2.39

Numbers

Weighted average number of shares outstanding

during the year

For basic EPS (Refer Foot Note 3 below) 60,861,798 32,606,441 32,606,441 32,488,096 28,254,352

For diluted EPS (Refer Foot Notes 1 and 3 below) * 60,861,798 57,758,706 57,738,791 37,514,566 28,254,352

Rupees

Earnings Per Share

Basic (Refer Foot Note 3 below) 4.83 1.46 1.68 2.30 0.08

Diluted (Refer Foot Note 3 below) * 4.83 0.82 0.95 1.99 0.08

Nominal value per share (Refer Foot Note 3 below) 10 10 10 10 10

* The potential equity shares arising out of issue of ESOP have an anti – dilutive effect and hence the same is ignored for calculating diluted EPS

Foot Notes :

1. Weighted average number of shares outstanding during the year- for Diluted EPS:

Year ended


2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Weighted average number of shares outstanding during

the year – for calculating basic EPS (numbers)

(Refer Foot Note 3 below) 60,861,798 32,606,441 32,606,441 32,488,096 28,254,352

Add: Diluted effect of weighted average number

ofpotential equity shares that could arise on conversion of

28,049,567 Zero Coupon fully Convertible Debentures

into equity shares (Refer Foot Note 2 below) - 25,132,350 25,132,350 5,026,470 -

Add: Diluted effect of weighted average number of

potential equity shares that could arise on conversion of

2,775,741 (as at March 31, 2009 217,965) Compulsorily

Convertible Preference Shares into equity shares (Refer

Foot Note 2 below) - 19,915 - - -

Add: Potential equity shares that would be issued at fair

value in respect of employee stock options * 25,669 25,669 17,160 - -

Total 60,887,467 57,784,375 57,755,951 37,514,566 28,254,352

2. During the year ended March 31, 2010, Zero Coupon Convertible Debentures and Compulsorily Convertible Preference Shares have been converted in to

equity shares. Accordingly for the purpose of calculation of Diluted EPS, actual number of equity shares issued on conversion have been considered.

3. As two equity shares of Rs. 5/- each were consolidated into one equity share of Rs. 10/- each during the year ended March 31, 2008, earnings per share

for the year ended March 31, 2007 and 2006 have been restated by adjusting weighted average number of equity shares outstanding during the respective

years, as required by Accounting Standard 20 "Earnings Per Share".

9. Components of Deferred Tax Assets (Net) are as follows:

(Rupees in Million)

As At

Particulars March 31,2010

March 31,

2009

March 31,

2008

March 31,

2007

March 31,

2006

Deferred Tax Assets

Fixed Assets / Depreciation - - - 6.61 -

Auditors Qualification 6.12 41.10 34.95 26.64 17.47

Provision for Compensated Absences and Gratuity 3.19 3.31 2.43 1.92 0.79

Provision for Doubtful Debts / Advances 31.64 - 1.19 - 3.33

Professional fees disallowed on account of non payment

of TDS - - - 0.68 -

Miscellaneous Expenditure - 0.59 0.89 1.17 1.47

Total (A) 40.95 45.00 39.46 37.02 23.06

Deferred Tax Liabilities

Fixed Assets / Depreciation 11.19 16.93 26.47 - 9.99

Excess provision for expenses, written back - 2.47 1.93 8.97 7.52

Bad debts written off earlier, recovered - - - 0.84 0.84

Write back of provision of doubtful debts - - - 0.40 0.40

Total (B) 11.19 19.40 28.40 10.21 18.75

Net Deferred Tax Assets(Net) (A-B) 29.76 25.60 11.06 26.81 4.31

Note: The above includes deferred tax impact of Restatement Adjustments.

F-82

10. Disclosure in respect of Joint Ventures under the Accounting Standard 27 – Financial Reporting of Interests in

Joint Ventures” (Based on the restated financial statements of the respective entities)

Ownership Interest

As at March

31, 2010

As at March

31, 2009

As at March

31, 2008

As at March

31, 2007

As at March

31, 2006

(a) Jointly Controlled Entities

(i) Zenith Sports Private Limited (Zenith), India (formerly

known as Juniper Holding Pvt. Ltd.) *(status changed

from Subsidiary to Joint Venture w.e.f. March 27, 2006)

49% 49% 49% 49% 49%

(ii) Neo Sports Broadcast Private Limited (Neo), India

(formerly known as Nimbus Sports Broadcast Pvt.

Limited) (incorporated on March 17,2006) *(status

changed from Subsidiary to Joint Venture w.e.f. March

27,2006)

[ The Company has also made an investment of Rs.

4,470.00 million in the entire Non Cumulative

Redeemable Preference Shares of Neo on March

27,2007]

48.94% 49% 49% 49% 49%

(Rupees in Million)

(b) Aggregate amount of assets, liabilities, income and

expenditure related to the company's interests in jointly

controlled entities:

As at March

31, 2010

As at March

31, 2009

As at March

31, 2008

As at March

31, 2007

As at March

31, 2006

(i) Assets: Fixed Assets 31.92 45.26 48.87 52.98 -

Investment 34.34 - - 0.11 -

Sundry Debtors 716.30 411.75 382.76 350.35 -

Cash and Bank Balance 78.74 350.59 24.45 502.80 0.10


Total 1,070.53 888.24 1,052.32 980.02 21.53

(ii) Liabilities:

Unsecured Loans 49.67 47.03 44.69 41.59 @

Current Liabilities 4,212.05 2,666.81 1,421.34 137.50 483.26

Provisions 396.84 296.42 197.40 98.37 -

Total 4,658.56 3,010.26 1,663.43 277.46 483.26

As at March

31, 2010

As at March

31, 2009

As at March

31, 2008

As at March

31, 2007

As at March

31, 2006

(iii) Income:

Ad Sales Broadcasting 1,345.06 780.32 1,092.24 389.23 77.71

Distribution Revenue 495.36 459.58 239.92 335.50 -

Other Income 163.31 493.25 49.81 31.64 -

Total 2,003.73 1,733.15 1,381.97 756.37 77.71

(iv) Expenditure:

Cost of Sports Rights 3,166.99 2,216.90 2,625.65 1,411.15 249.38

Production Expenses 121.83 105.93 107.52 103.65 -

Marketing expenses 28.75 44.95 87.92 66.35 -

Payments to and Provision for Employees 67.54 68.39 57.15 22.40 -

Interest and Financial Charges 145.59 65.45 53.45 24.09 3.10


Depreciation/Amortisations 34.03 12.99 9.00 2.00 -

Total 3,660.29 2,663.89 3,068.98 1,711.37 258.95

(v) Share of Restatement Adjustments (23.90) (480.61) 472.66 31.85 -

(c) The company's share of contingent liabilities of jointly controlled

entities 65.35 5.35 4.20 4.57 -

(d) The company's share of capital commitment of jointly controlled

entities - - - 1.14 -

H. The figures for the years ended March 31, 2009, 2008, 2007 and 2006 have been regrouped, rearranged,

reclassified and re-casted wherever necessary, to conform to the year ended March 31, 2010’s classification.

I. @ denotes amounts less than five thousand rupees.

F-83

ANNEXURE VA: DETAILS OF SECURED AND UNSECURED LOANS

SECURED LOANS

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

From Banks

Vehicle Loans 4.67 3.07 1.56 0.31 0.14

Working Capital - Oriental Bank of Commerce - 51.28 38.80 59.23 33.46

Axis Bank Limited - - 620.57 - -

Punjab National Bank - - - 2,424.47 2,272.94

Union Bank of India - - - - 1,009.98

UTI Bank Limited 84.26 - - - -

State Bank of India 161.07 - - - -

Deutsche Bank A.G. - 1,350.00 - - -

From Financial Institution 4.50 - - - -

- - - - -

Total 254.50 1,404.35 660.93 2,484.01 3,316.52

UNSECURED LOANS

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Short Term :

- Bank Overdraft per books - - - 2.01 -

- Others :

SREI Infrastructure Finance Limited - - - 400.00 -

Other Loans :

Promoter Directors 53.07 53.07 291.07 126.17 126.17

Promoter Company- Paramount Corporation Limited - - 32.42 24.17 -

Zero Coupon Convertible Debentures

- 3i Sports Media (Mauritius ) Limited (3i) - 1138.52 1138.52 1138.52 -

(3i has significant influence over the Company

w.e.f. August 05, 2005)

- Others - 4326.38 4326.38 4326.38 -

Total 53.07 5,517.97 5,788.39 6,017.25 126.17

F-84

ANNEXURE VB : DETAILS OF SECURED LOANS AS AT MARCH 31, 2010 ( Rupees in Million )

Sr.No Name of the

Lender

Nature of

Loan

Loan

Sanctione

d

(Amount)

Loan

Outstanding

as at March

31, 2010

(Amount)

Rate of

Interest

as at

March

31, 2010

Repayment Schedule Security offered

1 ICICI Bank

Ltd.

Vehicle

Loan

0.75 0.14 7.57%

p.a.

Equated Monthly

Installment

Secured against hypothecation of

a vehicle

2 Oriental

Bank of

Commerce

Working

Capital

Loan(Cash

Credit)

60.00 33.46 13% p.a. Repayable on Demand Secured by first pari passu

charge by way of hypothecation

of the stocks and book debts and

collaterally secured by pari passu

equitable mortgage on the

Company’s flats at Mumbai and

Bangalore, exclusive / first

exclusive equitable mortgage on

flats of Paramount Corporation

Limited (PCL) at Mumbai and

Bangalore.

Further, secured by second

charge on the present and future

fixed assets of the Company and

second pari passu charge on the


Nimbus Centre.

Also guaranteed by the two

directors of the Company and

exclusive pledge of 3 lacs equity

shares of the Company held by a

Director.

3 Punjab

National

Bank

Short Term

Loan

2,250.00 2,272.94

[including

interest

accrued and

due

Rs. 22.94

Million]

12% p.a. Bullet payment after 9

months from the date of

first disbursement i.e

September 25, 2009 but

before June 30, 2010 [Rs.

372.94 Million (including

interest accrued and due as

on March 31, 2010)repaid

by June, 2010 and the

Company has vide its letter

dated June 21, 2010

requested for rollover of the

balance amount for a period

of 90 days].

Secured by first charge by way

of hypothecation of receivables

of certain series of cricket

matches, and second charge by

way of hypothecation on other

current assets. Further, secured

by first pari passu charge by way

of extension of equitable

mortgage of the Company’s

office premises, Nimbus Centre.

Also guaranteed by a director of

the Company.

Also secured by first pari passu

charge by way of extension of

pledge on 18 lacs shares held by

Zenith Sports Private Limited in

Neo Sports Broadcast Private

Limited and collaterally secured

by equitable mortgage on office

premise of Nirvana Television

Ltd. Further, to be secured by

pledge of 17,245,102 shares in

aggregate of the Company held

by Paramount Corporation

Limited and two directors of the

Company.

4 Union Bank

of India

Short Term

Loan

1,000.00 1,009.98

[including

interest

accrued and

due

Rs. 9.98

Million]

11.75%

p.a.

4 monthly installments

commencing from 7th

month from the first month

of disbursement i.e

September, 2009. Full

repayment by June 30,

2010, however with an

option to pre-repay prior to

maturity without any

prepayment penalty (Fully

repaid subsequent to March

31, 2010).

Secured by first charge by way

of hypothecation of receivables

of certain series of cricket

matches, and collaterally secured

by first pari passu charge on the


Nimbus Centre. Also guaranteed

by a director of the Company.

Total 3,316.52

F-85

Annexure VB : Details of Unsecured Loans as on March 31, 2010

Loans from Promoter Directors


Tenure of the loans Not stipulated.

Security / Collateral Nil

Other details The loan amounts can be utilised by the Company for any loss incurred on account of partial or

non recovery of the debt of the Company of Rs. 35.67 Million and of one of its subsidiary

companies Rs. 21.20 Million due from a party and outstanding for several years.

Amount Outstanding as on March 31, 2010 Rs. 126.17 Million

ANNEXURE VI: DETAILS OF SUNDRY DEBTORS (Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


-Considered Good 65.99 163.95 1,319.32 765.07 68.05

-Considered Doubtful 8.71 - - - 17.74

Less: Provision for Doubtful Debts 8.71 - - - 17.74

65.99 163.95 1,319.32 765.07 68.05

Other Debts

-Considered Good 1,690.33 599.77 1,235.88 4,017.95 7,580.11

Total 1,756.32 763.72 2,555.20 4,783.02 7,648.16

Above includes dues from :

- Neo Sports Broadcast Private Limited

(NSBPL)(formerly known as Nimbus Sports Broadcast

Private Limited) :- A Joint Venture Company (also a

Company under same management) 985.40 39.90 2,369.92 4,511.78 7,003.50

- Paramount Corporation Limited (PCL):-PCL had

significant influence over the Company upto February 08,

2010. Further a Key Management Personnel (KMP)of the

Company and his relative (KMP and his relative are also

promoter directors of the Company) have significant

influence over PCL. 79.00 - - - -

-Nimbus Sport International Pte. Ltd (formerly known as

World Sport Nimbus Pte Ltd) - A Subsidiary Company 31.27 0.11 2.02 - 278.74

F-86

ANNEXURE – VII: DETAILS OF LOANS AND ADVANCES (Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


Loan to Subsidiaries (Refer Note 1 below)

-Considered Good 75.27 96.44 66.78 106.64 89.72

-Considered Doubtful - 27.24 50.91 69.00 69.00

Less: Provision for Doubtful Loans - 27.24 50.91 69.00 69.00

75.27 96.44 66.78 106.64 89.72

Advances Recoverable in Cash or in Kind or for value to

be received (Refer Note 2 below)

-Considered Good 217.25 373.19 355.01 189.39 585.21

-Considered Doubtful - - 3.51 - 6.36

Less: Provision for Doubtful Advances - - 3.51 - 6.36

217.25 373.19 355.01 189.39 585.21

Deposits

-Considered Good 31.38 31.83 31.84 30.69 30.84

-Considered Doubtful 18.00 18.00 18.00 18.00 18.00

Less: Provision for Doubtful Deposits 18.00 18.00 18.00 18.00 18.00

31.38 31.83 31.84 30.69 30.84 Tax Payments less Provisions 3.72 24.00 109.06 143.17 157.86

MAT credit entitlement - - 7.97 - -

Total 327.62 525.46 570.66 469.89 863.63

Note 1 :Loans to Subsidiaries

Nimbus Motion Pictures (A. P.) Pvt. Ltd. 25.07 25.12 25.16 25.22 25.22

Nimbus Home Entertainment Pvt Ltd (formerly known as

Nirvana Music Private Limited) 14.80 15.28 49.11 74.48 84.38

Nirvana Adzone Limited @ 0.04 0.11 0.17 0.23

Nirvana Television Ltd 29.87 26.37 29.08 29.85 30.53

Nimbus Communication Ltd - British Virgin Islands 3.52 3.52 3.15 4.02 3.56

Nimbus Media Pte. Ltd. 0.40 0.40 0.36 0.52 0.46

Nimbus Sport International Pte. Ltd (formerly known as

World Sport

Nimbus Pte Ltd) 1.61 52.95 10.72 41.38 14.34

Total 75.27 123.68 117.69 175.64 158.72

Note 2: Advances Recoverable in Cash or in Kind or

for value to be received includes dues from :

- Joint Venture -

Neo Sports Broadcast Private Limited (a Company

under same management) - 0.16 0.20 3.34 328.79

Zenith Sports Private Limited (formerly known as

Juniper Holdings Private Limited) (a Company under

same management) 0.01 84.88 91.21 95.97 101.36

- Paramount Corporation Limited (PCL):-PCL had

significant influence over the Company till 09

February, 2010. Further a Key Management

Personnel (KMP) of the Company and his relative

(KMP and his relative are also promoter directors of

the Company) have significant influence over PCL. - - 0.01 @ @

F-87

ANNEXURE VIII: DETAILS OF INVESTMENTS

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


- Quoted - - - - -

- Unquoted (Trade, unless otherwise stated)

i) In Fully Paid up Equity Shares of Subsidiary Companies

Nirvana Television Limited 44.00 44.00 44.00 44.00 44.00

Nimbus Communications Worldwide Limited, Mauritius 68.05 68.05 68.05 68.05 68.05

Nimbus Motion Pictures (A.P.) Private Limited 0.10 0.50 0.50 0.50 0.50

Nirvana Adzone Limited 1.11 1.11 1.11 1.11 1.11

Nimbus Home Entertainment Private Limited

(formerly known as Nirvana Music Private Limited) 0.10 0.50 0.50 0.50 0.50

Nimbus Communications Limited (British Virgin Islands) 0.04 0.04 0.04 0.04 0.04

Nimbus Media Pte.Ltd., Singapore 0.02 0.02 0.02 0.02 0.02

ii) In Fully Paid up Equity Shares of Other Companies

Zenith Sports Pvt. Ltd

(a Joint Venture company and also a company under same

management) 0.05 0.25 0.25 0.25 0.25

UCL Plastics Limited (Non- Trade ) 0.05 0.05 0.05 0.05 0.05

Zuari Crefin Limited (Non- Trade ) 0.03 0.03 0.03 0.03 0.03



management) - @ @ @ @

iii) In Fully Paid up Preference Shares of Other Company



management) - 4,470.00 4,470.00 4,470.00 4,470.00

CURRENT INVESTMENTS

- Quoted - - - - -


Units of Mutual Funds - 133.56 - - 473.22

Grand Total 113.55 4,718.11 4,584.55 4,584.55 5,057.77

F-88

ANNEXURE IX: DETAILS OF CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Sundry Creditors 211.89 711.28 349.71 471.00 2,448.68

Advances from a Subsidiary 614.94 5.62 69.17 722.94 2,282.94

Dues to Subsidiaries 5.34 3.74 0.99 92.95 9.14

Advances from Customers 2.77 17.81 4.25 0.99 -

Unpaid Dividend 0.01 0.02 0.13 0.13 0.13

Investor Education and Protection Fund – Unpaid Dividend - - @ @ @

Other Liabilities 54.46 99.75 247.10 68.27 255.17

Total 889.41 838.22 671.35 1,356.28 4,996.06

Provisions

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Provision for Compensated Absences 2.34 3.77 5.48 6.40 3.80

Provision for Gratuity - 1.87 1.67 3.32 5.60

Proposed Dividend 21.19 - - - -

Tax on Dividend 2.97 - - - -

Tax Provisions less Payments 22.84 9.03 - - 106.04

Total 49.34 14.67 7.15 9.72 115.44

ANNEXURE X: DETAILS OF DIVIDEND AND OTHER INCOME

(Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Nature

License Fee from Office Premises 2.17 5.00 6.66 5.21 4.56 Recurring

Interest on fixed deposits with Banks and loans, etc. 5.45 44.12 155.69 128.74 104.13 Recurring


Credit balances no longer payable, written back - - 0.32 21.35 0.78 Recurring

Profit on assignment of Satellite Television Broadcasting,

Terrestrial Television, etc. rights of a Movie (acquired)

(Refer Note 2 below) - - 50.10 - -

Recurring

Profit on Sale of Other Fixed Assets (net) - - 0.02 - 4.00 Recurring

Miscellaneous Income 2.62 1.25 0.50 0.65 0.18 Recurring

Dividend from units of Mutual Funds (Refer Note 3) 41.19 59.24 2.79 0.72 2.43 Non recurring

Profit on redemption of Current Investments - - - - 0.04 Non recurring

Credit balances of customers no longer payable written back - - - 36.37 - Non recurring

Discounts and Incentives Received 10.27 0.41 - - - Non recurring

Total 61.70 110.02 216.08 193.04 116.12

Notes: 1)Net of reduction in Interest accrued in the year ended March 31, 2009 on account of premature withdrawals of Fixed Deposits - Rs. 16.55 million

2) Related to business activities of the Company. 3) The dividend income is earned from temporary deployment of surplus fund, accordingly considered as Non recurring.

Reconciliation

Year Ended Particulars March 31,

2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Other Income before restatement 66.92 111.58 241.11 194.09 123.38 Less: Restatement Adjustments 5.22 1.56 25.03 1.05 7.26

Other Income as restated 61.70 110.02 216.08 193.04 116.12

F-89

ANNEXURE XI: DETAILS OF DIVIDEND PAID

For the Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


Equity Share Capital (Rs. Million) 324.65 326.06 326.06 326.06 615.02

Face Value per share (Rs.) 5 5 10 10 10

Rate of Dividend (%) 7.50 - - - -

Total Dividend Paid (Rs. Million) 21.19 - - - -

Tax on Dividend (Rs. Million) 2.97 - - - -

Class of Shares - - - Preference Preference

Preference Share Capital (Rs. Million) 2.18 *

Face Value per share (Rs.) 10 10

Rate of Dividend(%) - -

Total Dividend Paid (Rs. Million) - -

Tax on Dividend (Rs. Million) - -

* During the year Compulsorily Convertible Preference Shares have been converted in to Equity Shares (Refer Note III - D (1) of Annexure IV)

F-90

ANNEXURE XII: STATEMENT OF TAX SHELTER (Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Tax Rate - Normal (including surcharge and education

cess where applicable) 33.66% 33.66% 33.99% 33.99% 33.99%

Tax Rate - MAT(including surcharge and education cess

where applicable) 8.42% 11.22% 11.33% 11.33% 11.33%

Profit before tax as per Restated Statement of Profits

and Losses 22.28 89.65 85.72 86.26 453.24

Tax on above at Notional Rate 7.50 30.18 29.14 29.32 154.06

Less: Tax Impact of Restatement Adjustments (9.69) (12.82) (38.32) 14.04 128.68

A Tax at Notional Rate 17.19 43.00 67.46 15.28 25.38

B Permanent Differences

Deductions from Income from House Property (0.64) (1.33) (1.76) (1.38) (1.21)

Dividend Income (41.19) (59.24) (2.79) (0.72) (2.47)

Others (expense incurred in relation to increase in

authorised share capital, interest on delay in payment of

TDS, etc.) 2.07 0.12 26.16 12.68 16.62

(39.76) (60.45) 21.61 10.58 12.94

C Timing Differences

Fixed assets / depreciation 13.14 17.65 (184.24) 84.45 298.16

Section 43B / 40 (a) disallowances / (allowances) under

the Income Tax Act, 1961 0.35 3.30 3.53 5.14 (0.33)

Provision for Doubtful debts / Advances 8.71 - 3.51 (3.51) 93.10

Others (0.05) (1.08) (1.08) 0.87 1.74

22.15 19.87 (178.28) 86.95 392.67

Total(B) + (C) (17.61) (40.58) (156.67) 97.53 405.61

D Tax (Saving)\ Increase thereon (5.93) (13.66) (53.25) 33.15 137.87

E Net Tax(A+D) 11.26 29.34 14.21 48.43 163.25 F Tax Credit u/s 115JAA �recognized in the books - - - (7.97) -

Net Tax As per Income Tax Return (E+F) 11.26 29.34 22.18 39.40 163.25

(Refer note

1 below)

(Refer note

3 below)

(Refer note

2 below)

H Brought forward Tax Credit u/s 115 JAA (MAT

Credit) - - - 7.97 - Add: Tax credit allowed - - 7.97 - -

Less: Tax credit set off - - - 7.97 -

Carried forward Tax Credit u/s 115 JAA (MAT

Credit) - - 7.97 - -

Notes:

1) Tax payable under section 115 JB, being higher than the tax computed under the Income Tax Act, 1961.

2) The statement of tax shelter for the years ended March 31, 2010 has been prepared based on Income Tax Calculations made by the Company. The

Company is yet to file the income Tax return for the year ended March 31, 2010.

3) Net of saving of surcharge and cess on tax credit set off – Rs. 1.06 million.

F-91

ANNEXURE XIII: STATEMENT OF ACCOUNTING RATIOS (Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Face Value per Equity Share (Rs.) 5.00 5.00 10.00 10.00 10.00

Restated Face value per Equity Share (Rs.) (Refer note 3 (ii) below) 10.00 10.00 N.A. N.A. N.A.

Earnings per Equity Share

-Basic -(C/D) (Refer note 3 (ii) below) 0.08 2.30 1.68 1.46 4.83

-Diluted -(C/E) (Refer note 3 (ii) below) * 0.08 1.99 0.95 0.82 4.83

Return on Net Worth (%) (C/A) 0.11% 3.28% 2.34% 1.91% 3.10%

Net Asset value per Equity Share (Rs.) (B/F) 34.88 34.98 71.82 76.07 154.51

Net Worth excluding Revaluation Reserve (A) 2,264.87 2,281.28 2,341.85 2,482.57 9,502.54

Net Worth excluding Revaluation Reserve 2,264.87 2,281.28 2,341.85 2,480.39 9,502.54

and Preference Share Capital (B)

Net Profit After Restatement Adjustments (C) 2.39 74.82 54.69 47.54 294.17

Weighted Average Number of Equity Shares - Basic (D) (Refer note 3 (ii) below) 28,254,352 32,488,096 32,606,441 32,606,441 60,861,798

Weighted Average Number of Equity Shares - Diluted (E) (Refer note 3 (ii) & (iii)

below) * 28,254,352 37,514,566 57,738,791 57,758,706 60,861,798

Total Number of Equity Shares outstanding at the end of the year (F) 64,929,552 65,212,881 32,606,441 32,606,441 61,501,870

Notes:

1) The ratios have been computed as per the following formulae :

Basic Earnings Per Share (Rs.) Net profit after restatement adjustments attributable to equity shares

Weighted average number of equity shares

Diluted Earning Per Share (Rs.) Net profit after restatement adjustments and adjustments related to dilutive potential equity shares

Weighted average number of equity shares plus weighted average number of dilutive potential equity

shares

Return on Net worth (%) Net profit after restatement adjustments

Net worth excluding revaluation reserve

Net Asset Value per Equity Share (Rs.) Net worth excluding revaluation reserve and preference share capital

Total number of equity shares outstanding at end of the year

2) The above ratios have been computed on the basis of the Restated Financial Information as per Annexure I and II

3) (i) Earnings Per Share has been calculated in accordance with Accounting Standard 20 - "Earnings Per Share".

* The potential equity shares arising out of issue of ESOP have an anti-dilutive effect and hence the same is ignored for calculating diluted EPS.

(ii) As two equity shares of Rs. 5/- each were consolidated into one equity share of Rs. 10/- each during the year ended March 31, 2008, earnings per share for the year ended March

31, 2006 and 2007 have been restated by adjusting weighted average number of equity shares outstanding during the respective years, as required by Accounting Standard 20

"Earnings Per Share".

(iii) During the year ended March 31, 2010, Zero Coupon Convertible Debentures and Compulsorily Convertible Preference Shares have been converted in to equity shares.

Accordingly for the purpose of calculation of Diluted EPS, actual number of equity shares issued on conversion have been considered

4) Accounting ratios after giving impact of conversion during the year ended March 31, 2010 of Zero Coupon Convertible Debentures issued during the year ended March 31, 2007 and

of Compulsorily Convertible Preference Shares issued during years ended March 31, 2009 and March 31, 2010, are given below:

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Earnings per Equity Share (Rs.) N.A. N.A.

As reflected in the diluted earnings per share

disclosed above

Return on Net Worth (%) (C/G) N.A. 0.97% 0.70% 0.60% N.A.

Net Asset value per Equity Share (Rs.) (G/H) N.A. 67.08 135.21 136.98 N.A.

Net worth after conversion(excluding Revaluation Reserve) (G) N.A. 7,746.18 7,806.75 7,947.47 N.A.

Total Number of Equity Shares after conversion outstanding at the

end of the year (H) N.A. ** 115,477,581 57,738,791 58,018,372 N.A.

N.A. = Not Applicable

**Since the face value per equity share as at March 31, 2007 was Rs. 5 the number of converted equity shares of Rs. 10 each have been adjusted to arrive at the

total no. of equity shares after conversion outstanding as at March 31,2007.

F-92

ANNEXURE XIV:CAPITALISATION STATEMENT (Rupees in Million)

Particulars Pre-Issue As at March 31, 2010 Adjusted for Issue


Short Term Debts (Refer Note 1 below) 3,316.52

Long Term Debts 126.17

Total Debts 3,442.69

Shareholders’ Funds (Equity) :

Equity Share Capital 615.02

Stock Option Outstanding 4.24

Reserves and Surplus (net of Revaluation reserve) 8,883.28

Total 9,502.54

Long Term Debts/ Equity 0.01:1

Notes:

(1) Short Term debts represents debts which are due for repayment within twelve months from March 31, 2010 and includes current portion of

long term debts, if any.

(2) The Pre-Issue figures considered above are as per the Restated Statement of Assets and Liabilities

(3) Post Issue figures can be ascertained only after the conclusion of the book building process.

ANNEXURE XV: STATEMENT OF RECONCILIATION OF PROFITS/LOSSES

(Rupees in Million)

Year Ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A Profit After Tax as per audited accounts - 33.64 82.25 113.26 21.99 1.90

B Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of


B1 Restatement Adjustments relating to :

(a) Advertisement expenses 0.20 - - - -

(b) Revaluation reserve written back (2.44) - - - -

(c) Excess provision for expenses, written back 8.26 4.29 (20.97) 1.59 (7.27)

(d) Bad debts written off earlier, recovered - - (2.50) - -

(e) Write back of provision of doubtful debts - - (1.18) - -

(f) Change in Depreciation / amortisation policy 16.24 (16.04) (65.30) 56.92 281.21

(g) Miscellaneous Expenditure Written off 0.87 0.87 0.87 0.87 1.74

(h) Auditors' Qualifications (51.91) (27.24) (23.67) (18.09) 102.91

Sub Total (28.78) (38.12) (112.75) 41.29 378.59

B2 Restatement adjustments relating to Current Tax / Fringe Benefit

Tax/ Deferred Tax (15.01) 11.41 8.59 (8.22) 22.33

C Deferred Tax Impact of Restatement Adjustments (on B1 above) (12.54) (19.28) (45.59) 7.52 108.65

Net Profit After Restatement Adjustments (A+B1+B2-C) 2.39 74.82 54.69 47.54 294.17

F-93

ANNEXURE XVI A : STATEMENT OF CONTINGENT LIABILITIES (Amount in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

i) Claim by a party on account of alleged breach of contract relating to a

television program 1.13 1.13 1.13 1.13 1.13

ii) In respect of arbitration award dated July 5, 2002 passed relating to claim of

Doordarshan / Prasar Bharti ( Broadcasting Corporation of India ) and upheld

by the Bombay High Court vide its order dated November 29, 2004 against

which the Company has appealed before the Division Bench of the Bombay

High Court. The Division Bench has stayed the operation of the award on the

Company depositing Rs. 30.00 Million and furnishing the bank guarantee of

Rs. 40.00 Million in favour of the Prothonotary & Senior Master of the High

Court. 76.24 76.24 76.24 76.24 76.24

Amount of interest included under (ii) above 13.44 13.44 13.44 13.44 13.44

iii)

(a) In respect of the suit filed against the Company in the Bombay High Court

relating to a contract for Television logo to be designed for the Company

(excluding interest claimed @ 18% per annum) - - 4.38 4.38 4.38

(b) The Company has filed the counter claim in the Bombay High Court against

(iii) (a) above (excluding interest claimed@ 9% per annum by the Company) - - 8.51 8.51 8.51

iv) Claim by a party on account of a dispute relating to scope of a contract for IT

related services provided to the Company. - - - - 11.41

v) Claim by Board of Control for Cricket in India under the Media Rights

Agreement for full consideration for an ODI played during the year ended

March 31, 2010 which was abandoned after certain number of overs due to an

unplayable pitch. The Company contends that consideration is payable pro-rata

based on the number of overs played. The differential amount disputed by the

Company is Rs. 157.30 Million . However, the full consideration has been paid

subsequent to the year end under protest. Out of abundant caution, the

Company has made full provision except to the extent of - - - - 39.47

vi) In respect of disputed demands of income tax 9.37 9.37 9.37 62.81 17.84

vii)

(a) Corporate guarantees to banks for facilities extended to certain foreign

subsidiaries of the Company US $ 18.00 US $ 18.00 US $ 5.02 US $ 2.02 US $ 2.02

Equivalent Indian Rupees 802.98 784.62 200.75 103.04 91.29

(b) Amount outstanding in respect of (a) above US $ 3.84 US $ 5.02 US $ 5.02 US $ 2.02 US $ 2.02

Equivalent Indian Rupees 171.41 218.93 200.75 103.04 91.29

viii)

(a) Corporate guarantee to a bank for a cash credit facility given to an Indian

Subsidiary 50.00 50.00 - - -

(b) Amount outstanding in respect of (a) above 10.19 4.47 - - -

ix) Corporate guarantee issued to the investors of the Loan Notes issued by a step

down wholly owned foreign subsidiary - - - US $ 10.00 -

Equivalent Indian Rupees - - - 509.50 -

x)

(a) Corporate guarantee issued to the investors of the Loan Notes issued by a

wholly owned foreign subsidiary - - - -

Not exceeding

US $ 75.00

Equivalent Indian Rupees - - - - 3,385.50

(b) Amount outstanding in respect of (a) above including interest - - - - US $ 52.08

Equivalent Indian Rupees - - - - 2,351.04

xi) The Company has given corporate guarantee during the year 2007-08 to a

party under which the Company has unconditionally and irrevocably

guaranteed for due and punctual performance of all the obligations by a step

down wholly owned foreign subsidiary under the media rights agreement

entered into by the subsidiary with the party, the liability in respect of which

can be quantified only on occurrence of non fulfillment by the subsidiary of

any term of the agreement.

In terms of the above guarantee the maximum liability in respect of guarantee

to refund the party any advance rights fees paid to the subsidiary in the event

of cancellation of a tour and /or events is restricted to - - US $ 8.90 US $ 8.90 US $ 8.90

Equivalent Indian Rupees - - 355.73 453.46 401.75

xii) In respect of assignment of receivables with recourse under factoring

agreement with the third party - - - - 38.03

Foot Note :

Future ultimate outflow of resources embodying economic benefits in respect of these matters is uncertain as it depends on the final outcome of the matters

involved.

B: CAPITAL COMMITMENT

Estimated amount of contracts remaining to be executed

on capital account (net of advances ) and not provided for - - - - 0.41

Amount in respect of Intangible Assets included above - - - - 0.41

F-94

ANNEXURE XVII- DETAILS OF RELATED PARTY DISCLOSURE

A . Names of Related Parties and Description of Relationship :

For the year ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A. Enterprise which control the Company:

Holding Company*(upto August 04, 2005)

Nimbus Creative Corporation Limited ( now known as Paramount


*√ X X X X

B. Enterprises where control exists:

Subsidiaries

Nirvana Television Limited √ √ √ √ √

Nimbus Motion Pictures (A.P.) Pvt. Ltd √ √ √ √ √

Nimbus Home Entertainment Pvt. Ltd.(formerly known as Nirvana Music

Pvt. Ltd.)

√ √ √ √ √

Nirvana Adzone Limited √ √ √ √ √

Nimbus Communications Worldwide Limited, Mauritius √ √ √ √ √

Nimbus Media Pte. Ltd., Singapore √ √ √ √ √

Nimbus Communications Ltd. (BVI) √ √ √ √ √

Zenith Sports Pvt. Limited (formerly known as Juniper Holdings Pvt. Ltd. )

*(status changed to Joint Venture w.e.f.March 27, 2006)

*√ X X X X

Nimbus Sport International Pte Ltd., Singapore (formerly known as World

Sport Nimbus Pte. Ltd.) *(status changed from Joint Venture w.e.f. June 02,

2005)

*√ √ √ √ √

Nimbus Sports Broadcast Pvt. Limited ( now known as Neo Sports Broadcast

Pvt. Limited ) *[Subsidiary for the period from March 17, 2006 (the date of

incorporation) to March 26, 2006and status changed to Joint Venture w.e.f.

March 27,2006]

*√ X X X X

World Sports Nimbus SA (PTY) Ltd. *(w.e.f. June 01,2005, # Deregistered

on July 25, 2008)

*√ √ √ #√ X

C. Joint Ventures

World Sport Pte. Ltd., Singapore (now known as Nimbus Sport International

Pte Ltd., Singapore) *(status changed to subsidiary w.e.f. June 02, 2005 )

*√ X X X X

Zenith Sports Pvt. Limited (formerly known as Juniper Holdings Pvt. Ltd.)

*(status changed from subsidiary w.e.f. March 27, 2006)

*√ √ √ √ √

Neo Sports Broadcast Pvt. Limited (formerly known as Nimbus Sports

Broadcast Pvt. Limited) *(status changed from subsidiary w.e.f. March 27,

2006)

*√ √ √ √ √

D. Ventures in respect of which the reporting enterprise is an associate

(Associates)

3i (Mauritius) Investments 2 Technology Limited (now known as 3i Sports

Media (Mauritius) Limited) * (w.e.f. August 05, 2005)

*√ √ √ √ √

Funderburk Enterprises Limited * (w.e.f. February 09, 2010) X X X X *√


Corporation Limited) *( for the period August 05, 2005 to February 08, 2010)

*√ √ √ √ *√

E. Key Management Personnel

Mr. Harish Thawani [Executive Chairman (who has ability to exercise

'Significant influence' on the Company)]

√ √ √ √ √

Dr. Akash Khurana (Vice Chairman/ Managing Director) √ √ √ √ √

Mr. Sunil Manocha (Director) *(uptoOctober 31, 2005) *√ X X X X

F. Relative of Key Management Personnel

Mrs. Shobha Thawani (also a director in the company) √ √ √ √ √

G. Enterprises in which Key Management Personnel and relatives have

significant influence


Corporation Limited) ( upto August 04, 2005, the Company was subsidiary

and for the period August 05, 2005 to February 08, 2010, the Company was

an Associate)

√ √ √ √ √

F-95

(B) Related Parties Transactions :

(i) (a) Transactions with the related parties during the year ended March 31, 2006 Rupees in Million

Transactions

Subsidiaries

Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Sales & Services 1,083.12 504.59 79.00 - - 1,666.71

Nimbus Sport International Pte Ltd., Singapore 326.24 - - - - 326.24

Paramount Corporation Limited - - 79.00 - - 79.00

Nimbus Sports Broadcast Pvt. Limited 756.88 504.59 - - - 1,261.47

Interest and Other Income Received /Receivable 0.04 - - - - 0.04 Nimbus Communications Worldwide Ltd., Mauritius 0.04 - - - - 0.04

Purchases/ Payment of Services 0.74 - - - - 0.74 Nimbus Sport International Pte Ltd., Singapore 0.74 - - - - 0.74



Mr. Sunil Manocha - - - 2.09 - 2.09

Buyback - - - 6.16 - 6.16


Payments made on behalf of the related party 32.97 0.02 - - - 32.99 Nimbus Sport International Pte Ltd., Singapore 29.42 - - - - 29.42

Nimbus Communications Limited (BVI) 3.23 - - - - 3.23

Nimbus Media Pte Ltd., Singapore 0.30 - - - - 0.30

Nirvana Music Private Limited 0.01 - - - - 0.01

Nimbus Motion Pictures (A.P.) Pvt. Ltd. 0.01 - - - - 0.01

Nirvana Adzone Limited @ - - - - @

Nimbus Sports Broadcast Pvt. Limited - 0.02 - - - 0.02

Zenith Sports Private Limited - @ - - - @

Advance / Deposit received 614.94 - - - - 614.94


Advance/ Loan Received Back 1.37 - - - - 1.37 Nimbus Communications Worldwide Ltd., Mauritius 1.37 - - - - 1.37

Unsecured Loan Repaid - - 21.10 25.12 33.81 80.03 Mrs. Shobha Thawani - - - - 33.81 33.81



Shares Issued - - 1,971.92 - - 1,971.92

3i Sports Media (Mauritius) Limited - - 1,971.92 - - 1,971.92

Sale of Investments in Zenith Sports Pvt.Ltd. - - 0.05 - - 0.05


Purchase of Shares in Nirvana Television Ltd. - - - 5.00 1.25 6.25 Mr. Harish Thawani - - - 5.00 - 5.00


Purchase of Shares in Nirvana Music Pvt.Ltd. - - - @ @ @

Mr. Harish Thawani - - - @ - @

Mrs. Shobha Thawani - - - - @ @

Dr. Akash Khurana - - - @ - @

Mr. Sunil Manocha - - - @ - @

(i) (b) Balances outstanding as at March 31, 2006 Rupees in Million

Subsidiaries

Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Amount receivable/ ( payable) (513.74) 985.41 79.00 (53.07) - 497.60 Nimbus Communications Worldwide Ltd., Mauritius (1.39) - - - - (1.39)

Nimbus Sport International Pte Ltd., Singapore (583.11) - - - - (583.11)




Nirvana Music Private Limited 14.80 - - - - 14.80

Nirvana Television Limited 26.97 - - - - 26.97

Nirvana Adzone Limited @ - - - - @

Nimbus Sports Broadcast Pvt. Limited - 985.40 - - - 985.40

Zenith Sports Private Limited - 0.01 - - - 0.01



Investments 113.42 0.05 - - - 113.47

Nimbus Communications Worldwide Ltd., Mauritius 68.05 - - - - 68.05




Nimbus Home Entertainment Pvt. Ltd. 0.10 - - - - 0.10

Nirvana Adzone Limited 1.11 - - - - 1.11


Zenith Sports Private Limited - 0.05 - - - 0.05

F-96

(ii) (a) Transactions with the related parties during the year ended March 31, 2007 Rupees in Million

Transactions

Subsidiaries


Management

Personnel

Total

Sales & Services 630.90 2,885.96 - - 3,516.86 Nimbus Sport International Pte Ltd., Singapore 630.90 - - - 630.90

Neo Sports Broadcast Pvt. Limited - 2,885.96 - - 2,885.96

Rent Income - 1.22 - - 1.22 Neo Sports Broadcast Pvt. Limited - 1.22 - - 1.22

Interest and Other Income Received /Receivable - 3.45 - - 3.45 Zenith Sports Pvt. Limited - 3.45 - - 3.45

Salary & Perks paid - - - 9.06 9.06

Mr. Harish Thawani - - - 6.37 6.37

Dr. Akash Khurana - - - 2.69 2.69

Payments made on behalf of the related party 0.72 0.55 - - 1.27 Niravana Music Private Limited 0.48 - - - 0.48

Nirvana Television Limited 0.15 - - - 0.15

Nimbus Motion Pictures (A.P) Pvt. Ltd 0.05 - - - 0.05

Nirvana Adzone Limited 0.04 - - - 0.04

Neo Sports Broadcast Pvt. Limited - 0.55 - - 0.55

Advance / Loan Given - 81.42 - - 81.42 Zenith Sports Pvt. Limited - 81.42 - - 81.42

Advance Received - - 10.00 - 10.00

Paramount Corporation Limited - - 10.00 - 10.00

Loans / Advances received back 4.09 29.42 - - 33.51



Issue of Compulsorily Convertible Debentures - - 1,138.52 - 1,138.52

3i Sports Media (Mauritius) Limited - - 1,138.52 - 1,138.52

Shares Issued - - 11.50 - 11.50

3i Sports Media (Mauritius) Limited - - 11.50 - 11.50

Investments made 0.80 4,470.20 - - 4,471.00

Nimbus Motion Pictures (A.P) Pvt. Ltd 0.40 - - - 0.40

Nirvana Music Pvt. Ltd 0.40 - - - 0.40


Zenith Sports Pvt. Limited - 0.20 - - 0.20

Bad Debts written off - - 79.00 - 79.00 Paramount Corporation Limited - - 79.00 - 79.00

(ii) (b) Balances outstanding as at March 31, 2007 Rupees in Million

Subsidiaries


Management

Personnel

Total

Net receivable/ ( payable) 114.43 124.94 (10.00) (53.26) 176.11

Nimbus Communications Worldwide Ltd., Mauritius (1.09) - - - (1.09)

Nimbus Sport International Pte Ltd., Singapore 47.43 - - - 47.43

Nimbus Media Pte Ltd., Singapore 0.40 - - - 0.40

Nimbus Communications Limited (BVI) 3.52 - - - 3.52

Nimbus Motion Pictures (A.P.) Pvt. Ltd 25.12 - - - 25.12

Nimbus Home Entertainment Pvt. Ltd. 15.28 - - - 15.28





Paramount Corporation Limited - - (10.00) - (10.00)

Dr. Akash Khurana - - - (0.09) (0.09)

Mr. Harish Thawani - - - (53.17) (53.17)

Provision for doubtful advances 27.24 - - - 27.24

Nirvana Television Limited * (provided during the year ) *15.00 - - - 15.00

Nimbus Home Entertainment Pvt. Ltd.

*(provided during the year) *12.24 - - - 12.24

Debentures - - 1,138.52 - 1,138.52 3i Sports Media (Mauritius) Limited - - 1,138.52 - 1,138.52

Investments 114.22 4,470.25 - - 4,584.47

Nimbus Communications Worldwide Ltd., Mauritius 68.05 - - - 68.05

Nimbus Media Pte Ltd., Singapore 0.02 - - - 0.02

Nimbus Communications Limited (BVI) 0.04 - - - 0.04

Nimbus Motion Pictures (A.P.) Pvt. Ltd 0.50 - - - 0.50

Nimbus Home Entertainment Pvt. Ltd. 0.50 - - - 0.50





F-97

(iii) (a) Transactions with the related parties during the year ended March 31, 2008 Rupees in Million

Transactions

Subsidiaries

Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Sales & Services 902.69 5,113.23 - - - 6,015.92


Neo Sports Broadcast Pvt. Limited - 5,113.23 - - - 5,113.23

Rent Income - 2.84 - - - 2.84

Neo Sports Broadcast Pvt. Limited - 2.84 - - - 2.84

Interest Received / Receivable - 5.53 - - - 5.53

Zenith Sports Pvt. Limited - 5.53 - - - 5.53

Miscellaneous Income - 0.01 - - - 0.01 Neo Sports Broadcast Pvt. Limited - 0.01 - - - 0.01



Interest Payable / Paid ( Gross) - - 1.19 - - 1.19 Paramount Corporation Limited - - 1.19 - - 1.19

Payments made on behalf of the related party 155.48 124.36 0.01 - - 279.85 Nimbus Home Entertainment Pvt. Ltd. 14.28 - - - - 14.28




Nimbus Motion Pictures (A.P) Pvt. Ltd. 0.04 - - - - 0.04





Company

- 2.92 - - - 2.92


Advance / Loan Given 19.55 - - - - 19.55 Nimbus Home Entertainment Pvt. Ltd. 19.55 - - - - 19.55

Advance / Loan Taken - - 23.22 80.50 157.50 261.22 Paramount Corporation Limited - - 23.22 - - 23.22



Loan Repaid - - 1.75 - - 1.75


Shares Issued - - - - @ @

Mrs. Shobha Thawani - - - - @ @

(iii) (b) Balances outstanding as at March 31, 2008 Rupees in Million

Subsidiaries

Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Net receivable/ ( payable) 49.55 2,461.33 (32.41) (133.57) (157.50) 2,187.40 Nimbus Communications Worldwide Ltd., Mauritius (0.99) - - - - (0.99)

Nimbus Sport International Pte Ltd., Singapore (56.43) - - - - (56.43)









Paramount Corporation Limited - - (32.41) - - (32.41)



Provision for doubtful advances 50.91 - - - - 50.91

Nimbus Home Entertainment Pvt. Ltd. *( includes Rs.

19.67 million provided during the year ) *31.91 - - - - 31.91


Nimbus Motion Pictures (A.P) Pvt. Ltd. * (provided

during the year) *4.00 - - - - 4.00

Debentures - - 1,138.52 - - 1,138.52 3i Sports Media (Mauritius) Limited - - 1,138.52 - - 1,138.52

Investments 114.22 4,470.25 - - - 4,584.47










F-98

(iv) (a) Transactions with the related parties during the year ended March 31, 2009 Rupees in Million

Transactions

Subsidiaries

Joint

Ventures

Associates Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Sales & Services 1,063.10 4,098.00 - - - 5,161.10

Nimbus Sport International Pte Ltd., Singapore 1,063.10 - - - - 1,063.10


Rent Income - 3.00 - - - 3.00 Neo Sports Broadcast Pvt. Limited - 3.00 - - - 3.00

Interest Received / Receivable - 5.93 - - - 5.93


Media Rights and Signage Fees 145.00 - - - - 145.00


Technical and other Production Costs 0.69 9.58 - - - 10.27



Salary & Perks paid - - - 7.93 - 7.93



Interest Payable / Paid ( Gross) - - 1.19 - - 1.19


Sale of Fixed Assets - - - 0.12 - 0.12


Payments made on behalf of the related party 157.39 2.18 @ - - 159.57 Nimbus Home Entertainment Pvt. Ltd. 2.81 - - - - 2.81


Paramount Corporation Limited - - @ - - @








Company

0.02 0.03 - - - 0.05



Advance / Loan Given 22.58 - - - - 22.58 Nimbus Home Entertainment Pvt. Ltd. 22.58 - - - - 22.58

Advance / Loan Taken 943.13 - 24.00 - - 967.13 Nimbus Sport International Pte Ltd., Singapore 943.13 - - - - 943.13


Loan Repaid 943.13 - 32.42 97.40 67.50 1,140.45 Nimbus Sport International Pte Ltd., Singapore 943.13 - - - - 943.13


Mr. Harish Thawani ( Refer Foot Note 1 ) - - - 97.40 - 97.40


Issue of Compulsorily Convertible Preference Shares - - - 97.40 - 97.40 Mr. Harish Thawani ( Refer Foot Note 1 ) - - - 97.40 - 97.40

Amount written off 0.54 - - - - 0.54 Nimbus Sport International Pte Ltd., Singapore 0.24 - - - - 0.24


Amount written back 0.87 - - - - 0.87 Nimbus Communications Worldwide Ltd., Mauritius 0.87 - - - - 0.87

F-99

(iv) (b) Balances outstanding as at March 31, 2009 Rupees in Million

Subsidiaries

Joint

Ventures

Associate Key

Management

Personnel

Relative of Key

Management

Personnel

Total

Amount receivable/ ( payable) (640.25) 4,611.09 (24.17) (36.17) (90.00) 3,820.50 Nimbus Communications Worldwide Ltd., Mauritius (0.42) - - - - (0.42)

Nimbus Sport International Pte Ltd., Singapore: -

-Receivable 41.38 - - - - 41.38

-Payable ( Refer Foot Note 2 ) (815.47) - - - - (815.47)









Paramount Corporation Limited:

- Receivable - - @ - - @

- Payable - - (24.17) - - (24.17)



Provision for doubtful advances 69.00 - - - - 69.00

Nimbus Home Entertainment Pvt. Ltd. *( includes Rs.

18.09 million provided during the year ) *50.00 - - - - 50.00



Debentures - - 1,138.52 - - 1,138.52 3i Sports Media (Mauritius) Limited - - 1,138.52 - - 1,138.52

Investments 114.22 4,470.25 - - - 4,584.47 Nimbus Communications Worldwide Ltd., Mauritius 68.05 - - - - 68.05









Foot Notes:

1. The Preference Shares are issued as fully paid-up by adjustment of part of the loan.

2. Amount Payable includes advances received against media rights Rs. 722.94 million.

F-100

(v) (a) Transactions with the related parties during the year ended March 31, 2010 Rupees in Million

Transactions

Subsidiaries

Joint

Ventures


in which

Key

Managemen

t Personnel

and

relatives

have

significant

influence

Key

Manage

ment

Personnel

Relative

of Key

Manage

ment

Personnel

Total

Sales & Services 986.44 6,016.32 - - - - 7,002.76

Nimbus Sport International Pte Ltd., Singapore 986.44 - - - - - 986.44

Neo Sports Broadcast Pvt. Ltd. - 6,016.32 - - - - 6,016.32

Rent Income - 2.95 - - - - 2.95 Neo Sports Broadcast Pvt. Ltd. - 2.95 - - - - 2.95

Interest Received /Receivable - 6.24 - - - - 6.24

Zenith Sports Private Limited - 6.24 - - - - 6.24

Media Rights and Signage Fees 1.89 - - - - - 1.89


Technical and other Production Costs - 0.05 - - - 0.05 Neo Sports Broadcast Pvt. Ltd. - 0.05 - - - - 0.05

Salary & Perks paid - - - - 8.18 - 8.18 Mr. Harish Thawani - - - - 6.54 - 6.54

Dr. Akash Khurana - - - - 1.64 - 1.64

Trademark Usage Charges @ - - - - - @ Nirvana Television Ltd. @ - - - - - @

Interest Payable / Paid ( Gross) - - 1.38 0.09 - - 1.47 Paramount Corporation Ltd. - - 1.38 0.09 - - 1.47

Sale of Fixed Assets - 45.00 - - - - 45.00 Neo Sports Broadcast Pvt. Ltd. - 45.00 - - - - 45.00

Payments made on behalf of the related party 146.02 1.18 @ - - 147.20

Nimbus Home Entertainment Pvt. Ltd. 0.24 - - - - - 0.24

Nirvana Television Ltd. 0.68 - - - - - 0.68

Paramount Corporation Ltd. - - @ - - @

Zenith Sports Pvt. Ltd. - @ - - - - @

Nimbus Motion Pictures (A.P.) Pvt. Ltd. @ - - - - - @

Nirvana Adzone Limited @ - - - - - @


Neo Sports Broadcast Pvt. Ltd. - 1.18 - - - - 1.18

Recovery of bank guarantee charges - 316.81 - - - - 316.81 Neo Sports Broadcast Pvt. Ltd. - 316.81 - - - - 316.81

Payments made by the related party on behalf of

the Company - 0.13 - - - - 0.13

Neo Sports Broadcast Pvt. Ltd. - 0.13 - - - - 0.13

Advance / Loan Given 9.71 0.10 - - - - 9.81 Zenith Sports Pvt. Ltd. - 0.10 - - - - 0.10

Nirvana Adzone Limited 0.05 - - - - - 0.05


Advance / Loan Taken - - 10.00 - - 50.00 60.00

Paramount Corporation Ltd. - - 10.00 - - 10.00

Mrs. Shobha Thawani - - - - - 50.00 50.00

Loan Repaid - - 10.10 24.07 - 50.00 84.17

Mrs. Shobha Thawani - - - - - 50.00 50.00

Paramount Corporation Ltd. - - 10.10 24.07 - - 34.17

Refund of part of the advance received against

Media Rights 504.75 - - - - - 504.75


F-101

Rupees in Million

Transactions

Subsidiaries

Joint

Ventures


in which

Key

Managemen

t Personnel

and

relatives

have

significant

influence

Key

Manage

ment

Personnel

Relative

of Key

Manage

ment

Personnel

Total

Issue of Compulsorily Convertible Preference

Shares - - 373.57 - - - 373.57

3i Sports Media (Mauritius) Limited - - 373.57 - - - 373.57

Issue of Equity Shares on conversion of

Compulsorily Convertible Preference Shares - - 989.93 - 97.40 - 1,087.33

Mr. Harish Thawani - - - - 97.40 - 97.40

3i Sports Media (Mauritius) Limited - - 373.58 - - - 373.58

Funderburk Enterprises Ltd. - - 616.35 - - - 616.35

Issue of Equity Shares on conversion of

Compulsorily Convertible Debentures - - 4,554.08 - - - 4,554.08

3i Sports Media (Mauritius) Limited - - 1,138.52 - - - 1,138.52

Funderburk Enterprises Limited - - 3,415.56 - - - 3,415.56

Amount written off - 0.67 - - - 0.67 Neo Sports Broadcast Pvt. Ltd. - 0.67 - - - - 0.67

(v) (b) Balances outstanding as at March 31, 2010 Rupees in Million

Subsidiaries

Joint

Ventures


in which

Key

Managemen

t Personnel

and

relatives

have

significant

influence

Key

Manage

ment

Personnel

Relative

of Key

Manage

ment

Personnel

Total

Amount receivable/ ( payable) (1,854.62) 7,433.65 - @ (36.17) (90.00) 5,452.86 Nimbus Communications Worldwide Ltd. - Mauritus

( Refer Foot Note ) (2,283.31) - - - - - (2,283.31)

Nimbus Sport International Pte Ltd., Singapore:

- Receivable 293.08 - - - - - 293.08

- Payable (8.77) - - - - - (8.77)

Nimbus Media Pte. Ltd. 0.46 - - - - - 0.46

Nimbus Communication Ltd. BVI 3.56 - - - - - 3.56

Nimbus Motion Pictures (A.P.) Pvt. Ltd. 25.22 - - - - - 25.22


Nirvana Adzone Ltd. 0.23 - - - - - 0.23


Zenith Sports Pvt. Ltd. - 101.36 - - - - 101.36


Paramount Corporation Ltd. - - - @ - - @

Mr. Harish Thawani - - - - (36.17) - (36.17)

Mrs. Shobha Thawani - - - - - (90.00) (90.00)

Provision for doubtful advances 69.00 - - - - - 69.00


Nirvana Television Limited 15.00 - - - - - 15.00

Nimbus Motion Pictures (A.P) Pvt. Ltd. 4.00 - - - - - 4.00

Investments 114.22 4,470.25 - - - - 4,584.47 Nimbus Communications Worldwide Ltd., Mauritius 68.05 - - - - - 68.05

Nimbus Media Pte. Ltd., Singapore 0.02 - - - - - 0.02

Nimbus Communications Limited (BVI) 0.04 - - - - - 0.04

Nimbus Motion Pictures (A.P.) Pvt. Ltd. 0.50 - - - - - 0.50


Nirvana Adzone Limited 1.11 - - - - - 1.11


Zenith Sports Private Limited - 0.25 - - - - 0.25


Foot Note : Amount Payable includes advance received against media rights Rs. 228.29 million.

F-102

AUDIT REPORT ON THE RESTATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION

FOR THE YEARS ENDED MARCH 31, 2006, 2007, 2008, 2009 AND 2010

AUDITORS’ REPORT

To,

The Board of Directors,

NEO Sports Broadcast Pvt Limited

Dear Sirs,

In connection with the proposed Initial Public Offer (“IPO”) of Equity Shares of Nimbus Communication

Limited”), and in terms of our engagement letter dated 05.10.2009, we have examined the attached financial

information of Neo Sports Broadcast Pvt Ltd (‘the Company’) prepared considering the terms of the requirements

of Paragraph B of Part II of Schedule II of the Companies Act, 1956 (the “Act”) and the Securities and Exchange

Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the “SEBI Regulations”),

issued by Securities and Exchange Board of India (“SEBI”) in pursuance of Section 11 of the Securities and

Exchange Board of India Act, 1992. The financial information has been prepared by the Company.

1. Financial Information as per the Audited Financial Statements of the Company We have examined the following attached statements of the Company:

i. the “Restated Statement of Profits and Losses” of the Company for each of the years ended 31st March 2006,

2007, 2008, 2009 and 2010 (Annexure II);

ii. the “Restated Statement of Assets and Liabilities” of the Company as at 31st March 2006, 2007, 2008, 2009

and 2010 (Annexure I); and

iii. the “Restated Statement of Cash Flows” of the Company for each of the years ended 31st March 2006, 2007,

2008, 2009 and 2010 (Annexure III)

Together referred to as “Restated Summary Statements”. These Restated Summary Statements have been extracted from the financial statements of the Company prepared

in accordance with the accounting principles generally accepted in India as at and for the years ended 31st March

2006, 2007, 2008, 2009 and 2010, which have been approved by the Board of Directors and audited by us. Based on our examination of these Restated Summary Statements, we state that:

i. The ‘Restated Summary Statements’ have to be read in conjunction with the ‘Significant Accounting Policies and Notes to the Restated Summary Statements’ of the Company given in Annexure IV to this report.

ii. The restated profits / losses have been arrived after adjusting for the changes in accounting policies retrospectively in respective financial years to reflect the uniform accounting treatment for all the reporting years.

iii. The restated profits / losses have been arrived at after making such adjustments and regroupings as in our

opinion are appropriate in the year to which they relate and are described in Annexure XV to this report.

iv. There are no extra ordinary items that need to be disclosed separately in the Restated Summary Statements;

however, there are exceptional incomes in certain years which have been included in other income of respective years.

v. There are no qualifications/ emphasis of matters in the auditors’ report on the financial statements which require adjustments to the Restated Summary Statements :

2. Other Financial Information of the Company

We have also examined the following other financial information relating to the Company as at and for the

years ended March 2006, 2007, 2008, 2009 and 2010 approved by the Board of Directors and annexed to this report:

a. Significant Accounting Policies adopted by the Company and Notes to the Restated Summary Statements (Annexure IV);

b. Details of Secured and Unsecured Loans as at March 2006, 2007, 2008, 2009 and 2010 (Annexure V);

F-103

c. Details of Sundry Debtors as at March 2006, 2007, 2008, 2009 and 2010 (Annexure VI);

d. Details of Loans and Advances as at March 2006, 2007, 2008, 2009 and 2010 (Annexure VII);

e. Details of Investments as at March 2006, 2007, 2008, 2009 and 2010 (Annexure VIII);

f. Details of Current Liabilities and Provisions as at March 2006, 2007, 2008, 2009 and 2010 (Annexure IX);

g. Details of Dividend and Other Income for the years ended March 2006, 2007, 2008, 2009 and 2010

(Annexure X);

h. Details of Dividends Paid for the years ended March 2006, 2007, 2008, 2009 and 2010 (Annexure XI);

i. (Annexure XII) is not used;

j. Accounting Ratios relating to earnings per share, net asset value and return on net worth (Annexure XIII);

k. Capitalisation Statement (Annexure XIV)

l. Statement of Reconciliation of Profits for the years ended March 2006, 2007, 2008, 2009 and 2010 (Annexure XV)

m. Contingent Liability as at March 2007, 2008, 2009 and 2010 (Annexure XVI); and

n. Statement of Restated Related Party Transactions Information as at and for the years ended March 2006, 2007, 2008, 2009 and 2010 (Annexure XVII).

together referred to as “Other Financial Information”.

3. Based on our examination of the financial information of the Company attached to this report, we state that in

our opinion, the ‘Restated Summary Statements’ and ‘Other Financial Information’ mentioned above, as at

and for the years ended March 2006, 2007, 2008, 2009 and 2010 have been prepared in accordance with

Paragraph B of Part II of Schedule II of the Act and the SEBI Regulations.

4. This report should not, in any way, be construed as a re-issuance or re-dating of any of the previous audit

reports nor should this be construed as a new opinion on any of the financial statements referred to herein.

5. We did not perform audit tests for the purpose of expressing an opinion on individual balances of account or

summaries of selected transactions, and accordingly, we express no such opinion thereon.

6. This report is intended solely for use of the management and the auditors of Nimbus Communication Limited for consideration in the preparation of consolidated financial information and for inclusion of such

information in the Draft Red Herring Prospectus in connection with the proposed IPO of Nimbus

Communication Limited.

For Anil Masand & Co

Chartered Accountants

Proprietor Membership No. 37245

Firm Registration No. 100412W

Place: Mumbai

Date : September 24, 2010

F-104

ANNEXURE I : RESTATED STATEMENT OF ASSETS AND LIABILITIES (Rupees in Million)

As at

Particulars

March 31,

2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

A Fixed Assets

Gross Block - 60.32 123.03 141.73 187.97

Less : Depreciation/ Amortisation and Impairment - 4.92 23.29 49.37 122.82

Net Block - 55.40 99.74 92.36 65.15

Less: Revaluation Reserve - - - - -

Net block after adjustment for Revaluation Reserve - 55.40 99.74 92.36 65.15

Capital work in progress - 52.72 - - -

Total - 108.12 99.74 92.36 65.15

B Investments - 0.22 - - 70.08

C Current Assets, Loans and Advances

Inventories - 4.60 1.42 1.78 2.63

Sundry Debtors - 715.00 781.14 840.31 1,461.85

Cash and Bank Balances 0.10 1,025.78 49.59 715.44 160.62

Loans and Advances 43.73 145.98 1,215.63 163.43 424.97

Total 43.83 1,891.36 2,047.78 1,720.96 2,050.08

43.83 1,999.70 2,147.52 1,813.32 2,185.31

D Liabilities and Provisions

Unsecured Loans - 51.52 51.52 51.52 49.52

Current Liabilities 986.11 279.59 2,900.42 5,441.20 8,595.56

Provisions - 200.75 403.11 605.57 810.48

Total 986.11 531.86 3,355.05 6,098.29 9,455.56

E Miscellaneous Expenditure

(to the extent not written off or adjusted)

Profit & Loss A/c 942.38 2,823.43 5,298.05 8,174.74 11,601.65

Total 942.38 2,823.43 5,298.05 8,174.74 11,601.65

F Net Worth (A+B+C-D +E) 0.10 4,291.27 4,090.52 3,889.77 4,331.40

G Represented by

Share Capital

- Equity Shares - 30.00 30.00 30.00 36.70

- Preference Shares - 447.00 447.00 447.00 450.44

- 477.00 477.00 477.00 487.14

Advance Subscription towards Share Capital 0.10 - - - -


- Securities Premium - 3,814.27 3,613.52 3,412.77 3,844.26

Reserves and Surplus (Net of Revaluation Reserve) - 3,814.27 3,613.52 3,412.77 3,844.26

Net worth 0.10 4,291.27 4,090.52 3,889.77 4,331.40

- - - - -

Note:

* Equity Shares include 5 Share Warrants which entitle the holder of the warrants to exercise at any time within 5 years of payment for the warrants, the

right to convert the 5 warrants into 11,752 equity shares.

The above statement should be read together with Significant Accounting Policies and Notes to Restated Financial Information.

F-105

ANNEXURE II : RESTATED STATEMENT OF PROFITS AND LOSSES

(Rupees in Million)

Year ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Income

Sales and Services Ad Sales (Internet) - - 0.50 - -

Ad Sales (Neo Cricket) 396.48 742.79 2,042.06 1,583.67 2,703.89

Ad Sales (Neo Sports) - 0.18 - - -

Ad Sales Secondary Events (Neo Cricket) - 42.44 186.50 - -

International Ad Sales - 8.94 - - 41.15

International Subscription Income - 2.80 151.48 145.17 99.91

International Distribution Income - 1.89 - - -

Domestic Subscription Income - 680.00 338.15 792.75 911.04

Total 396.48 1,479.04 2,718.69 2,521.59 3,755.99

Other Income - 64.56 101.66 1,006.63 333.28

396.48 1,543.60 2,820.35 3,528.22 4,089.27

Expenditure Cost of sports rights 1,260.79 2,879.90 5,358.47 4,524.29 6,425.64


Marketing Expenses - 135.41 179.43 82.90 1.84

Payments to and Provision for Employees - 45.72 116.64 139.58 137.83



Depreciation/Amortisation (Net) - 4.92 18.37 26.52 73.45

Total 1,338.86 3,488.93 6,257.61 5,421.69 7,467.42

Profit Before Tax and Extra ordinary items (942.38) (1,945.33) (3,437.26) (1,893.47) (3,378.15)

Extra ordinary items

(942.38) (1,945.33) (3,437.26) (1,893.47) (3,378.15)

Provision for Tax

- Fringe Benefit Tax - 0.72 1.96 2.38 -

Profit After Tax and extra ordinary items (942.38) (1,946.05) (3,439.22) (1,895.85) (3,378.15)

Impact on account of adjustments required in terms of Paragraph

IX (B)(9)(c) of Part A of Schedule VIII of SEBI Regulations

- Adjustments made on account of Restatement / Audit

Qualification - 65.00 964.60 (980.84) (48.76)

- Restatement adjustments relating to Current tax / Fringe Benefit

Tax/ Deferred tax

Restatement of Fringe Benefit Tax - - - - -

Restatement of Deferred Tax - - - - -

- Deferred Tax on restatement adjustments Deferred Tax as per Restated adjustments - - - - -

Net Profit After Restatement Adjustments (942.38) (1,881.05) (2,474.62) (2,876.69) (3,426.91)

Balance Brought Forward from Previous Year - (942.38) (2,823.43) (5,298.05) (8,174.74)

Balance Available for Appropriation (942.38) (2,823.43) (5,298.05) (8,174.74) (11,601.65)

Appropriations Dividend - - - - -

Dividend Tax - - - - -

Transfer to Capital Redemption Reserve - - - - -

Balance carried forward (942.38) (2,823.43) (5,298.05) (8,174.74) (11,601.65)

Note: 942.38 2,823.43 5,298.04 8,174.73 11,601.68

The above statement should be read together with Significant Accounting Policies and Notes to Restated Financial Information.

F-106

ANNEXURE III: RESTATED STATEMENT OF CASH FLOWS

(Rupees in Million)

Year ended

Particulars

March 31,

2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Cash Flow from Operating Activities Profit before tax and restatement adjustments (942.38) (1,946.05) (3,439.22) (1,895.85) (3,378.15)

Impact on account of adjustment as per Annexure XV - 65.00 964.60 (980.84) (48.76)

Net profit after restatement adjustments before tax (942.38) (1,881.05) (2,474.62) (2,876.69) (3,426.91)

Adjustments for:

Depreciation - 4.92 18.37 26.52 73.45

Interest Cost 6.33 44.71 103.54 127.63 290.75

Dividend received - (1.18) (2.60) (12.79) (2.20)

Interest on fixed deposits - (1.58) (31.49) (1.33) (0.66)

Fringe benefit tax - 0.72 1.96 2.38 -

Operating profit before changes in working capital (936.05) (1,833.46) (2,384.84) (2,734.28) (3,065.57)

Adjustments for (Increase)/decrease in working capital

Sundry Debtors - (715.00) (66.14) (59.17) (621.54)

Loans and advances (43.73) (102.25) (1,069.65) 1,052.20 (261.54) Inventories - (4.60) 3.18 (0.36) (0.86)

Current Liabilities / Provisions 986.11 (505.77) 2,622.43 2,542.49 3,359.27

Other current Assets - - - - -

Net changes in working capital 6.33 (3,161.08) (895.02) 800.88 (590.24)

Direct Taxes paid - 0.72 1.96 2.38 -

Cash generated from/ (used in) operations 6.33 (3,161.80) (896.98) 798.50 (590.24)

Cash flow from investing activities

Purchase of fixed assets - (60.32) (62.71) (20.84) (46.24)

Proceeds from sale of fixed assets - - - 1.70 -

Capital work in progress (incl capital advances) - (52.72) 52.72 - -

Purchase of Intangible assets - - - - -

Purchase of Investments - (0.22) - - (70.08)

Proceeds from sale of investments - - 0.22 - -

Interest on fixed deposits - 1.58 31.49 1.33 0.66

Interest on delayed payments - - - - -

Dividend received - 1.18 2.60 12.79 2.20

Net cash (used in) /generated from investing activities - (110.50) 24.32 (5.02) (113.46)

Cash flow from financing activities

Proceeds from issue of Share Capital - 476.90 - - 10.15

Advance Subscription towards Share Capital 0.10 - - - -

Securities Premium received - 3,814.27 - - 431.50

Interest Paid (6.33) (44.71) (103.54) (127.63) (290.75)

Unsecured Loans taken (net of repayments) - 51.52 - - (2.00)

Net cash (used in)/ generated from financing activities (6.23) 4,297.98 (103.54) (127.63) 148.90

Net cash (used in)/ generated 0.10 1,025.68 (976.20) 665.85 (554.80)

Cash and cash equivalents at the beginning of the year - 0.10 1,025.78 49.59 715.45

Cash and cash equivalents at the end of the year 0.10 1,025.78 49.59 715.44 160.62

Note:

(1) The above statement should be read together with Significant Accounting Policies, Notes on Adjustments to Restated Financial Information, Notes on Restated

Financial Information and Audit Qualifications.

(2) Figures have been regrouped for consistency of presentation.

F-107

ANNEXURE IV: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE RESTATED SUMMARY

STATEMENTS

I. Significant Accounting Policies

A Basis of Accounting

(i) The financial statements have been prepared on historical cost convention. The Company follows the accrual

basis of accounting. The financial statements are prepared in accordance with the generally accepted

accounting principles in India and the applicable Accounting Standards.

B Revenue Recognition

(i) Revenue from sale of airtime or free commercial time available on various channels for television programmes is recognised when the related advertisement or commercial is telecast.

(ii) Dividend Income is accounted as and when right to receive dividend is established.

(iii) Interest income is accounted on time proportion basis.

(iv) Revenue for subscription is recognized on accrual basis as per agreement with parties.

(v) Revenue is recognised only when it is reasonably certain that the ultimate collection will be made.

C Intangible Assets:

(i) Channel Logo:

Logo designing charges are capitalized and amortised over the period of five years from the date of

transaction.

(ii) Computer Software:

Computer Software is capitalized and amortised over the period of licensed but not exceeding five years based

on the management’s estimate of its useful life.

D Tangible Fixed Assets & Depreciation

Fixed assets are stated at cost or at revalued amount less accumulated depreciation. Cost comprises of

purchase/ acquisition price, taxes and any directly attributable cost of bringing the assets to its working

condition for its intended use.

Exchange difference on translation of foreign currency loans obtained to purchase fixed assets from countries

outside India are included in the cost of such assets. Fixed assets exclude computers and other assets

individually costing Rs. 5,000 or less which are not capitalized except when they are part of a larger capital investment programme.

F-108

Mobile & Telephone Instruments are depreciated 100% at the time of purchase except in case of instruments

above Rs. 20,000 which will be fully depreciated over 2 years.

Depreciation is charged so as to write-off the cost of the assets on the following basis:

Nature of Asset Basis As per Sch. XIV of Provided in Books

Companies Act of accounts

Plant & Machinery Straight Line 4.75% 20%

Furniture & Fixture Straight Line 6.33% 20%

Motor Car Straight Line 9.50% 20%

Computer Equipments Straight Line 16.21% 20%

E Impairment of Assets

Assessment of indication of impairment of an asset is made at the balance sheet date and impairment loss, if

any, is recognised.

F Investments

Long Term Investments are stated at cost. Provision is made for diminution, other than temporary, in the value

of investment.

However, when there is a decline other than temporary, in the value of the long-term investment, the carrying

amount is reduced to recognise the decline.


G Employee Benefits

1. Retirement Benefits:

The Company’s contribution to the Provident Fund as required by statute and paid to the Government

Provident Fund is charged to the Profit and Loss Account.

Gratuity is charged to revenue on the basis of actuarial valuation and premium paid under Group Gratuity Scheme of Life Insurance Corporation of India.

Leave encashment is charged to revenue on the basis of leave available to the credit of the employee at the end of the year within limits determined by the management.

2. Short Term Employee Benefits:

Short-term employee benefits are recognised during the period when the employee renders the services. These

benefits include compensated absences such as paid annual leave and also include performance incentives.

H Share Issue Expenses

Share issue expenses incurred are adjusted against Securities Premium Account.

F-109

I Taxes on Income

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with

the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences between taxable income and accounting income which are capable of reversal in one or more subsequent periods is recorded as deferred tax asset subject to the consideration of

prudence or deferred tax liability. They are measured using the substantively enacted tax rates and tax

regulations as of the Balance Sheet date.

Deferred Tax assets arising on account of brought forward losses are recognised, only if there is virtual

certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing

differences are recognised only to the extent there is reasonable certainty of its realisation. The carrying amount of deferred tax asset/liability is reviewed at each balance sheet date.

J Provision and Contingent Liabilities:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that

an outflow of resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined

based on best estimates of the expenditure required to settle the obligation at the Balance Sheet date. These are

reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote.

K Segment Accounting Policies



Segment assets include all operating assets used by the segment and consist principally of fixed assets,

inventories, sundry debtors and loans and advances. Segment liabilities do not include share capital,

reserves and surplus, borrowings and income tax (both current and deferred).


Segment revenue and expenses are directly attributable to segment. It does not include interest income, interest expense and income tax.

L Foreign Currency Transactions

Foreign currency transactions during the year are recorded at the rates of exchange prevailing at the date of

transaction. Exchange gains or losses realised and arising due to translation of the foreign currency monetary

items outstanding at the balance sheet date are accounted in the Profit and Loss Account of the year in which they arise except those relating to acquisition of fixed assets from outside India, in which case such exchange

differences are capitalized. Non-monetary items which are carried in terms of historical cost denominated in a

foreign currency are reported using the exchange rate at the date of the transaction.

F-110

M Borrowing Cost Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the

acquisition / construction of qualifying fixed assets are capitalised up to the date when such assets are ready

for its intended use and all other borrowing costs are recognised as an expense in the period in which they are

incurred.

Charges towards commission and processing fees towards bank guarantees are recognized as expense during

the period of the bank guarantee.

N Leases

(a) Assets acquired under lease where the Company has substantially all the risks and rewards incidental to ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value and the present value of minimum lease payments and a liability is

created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each

period.

(b) Assets acquired on leases where significant portions of the risks and rewards incidental to ownership are retained by the lessors, are classified as operating leases. Lease rentals are charged to the profit

and loss account over the lease period.

O Uses of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and

expenses during the reporting period. Difference between the actual results and estimates are recognised in the

period in which results are known / materialised.

F-111

III. Notes to Restated Summary Statements

A. Common significant notes for the years ended March 31, 2010, 2009, 2008, 2007.

1. Segment information in respect of Primary segments (Business Segments):

Having regard to the nature of the Company’s operations, the Company has identified Broadcasting as its

only primary segment, which consists of procuring of television rights and delivering via satellites, thereby

earning revenue by way of advertisement and subscription revenues.

2. Related party transactions:

Relationships

Holding Company

Zenith Sports Pvt. Limited (formerly known as

Juniper Holding Pvt. Limited)

Subsidiary Company NIL

Venturer in respect of which the reporting enterprise

is a Joint Venture.

Nimbus Communications Ltd.

Ultimate Holding Company. Paramount Holdings Ltd.

Ventures in which key Management Personnel have significant influence

Aquarius Transnational

Key Management Personnel

Director Mr. Harish Thawani

Director Dr. Akash Khurana

Other Related Parties

Wife of Mr. Harish Thawani Shobha Thawani

Nimbus Sports International Pte.Ltd

Nimbus Media Pte Ltd

Refer to Annexure XVII to the restated financial statement for transactions with related parties.

3. Earnings per share:

Earning per Share is not calculated as company has accumulated loss on the date of balance sheet.

B. Other significant notes for the year ended March 31, 2010.

1. Under the Memorandum of Association of the Company, the authorised share capital of the Company is Rs.502 million divided into 5,000,000 Equity Shares of Rs. 10/- each, 44,700,000 Non-Convertible

Redeemable Non Cumulative Preference Shares of face Value Rs. 10 each and 5,00,000 Compulsorily

Convertible Non Cumulative Preference Shares of Rs. 10/- each with powers to increase and reduce the

capital for the time being into two or more classes and to attach thereto such rights, privileges or conditions in such manner as may for the time being be provided by the Articles of Association of the Company.

F-112

2. Under the Agreement dated 14th April, 2009 between the Company, the Founder and Investors, 3,475 equity

shares of Rs 10 each at a premium of Rs.1819, and 344,098 Compulsorily Convertible Non Cumulative Preference Shares (CCPS) of Rs. 10 each, are to be issued and allotted to the Investors as specified in the

agreement at a price of Rs. 1,829 each CCPS conversion will occur upon any of the following three events:

1. In the event of an IPO 2. In the event of the Sale of the company

3. Any other event after 31st December, 2010 as specified in the Agreement.

On 31st December, 2019 if any CCPS is still unconverted it shall be converted as provided in the Agreement.

3. As per the Agreement between the Company, Promoters and Bennett Coleman & Co Ltd, the Company has

issued 2 Equity shares of Rs 10 each at premium of Rs 5,665.50, and 5 Warrants at a subscription price of Rs 1,333,969.60 per Warrant. As per terms of the said Agreement, these Warrants can be converted 11,752

Equity Shares with an aggregate value of Rs 66.70 within a period of 5 years from the date of payment of the

Warrant Exercise Amount.

4. Contingent Liability not provided for on Assignment of receivables with recourse under Factoring Agreement

with a third party Rs. 133.38.

F-113

C. Other notes

1. Payment to Auditors

(Rupees in Million)


March 31,

2010

Year Ended

March 31,

2009

Year Ended

March 31,

2008

Year Ended

March 31,

2007

Year Ended

March 31,

2006

Rs. Rs. Rs. Rs. Rs.

As Auditors 0.30 0.30 0.30 0.30 -

As Advisor or in any other capacity in respect of:

Tax Audit 0.15 0.15 0.15 0.20 -

In any other manner 0.15 0.15 0.05 -

Service Tax on above fees

Total 0.60 0.45 0.60 0.55 -


(Rupees)

Particulars

Year Ended

March 31,

2010

Year Ended

March 31,

2009

Year Ended

March 31,

2008

Year Ended

March 31,

2007

Year Ended

March 31,

2006

Rs. Rs. Rs. Rs. Rs.

Salaries and allowances NA NIL NIL NIL NIL

Contribution to provident fund NA NIL NIL NIL NIL

Perquisites in cash or in kind NA NIL NIL NIL NIL

F-114


The Company has not taken any derivative instrument during the years ended March 31, 2010, 2009, 2008 and 2007 and there is no derivative instrument

outstanding as at the respective year end. The year end foreign currency exposures that are not hedged by derivative instruments or otherwise are as follows:

(Rupees in Million)

2006-07 2007-08 2008-09 2009-10

Particulars Rs. Foreign Currency Rs. Foreign Currency Rs. Foreign Currency Rs. Foreign Currency

0.34 SGD 0.01

- SGD -

- SGD

-

- SGD

-

72.14 USD 1.67

236.46 USD 5.92

551.60 USD

10.83

679.19 USD

15.07

1.01 GBP 0.01

9.61 GBP 0.12

- GBP

-

- GBP

-

Sundry

Creditor

0.58 EURO 0.01

2.27 EURO 0.04

6.61 EURO

0.10

3.12 EURO

0.05

- SGD -

1.34 SGD 0.05

1.34 SGD

0.05

- SGD

-

2.80 USD 0.06

8.07 USD 0.20

8.07 USD

0.20

- USD

-

- GBP -

- GBP -

- GBP

-

3.01 GBP

0.06

Loans &

Advances

- EURO -

- EURO -

- EURO

-

- EURO

-

Sundry Debtors

3.57 USD 0.08

80.21 USD 2.01

- USD

-

- USD

-

F-115

4. Details of Employee Benefits as required by the Accounting Standard – 15 ‘Employee Benefits’ are as follows:

Rupees in Million

Year ended 31st

March, 2010

Year ended 31st

March, 2009

Year ended 31st March,

2008

1 Defined Contribution Plan

The Company has recognised the following amount in Profit and

Loss Account :

- Contribution to Provident Fund and Family Pension Fund 8.12 7.51 5.47

2 Defined Benefit Plan (Funded)


The Group has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump

sum payment to vested employees at retirement, death while in employment or an termination of the employment of an amount equivalent to 15

days salary payable for each completed year of service or part thereof in excess of year ended. Vesting occurs upon completion of 5 years of

services

b. Details of defined benefit plan - As per Actuarial Valuation are as follows:

Particulars Year ended 31st

March, 2010

Year ended 31st

March, 2009


2008





4 Actuarial Losses / (Gains) (0.59) (0.62) 0.42

5 Past Service Cost 0.80 - (0.00)

6 Total expense recognised in the Profit and Loss Account 2.26 1.14 1.05


1 Actual Benefits Payments - - -

2 Actual Contributions 1.43 (1.52) (1.30)




3 Funded Status [Surplus/(Deficit)] 0.19 0.64 0.25

4 Net asset/(liability) recognised in the Balance Sheet 0.19 0.64 0.25


1 Present value of Defined Benefit Obligation as at the

beginning of the year

2.60 1.41 0.36




5 Actuarial Losses/ (Gains) (0.52) (0.69) 0.39

6 Benefits paid - - -

7 Present value of Defined Benefit Obligations as at the

end of the year

5.18 2.60 1.41




3 Actuarial Gains/ (Losses) 0.07 (0.07) (0.03)

4 Actual Company Contributions 1.43 1.52 (1.30)

5 Benefits paid - - -



1 Discount Rate 8.00% p.a 7.50% p.a 7.50% p.a

2 Expected Return on plan assets 7.50% p.a 7.50% p.a NA

3 Salary escalation Rate 7.00% p.a 5.00% p.a 5.00% p.a

VII The expected rate of return on the plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of

the obligations.

VIII The assumption of the future salary increases, considered in actuarial valuation, takes into account the inflation, seniority, promotion and other relevant factors.



Note: The details of investment made by the Insurer is not readily available with the Company


Year ended 31st

March, 2010

Year ended 31st

March, 2009


2008

1 Present value of Defined Benefit Obligation as at the end

of the year

5.18 2.60 1.41


3 Funded Status [Surplus/(Deficit)] (0.19) 0.64 0.25

4 Experience adjustment on Plan Liabilities (1.28) - -

5 Experience adjustment on Plan Assets 0.07 (0.07) (0.03)

XI Contribution expected to be paid to the Plan during the year ending March 31,2011 - Rs. 0.98 million

F-116

5. The specified disclosures for Operating Leases as required by Accounting Standard 19 - "Leases" are given below:

(Rupees in million)

Year Ended

March 31, 2010

Year Ended

March 31, 2009

Year Ended

March 31, 2008

Year Ended

March 31, 2007

Year Ended

March 31, 2006 Particulars

Rs. Rs. Rs. Rs. Rs.

(a) Disclosures in respect of agreement for

office premises taken on lease: - - - - -

(i) Lease payments recognised in the Profit

and Loss Account for the year 20.42 19.90 15.58 7.56 -


1. Under the agreement. Refundable interest free deposits / advance rent have been given'

2. The agreement contains provision for renewal.

Certain agreements provide for increase in rent during the tenure of the agreement

F-117

6. The figures for the year ended March 31, 2010, 2009, 2008 and 2007 have been regrouped, rearranged and

reclassified wherever necessary to conform to the year ended March 31, 2010’s classification.

ANNEXURE VA: DETAILS OF UNSECURED LOANS

UNSECURED LOANS

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Loan form Holding Company

Zenith Sports Pvt. Ltd. - 51.52 51.52 51.52 49.52

Total - 51.52 51.52 51.52 49.52

F-118

ANNEXURE VB: DETAILS OF UNSECURED LOANS AS ON MARCH 31, 2010

Loan from Holding Conpany - Zenith Sports Pvt. Ltd.


Tenure of the loan Not Stipulated

Security / collateral Nil

Other Details - - -

Amount Outstanding as on March 31, 2010 49.52

F-119

ANNEXURE VI: DETAILS OF SUNDRY DEBTORS

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


-Considered Good - - 272.39 77.61 142.86

-Considered Doubtful - - 96.79 67.39 119.15

Less: Provision for Doubtful Debts - - 96.79 67.39 119.15

- - 272.39 77.61 142.86

Other Debts

- considered good - Trade Debtors - 715.00 508.75 762.70 1,318.99

- considered good - Insurance Claim Receivable - - - - -

-Considered Doubtful- Trade - 7.03 - - -

Less: Provision for Doubtful Debts - 7.03 - - -

Total - 715.00 781.14 840.31 1,461.85

Above includes dues from

Dues from Nimbus Communications Limited

- Neo Sports Broadcast Private Limited - - - -

- Paramount Corporation Limited(Having significant influence in the

Company)

- - - -

F-120

ANNEXURE VII: STATEMENT OF LOANS AND ADVANCES (Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


Inventories - - - - -

Advances recoverable in cash or in kind or for value to be received 43.73 100.83 1,134.23 51.13 308.94

Deposits - 26.03 30.78 28.93 47.25

Tax Payments less Provisions - 19.12 50.62 83.37 68.78

Total 43.73 145.98 1,215.63 163.43 424.97

F-121

ANNEXURE VIII: DETAILS OF INVESTMENTS

(Rupees in Million)


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


- Quoted - - - - -

- Unquoted (Trade) - - - - -

CURRENT INVESTMENTS

- Quoted


In Mutual Fund - 0.22 - - 70.08

(Previous Year i.e. March 2006, ICICI Prudential Liquid Fund Daily

Dividend Option, 18778.06 units at NAV of Rs.11.85 per unit)

Grand Total - 0.22 - - 70.08

F-122

ANNEXURE IX: DETAILS OF CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

(Rupees in Million)

As at


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Sundry Creditors 986.11 184.95 2,663.08 5,137.81 8,258.44

Advances from Customers - 0.15 57.76 21.38 8.14

Advance from Nimbus Media Pte Ltd - - - 125.85 77.84

Other Current liabilities - 94.49 179.58 156.16 251.14

Total (A) 986.11 279.59 2,900.42 5,441.20 8,595.56

Dues to Related parties -

Nimbus Communications Limited - 39.30 2,310.91 4,593.25 7,332.26

Nimbus Sports International Pte Ltd - - 220.20 408.49 795.14

- -

Advances from a Subsidiary

Nimbus Media Pte Ltd - - - 125.85 77.84

Provisions

(Rupees in Million)

As at

Particulars March 31, 2006

March 31, 2007

March 31, 2008

March 31, 2009

March 31, 2010

Provision for Performance Pay - - - - -

Provision for Leave Travelling Allowance - - - - -

Provision for Compensated Absences - - 1.61 3.32 7.48

Provision for share redemption - 200.75 401.50 602.25 803.00

- -

Total (B) - 200.75 403.11 605.57 810.48

Grand Total (A+B) 986.11 480.34 3,303.53 6,046.77 9,406.04

F-123

ANNEXURE X: DETAILS OF OTHER INCOME (Rupees in Million)

Year ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Nature

Related to Business Activities

Interest on fixed deposits with Banks and loans - 1.58 31.49 1.33 0.66 Recurring

Foreign Exchange Fluctuation Gain (net) - - - - 39.65 Recurring

Dividend from units of Mutual Funds (Refer Note 1) - 1.18 2.60 12.79 2.20 Non recurring

Credit balances no longer payable written back - - - - - Recurring

Bad debts written off recovered - - - - - Non recurring

Compensation for Consent Award - - 865.85 - - Non recurring

Refund of tax deducted at source - - 26.51 - - Non recurring

Insurance claim Received - 60.00 64.29 - 240.52 Non recurring

Miscellaneous Income - 1.80 3.28 11.67 1.49 Non recurring

Total - 64.56 994.02 25.79 284.52

Notes: 1) The dividend income is earned from temporary deployment of surplus fund, accordingly considered as Non recurring.

Reconciliation

Year ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

Other Income before restatement - 64.56 101.66 1,006.63 333.28

Less: Restatement Adjustments - - 892.35 (980.84) (48.76)

Other Income as restated - 64.56 994.02 25.79 284.52

F-124

ANNEXURE XI: DETAILS OF DIVIDEND PAID (Rupees in Million)

For the Year ended


2006

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010


Equity Share Capital - 30.00 30.00 30.00 36.70

Face Value - (Rs.) 10.00 10.00 10.00 10.00 10.00

Rate of Dividend (%) - - - - -

Total Dividend Paid (Rupees) - - - - -

Tax on Dividend - - - - -

Class of Shares Preference Preference Preference Preference Preference

Preference Share Capital - 447.00 447.00 447.00 450.44

Face Value - (Rs.) 10.00 10.00 10.00 10.00 10.00

Rate of Dividend (%) - - - - -

Total Dividend Paid (Rupees) - - - - -

Tax on Dividend - - - - -

F-125

ANNEXURE XIII: STATEMENT OF ACCOUNTING RATIOS

(Rupees in Million)

As at


2007

March 31,

2008

March 31,

2009

March 31,

2010

Face Value per Equity share(Rs.) 10 10 10 10

Earning per Equity share

-Basic -(C/D) (0.00) (0.00) (0.00) (0.00)

-Diluted -(C/E) (0.00) (0.00) (0.00) (0.00)

Return on Net Worth (%) (C/A) (128.15%) 204.93% 67.13% 47.14%

Net asset value per equity share (Rs.) 340.28 (551.51) (1,577.32) (2,570.59)

Net Worth excluding Revaluation Reserves (A) 1,467.84 (1,207.53) (4,284.97) (7,270.25)

Net Worth excluding Revaluation Reserves 1,020.84 (1,654.53) (4,731.97) (7,720.69)

& preference share capital (B)

Net Profit After Restatement Adjustments (C) (1,881.05) (2,474.62) (2,876.69) (3,426.91)

Weighted average number of equity shares - Basic (D) 3,000,001 3,000,001 3,000,001 3,003,295

Weighted average number of equity shares - Diluted (E) 3,000,001 3,000,001 3,000,001 3,003,521

Total Number of equity shares outstanding at end of the year/period (F) 3,000,001 3,000,001 3,000,001 3,003,478

Notes:

1) The above ratios have been computed on the basis of the restated Financial Information as per Annexure I and II

2) The effect of potential dilution pursuant to the proposed issue has not been considered since the quantum of equity shares that will ultimately be

subscribed cannot be ascertained at present.

3) Earning Per Share have been calculated in accordance with Accounting Standard 20 - "Earning per share" notified under section 211 (3C) of the

Companies Act, 1956.

4) Return on Net Worth (%) represents Profit/(Loss) after tax as restated, divided by Net Worth.

5) Net Assets Value per share is calculated as Net Worth at the end of each financial year divided by the number of equity shares at the end of each

financial year.

F-126

ANNEXURE XIV:CAPITALISATION STATEMENT

(Rupees in Million)

Particulars As at March 31,2010

Pre-Issue As at March 31,2010

Secured Debt

Short term -

Long term -

Unsecured Debt

Short term -

Long term 49.52

Total debt 49.52

Shareholders’ funds :

Equity Share capital and Preference Share capital 487.14

Reserves (net of Revaluation reserve) (7,757.39)

Total shareholders’ funds (7,270.25)

Total Capitalization (7,220.75)

Long term debt/ equity ratio (0.01)

Notes:

(1) Debts maturing within the next one year from March 31, 2010 are considered as short-term debts.

(2) The pre-issue figures included above are as per the Restated Statement of Assets and Liabilities.

F-127

ANNEXURE XV: STATEMENT OF RECONCILIATION OF PROFITS

(Rupees in Million)

Year Ended

Particulars

March 31,

2006

March 31,

2007

March 31,

2008

March

31, 2009

March 31,

2010

A Profit/(Loss) After Tax before Restatement Adjustments (942.38) (1,946.05) (3,439.22)

(1,895.85) (3,378.15)

Balance in Profit and Loss Account as at April 1, 2006 Before

Restatement Adjustments - - - - -

- - - - -

B Adjustments required by Paragraph IX (B)(9)(c) of Part A of

Schedule VIII of ICDR Regulations - - - - -

Resatement Adjustments relating to : - - - - -

(a) Compensation for consent Award - - 865.84 (865.84) -

(b) Excess provision for expenses of earlier years no longer

required - - 26.51 - (26.51)

(c) Bad debts written off recovered - 65.00 50.00 (115.00) -

(d) Write back of provision for Archive rights - - 22.25 - (22.25)

Total - 65.00 964.60 (980.84) (48.76)

Net Profit/(Loss) After Restatement Adjustments (A+B) (942.38) (1,881.05) (2474.62) (2,876.69) (3,426.91)

Note:

The above statement should be read together with notes on adjustments on account of restatements.

F-128

ANNEXURE XVI: STATEMENT OF CONTINGENT LIABILITIES (Rupees in Million)

As at

Particulars

March 31,

2007

March 31,

2008

March 31,

2009

March 31,

2010

1. Claims not Acknowledged as debt 449.30 449.30 - -

2. Bank Guarantee 2,500.00 - - -

3. Letter of credit obtained by company

($ 2,14,200 converted in Indian Rupees as on 31.03.2007) 9.34 - - -

($ 2,14,200 converted in Indian Rupees as on 31.03.2008) - 8.54 - -

($ 2,14,200 converted in Indian Rupees as on 31.03.2009) - - 10.32 -

F-129

ANNEXURE XVII: STATEMENT OF RELATED PARTIES RELATED PARTIES TRANSACTIONS:

Year ended 31.03.2006 Year ended 31.03.2007 Year ended 31.03.2008 Year ended 31.03.2009 Year ended 31.03.2010

Transactions Holding Compan

y

Associat

e

Other

Related

Parties Total

Holding Compan

y

Associat

e

Other

Related

Parties Total

Holding Compan

y

Associat

e

Other Related

Parties Total

Holdin

g Compa

ny

Associat

e

Other Related

Parties Total

Holdin

g Compa

ny

Associate

Other Related

Parties Total

Equity shares issued 0.10 - - 0.10 30.00 - - 30.00 - - - - - - - - - - - -

Unsecured loan taken - - - - 51.52 - - 51.52 - - - - - - - - - - - -

Preference Shares issued - As per note 2 above - - - - - 4,470.00 -

4,470.00 - - - - - - - - - - - -

Ad Sales - - - - - - - - - - - - - 79.02 - 79.02 - 385.15 - 385.15

International Ad Sales - - - - - - 8.94 - - - - - - - 39.80 - - - 41.15 -

International Subscription Income - - - - - - 3.55 - - - 148.12 - - - 105.37 - - - 99.91 -

Collection made by related party on our behalf - - - - - 927.16 - 927.16 - 789.66 57.30 846.96 - - 333.78 333.78 - - 106.51 106.51

Expenses recovered - - - - - - - - - 1.68 - - - - - - - - - -

License Fees/Revenue Management Expenses/Production Expenses - 1,261.47 -

1,261.47 - 2,891.46 6.47

2,897.92 - 5,110.35 237.68 5,348.03 - 4,098.00 401.85 4,499.85 - 6,054.97 458.98 6,513.95

Rent paid - - - - - 1.22 - 1.22 - 2.57 - 2.57 - 2.95 - 2.95 - 2.95 - 2.95

Expenses re-imbursed - 30.16 - 30.16 - 7.74 114.17 121.90 - 216.67 3.31 219.98 - 2.07 0.78 2.84 - 327.78 - 327.78

Pre-incorporation expenses incurred on our behalf - - - - - 47.01 - 47.01 - - - - - - - - - - - -

Loan Repaid - - - - - - - - - - - - - - - - 2.00 - - 2.00

Amount Receivable/(Payable) as at 31March (0.10) (985.24) - (985.34) (52.00) (39.30) (12.67) (103.97) (51.52) (2,369.45) (139.99) (2,560.96) (51.52) (4,514.23) (535.28) (5,101.03) (49.52) (7,332.26) (872.97) (8,254.75)

143

Management's Discussion and Analysis of Financial Condition and Results of Operations as Reflected in the Financial Statements

The following discussion of our financial condition and results of operations should be read in conjunction with the restated financial statements of our Company as of and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006, and the restated financial statements of Neo Sports Broadcast as of and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006 included elsewhere in this Draft Red Herring Prospectus.

Unless otherwise indicated, the financial information used in this section is derived from and should be read in conjunction with the restated consolidated financial statements of our Company as of and for the years ended March 31, 2010, 2009, 2008, 2007 and 2006.

Indian GAAP differs in certain material respects from U.S. GAAP and IFRS. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Draft Red Herring Prospectus, nor do we provide a reconciliation of our financial statements to those of U.S. GAAP or IFRS. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the section "Risk Factors" on page xii of this Draft Red Herring Prospectus.

In this section, a reference to “Nimbus” or “the Company” means Nimbus Communications Limited. Unless the context otherwise requires or implies, references to the "Group", “we”, “us”, or “our” refers to Nimbus Communications Limited, its subsidiaries and jointly controlled entities including Neo Sports Broadcast, on a consolidated basis Overview

We believe we are one of the leading sports rights management companies engaged in the acquisition, management and marketing of commercial rights relating to cricket events globally. We currently hold an indirect 48.94% shareholding in Neo Sports Broadcast through Zenith, our joint venture company with one of our Promoters, Paramount. Neo Sports Broadcast owns and operates two 24-hour channels, Neo Cricket and Neo Sports. We intend to acquire the remaining shares of Zenith from Paramount by exercising the call option in accordance with the terms of the Zenith Agreement. For further information, see “Government and other Approvals”, “History and Certain Corporate Matters” and “Risk Factors” on pages 194, 100 and xii, respectively. We own the global media rights for all international cricket matches organised by the BCCI in India until March 2014 and have licensed the broadcast rights with respect to such matches in India to Neo Sports Broadcast. In addition to the rights that we have acquired from the BCCI, we have acquired and manage certain rights with respect to other sports federations, including Bangladesh Cricket Board, Asian Cricket Council and Cricket Kenya. We are also involved in the filmed entertainment business through distribution rights management, content generation and our home video rental business under our brand “Showtime Video”. Our other businesses include production of television content as well as creation and maintenance of online cricket-related content through our website www.cricketnirvana.com. Our total income in fiscal 2006, 2007, 2008, 2009 and 2010 was Rs.2,509.80 million, Rs.4,762.51 million, Rs.7,043.16 million, Rs.6,610.43 million and Rs.7687.20 million, respectively. Proposed Acquisition of Neo Sports Broadcast and Presentation of Financial Information Our Company currently holds 48.94% of the total shareholding of Zenith which, in turn, holds 99.9% of the total equity share capital of Neo Sports Broadcast. Neo Sports Broadcast owns and operates two channels, Neo Sports and Neo Cricket. The remaining 51.06% shareholding in Zenith is held by Paramount, one of our Promoters. Our Company intends to exercise its call option under the Zenith Agreement to acquire the remaining 51.00% of the shareholding in Zenith from Paramount. In accordance with the terms of the Zenith Agreement, the price of acquisition of the remaining shares in Zenith has been agreed with Paramount at Rs.14.24 per equity share of Zenith, aggregating Rs.363,050.00 We have received FIPB approval dated May 19, 2010 in connection with the proposed acquisition of the remaining equity shares in Zenith.

144

We have included in this Draft Red Herring Prospectus (i) the restated standalone financial statements of our Company for fiscal 2010, 2009, 2008, 2007 and 2006, (ii) the restated consolidated financial statements of our Company for fiscal 2010, 2009, 2008, 2007 and 2006, and (iii) the restated financial statements of Neo Sports Broadcast for fiscal 2010, 2009, 2008, 2007 and 2006. As of March 31, 2010 our Company had made an investment of Rs.4,470 million in Neo Sports Broadcast through equity shares and non-cumulative redeemable preference shares. As of March 31, 2010, Neo Sports Broadcast also had a loan outstanding to our Company in the amount of Rs.328.79 million. In addition, we have entered into various transactions with Neo Sports Broadcast, including the licensing of the rights under the BCCI arrangements to Neo Sports Broadcast, and revenues from such licensing arrangements with Neo Sports Broadcast contribute a significant majority of our Company’s standalone total income. We expect such transactions with Neo Sports Broadcast to continue in the future. In fiscal 2006, 2007, 2008, 2009 and 2010, Neo Sports Broadcast incurred losses of Rs.942.38 million, Rs.1,881.05 million, Rs.2,474.62 million, Rs.2,876.69 million and Rs.3,426.91 million, respectively. Since currently holds 48.94% of the equity shareholding in Zenith, the restated consolidated financial statements of our Company included in this Draft Red Herring Prospectus are consolidated only to the extent of our shareholding in accordance with Accounting Standard 27 – 'Financial Reporting of Interests in Joint Ventures' issued by the ICAI, using the proportionate consolidation method. For further information on such consolidation under Accounting Standard 27, see “Critical Accounting Policies” below. Following the completion of the proposed acquisition of the remaining shareholding in Zenith, full consolidation of the financial statements of Zenith and Neo Sports Broadcast will be required to be made in accordance with Accounting Standard 21- 'Consolidated Financial Statements' issued by the ICAI. Accordingly, our consolidated financial statements following such proposed acquisition may not be comparable to our restated consolidated financial statements included in this Draft Red Herring Prospectus. This Draft Red Herring Prospectus does not include any pro forma balance sheet or pro forma profit and loss statement prepared in accordance with the laws and regulations of any jurisdiction, which would have shown the effect of the proposed acquisition of the remaining equity shares in Zenith on our historical financial condition and results of operations. Investors will therefore need to base their assessment of our financial condition and results of operations subsequent to the proposed acquisition on the basis of the restated consolidated financial statements of our Company and the restated financial statements of Neo Sports Broadcast and other information with respect to Zenith and Neo Sports Broadcast included in this Draft Red Herring Prospectus.

Key Factors affecting our Financial Condition and Results of Operations

Our business, prospects, results of operations and financial condition are affected by a number of factors. Some of the more significant factors are discussed below:

Acquisition of commercial rights for popular sports events

Our revenues are dependent on the successful acquisition and distribution of media and other commercial rights relating to popular sports events, particularly cricket. The acquisition of these rights typically involves a bidding process, and is subject to, among other factors, competitiveness of the bid, distribution capabilities, prior experience, relationships with the relevant sports federation and other distribution and merchandising intermediaries, financial strength, technical capabilities as well as reputation. Historically, a significant portion of our revenues relate to rights acquired under a limited number of rights management agreements, including the BCCI Agreement.

Pursuant to the New BCCI Agreement, we have been granted exclusive global media rights, including television and radio broadcast rights, to all matches and series organized by the BCCI in India for the period April 2010 through March 2014, involving, in the aggregate during this period, 17 test matches, 43 ODI matches, and four 20/20 format matches. The New BCCI Agreement also grants us a right of first negotiation with BCCI for the period between April 2014 and March 2018. We expect that our revenues will continue to be significantly dependent on the New BCCI Agreement and our continuing relationship with BCCI, and a termination of such agreement may materially and adversely affect our results of operations. The cost of acquisition of media and other rights for more popular sports events are significantly higher than those relating to less popular events, and similarly, revenues from the sale or sub-licensing of such rights for more popular events are likely to be higher. A limited number of rights management contracts may represent a large part of our portfolio, increasing the potential volatility of our results and exposure to individual contract risks.

Ability to successfully monetize commercial rights acquired

Our results of operations in the sports management business are primarily dependent on the licensing and distribution arrangements that we enter into with broadcasters and other distribution intermediaries. Our results of

145

operations are also dependent on our ability to successfully monetize the media and other rights acquired by us, through the sale of advertisement space on television, production and signage fees from generation of live feed, digital content and organization of signage and advertising for clients at sports events and sports service income from various marketing activities, as well as hospitality, production and airtime sales services.

Various factors beyond our control may affect our ability to successfully monetize commercial rights acquired, such as cancellation of these events or the risk that certain cricket teams may not retain cricket test match status or ODI status, thereby affecting our ability to generate adequate interest in such cricket matches. Public acceptance of particular programming of such sports events is also dependent upon, among other things, the quality of the programming, the strength of networks on which the programming is broadcast, the promotion and scheduling of the programming and the quality and acceptance of competing television programming, and other sources of entertainment. Public acceptance may also be impacted by the continued appeal of these sports events or the teams scheduled to play in these events or the evolution of different formats of cricket such as the 20/20 format.

Our revenues and results of operations may therefore fluctuate significantly from period to period depending on the occurrence of specific sports events during such period, and the results of any one period may not be comparable to that of other periods or may not be indicative of the results for any future periods. Historically, our revenues and results of operations have been dependent on the number of live cricket matches involving the Indian cricket team in any period. In addition, a significant majority of our revenues are derived from contracts with BCCI, BCB and other cricket federations, where the main season for playing cricket is between the months of October and March. Our revenues and associated expenses from such sports events are recognized as and when the relevant events take place, and consequently a significant majority of our revenues and expenses are reflected in the second half of the fiscal year.

We also intend to leverage our experience in rights management and production of live content to develop and create sports events for which we own the entire commercial rights, enabling us to building a consistent stream of assets across various sports. In this connection, we have procured sanctions for events in cricket, golf and football, including the Afro Asia Cup (cricket), the Asian Club Championship, Asian Tour Golf events. We believe that this will become a significant growth driver in the future as we are able to replicate and increase the scale of such events for various sports, thereby increasing the number of product offerings targeted at our clients.

Subscription and advertisement revenue from the broadcasting business.

As discussed above we intend to acquire the remaining 51.00% shareholding in Zenith from Paramount in accordance with the terms of the Zenith Agreement. We expect that the proposed acquisition of Zenith, and consequently Neo Sports Broadcast, and the resultant consolidation of the financial statements of Neo Sports Broadcast with those of our Company, will materially affect our financial condition and results of operations. The proposed acquisition is expected to result in increased synergies and other benefits resulting from the integration of our content sourcing, ownership, distribution and delivery operations. Neo Sports Broadcast generates subscription revenues from subscribers of its channels in the cable and DTH segments both in India and outside India. Neo Cricket is currently broadcast to over 25 countries through various distribution platforms. Neo Sports Broadcast has entered into agreements with DTH operators, MSOs and/or LCOs in each of the countries in which its channels are distributed. The agreements are generally for fixed periods of time that vary from region to region. Under these agreements, Neo Sports Broadcast generally receives subscription revenues from operators in the form of fixed fees and/or per subscriber fees, and/or minimum guarantees and/or revenue shares. In the Indian markets, historically, there has been under-reporting of subscribers by MSOs and LCOs in the analog cable markets, and thus the fees we received were based on negotiations between us, the MSOs and the LCOs. On July 19, 2010, Neo Sports Broadcast entered into a distribution agreement with MSM Discovery Private Limited for the pan-India distribution of its two channels - Neo Sports and Neo Cricket - as part of ‘The OneAlliance’ programming package. The arrangement is for distribution on all cable platforms (analog and digital) for both the channels along with the CAS markets and hotels and commercial establishment segments. Our broadcasting business is dependent on advertising income generated from advertisements aired on our channels and the distribution of advertisement time for live coverage sports events for which we have acquired advertisement rights. Advertisement income is influenced by various factors, including viewership of our programs and general economic conditions. Advertisers generally allocate television marketing budgets among channels on the basis of national or regional audience market shares, ratings, reach, demographic audience profile and overall advertising rates. The slowdown in the Indian economy and internationally in fiscal 2008 and 2009 as a result of the financial crisis resulted in a decline our income from ad sales broadcasting from Rs.1,092.24 million in fiscal 2008 to Rs.775.62 million in fiscal 2009. Income from ad sales broadcasting in fiscal 2010 increased to Rs.1,345.06 million as the financial crisis abated.

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Since its commercial launch in October 2006, Neo Sports Broadcast has had a significant number of advertisers and brands advertise on Neo Cricket and Neo Sports. Any change in advertiser preferences regarding programs produced or distributed and aired on our channels, our ability to successfully maintain and enhance the reach and market share of our channels, capture new or emerging revenue streams such as Indian and international subscription revenue, changes in governmental regulation governing the broadcasting industry or changes in technology and introduction of competing broadcasting, advertising or distribution media, may affect advertisement income. We continue to focus on increasing market share for our two sports related channels, Neo Cricket and Neo Sports. In addition, we intend to establish three new channels, Neo Cinema, a movie channel, Neo Zindagi, a lifestyle channel and Neo Sports +, a sports channel. These new channels will compete with a large number of existing channels for general entertainment, films and sports, and the success of these channels and our ability to grow advertising income from these channels will depend on the quality and market acceptance of content acquired for these channels. We expect that the establishment of Neo Cinema and Neo Zindagi will also enable us to capitalize on the various synergies between the broadcasting business and our filmed entertainment business.

Widespread operations and governmental regulation

In the course of our business, we acquire media and other rights associated with sports events and enter into licensing and distribution arrangements to distribute these media rights through various third party licensees in India and internationally and derive revenues from these sources. Our business and results of operations are therefore subject to various factors inherent in international business, many of which are beyond our control, including government regulation in various jurisdictions, laws and policies affecting trade, investment and taxes, and changes in these laws, variable degrees of intellectual property protection, general economic and political conditions in these countries, import/export restrictions, difficulties and costs of staffing and managing foreign operations. Our ability to manage, evolve and improve our operational, financial and internal controls across the organization and to integrate our widespread operations and derive benefits from our international operations is key to our growth strategy and results of operations.

Because of our international operations, we must comply with diverse and evolving regulations. In addition, the regulatory environment in which we operate is subject to change. New or revised requirements imposed by governmental authorities could have adverse effects on us, including increased costs of compliance. Changes in the regulation of our operations or changes in interpretations of existing regulations by courts or regulators relating to one or more of licensing requirements, access requirements, programming transmission, uplinking requirements, spectrum specifications, consumer protection, or other aspects of our or any competitor’s business, could materially affect our business and results of operation.

Competition

We face competition from a broad range of companies in the media and entertainment industry in each of our primary business verticals. In the sports management business, we compete for access to media rights of a limited number of sports events, primarily cricket, with primary broadcasters and other intermediaries.

In our broadcasting business, our Neo Cricket and Neo Sports channels compete with sports and other entertainment channels broadcast in India and internationally via satellite and delivered through cable, terrestrial television and home video products companies. For advertising revenues, these channels also compete with other forms of advertising media, such as newspapers, magazines, outdoor advertising, transit advertising, telephone directory advertising, on-line advertising and direct mail. Some competitors are government-supported operations or are part of larger companies that have substantially greater financial resources than we have. The Neo Sports and Neo Cricket channels directly compete with other sports channels in India and with other channels in various other geographies. Although we believe that there are significant entry barriers in the sports broadcasting business, including experience in sports rights management and existing relationships with sports federations and distribution intermediaries, a potential increase in competition may adversely affect market share, advertising income and our results of operations.

The motion picture industry is highly competitive and at times may create an oversupply of motion pictures in the market, resulting in reduction in box office receipts and/or margins. We have limited production and advertising budgets, and may not succeed in adequately marketing motion pictures produced and/or distributed by us. In addition, the box office performance of a motion picture determines future revenue streams from such property, such as from home video and pay television. Similarly, our Home Video business is in its early stages and we may not be able to develop the relationships and delivery capabilities that will determine customer acquisition and retention.

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Currency exchange rates

Changes in currency exchange rates influence our results of operations. A portion of our revenues, including income from sports rights, is denominated in currencies other than Indian rupees, most significantly the U.S. dollar. Similarly, a portion of our expenses, including the cost of sport rights under various sports rights contracts, a part of our production expenses, as well as other operating expenses in connection with our international operations are denominated in currencies other than Indian rupees, most significantly theU.S. dollar and Singapore dollar. Although our business operations provide a kind of natural hedge to our foreign currency exposure, significant fluctuations in currency exchange rates between the Indian rupee and these currencies may adversely affect our results of operations.

In addition, from time to time a portion of our indebtedness may be denominated in foreign currencies. Depreciation of the Indian rupee against the U.S. dollar and other foreign currencies may adversely affect our results of operations by increasing the cost of financing any debt denominated in foreign currency.

Furthermore, the financial reporting currency of our Company and our Indian subsidiaries is Indian rupees, while the financial reporting currency of our international subsidiaries is U.S. dollar .Our results of operations may therefore be affected by the mismatch between our financial reporting currencies, currency of our revenue and expenses and our indebtedness, as well as timing differences between receipts and payments which could result in an increase of any such mismatch.

Basis of Consolidation and Critical Accounting Policies Basis of consolidation Our restated consolidated financial statements included in this Draft Red Herring Prospectus have been prepared under the historical cost convention except for certain revalued fixed assets as specified, on an accrual basis in accordance with Indian GAAP as adopted by our Company and the applicable Accounting Standards, and in the manner provided under theSEBI ICDR Regulations. The preparation of our restated consolidated financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management’s evaluation of relevant facts and circumstances as of the date of the respective restated consolidated financial statements. The differences between the actual results and the estimates are recognized in the period in which the results are known / materialize.

Principles of consolidation • The restated consolidated financial statements have been prepared in accordance with Accounting Standard

(AS) 21 on “Consolidated Financial Statements” and AS 27 on “Financial Reporting of Interests in Joint Ventures”. The restated consolidated financial statements have been prepared on the following basis:

• The financial statements of our Company and its subsidiary companies have been combined on a line-by-line

basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions and resulting unrealized profits or losses.

• In case of foreign subsidiary companies, being non-integral foreign operations, revenue items are consolidated

at the average rate of foreign exchange prevailing during the year/period. All assets and liabilities are translated at the exchange rates prevailing at the end of the year/period. Exchange gains/losses arising on translation are recognized under foreign currency translation reserve.

Interests in jointly controlled entities have been accounted by using the proportionate consolidation method as per AS 27 on “Financial Reporting of Interests in Joint Ventures”. The intra-group balances and intra-group transactions and resulting unrealised profits or losses are eliminated to the extent of our Company’s proportionate share.

• The restated consolidated financial statements have been prepared after making disclosures and adjustments

required to be made in accordance with the provisions of Paragraph IX (B)(9) of Part A of Schedule VIII of SEBI ICDR Regulations.

• The financial statements of the subsidiary companies and jointly controlled entities used in the consolidation are

drawn up to the same reporting date as that of our Company except for certain subsidiaries and jointly controlled entities as indicated in Annexure IV to our restated consolidated financial statements. Effect has been

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given to significant transactions between the two reporting dates, as indicated in the table referred above, which have been certified by the management of our Company and relied upon by the auditors.

• The excess of cost of investment in subsidiary companies / jointly controlled entities over our portion of equity

on acquisition date is recognized in the restated consolidated financial statements as goodwill. The excess of our portion of equity of the subsidiary companies / jointly controlled entities on the acquisition date over its cost of investment is treated as capital reserve.

• Minority interest in the net assets of the consolidated subsidiary companies consists of: (i) the amount of equity

attributable to minorities at the date on which investment in a subsidiary is made; and (ii) the minorities’ share of movements in equity since the date the parent-subsidiary relationship came into existence.

• Minority interest’s share of results for the year of the consolidated subsidiaries is identified and adjusted against

the profit after tax of the restated consolidated financial statements. The share of losses applicable to the minority if exceeds the minority interest in the equity of the subsidiary company, the excess and any further losses are adjusted against the majority interest except to the extent that the minority has a binding obligation to, and is able to, make good the losses.

Revenue recognition • Revenue from sale of airtime or free commercial time available on various channels for television programs is

recognized when the related advertisement or commercial is telecast. • In respect of film distribution, revenue accruing from the licensing of various rights is recognized on the basis

of terms and conditions of licensing and delivery of the film. • In respect of television / entertainment programs, revenue accruing from the licensing of various rights is

recognized on the basis of terms and conditions of licensing and delivery of the program. • The revenue from licensing /marketing of media rights is recognized on the happening of events in terms of

agreements at the values determined in accordance with the norms specified in those agreements. • Advertising income in respect of our broadcasting business is recognized when the related advertisement or

commercial is telecast. Further, distribution revenue (subscription revenue) is recognized on accrual basis in accordance with terms of the respective distribution agreements.

• In respect of income from services, the Group recognizes revenue after the services are rendered. • Dividend income is recognized as and when right to receive dividend is established. • Interest income is accounted on time proportion basis. Intangible assets and amortization Television / entertainment programs / movies / sports rights • Based on the revised accounting policy for television /entertainment adopted in fiscal 2010, the cost of the

television / entertainment programs we produce is fully amortized in the year of first telecast. • The cost of movie rights / television / entertainment programs acquired by our Company is fully amortized in

the year of acquisition if the period of rights does not exceed one year. In other cases 80 % of the cost is amortized in the year of acquisition and the balance over the remaining period of rights, not exceeding two years.

• The cost of movies we produce is amortized 80% in the year of first release and the balance equally over the

next two years. • The cost of sports rights acquired from BCCI for three years is amortized 80% in the year of first telecast and

the balance 20% in equal installments over the remaining term of the contract. • In respect of music software produced, the cost of such software is amortized over a period of three years from

the year in which it is first capitalized.

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Computer Software: Computer software is amortized on written down value basis at the rate of 33.33%. Valuation of Inventory: Inventory of airtime available on various channels for the television / entertainment programs already telecast, to the extent of unused air time, is carried as airtime inventory and has been valued at average unit sale price realized. Tangible fixed assets and depreciation Fixed assets are stated at cost or at their revalued amount less accumulated depreciation. Cost comprises purchase/ acquisition price, taxes and any directly attributable cost of bringing the asset to its working condition for its intended use. • Movie rights comprise negative rights and distribution rights of movies and are for a contractually specified

mode of exploitation, period and territory. In case where multiple rights are acquired for a consolidated amount, cost is allocated to each right based on estimates made by the management.

• Assessment of indication of impairment of an asset is made at the balance sheet date and impairment loss, if

any, is recognized. • Depreciation on fixed assets is provided on the written down value basis at the rates and in the manner specified

in Schedule XIV to the Companies Act. • Leasehold improvements have been amortised over the period of the respective lease agreements. Impairment of assets Assessment of indication of impairment of an asset (including goodwill on consolidation) is made at the balance sheet date and impairment loss, if any, is recognized.

Investments

Long term investments are stated at cost. Provision is made for diminution, other than temporary, in the value of investment. Current investments are stated at the lower of cost and fair value.

Provision and contingent liabilities Provision is recognized when we have a present obligation as a result of past event and it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to present value and are determined based on best estimates of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote. Taxes on income

Current tax is determined as the amount of tax payable in respect of estimated taxable income for the period.

The tax effect of the timing differences between taxable income and accounting income which are capable of reversal in one or more subsequent periods is recorded as deferred tax asset subject to the consideration of prudence or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations as of the balance sheet date. Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized, only if there is virtual certainty of realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is reasonable certainty of realization. The carrying amount of deferred tax asset/liability is reviewed at each balance sheet date.

Foreign currency transactions Foreign currency transactions are recorded at the rates of exchange prevailing at the date of transaction. Exchange gains or losses realized and arising due to translation of the foreign currency monetary items outstanding at the balance sheet date are accounted in the profit and loss account. Non-monetary items which are carried in terms of

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historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Valuation of Inventory

Inventory of airtime available on various channels for the television / entertainment programs already telecast, to the extent of unused airtime, is carried as airtime inventory and is valued at cost and net realisable value, whichever is lower. Cost is arrived at on weighted average basis.

Borrowing cost Interest and other costs in connection with the borrowing of the funds to the extent related to the acquisition or construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowing costs are recognized as an expense in the period in which they are incurred. Leases Assets acquired under lease where we have substantially all the risks and rewards incidental to ownership are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the fair value and the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. Assets acquired on leases where significant portions of the risks and rewards incidental to ownership are retained by the lessors, are classified as operating leases. Lease rentals are charged to the profit and loss account over the lease period. Current investments are stated at the lower of cost and fair value. Components of our Income and Expenditure Income

Our income comprises (i) income from sales and services and (ii) other income. Our income is presented as adjusted for increases or decreases in airtime inventory relating to air time acquired on television channels.

Sales and services

We derive our income from:

(i) Airtime sales relating to sale of advertisement space on television, either for sports programs or entertainment programs. Airtime sales are presented net of any agency commission;

(ii) Income from sub-licensing sports contracts acquired by us to various licensees, including broadcasters;

(iii) advertisement revenue earned by our joint venture company Neo Sports Broadcast from advertisement on its two channels Neo Cricket and Neo Sports;

(iv) Distribution revenue earned by our joint venture company Neo Sports Broadcast from distribution of its two channels Neo Cricket and Neo Sports in India as well as from international distribution revenues from countries where Neo is available;

(v) Production fees relating to production of live feed for sports events, organizing signage and advertising for clients at sports events, and for digital content generation for mobile operators in the new media business;

(vi) Sports services income relating to fees generated by the sports division from various marketing activities, including commission where the division serves as marketing agent;

(vii) Income from licensing of and distribution of various of rights of films acquired by us;

(viii) Income from motion pictures produced, including from distribution of such films;

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(ix) Income from assignment of television program rights relating mainly to licensing of television content library; and

(x) Income from disk rental income comprising revenue earned from sales and rental of disks by our home video market business.

Other income

We derive other income from license fees for premises leased out, interest on fixed deposits with banks and loans, dividends from investments in money market mutual funds as well as miscellaneous income. Other income also includes any non-recurring income such as profit on sale of fixed assets, any profit on assignment of satellite television broadcasting, terrestrial television and other rights, if any, foreign exchange gains, if any, and any excess provisions for expenses not required written back. Some of these income streams are not recurring in nature, may be exceptional items, and may fluctuate from period to period such as compensation awards.

Adjustments for increase/ decrease in advertisement inventory

Our total income is presented as adjusted for increases or decreases in advertisement inventory obtained from various broadcasters for the entertainment television media business.

Expenditure

Our expenditure consists of:

(i) Cost of sports rights relating to cost of acquisition of media rights under various sports rights contracts relating to sports events, from sports federations or other owners of such rights. This also includes cost of media rights acquired by our joint venture company Neo Sports Broadcast for telecast on its two channels Neo Cricket and Neo Sports;

(ii) Marketing rights and telecast costs in connection with acquiring marketing rights and telecast fees paid

to broadcasting companies for air time inventory;

(iii) Production expenses, relating to the live feed prepared for sports events, for television programs and motion pictures produced by us and production costs in relation to our joint venture company Neo Sports Broadcast for its two channels Neo Cricket and Neo Sports. Production expenses include hire charges for equipment, hire charges for locations and sets, technical and other production costs, artists’ fees, electricity, telecommunication, professional fees paid to freelancing technicians, shooting and incidental expenses, production charges, dubbing, editing and capsuling charges, vehicle and conveyance charges as well as airtime inventory, television inventory and motion picture inventory written off;

(iv) Payments to and provision for employees, including salaries, wages and bonus paid to our employees,

and as well as employees’ provident fund and pension funds payments, gratuity and ex gratia payments, leave travel costs, managerial remuneration, staff recruitment expenses, training and development expenses, salaries, wages and bonus payments as well as staff welfare and medical expenses;

(v) Administrative and other expenses, including communication charges, electricity, consultancy charges,

insurance charges, legal and professional expenses, professional fees, auditors’ fees, rent, rates and taxes, repairs and maintenance, conveyance charges, printing expenses and other miscellaneous expenses. Administrative and other expenses also include sundry/ old balances written off and foreign exchange losses;

(vi) Marketing expenses, relating to publicity and marketing of the various sports events for which we have

acquired sports management rights, marketing expenses in connection with films which we have produced or distributed, which include advertising and publicity expenses, commission charges and processing charges, survey and research expenses, customs duty, conference charges as well as discounts and marketing, advertising and publicity expenses in relation to our joint venture company Neo Sports Broadcast for its two channels Neo Cricket and Neo Sports ;

(vii) Interest and other financial charges, including interest expense on fixed loans and working capital

facilities availed from banks and financial institutions, and other financing charges including bank charges and commissions paid for bank guarantees and letters of credit;

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(viii) Depreciation / amortization costs relating to depreciation of tangible assets and amortization of

intangible assets such as television entertainment software acquired/produced, movie rights and computer software; and

(ix) Impairment loss relating to impairment provision made for dimunition in carrying value of assets such as television/entertainment program (produced).

Results of Operations

The following table sets forth certain information with respect to our results of operations for the periods indicated: (Rs. in Million)

Year ended March 31

Particulars 2006 2007 2008 2009 2010 Income Sales and Services Airtime Sales (net) 612.77 973.19 820.09 392.41 347.94Income from Sports Rights 1,248.97 2,083.16 3,808.29 3833.52 4421.50 Ad Sales Broadcasting - 389.23 1,092.24 775.62 1,345.06 Distribution Revenue Broadcasting - 335.50 239.92 459.58 495.36 Production Fees 231.25 375.26 545.33 421.42 666.90 Sports Services Income 58.29 272.96 164.16 25.46 49.29 Income from Film Rights (Acquired) 11.09 74.29 69.41 - -

Income from Motion Picture Produced - 12.11 14.10 -

-

Income from assignment of Television Programme Rights 5.46 1.95 0.94

0.32 4.61 Disks Sales/ Rental Income - - 0.55 1.44 2.43 2,167.83 4,517.65 6,755.03 5,909.77 7,333.09 Other Income 339.45 234.02 295.81 697.50 354.65

Increase/(Decrease) in Air Time Inventory 2.52 10.84 (7.68) 3.16 (0.54) Total Income 2,509.80 4,762.51 7,043.16 6,610.43 7,687.20 Expenditure Cost of Sports Rights 1,903.10 3,272.77 5,642.03 5,252.54 6,834.24

Marketing Rights and Telecast Costs

322.97

907.40

677.98

238.38

330.52 Production Expenses 188.01 405.30 559.57 498.43 526.46 Marketing Expenses 23.52 111.34 86.65 59.01 37.34 Payments to and Provision for Employees 44.84 97.91 154.41 187.67 160.85 Interest and Other Financial Charges 37.76 186.63 204.43 432.53 583.12 Administrative and Other Expenses 143.19 351.21 341.33 577.88 314.23 Depreciation/ Amortization (Net) 84.17 133.11 803.98 242.56 428.40 Total Expenditure 2,747.56 5,465.67 8,470.38 7,489.00 9,215.16 (Loss) before Tax and Restatement Adjustments (237.76) (703.16) (1,427.22) (878.57) (1,527.96) Provision for Tax

- Current Tax (* Net of MAT Credit) 3.15 18.21

22.50

45.49*

165.47 - Deferred Tax 16.10 22.97 60.93 (22.35) (113.42) - Fringe Benefit Tax 1.77 1.20 1.88 2.37 -- Wealth Tax 0.01 - - - -

- Short provision for Income Tax in respect of earlier years - 12.25 28.39

1.39 24.97

- Short provision for Fringe Benefit Tax for an earlier year - - - 0.25 0.21 - Deferred tax relating to Short provision for tax for an earlier year - - (26.49) - - -

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Year ended March 31

Particulars 2006 2007 2008 2009 2010

(Loss) After Tax before Restatement Adjustments (a)

(258.79)

(757.79)

(1,514.43)

(905.72)

(1,605.19) Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of Part A of Schedule VIII of the ICDR Regulations

- Restatement Adjustments (b) (86.16) (56.09) 389.84 (378.05) 248.72

- Restatement Adjustments relating to Current Tax / Fringe Benefit Tax / Deferred Tax (c) (20.56) 6.66 5.18 (19.65) 17.74

- Deferred Tax Impact of Restatement Adjustments(d) (12.54) (10.11) (37.45) 13.67 85.20

Net Profit / (Loss) After Restatement Adjustments (a+b+c-d) (352.97) (797.11) (1,081.96) (1,317.09) (1,423.93) Restatement Adjustments

Our restated consolidated financial information has been presented in compliance with paragraph B(1) of Part II of Schedule II to the Companies Act, Indian GAAP and the ICDR Regulations. For further information on restatement adjustments, see "Basis of Consolidation and Critical Accounting Policies" above. The table below describes such restatement adjustments:

(In Rs. million) Particulars Year Ended March 31 2006 2007 2008 2009 2010 A Profit/ (Loss) After Tax before Restatement Adjustments

(258.79)

(757.79)

(1,514.43)

(905.72)

(1,605.19) B Adjustments in terms of Paragraph IX (B)(9) (a) to (d) of


B1 Restatement Adjustments relating to: (a) Advertisement expenses 0.20 - - - - (b) Revaluation reserve written back (2.44) - - - - (c) Excess provision for expenses, written back 13.20 3.85 (10.17) (5.49) (18.55) (d) Bad debts written off earlier, recovered - - (2.50) - - (e) Write back of provision of doubtful debts - 31.85 23.32 (56.35) (f)Miscellaneous Expenditure Written off 0.87 0.87 0.87 0.87 1.74 (g) Change in Depreciation/Amortization policy 20.62 (11.66) (60.92) 60.17 294.21 (h) Refund of tax deducted at source - - 12.99 - (12.99) (i) Gain on settlement with a Cricket Board - (81.40) - - - (j) Compensation received from a Cricket Board - - - 52.50 (52.50) (k) Compensation for Consent Award - - 424.26 (424.26) - (l) Prior period items (0.07) (0.11) 0.18 - - (m) Auditors' Qualifications (118.54) 0.51 1.81 (5.49) 36.81

Sub Total (86.16) (56.09) 389.84 (378.05) 248.72 B2 Restatement Adjustments relating to Current Tax / Fringe

Benefit Tax/ Deferred Tax (20.56) 6.66 5.18 (19.65) 17.74

C Deferred Tax Impact of Restatement Adjustments, where

applicable (12.54) (10.11) (37.45) 13.67 85.20

Net Profit/(Loss) After Restatement Adjustments (A+B1+B2-C)

(352.97) (797.11) (1081.96) (1317.09) (1,423.93)

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• The effect of restated adjustments relating to financial years ended prior to March 31, 2006 in an aggregate amount of Rs.247.01 million (net of deferred tax) (including impact of change in accounting policy of amortization of television/entertainment programs produced/acquired during the year ended March 31, 2010 of Rs.252.16 million) has been adjusted by debiting Rs.247.81 million to balance in the profit and loss account brought forward as of April 1, 2005 and crediting Rs.0.8 million to general reserve as of April 1, 2005.

In respect of the following matters no restatement adjustment has been made to the consolidated financial information for the relevant years for the reasons specified below:

a. Until fiscal 2005, accounted for leave encashment liability on an actual payment basis. For fiscal 2007 and

2006, liability for leave encashment was provided on the basis of the leave available to the credit of the employees at the end of the respective years within limits determined by the management. The additional charge of Rs.2.34 million on account of change in the policy with effect from April 1, 2005 was recognized in the accounts for fiscal 2006. Further, consequent to the Accounting Standard Employees Benefits AS – 15 becoming applicable to our Company from April 1, 2007, our Company has followed the policy stated in Note I.3.E. (ii) of Annexure IV of our restated consolidated financial statements included herein to recognize liability for compensated absences and gratuity, and in terms of the transitional provisions of such Accounting Standard has adjusted as stated in Note III.G.5 of Annexure IV of our restated consolidated financial statements included herein, the increase in the liability for compensated absences and reduction in the liability for gratuity up to March 31, 2007 amounting to Rs.0.24 million (net of deferred tax of Rs. 0.12 million) and Rs.0.47 million (net of deferred tax of Rs. 0.24 million) respectively against the opening balance of the general reserve as on April 1, 2007.

b. No adjustment has been made to the consolidated financial information for fiscal 2007, 2006 and 2005 and

in the balance in the profit and loss account brought forward as at April 1, 2004 to reflect the effect had the policy stated in Note I.3.E (ii) of Annexure IV of our restated consolidated financial statements included herein for recognizing our Company’s liability towards compensated absences and gratuity been followed in each of the three years ended March 31, 2007 as the effect thereof is not material.

The profit & loss analysis below is based on the consolidated restated financial statements prior to restatement adjustments.

Fiscal 2010 compared to fiscal 2009

Factors affecting our results of operations in fiscal 2010 and 2009

Our results of operations in fiscal 2010 and 2009 were affected by, amongst other factors, the following:

Sports Business

Fiscal 2009

• Events under the BCCI contract: South Africa tour of India in April 2008 which included two test matches; Australia tour of India in October and November 2008, which included four test matches; England tour of India in November and December 2008, which included two test matches and five ODI’s; and various cricket matches played under the BCCI domestic season in the 2008 - 2009 season.

• Events under the BCB contract: Tri Series among Bangladesh, India and Pakistan in June 2008 which included four ODI’s; Sri Lanka tour of Bangladesh in December 2008 and January 2009 which included two test matches; Sri Lanka, Zimbabwe and Bangladesh Tri Series in January 2009 which included four ODI’s; and Zimbabwe tour of Bangladesh in January 2009 which included three ODI’s.

• Sri Lanka cricket board: We acquired the media and sponsorship rights for the India tour of Sri Lanka in January and February 2009, which included five ODI’s and one 20/20 format match.

• Premier league: We sold the mobile and internet clip rights for the English Premier League in 77 countries for the Barclays Premier League season 2008 - 2009.

Fiscal 2010

• Events under the BCCI contract: Australia tour of India in October 2009, which included seven ODI’s of which six were held and one match in Mumbai was cancelled due to bad weather; Sri Lanka tour of India

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in November and December 2009, which included three test matches and five ODIs of which four were completed and one was abandoned due to bad playing conditions and two 20/20 format matches; South Africa tour of India in February 2010, which included two test matches and three ODI’s; BCCI Corporate Trophy and various cricket matches played under the BCCI domestic season 2009-2010.

• Events under the BCB contract: Zimbabwe tour of Bangladesh in October and November 2009 which included five ODI’s; Tri Series in Bangladesh between Bangladesh, India and Srilanka in January 2010 which included seven ODI’s; India tour of Bangladesh in January 2010, which included two tests; England tour of Bangladesh in February and March 2010, which included three ODI’s; and two test matches and three ODI’s.

• Premier league: Premier league: We sold the mobile and internet clip rights for the English Premier

League in 77 countries for the Barclays Premier League season 2009 - 2010.

Sports Broadcast

Fiscal 2009

In fiscal 2009, Neo Sports Broadcast telecast the following live cricket matches on Neo Cricket: all BCCI and BCB events as described above, and the India tour of Sri Lanka in January and February 2009. These rights were all licensed to Neo Sports Broadcast by our Company in case of BCCI events and by NSI in case of BCB and Sri Lanka Cricket events. In addition, Neo Sports telecast various other content, including the German Bundesliga football league, Italian Serie A football league, the US PGA , WTA women’s tennis, ITF Davis Cup events among others in this period. Fiscal 2009 was the first full year of operation of our in-house distribution network.

Fiscal 2010

In fiscal 2010, Neo Sports Broadcast telecast the following live cricket matches on Neo Cricket: all BCCI and BCB events (except Zimbabwe tour of Bangladesh which was telecast on Neo Sports) as described above. These rights were all licensed to Neo Sports Broadcast by our Company in case of BCCI events and by NSI in case of BCB. In addition, Neo Sports telecast various other content, including the German Bundesliga football league, Italian Serie A football league, the US PGA , NASCAR, WTA women’s tennis, ITF Davis Cup and Fed Cup events among others in this period.

Television Fiscal 2009 In fiscal 2009, we marketed advertisement airtime for 23 programs on various channels, including the following significant programs: (i) Programs acquired by us: Muthyala Muggu, Anandham, Minnukettu, Aadam Padam, Mettiolli and Chandralekha, and (ii) programs produced by us: Magal, Sprite Navvula Saval, Madhumasham and Soundarya. Fiscal 2010

In fiscal 2010, we marketed advertisement airtime for 16 programs on various channels, including the following significant programs: Programs acquired by us: Muthyala Muggu; Kalasam; Amruthavarsham; Aadam Padam; Mettiolli; Aha Emmi Ruchi, Aha Enna Rusi, Maa Inti Kalyanam and Chandralekha. Programs produced by us: Magal and Soundarya. Filmed Entertainment We did not produce or distribute any feature films in fiscal 2009 and fiscal 2010. Income Our total income increased by 16.29% from Rs.6,610.43 million in fiscal 2009 to Rs.7,687.20 million in fiscal 2010. Sales and Services Airtime sales (net) Airtime sales (net) decreased by 11.33% from Rs.392.41 million in fiscal 2009 to Rs.347.94 million in fiscal 2010.

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The decline was primarily due to fewer programs in fiscal 2010 for which we marketed airtime as compared to fiscal 2009. Income from airtime sales (net) contributed 5.94% and 4.53% of our total income in fiscal 2009 and 2010, respectively Income from sports rights Income from sports rights increased by 15.34% from Rs.3,833.52 million in fiscal 2009 to Rs.4,421.50 million in fiscal 2010. Income from sports rights in fiscal 2009 and 2010 primarily related to revenues from licensing of various media rights, primarily BCCI media rights. In fiscal 2010 there were higher number of matches organized under BCCI and BCB rights contracts resulting in higher revenue from sports rights as compared to fiscal 2009. Income from sports rights contributed 57.99% and 57.52% of our total income in fiscal 2009 and 2010, respectively. Ad sales broadcasting Ad sales broadcasting increased by 73.42% from Rs.775.62 million in fiscal 2009 to Rs.1,345.06 million in fiscal 2010. Ad sales broadcasting increased significantly primarily due to the revival of the economy and strong rebound in advertisement rates in fiscal 2010 as compared to fiscal 2009, where the advertisement rates significantly declined due to the impact of the global economic crisis. Advertisement revenues also improved due to increased number of matches being played in fiscal 2010 as compared to fiscal 2009. Ad sales broadcasting contributed 11.73% and 17.50% of our total income in fiscal 2009 and 2010, respectively. Distribution revenue broadcasting Distribution revenue broadcasting increased by 7.79% from Rs.459.58 million in fiscal 2009 to Rs.495.36 million in fiscal 2010, primarily due to organic growth in the distribution industry resulting in additional agreements being signed with MSO/Cable/DTH operators or better renewal terms achieved. Distribution revenue broadcasting contributed 6.95% and 6.44% of our total income in fiscal 2009 and 2010, respectively. Production fees Production fees increased by 58.25% from Rs.421.42 million in fiscal 2009 to Rs.666.90 million in fiscal 2010, primarily due to increased television production revenues from production of live television events for various sports federations such as BCCI and BCB. Production fees contributed 6.38% and 8.68% of our total income in fiscal 2009 and 2010, respectively. Sports services income Sports services income increased by 93.60% from Rs.25.46 million in fiscal 2009 to Rs.49.29 million in fiscal 2010, primarily relating to significant commission and revenue management fees from marketing of commercial rights and marketing of airtime inventory for the BCCI and BCB events. Sports services income contributed 0.39% and 0.64% of our total income in fiscal 2009 and 2010, respectively. Income from assignment of television program rights Income from assignment of television program rights increased from Rs.0.32 million in fiscal 2009 to Rs.4.61 million in fiscal 2010, arising from licensing of television programs. Disk rental income Disk rental income increased by 68.75% from Rs.1.44 million in fiscal 2009 to Rs.2.43 million in fiscal 2010. Income from disk rental income was higher in fiscal 2010 primarily due to the opening of new stores at better location to target new customers. Disk rental income contributed 0.02 % and 0.03% of our total income in fiscal 2009 and 2010, respectively. Other income Other income decreased by 49.15% from Rs.697.50 million in fiscal 2009 to Rs.354.65 million in fiscal 2010. In fiscal 2009, other income included non-recurring income from consent awards. In addition, other income includes interest on fixed deposits placed with banks in connection with margin security against bank guarantee facilities, which was Rs 127.13 million and Rs 102.88 in 2009 and 2010, respectively. Other income contributed 10.55% and 4.61% of our total income in fiscal 2009 and 2010, respectively. Increase/ decrease in airtime inventory

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In fiscal 2010, we recorded a decrease in the airtime inventory of Rs.0.54 million. Expenditure Total expenditure increased by 23.05% from Rs.7,489 million in fiscal 2009 to Rs.9,215.16 million in fiscal 2010. Cost of sports rights Cost of sports rights increased by 30.11% from Rs.5,252.54 million in fiscal 2010 to Rs.6,834.24 million in fiscal 2010, primarily due to an increase in significant sports events scheduled in fiscal 2010 compared to those scheduled in fiscal 2009 and higher attributable costs to such events. Expressed as a percentage of total income, cost of sports rights increased from 79.46% in fiscal 2009 to 88.90% in fiscal 2010. Marketing rights and telecast costs Marketing rights and telecast costs increased by 38.65% from Rs.238.38 million in fiscal 2009 to Rs.330.52 million in fiscal 2010, primarily due to increase in telecast fees paid for matches telecast on terrestrial television in India. Expressed as a percentage of total income, marketing rights and telecast costs increased from 3.61% in fiscal 2009 to 4.30% in fiscal 2010. Production expenses Production expenses increased by 5.62% from Rs.498.43 million in fiscal 2009 to Rs.526.46 million in fiscal 2010, primarily due to a increased television production of BCCI and BCB events in fiscal 2010 as compared to fiscal 2009. Expressed as a percentage of total income, production expenses decreased from 7.54% in fiscal 2009 to 6.85% in fiscal 2010. Payments to and provisions for employees Payments to and provision for employees decreased by 14.29% from Rs.187.67 million in fiscal 2009 to Rs.160.85 million in fiscal 2010, due to our rationalization of manpower. Expressed as a percentage of total income, payments to and provision for employees decreased from 2.84% in fiscal 2009 to 2.09% in fiscal 2010. Administrative and other expenses Administrative and other expenses decreased by 45.62% from Rs.577.88 million in fiscal 2009 to Rs.314.23 million in fiscal 2010. In fiscal 2009 we incurred foreign exchange fluctuation loss of Rs.242.85 million which was due to appreciation of the Indian Rupee against the U.S. dollar on payment of certain U.S. dollar denominated foreign currency liabilities. We did not incur significant foreign exchange loss in fiscal 2010. As a result, expressed as a percentage of total income, administrative and other expenses decreased from 8.74% in fiscal 2009 to 4.09% in fiscal 2010. Marketing expenses Marketing expenses decreased by 36.72% from Rs.59.01 million in fiscal 2009 to Rs.37.34 million in fiscal 2010. This primarily included advertisement and publicity expenses which decreased due to cost rationalization efforts from Rs 49.88 million in fiscal 2009 to Rs. 30.72 million in fiscal 2010. Expressed as a percentage of total income, marketing expenses decreased from 0.89% in fiscal 2009 to 0.49% in fiscal 2010. Interest and other financial charges Interest and other financial charges increased by 34.82% from Rs.432.53 million in fiscal 2009 to Rs.583.12 million in fiscal 2010, primarily due to higher cost of bank guarantee commission and processing fees, which increased from Rs.62.55 million to Rs.142.47 million. Interest expense increased marginally from Rs.306.53 million in fiscal 2009 to Rs.309.79 million in fiscal 2010. Expressed as a percentage of total income, interest and other financial charges increased from 6.54% in fiscal 2009 to 7.59% in fiscal 2010. Depreciation/ amortization (net) Depreciation/ amortization (net) increased significantly from Rs.242.56 million in fiscal 2009 to Rs.428.40 million in fiscal 2010, primarily due to additional depreciation being charged in fiscal 2010 due to the change in accounting policy for amortization of cost of movie rights and television programs produced and acquired. Expressed as a

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percentage of total income, depreciation / amortization (net) increased from 3.67% in fiscal 2009 to 5.57% in fiscal 2010. Provision for taxes Total tax expenses increased by 184.46% from Rs.27.15 million in fiscal 2009 to Rs.77.23 million in fiscal 2010. The increment was primarily due to recognition of shortfalls in the provision of income tax for earlier years of Rs.1.39 million in fiscal 2009 and Rs.24.97 million in fiscal 2010. We incurred an increase in current taxes (net of MAT credit) from Rs.45.49 million in fiscal 2009 to Rs.165.47 million in fiscal 2010. Loss after taxes before restatement adjustments Loss after taxes before restatement adjustments was Rs.905.72 million and Rs.1,605.19 million in fiscal 2009 and 2010, respectively. Net loss after restatement adjustments Net loss after restated adjustments was Rs.1,317.09 million and Rs.1,423.93 million in fiscal 2009 and 2010, respectively. For further information restatement adjustments applied in fiscal 2010 and 2009, see “Results of Operations – Restatement Adjustments” above. Fiscal 2009 compared to fiscal 2008


Sports Business

Fiscal 2008

• Events under the BCCI contract: Australia tour of India in October 2007, which included seven ODIs and one 20/20 format match; Pakistan tour of India in November and December 2007, which included three test matches and five ODIs; South Africa tour of India in March 2008, which included one test match; BCCI Overseas Venue Series in June and July 2007, which included three ODIs between India and South Africa in Ireland and one ODI between India and Pakistan in Scotland; and various cricket matches played under the BCCI domestic season 2007-2008.

• Events under the ICC marketing agreement: We marketed the television and sponsorship rights and event

implementation services for the ICC Cricket World Cup 2007 held in West Indies that concluded in April 2007. • Events under the BCB contract: India tour of Bangladesh in May 2007, which included two tests and three

ODIs; and South Africa tour of Bangladesh in February 2008, which included two test matches and three ODIs. • Premier league: We sold the mobile and internet clip rights for the English Premier League in 77 countries for

the Barclays Premier League season 2007 - 2008.

Fiscal 2009

• Events under the BCCI contract: South Africa tour of India in April 2008 which included two test matches; Australia tour of India in October and November 2008, which included four test matches; England tour of India in November and December 2008, which included two test matches and five ODIs ; and various cricket matches played under the BCCI domestic season in the 2008 - 2009 season.

• Events under the BCB contract: Tri Series among Bangladesh, India and Pakistan in June 2008 which included four ODIs; Sri Lanka tour of Bangladesh in December 2008 and January 2009 which included two test matches; Sri Lanka, Zimbabwe and Bangladesh Tri Series in January 2009 which included four ODIs; and Zimbabwe tour of Bangladesh in January 2009 which included three ODIs.

• Sri Lanka cricket board: We acquired the media and sponsorship rights for the India tour of Sri Lanka in January and February 2009, which included five ODIs and one 20/20 format match.

• Premier league: We sold the mobile and internet clip rights for the English Premier League in 77 countries for the Barclays Premier League season 2008 - 2009.

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Sports Broadcast Fiscal 2008

In fiscal 2008, Neo Sports Broadcast telecast the following live cricket matches on Neo Cricket: all BCCI and BCB events as described above. These rights were licensed to Neo Sports Broadcast by our Company in case of BCCI events and NSI in case of BCB events. In addition, Neo Sports telecast various other content, including German Bundesliga football league, Italian Serie A football league, the U.S. PGA Tour, NASCAR, WTA Tour Women’s Tennis and ITF Davis Cup and Fed Cup events in this period. In June 2007, we terminated our distribution arrangement with a leading distribution bouquet and in October 2007 we set up our in-house distribution team to distribute the channels in India.

Fiscal 2009

In fiscal 2009, Neo Sports Broadcast telecast the following live cricket matches on Neo Cricket: all BCCI and BCB events as described above, and the India tour of Sri Lanka in January and February 2009. These rights were all licensed to Neo Sports Broadcast by our Company in case of BCCI events and by NSI in case of BCB and Sri Lanka Cricket events. In addition, Neo Sports telecast various other content, including the German Bundesliga football league, Italian Serie A football league, the U.S. PGA Tour, WTA Tour Women’s Tennis, ITF Davis Cup events in this period. Fiscal 2009 was the first full year of operation of our in-house distribution network.

Television Fiscal 2008 In fiscal 2008, we marketed advertisement airtime for 21 programs on various channels, including the following significant programs: (i) programs acquired by us: Mastana Mastana, Aanandam, Muthyala Muggu, Samsaram, Dharma Yudham and My Dear Bhootam; (ii) programs produced by us: Amma Nagamma, Magal, Surya, and Hutch Andhra Super Star. Fiscal 2009 In fiscal 2009, we marketed advertisement airtime for 23 programs on various channels, including the following significant programs: (i) programs acquired by us: Muthyala Muggu, Anandham, Minnukettu, Aadam Padam, Mettiolli and Chandralekha;. (ii) programs produced by us: Magal, Sprite Navvula Saval, Madhumasham and Soundarya. Filmed Entertainment In fiscal 2008, we acquired all global commercial rights (excluding music rights) for the films Naqaab, Raqeeb and Chhodon Na Yaar. We also sold television rights of the film Sarhaad Par in fiscal 2008. We did not produce or distribute any feature films in fiscal 2009. Income Our total income decreased by 6.14% from Rs.7,043.16 million in fiscal 2008 to Rs.6,610.43 million in fiscal 2009. Sales and Services Airtime sales (net) Airtime sales (net) decreased by 52.15% from Rs.820.09 million in fiscal 2008 to Rs.392.41 million in fiscal 2009. Airtime sales (net) were higher in fiscal 2008 as we received significant income from airtime sales for marketing the television and sponsorship rights of the ICC Cricket World Cup 2007 which ended in April 2007. There were no such significant series in fiscal 2009 for which we received income from airtime sales. Airtime sales (net) contributed 11.64% and 5.94% of our total income in fiscal 2008 and 2009, respectively. Income from sports rights Income from sports rights increased by 0.66% from Rs.3,808.29 million in fiscal 2008 to Rs.3,833.52 million in

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fiscal 2009. Income from sports rights in fiscal 2008 and 2009 primarily related to BCCI media rights. Although a particularly high premium more BCCI matches were played in fiscal 2009 compared to fiscal 2008 under the BCCI contract, due to the onset of global economic crisis prevented us from increasing our revenues. In addition, the India - Pakistan series in fiscal 2008 was one of the most valued series under the BCCI contract and commanded a particularly high premium. Income from sports rights contributed 54.07% and 57.99% of our total income in fiscal 2008 and 2009, respectively. Ad sales broadcasting Ad sales broadcasting decreased by 28.99% from Rs.1,092.24 million in fiscal 2008 to Rs.775.62 million in fiscal 2009. Ad sales broadcasting decreased significantly in fiscal 2009 due to the slow down in advertisement spend by our advertisers on account of the global financial crisis in fiscal 2009. Ad sales broadcasting contributed 15.51% and 11.73% of our total income in fiscal 2008 and 2009, respectively. Distribution revenue broadcasting Distribution revenue broadcasting increased by 91.56% from Rs.239.92 million in fiscal 2008 to Rs.459.58 million in fiscal 2009. We terminated our distribution arrangement with a leading distributor bouquet in June 2007 and in October 2007 we set up our in-house distribution team. Distribution revenue broadcasting in fiscal 2008 reflects approximately six months of our in-house distribution operations, whereas fiscal 2009 reflected a full year of our in-house distribution operations. Distribution revenue broadcasting contributed 3.41% and 6.95% of our total income in fiscal 2008 and 2009, respectively. Production fees Production fees decreased by 22.72% from Rs.545.33 million in fiscal 2008 to Rs.421.42 million in fiscal 2009. Production fees were higher in fiscal 2008 as we received significant signage production fees from the ICC Cricket World Cup 2007 in fiscal 2008. Production fees contributed 7.74% and 6.38% of our total income in fiscal 2008 and 2009, respectively. Sports services income Sports services income decreased by 84.49% from Rs.164.16 million in fiscal 2008 to Rs.25.46 million in fiscal 2009, primarily relating to a significant commission and revenue management fee from marketing of commercial rights and marketing of airtime inventory for the ICC Cricket World Cup 2007. There was no such significant series in fiscal 2009 as our agreement for marketing of ICC events concluded in fiscal 2008. Sports services income contributed 2.33% and 0.39% of our total income in fiscal 2008 and 2009, respectively. Income from film rights (acquired) In fiscal 2008 income from film rights (acquired) was Rs.69.41 million relating primarily to income from distribution of the movie Naqaab. In fiscal 2009, we did not receive any income from film distribution as we strategically refrained from acquiring film distribution rights in fiscal 2009 due to adverse industry conditions and the high cost of acquiring such rights. Income from film distribution contributed 0.99% of our total income in fiscal 2008. Income from motion picture produced Income from motion picture produced was Rs.14.10 million in fiscal 2008, relating to the sale of rights to the film Sarhad Paar. We did not receive any such income in fiscal 2009. Income from motion picture produced contributed 0.20% of our total income in fiscal 2008. Income from assignment of television program rights Income from assignment of television program rights decreased by 65.96% from Rs.0.94 million in fiscal 2008 to Rs.0.32 million in fiscal 2009. Disk rental income Disk rental income increased by 161.82% from Rs.0.55 million in fiscal 2008 to Rs.1.44 million in fiscal 2009. Income from disk rental income was higher in fiscal 2009 as we commenced the video distribution business in March 2008 with the launch of two stores and subsequently expanded it to four stores in fiscal 2009. Disk rental income received in fiscal 2008 therefore reflects income from one month of operations of the video distribution

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business while disk rentals in fiscal 2009 reflects the results of operations of this business for the full year. Disk rental income contributed 0.01% and 0.02% of our total income in fiscal 2008 and 2009, respectively. Other income Other income increased by 135.79% from Rs.295.81million in fiscal 2008 to Rs.697.50 million in fiscal 2009. Other income contributed 4.20% and 10.55% of our total income in fiscal 2008 and 2009, respectively. Other income increased significantly in fiscal 2009 compared to that in fiscal 2008 primarily due to an increase in miscellaneous income. Miscellaneous income increased from Rs.5.86 million in fiscal 2008 to Rs.9.73 million in fiscal 2009. Also included in other income for fiscal 2008 is compensation for consent award of Rs. 424.26 million. In addition, we wrote back credit balances no longer required of Rs.36.37 million in fiscal 2009. Dividend from units of mutual funds increased from Rs.4.07 million in fiscal 2008 to Rs.6.99 million in fiscal 2009. These increases were offset in part by a decrease in interest on fixed deposits with banks and loans from Rs.169.90 million in fiscal 2008 to Rs.127.13million in fiscal 2009 due to a decrease in margin security placed with banks and financial institutions. In addition, in fiscal 2008 we recorded profit on assignment of satellite television broadcasting, terrestrial television and other rights of Rs.50.10 million relating to the feature film Sarhad Paar, while in fiscal 2009, we did not have any such income. License fees from office premises also decreased from Rs.8.93 million in fiscal 2008 to Rs.6.28 million in fiscal 2009 due to discontinuation of certain leases at our office premises. Increase/ decrease in airtime inventory We recorded a decrease in airtime inventory of Rs.7.68 million in fiscal 2008, due to an increase in the number of programs being telecast in fiscal 2008 resulting in higher inventory utilization. In fiscal 2009, we recorded an increase in the airtime inventory of Rs.3.16 million, resulting from the general slowdown in the advertisement spend by our clients in fiscal 2009. Expenditure Total expenditure decreased by 11.59% from Rs.8,470.38 million in fiscal 2008 to Rs.7,489.00 million in fiscal 2009. Cost of sports rights Cost of sports rights decreased by 6.9% from Rs.5,642.03 million in fiscal 2008 to Rs.5,252.54 million in fiscal 2009, primarily reflecting fewer significant sports events scheduled in fiscal 2009 compared to those scheduled in fiscal 2008. Expressed as a percentage of total income, cost of sports rights increased from 80.11% in fiscal 2008 to 79.46% in fiscal 2009. Marketing rights and telecast costs Marketing rights and telecast costs decreased by 64.84% from Rs.677.98 million in fiscal 2008 to Rs.238.38 million in fiscal 2009, reflecting primarily the higher number of BCCI events in 2008 as compared to fiscal 2009, for which telecast fees were paid for matches telecast on terrestrial television in India. Expressed as a percentage of total income, marketing rights and telecast costs decreased from 9.63% in fiscal 2008 to 3.61% in fiscal 2009. Production expenses Production expenses decreased by 10.93% from Rs.559.57 million in fiscal 2008 to Rs.498.43 million in fiscal 2009, primarily due to a decrease in event implementation and production services in fiscal 2009. In fiscal 2008 we provided event implementation services for major event such as the ICC Cricket World Cup 2007. Expressed as a percentage of total income, production expenses decreased from 7.94 % in fiscal 2008 to 7.54% in fiscal 2009. Payments to and provisions for employees Payments to and provision for employees increased by 21.54% from Rs.154.41 million in fiscal 2008 to Rs.187.67 million in fiscal 2009, due to an increase in the number of employees as a result of increase in personnel in the sports broadcast personnel as well as an increase in salary levels. Expressed as a percentage of total income, payments to and provision for employees increased from 2.19 % in fiscal 2008 to 2.84% in fiscal 2009. Administrative and other expenses

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Administrative and other expenses increased by 69.30% from Rs.341.33 million in fiscal 2008 to Rs.577.88 million in fiscal 2009 primarily due to administrative costs of in relation to our joint venture company Neo Sports Broadcast and foreign exchange fluctuation loss of Rs.236.55 million which was due to appreciation of the Indian Rupee as against the United States Dollar on payment of certain United States Dollar denominated foreign currency liabilities. Expressed as a percentage of total income, administrative and other expenses increased from 4.85% in fiscal 2008 to 8.74% in fiscal 2009. Marketing expenses Marketing expenses decreased by 31.90% from Rs.86.65 million in fiscal 2008 to Rs.59.01 million in fiscal 2009. The higher marketing expenses in fiscal 2008 primarily related to marketing efforts in our sports broadcasting company for its two channels Neo Cricket and Neo Sports and an increase in advertising and publicity campaigns for our Home Video business in fiscal 2008. Expressed as a percentage of total income, marketing expenses decreased from 1.23% in fiscal 2008 to 0.89% in fiscal 2009. Interest and other financial charges Interest and other financial charges increased by 111.58% from Rs.204.43 million in fiscal 2008 to Rs.432.53 million in fiscal 2009. Interest expense increased from Rs.155.73 million in fiscal 2008 to Rs.306.53 million in fiscal 2009, primarily due to interest paid on additional short term loans obtained by our Company and its overseas subsidiary NSI to fund fee payments and higher cost of bank guarantee commission which increased from Rs.45.24 million to Rs.62.55 million to provide bank guarantees in connection with the acquisition of rights. Expressed as a percentage of total income, interest and other financial charges increased from 2.90% in fiscal 2008 to 6.54% in fiscal 2009. Depreciation/ amortization (net) Depreciation/ amortization (net) decreased significantly from Rs.803.98 million in fiscal 2008 to Rs.242.56 million in fiscal 2009. In fiscal 2008 we had acquired rights for certain cricket events that were secured for a three year period and consequently capitalized and amortized over a period of three years in accordance with the terms of the relevant contract with 80.00% being charged in fiscal 2008 as compared to 10% of the rights cost being charged in fiscal 2009 . Expressed as a percentage of total income, depreciations / amortization (net) decreased from 11.42% in fiscal 2008 to 3.67% in fiscal 2009. Provision for taxation Total tax expenses decreased by 68.87% from Rs.87.21 million in fiscal 2008 to Rs.27.15 million in fiscal 2009. The decline was primarily due to deferred tax liability of Rs.60.93million in fiscal 2008 translated to deferred tax assets of Rs.22.35 million in fiscal year 2009 as a result of timing differences arising due to reduction in depreciations of fixed assets due to the impact of difference in treatment of movie distribution rights in the books and in income tax. We also recognized short provision for income taxes for earlier years of Rs.28.39 million and Rs.1.39 million in fiscal 2008 and 2009, respectively. We incurred an increase in current taxes (net of MAT credit) from Rs.22.50 million in fiscal 2008 to Rs.45.49 million in fiscal 2009 because in fiscal 2007-08 company was falling under MAT provision (11.33%) and in fiscal year 2009 normal tax rate (33.99%) were applicable to our Company. Loss after taxes before restatement adjustments Loss after taxes before restatement adjustments was Rs.1,514.43 million and Rs.905.72 million in fiscal 2008 and 2009, respectively. Net loss after restatement adjustments Net loss after restated adjustments was Rs.1,081.96 million and Rs.1,317.09 million in fiscal 2008 and 2009, respectively. For further information restatement adjustments applied in fiscal 2008 and 2009, see “Results of Operations – Restatement Adjustments” above. Fiscal 2008 compared to Fiscal 2007


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Sports Business

Fiscal 2007

• Events under the BCCI contract: Part of the England tour of India in April 2006, which included five ODIs; West Indies tour of India in January and February 2007, which included four ODIs; Sri Lanka tour of India in January and February 2007, which included four ODIs; and various cricket matches played under the BCCI domestic season 2008-2009.

• Events under the ICC marketing agreement: We marketed the television and sponsorship rights and event implementation services for the ICC Cricket World Cup 2007 held in West Indies that commenced in March 2007. We also marketed television and sponsorship rights and event implementation services for the ICC Champions Trophy 2006 held in India in October 2006.

• Events under the BCB contract: Zimbabwe tour of Bangladesh in November and December 2006, which

included five ODIs and one T20 format match.

• Events under the PCB contract: West Indies tour of Pakistan in November and December 2006, which included three test matches and five ODIs.

• Events under CK contract: Bangladesh tour of Kenya in August 2006, which included three ODIs.

Fiscal 2008

• Events under the BCCI contract: Australia tour of India in October 2007, which included seven ODIs and one 20/20 format match; Pakistan tour of India in November and December 2007, which included three test matches and five ODIs; South Africa tour of India in March 2008, which included one test match; BCCI Overseas Venue Series in June and July 2007, which included three ODIs between India and South Africa in Ireland and ODI between India and Pakistan in Scotland; and various cricket matches played under the BCCI domestic season 2007-2008.

• Events under the ICC marketing agreement: We marketed the television and sponsorship rights and event implementation services for the ICC Cricket World Cup 2007 held in West Indies that concluded in April 2007.

• Events under the BCB contract: India tour of Bangladesh in May 2007, which included two tests and three

ODIs; and South Africa tour of Bangladesh in February 2008, which included two test matches and three ODIs.

• Premier league: We sold the mobile and internet clip rights for the English Premier League in 77 countries

for the Barclays Premier League season 2007 - 2008.

Sports Broadcast Fiscal 2007

Neo Sports Broadcast commenced the telecast of Neo Cricket and Neo Sports channels in October 2006. In August 2006, Neo Sports Broadcast entered into an distribution with a leading bouquet for the distribution of these two channels in India. Neo Sports Broadcast also commenced the international distribution of these two channels in January 2007, In fiscal 2007, Neo Sports Broadcast telecast the following live cricket matches on Neo Cricket: all BCCI and BCB events as described above. These rights were licensed to Neo Sports Broadcast by our Company for BCCI events and NSI for BCB events. In addition, Neo Sports telecast various other content, including the German Bundesliga football league, select ATP Tour Men’s tennis events and the V8 Supercars Championships among others in this period. Fiscal 2008

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In fiscal 2008, Neo Sports Broadcast telecast the following live cricket matches on Neo Cricket: all BCCI and BCB events as described above. These rights were licensed to Neo Sports Broadcast by our Company in case of BCCI events and NSI in case of BCB events. In addition, Neo Sports telecast various other content, including German Bundesliga football league, Italian Serie A football league, the US PGA TOUR, NASCAR, WTA TOUR Women’s Tennis and ITF Davis Cup and Fed Cup events among others in this period. In June 2007, we terminated our distribution arrangement with a leading distribution bouquet and in October 2007 we set up our in-house distribution team to distribute the channels in India. Television Division Fiscal 2007 In fiscal 2007, we marketed advertisement airtime for 19 programs on various channels, including the following significant programs: Programs acquired by us: My Dear Bootham, Yathra, Sagaram and Ishtam. Programs produced by us: Hutch Andhra Super Star, Amma Nagamma, Manassariyathe, Kanga Durga, Nagamma and Suryaa. Fiscal 2008 In fiscal 2008, we marketed advertisement airtime for 21 programs on various channels, including the following significant programs: Programs acquired by us: Mastana Mastana, Aanandam, Muthyala Muggu, Samsaram, Dharma Yudham and My Dear Bhootam. Programs produced by us: Amma Nagamma, Magal, Surya, and Hutch Andhra Super Star. Filmed Entertainment Division In fiscal 2007, we produced and released the Hindi feature film Sarhad Paar. We were also involved in the distribution of the following Hindi feature films in India: Zindagi Rocks, Woh Lamhe, Killer, Kachi Sadak, Gangster and Basic Instinct (Hindi). In fiscal 2008, we acquired all global commercial rights (excluding music rights) for the films Naqaab, Raqeeb and Chhodon Na Yaar. We also sold television rights of the film Sarhad Paar in fiscal 2008. Income Total income increased by 47.89% from Rs.4,762.51 million in fiscal 2007 to Rs.7,043.16 million in fiscal 2008. Sales and Services Airtime sales (net) Air time sales (net) decreased by 15.73% from Rs.973.19 million in fiscal 2007 to Rs.820.09 million in fiscal 2008. Airtime sales (net) were higher in fiscal 2007 primarily due to significant airtime sales (net) generated from the ICC Champions Trophy 2006 held in October 2006 and ICC cricket world Cup 2007. Airtime sales (net) contributed 20.43% and 11.64% of our total income in fiscal 2007 and 2008, respectively. Income from sports rights Income from sports rights increased by 82.81% from Rs.2,083.16 million in fiscal 2007 to Rs.3,808.29 million in fiscal 2008 primarily on account of more matches being played under the BCCI contract in fiscal 2008. In addition, the India - Pakistan series in fiscal 2008 was one of the most valued series under the BCCI contract and commanded the highest premium in the entire contract. Income from sports rights contributed 43.74% and 54.07% of our total income in fiscal 2007 and 2008, respectively. Ad sales broadcasting Ad sales broadcasting increased by 180.62% from Rs.389.23 million in fiscal 2007 to Rs.1,092.24 million in fiscal 2008. Ad sales broadcasting increased significantly in fiscal 2008 as a result of more matches that were telecast under the BCCI contract as compared to fiscal 2007, including major events such as the India - Pakistan series and the India – Australia series. Ad sales broadcasting contributed 8.17% and 15.51% of our total income in fiscal 2007 and 2008, respectively. Distribution revenue broadcasting

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Distribution revenue broadcasting decreased by 28.49% from Rs.335.50 million in fiscal 2007 to Rs.239.92 million in fiscal 2008. In fiscal 2008 we set up our own in-house distribution team whereas in fiscal 2007 we had outsourced the distribution. Distribution revenue broadcasting contributed 7.04% and 3.41% of our total income in fiscal 2007 and 2008, respectively. Production fees Production fees increased by 45.32% from Rs.375.26 million in fiscal 2007 to Rs.545.33 million in fiscal 2008 primarily due to increased television production of BCCI and BCB events in fiscal 2008.. Production fees contributed 7.88% and 7.74% of our total income in fiscal 2007 and 2008, respectively. Sports services income Sports services income decreased by 39.86% from Rs.272.96 million in fiscal 2007 to Rs.164.16 million in fiscal 2008. Sports services income was lower in fiscal 2008 as the ICC marketing rights contract ended in April 2008 and major events such as the ICC Champions Trophy 2006 and the ICC Cricket World Cup 2007 took place in fiscal 2007. Sports services income contributed 5.73% and 2.33% of our total income in fiscal 2007 and 2008, respectively. Income from film rights (acquired) Income from film rights (acquired) decreased by 6.57% from Rs.74.29 million in fiscal 2007 to Rs.69.41 million in fiscal 2008. While we distributed six films in fiscal 2007, we distributed only one film in fiscal 2008. Income from film rights (acquired) contributed 1.56% and 0.99% of our total income in fiscal 2007 and 2008, respectively. Income from motion picture produced Income from motion picture produced increased by 16.43% from Rs.12.11 million in fiscal 2007 to Rs.14.10 million in fiscal 2008, primarily resulting from the sale of distribution and music rights in fiscal 2007 and theatrical distribution for the film Sarhad Paar in fiscal 2008. Income from motion picture produced contributed 0.25% and 0.20% of our total income in fiscal 2007 and 2008, respectively. Income from assignment of television program rights Income from assignment of television program rights decreased by 51.79% from Rs.1.95 million in fiscal 2007 to Rs.0.94 million in fiscal 2008, primarily due to lower income from syndication of our television program library. Income from assignment of television program rights contributed 0.04% and 0.01% of our total income in fiscal 2007 and 2008, respectively. Disk rental income We commenced the video distribution business in March 2008 with the launch of two stores. Income from disk rental income in fiscal 2008 was Rs.0.55 million, and contributed 0.01% of our total income in fiscal 2008. Other income Other income increased by 26.40% from Rs.234.02 million in fiscal 2007 to Rs.295.81million in fiscal 2008 primarily due to an increase in interest on fixed deposits and loans, offset in part by a decrease in dividends from mutual funds. Other income contributed 4.91% and 4.20% of our total income in fiscal 2007 and 2008, respectively. Interest on fixed deposits and loans increased from Rs.44.21 million in fiscal 2007 to Rs.169.90 million in fiscal 2008 due to an increase in interest earned from security margin placed with banks and financial institutions. In addition, in fiscal 2008 we recorded profit on assignment of satellite television broadcasting, terrestrial television and other rights of Rs.50.10 million relating to the feature film Sarhad Paar, while in fiscal 2007, we did not have any such income. Income from dividends of mutual funds however decreased from Rs.59.93 million in fiscal 2007 to Rs.4.07 million in fiscal 2008. Miscellaneous income declined from Rs.7.96 million in fiscal 2007 to Rs.5.86 million in fiscal 2008. In fiscal 2007, this comprised arbitration settlement award with sports federation and income from insurance claim in our joint venture company Neo Sports Broadcast for cancellation of a match in both fiscal 2008 and fiscal 2007. Increase/ decrease in airtime inventory In fiscal 2007, we recorded an increase in airtime inventory of Rs.10.84 million, resulting from increase in banked

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inventory of air time for programs being telecast. In fiscal 2008, we recorded a decrease in airtime inventory of Rs.7.68 million due to an increase in the number of programs being telecast in fiscal 2008 resulting in higher inventory utilization. Expenditure Total expenditure increased by 54.97% from Rs.5,465.67 million in fiscal 2007 to Rs.8,470.38 million in fiscal 2008. Cost of sports rights Cost of sports rights increased by 72.39% from Rs.3.272.77 million in fiscal 2007 to Rs.5,642.03 million in fiscal 2008, primarily resulting from an increase in the number of major sports events that were scheduled in fiscal 2008 compared to those scheduled in fiscal 2007. Expressed as a percentage of total income, cost of sports rights increased from 68.72% in fiscal 2007 to 80.11% in fiscal 2008. Marketing rights and telecast costs Marketing rights and telecast costs decreased by 25.28% from Rs.907.40 million in fiscal 2007 to Rs.677.98 million in fiscal 2008. In fiscal 2007, our Company incurred higher telecast costs for telecast of ICC event matches on terrestrial broadcast channel in India for which telecast fees are paid. Expressed as a percentage of total income, marketing rights and telecast costs decreased from 19.05% in fiscal 2007 to 9.63% in fiscal 2008. Production expenses Production expenses increased by 38.06% from Rs.405.30 million in fiscal 2007 to Rs.559.57 million in fiscal 2008, primarily due to increased television production of BCCI and BCB events in fiscal 2008. Expressed as a percentage of total income, production expenses decreased from 8.51% in fiscal 2007 to 7.94% in fiscal 2008. Payments to and provisions for employees Payments to and provision for employees increased by 57.71% from Rs.97.91 million in fiscal 2007 to Rs.154.41 million in fiscal 2008 due to full year of costs from our joint venture company Neo Sports Broadcast Expressed as a percentage of total income, payments to and provision for employees increased from 2.06% in fiscal 2007 to 2.19% in fiscal 2008. Administrative and other expenses

Administrative and other expenses remained relatively steady at Rs.341.33 million in fiscal 2008, compared to Rs.351.21million in fiscal 2007. The cost for fiscal 2008 included full year of operation of Neo Sports Broadcast, where as fiscal 2007 had only part of the year. This contributed to higher operating expenses such as communication charges, rents/rates & taxes, legal and professional fees. The increase in cost of our broadcast business was offset by lower charge on account of sundry /old balances written off which was a significant amount in fiscal 2007. Expressed as a percentage of total income, administrative and other expenses decreased from 7.37% in fiscal 2007 to 4.85% in fiscal 2008. Marketing expenses

Marketing expenses decreased by 22.18% from Rs.111.34 million in fiscal 2007 to Rs.86.65 million in fiscal 2008 primarily as in fiscal 2007 we incurred higher advertising and publicity expenses in connection with launch of Neo sports broadcast channels Neo Cricket and Neo Sports. Hence advertising and publicity expenses reduced from Rs.81.31 million in fiscal 2007 to Rs.70.50 million in fiscal 2008. Expressed as a percentage of total income, marketing expenses decreased from 2.34% in fiscal 2007 to 1.23% in fiscal 2008. Interest and other financial charges Interest and other financial charges increased by 9.54% from Rs.186.63 million in fiscal 2007 to Rs.204.43 million in fiscal 2008 primarily due to an increase bank guarantee commission and charges on account of various bank guarantee given to sports federations in connection with acquisition of media rights and on account of short term loans taken. Total secured loans as of March 31, 2007 and 2008 was Rs.1,541.5 million and Rs.780.84 million, respectively. Expressed as a percentage of total income, interest and other financial charges decreased from 3.92% in fiscal 2007 to 2.90% in fiscal 2008.

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Depreciation/ amortization (net)

Depreciation/ amortization (net) increased from Rs.133.11 million in fiscal 2007 to Rs.803.98 million in fiscal 2008. In fiscal 2008 we had acquired rights for certain cricket events that were secured for a three year period and consequently capitalized and amortized over a period of three years in accordance with the terms of the relevant contract with 80.00% being charged in fiscal 2008 in accordance with our policies. Expressed as a percentage of total income, depreciation / amortization (net) increased from 2.79% in fiscal 2007 to 11.41% in fiscal 2008.

Provision for taxes Total tax expenses increased by 59.64% from Rs.54.63 million in fiscal 2007 to Rs.87.21 million in fiscal 2008. The increase was mainly due to increase in deferred tax liability of Rs.60.93 million in fiscal 2008 as compared to deferred tax liability of Rs.22.97 million in fiscal year 2007, respectively as a result of difference between the approach of treating movie distribution rights acquired during the year and capitalized in the books by claiming depreciation and taking full deduction on income tax. In fiscal 2007 and 2008, current taxes was Rs.18.21 million and Rs.22.50 million, respectively mainly due to increase in income. We also recognized short provision for income taxes for earlier years of Rs.12.25 million and Rs.28.39 million in fiscal 2007 and 2008, respectively. Loss after taxes before restatement adjustments Loss after taxes before restatement adjustments was Rs.757.79million and Rs.1,514.43 million in fiscal 2007 and 2008, respectively. Net loss after restatement adjustments Net loss after restated adjustments was Rs.797.11 million and Rs.1,081.96 million in fiscal 2007 and 2008, respectively. For further information on restatement adjustments applicable in fiscal 2007 and 2008, see “Results of Operations – Restatement Adjustments” above. Liquidity and Capital Resources Liquidity

Historically, our primary liquidity requirements have been to finance our working capital needs, for the acquisition of media rights relating to sports events and for producing and marketing motion pictures and television programs. To fund these costs, we have relied on equity contributions, including issuance of preferred stock, short term and long term borrowings including working capital financing and cash flows from operating activities.

The table below summarizes our cash flows for the periods indicated: (Rs. In millions)

Particulars Year Ended March 31,

2007 2008 2009 2010

Net Cash from / (used in) Operating Activities (496.39) (1,677.13) (1,299.31) (1,110.03)Net Cash from / (used in) Investing Activities (2,457.39) (690.18) 57.78 (452.30)Net Cash from / (used in) Financing Activities 6,376.93 (596.38) 2,323.10 3,416.53Net Increase / (Decrease) in Cash and Cash Equivalents 3,423.15 (2,963.69) 1,081.57 1,854.20

Operating activities

Net cash used in operating activities in fiscal 2010 was Rs.1,110.03 million, while net loss before taxation after restatement adjustments was Rs.1,279.24 million. The difference was primarily attributable to a increase in sundry debtors of Rs.2,061.72 million, increase in loans and advances of Rs.345.90 million and adjustment for interest income from fixed deposits of Rs.102.88 million. This was partly offset by an increase in current liabilities of Rs.2,233.51 million, adjustment for interest expense of Rs.309.79 million relating to interest on term loan and bank guarantee commissions, depreciation/ amortization (net) of Rs.134.19 million and provision for doubtful debts (net) of Rs.57.76 million .

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Net cash used in operating activities in fiscal 2009 was Rs.1,299.31 million, while net loss before taxation after restatement adjustments was Rs.1,256.62 million. The difference was primarily attributable to an increase in sundry debtors of Rs.1,113.94 million, current liabilities of Rs.97.68 million, adjustment for interest income from fixed deposits of Rs.127.13 million, write back of credit balances no longer payable of Rs.58.65 million and income taxes (including fringe benefit taxes) of Rs.92.61 million. These were offset in part by a decrease in loans and advances of Rs 690.36 million, increase in current liabilities by Rs 97.68 million, adjustment for interest expense of Rs 309.45 million and depreciation/amortization (net) of Rs 182.39 million.

Net cash used in operating activities in fiscal 2008 was Rs.1,677.13 million, while net loss before taxation after restatement adjustments was Rs.1,037.38 million. The difference was primarily attributable to an increase in sundry debtors of Rs.1,087.03 million, increase in loans and advances by Rs 327.85 million, adjustment for interest income from fixed deposits of Rs.169.90 million and income taxes (including fringe benefit taxes) of Rs.136.57 million. These were offset in part by adjustment for depreciation/ amortization of Rs.864.90 million, interest expense of Rs.105.00 million and increase in current liabilities of Rs.93.88 million.

Net cash used in operating activities in fiscal 2007 was Rs.496.39 million, while net loss before taxation after restatement adjustments was Rs.759.25 million. The difference was primarily attributable to an increase in loans and advances of Rs.414.15 million, income taxes (including fringe benefit taxes) of Rs.90.24 million, adjustment for dividend income of Rs.59.93 million and interest income of Rs.44.21 million. This was partly offset by an increase in current liabilities of Rs.257.71 million, a decrease in sundry debtors of Rs.221.88 million, adjustment for interest expense of Rs.147.43 million, depreciation/amortization (net) of Rs 144.77 million and bad debts written-off Rs 99.61 million.

Investing Activities

Net cash used in investing activities fiscal 2010 was Rs.452.30 million, resulting from purchase of current investments in mutual funds of Rs.4,007.09 million and purchase for acquisition of fixed assets (after adjustment of increase/ decrease in capital work in progress) of Rs.42.55 million, which was partly offset by the sale of current investments in mutual funds of Rs 3,499.56 million, interest received of Rs.50.91million and the sale of fixed assets of Rs.43.37 million. Net cash from investing activities in fiscal 2009 was Rs.57.78 million, resulting from interest received of Rs.96.98 million, which was partly offset by purchase of fixed assets and intangible assets (after adjustment of increase/ decrease in capital work in progress) of Rs.47.57 million. Net cash used in investing activities in fiscal 2008 was Rs.690.18 million, resulting from investment in purchase of current investments in mutual funds of Rs.1,083.38 million and purchase for acquisition of fixed assets (after adjustment of increase/ decrease in capital work in progress) of Rs.1,074.47 million. This was partly offset by the sale of current investments in mutual funds of Rs 1,216.73 million, interest received of Rs.183.98 million and sale of fixed assets of Rs.62.89 million. Net cash used in investing activities in fiscal 2007 was Rs.2,457.39 million, resulting from purchase of current investments in mutual fund of Rs 6,500.02 million, investment in joint venture of Rs.2,279.70 million and purchase for acquisition of fixed assets (after adjustment of increase/ decrease in capital work in progress) of Rs.133.93 million. This was offset in part by the sale of current investments in mutual funds of Rs.6,366.35 million, dividend received of Rs.59.93 million and interest received of Rs.29.98 million. Financing Activities Net cash from financing activities for fiscal 2010 was Rs.3,416.53 million, primarily relating to short term loans from banks of Rs.3,282.92 million, proceeds from unsecured loans of Rs 2,317.00 million, proceeds from the issuance of shares (including securities premium) of Rs.1,262.98 million (which excludes certain Equity Shares issued on conversion of Compulsorily Convertible Preference Shares and Compulsorily Convertible Debentures) and preference shares and equity warrants issued by jointly controlled entity of Rs.311.65 million. This was offset in part by repayment of short term loans from banks of Rs.2,526.37 million, repayment of unsecured loans of Rs.996.01 million and interest payments of Rs.210.77 million. Net cash from financing activities in fiscal 2009 was Rs.2,323.10 million, primarily relating to proceeds from short term loans from banks of Rs.2,526.37 million and proceeds from unsecured loans of Rs.935.76 million. These were offset in part by repayment of short term loans from banks of Rs.740.48 million, interest payments of Rs.314.97 million and repayment of unsecured loans of Rs.99.92 million.

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Net cash used in financing activities in fiscal 2008 was Rs.596.38 million, primarily relating to repayment of short term loans from banks of Rs.1,362.78 million and interest payments of Rs.106.39 million. These were offset in part by proceeds from short term loans from banks of Rs.620.57 million and proceeds from unsecured loans of Rs.272.42 million. Net cash from financing activities in fiscal 2007 was Rs.6,376.93 million, primarily relating to proceeds from unsecured loans of Rs.5,464.90 million, proceeds from short term loans from banks of Rs.1,350.00 million and proceeds from issuance of shares (including securities premium) of Rs.55.20 million. These were offset in part by repayment of short term loans from banks of Rs.252.34 million, interest payments of Rs.140.03 million, expenses relating to the issue of shares of Rs.82.61 million, repayment of unsecured loans of Rs.37.98 million and dividend payments of Rs.21.19 million. Indebtedness and Contractual Obligations

The following table provides certain information relating to our total indebtedness excluding working capital facilities as of March 31, 2010:

(Rs. in millions) Payment due by Total indebtedness

as of March 31, 2010

Less than 1 year 1-3 years 3-5 years

Not Stipulated

Secured 3,283.06 3,283.06 Unsecured 2,477.21 2351.04 126.17 In addition, we rely on short-term working capital facilities to finance a portion of our operations. As of March 31, 2010, we had outstanding working capital loans of Rs.33.46 million.

As of March 31, 2010 we had outstanding secured debt of Rs.3,316.52 million and unsecured debt of Rs.2,477.21 million, and we expect to incur significant additional indebtedness in the future, including in connection with the development of our proposed projects. Most of our borrowings are secured by our immovable and other assets. For further information relating to our indebtedness as of July 31 2010 See section “Financial Indebtedness” on page 173 and Annexure of our restated consolidated financial statements beginning on page 142 of this Draft Red Herring Prospectus for additional information relating to our borrowings.

Some of our financing agreements also include various conditions and covenants that require us to obtain lender consents prior to carrying out certain activities and entering into certain transactions. Failure to meet these conditions or obtain these consents could have significant consequences on our business and operations. Specifically, under some of our financing agreements, we require, and may be unable to obtain, consents from the relevant lenders to, among others, incur additional debt, issue equity, change our capital structure, increase or modify our capital expenditure plans, undertake any expansion, provide additional guarantees, change our management structure, merge with or acquire other companies, or distribute dividends under certain circumstances, whether or not there is any failure by us to comply with the other terms of such agreements. Our financing agreements also typically contain certain financial covenants including the requirement to maintain, among others, specified financial ratios. Such covenants may restrict or delay certain actions or initiatives that we may propose to take from time to time.

We may have in the past failed to comply with certain covenants and conditions in our loan documents. A failure to observe such covenants or conditions under our financing arrangements or to obtain necessary consents required thereunder may lead to the termination of our credit facilities, acceleration of all amounts due under such facilities and the enforcement of any security provided. Any acceleration of amounts due under such facilities may also trigger cross default provisions under our other financing agreements. If the obligations under any of our financing documents are accelerated, we may have to dedicate a substantial portion of our cash flow from operations to make payments under such financing documents, thereby reducing the availability of cash for our working capital requirements and other general corporate purposes. Further, during any period in which we are in default, we may be unable to raise, or face difficulties raising, further financing.

Capital Expenditures Our business is not capital intensive and hence most of our capital expenditure in the past related to our joint venture company Neo Sports Broadcast during the launch of its two channels Neo Cricket and Neo Sports in October 2006. Our proposed capital expenditures in the future would also be in connection with our broadcasting business at the

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stage of expansion of its distribution in North America and launch of two new channels, Neo Cinema and Neo Zindagi. For further information on our capital outlay plans, see "Objects of the Issue" on page 41. Related Party Transactions We have entered into and expect to enter into transactions with a number of related parties. For further information regarding our related party transactions, see the section “Related Party Transactions” and Schedule of our restated consolidated financial statements beginning on page 142 of this Draft Red Herring Prospectus. Qualitative Disclosure about Market Risks Foreign currency risk

Changes in currency exchange rates influence our results of operations. A portion of our revenues, include income from media rights and license fees, is denominated in currencies other than Indian rupees, most significantly the U.S. dollar. Similarly, a significant portion of our expenses, including the cost of acquisition of media rights under various sports rights contracts, part of our production expenses, as well as other operating expenses in connection with our international operations are denominated in currencies other than Indian rupees, most significantly the U.S. dollar and Singapore dollar. Although our business operations provide a kind of natural hedge to our foreign currency exposure, significant fluctuations in currency exchange rates between the Indian rupee and these currencies and inter-se such currencies may adversely affect our results of operations.

In addition, our foreign subsidiaries from time to time borrow in foreign currencies particularly in U.S. dollar. We expect that some portion of our future indebtedness will continue to be denominated in foreign currencies. Depreciation of the Indian rupee against the U.S. dollar and other foreign currencies may adversely affect our results of operations by increasing the cost of financing any debt denominated in foreign currency.

Furthermore, the financial reporting currency of our Company and its Indian subsidiaries is Indian rupees, while the financial reporting currency of our international subsidiaries is in various local currencies of countries that they operate in, mainly in United States Dollar. Our foreign currency exchange risks therefore arise from the mismatch between our financial reporting currencies, currency of a portion of our revenue and the currency of a significant portion of our expenses and our indebtedness, as well as timing differences between receipts and payments which could result in an increase of any such mismatch.

We have so far not entered into hedging transactions to minimize our currency exchange risks.

Interest rate risk Changes in interest rates could significantly affect our financial condition and results of operations. As of March 31, 2010, all our borrowings were at fixed rates of interest. If the interest rates for future borrowings increase significantly, our cost of servicing such debt will increase. This may adversely impact our results of operations, planned expenditures and cash flows. Known Trends or Uncertainties Other than as described in this Draft Red Herring Prospectus, particularly in the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, to our knowledge, there are no trends or uncertainties that have or had or are expected to have a material adverse impact on our income from continuing operations. Unusual or Infrequent Events or Transactions Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no events or transactions that may be described as “unusual” or “infrequent”. Seasonality of Business While we do not consider our business and operations are subject to seasonal variations, a significant majority of our revenues are derived from contracts with BCCI, BCB and other South Asian federations, where the principal season for cricket matches are between the months of October and March. Our revenues and associated expenses from such sports events are recognized as and when the relevant events take place, and consequently a significant

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majority of our revenues and expenses are reflected in the second half of the fiscal year. Future Relationship between Costs and Income Other than as described in the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages xii and 143, respectively, of this Draft Red Herring Prospectus, to our knowledge, there are no known factors which will have a material adverse impact on our operations and finances. Significant Dependence on a Single or Few Customers and Contracts We currently depend on a limited number of customers and contracts for a substantial majority of our revenues, and the loss of any significant customer or contract may adversely affect our results of operations. A significant part of total income was derived from media rights and license fees received under contractual arrangements with Neo Sports Broadcast. Our sports rights management business is dependent on our ability to acquire the media rights and other commercial rights relating to a limited number of cricket or other popular sports events. We derive a significant proportion of our revenues in our sports rights management business from a limited number of rights management agreements and there can be no assurance that we will be able to exploit the rights granted to us under such agreements or that such agreements will not be terminated in the future. Certain marquee sports events have a considerably higher value than others and our dependence on revenue generated from rights management agreements for such events may be significant. For example, a significant part of total income in fiscal 2009 and fiscal 2010, respectively, related to the BCCI Agreement. We are therefore significantly dependent on the BCCI Agreement and continuing relationship with BCCI in the future. Inflation In recent years, although India has experienced fluctuation in inflation rates, inflation has not had material impact on our business and results of operations. Competitive Conditions We expect competition in our industry from existing and potential competitors to intensify. For further information relating to competitive conditions and our competitors, see “Risk Factors” and “Business” beginning on pages xii and 78, respectively. Significant developments after March 31, 2010 that may affect our future results of operations Except as stated in this Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since the date of the last financial statements as disclosed in this Draft Red Herring Prospectus which materially and adversely affect or are likely to affect, the operations or profitability of our Company, or the value of our assets or our ability to pay our material liabilities within the next twelve months. Except as stated in this Draft Red Herring Prospectus, there is no development subsequent to March 31, 2010 that we believe is expected to have a material impact on the reserves, profits, earnings per share and book value of our Company.

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Recent Accounting Pronouncements There are no recent accounting pronouncements that are expected to impact our accounting policies or the manner of our financial reporting. However, the Institute of Chartered Accountants of India has announced a road map for the adoption of, and convergence of Indian GAAP with, IFRS, pursuant to which all public companies in India, such as us, will be required to prepare their annual and interim financial statements under IFRS beginning with financial year commencing April 1, 2014. Because there is significant lack of clarity on the adoption of and convergence with IFRS and there is not yet a significant body of established practice on which to draw in forming judgments regarding its implementation and application, we have not determined with any degree of certainty the impact that such adoption will have on our financial reporting.

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Financial Indebtedness Company Secured Loans The following are the outstanding secured loans taken by our Company as on August 31, 2010:

Name of the Lender Nature of Borrowing Amount Sanctioned

(Rs. in millions)

Principal amount

outstanding as on August 31,

2010 (Rs. in millions)

Rate of Interest

Tenure

Security

Punjab National Bank Short term loan vide sanction letter dated September 24, 2009

2,250

1,918.96 BPLR +1% . Till June 30, 2010

Please refer to Note 1

Note 1 Primary 1. First charge on advertisement revenues from India-Australia, India - Sri Lanka and India-South Africa, series of matches to be played between October

2009 - February 2010. 2. Insurance policies have been taken by our Company for the one day matches under the aforesaid series. Such insurance policies have been assigned in

favour of certain other bankers for bank guarantee facility and such assignment is required to be extended to Punjab National Bank also. 3. Second charge on the current assets of our Company excluding the receivables of the matches for which the loan is sanctioned.

Collateral 1. Mortgage of block assets immovable properties: First pari passu charge (along with other guarantee issuing banks and short term lenders) on the

property situated at Nimbus Center, Andheri, Mumbai. 2. Pledge of shares: Pledge of shares on first pari passu basis owned by Promoters in our Company and Neo Sports Broadcast already pledged with other

guarantee issuing banks.

Others

The tenure of the term loan expired on June 30, 2010. Approximately, Rs 1,400 million remained outstanding on the said loan as on Septemebr 24, 2010. Punjab National Bank vide its letter dated September 24, 2010 has rolled over the outstanding amounts for a period of three months ending December 23, 2010. The interest payable on the outstanding amount shall be charged at base rate plus 6.75% while the interest payable under the said loan was BPLR plus 1%. All the other terms of the said loan (including security) apply mutatis mutandis to the roll over facility granted by Punjab National Bank on September 24, 2010.

Bank Guarantees The following are the bank guarantees taken by our Company as on August 31, 2010:

Name of the Guarantor Nature of Facility Amount Sanctioned

(Rs. in millions)

Rate of Interest

Tenure

Security

Union Bank of India Financial bank guarantee in favour of BCCI vide sanction letter dated January 14, 2010 with respect to the media rights agreement dated October 2009 executed between our Company and BCCI Bank guarantee facility agreement dated January 15, 2010 was also entered into between Union Bank of India, Company, and Nimbus Sports International Pte. Ltd. and Neo Sports Broadcast.

7,500 Commission of 1.50% per annum or commission charged by Punjab National Bank whichever is higher.

Effective from April 1, 2010 to March 31, 2014


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Name of the Guarantor Nature of Facility Amount Sanctioned

(Rs. in millions)

Rate of Interest

Tenure

Security

Punjab National Bank Financial bank guarantee vide sanction letter dated January 14, 2010 in favour of BCCI with respect to the media rights agreement dated October 2009. Bank guarantee facility agreement dated January 15, 2010 was also entered into between Punjab National Bank, Company, Nimbus Sports International Pte. Ltd. and Neo Sports Broadcast.

7,500 Commission of 1.50% + AST on bank guarantee with reducing liability every year.

Effective from April 1, 2010 to March 31, 2014


Indian Bank One time bank guarantee vide sanction letter dated January 11, 2010.

5,000 1.50% per annum Effective from April 1, 2010 to March 31, 2014


Oriental Bank Of Commerce

Bank guarantee facility vide sanction letter dated June 23, 2008

62.08 Commission and other charges shall be as per the bank’s guidelines

Counter guarantee to be given by our Company and lien on deposits. For details on the terms and conditions of the Bank Guarantee, please refer to Note 4 below.

Note 1 Primary 1. First pari passu charge on receivables of Neo Sports Broadcast and Nimbus Sports International Pte. Ltd. (“NSI”) comprising advertisement revenues

and distribution revenues; 2. Contracts entered into by our Company for sale of airtime inventory and distribution revenue to be assigned in favour of the lenders; 3. First pari passu hypothecation charge on the entire receivables and other current assets of our Company.

Collateral 1. First pari passu charge on fixed assets of Neo Sports Broadcast; 2. Second pari passu charge on office property of Nimbus Centre-Andheri, Mumbai valued at Rs. 680 million; 3. Existing pledge with Punjab National Bank on Promoters’ shareholding (viz, 17,245,102 Equity Shares) in our Company to be extended to Union Bank

of India. The bank reserves the right to keep these Equity Shares till March 31, 2014 under respective lien on pari passu basis with other lenders; 4. Irrevocable power of attorney from our Company, Neo Sports Broadcast, NSI in favour of the lenders to sub-license the broadcasting rights to any

other channel in case of default.

Guarantee 1. Personal guarantee by Mr. Harish Kanayalal Thawani; 2. Corporate guarantee given by our Company, Neo Sports Broadcast, NSI, Paramount, Zenith Sports Private Limited, Nimbus Communications

Worldwide Limited (Mauritius) and Nimbus Communications Limited, BVI. Remark

As on the date of the filing of the Draft Red Herring Prospectus, the amount of additional margin money to be paid to the bank as per the sanction letter stands outstanding. However, Union Bank of India vide letter dated September 29, 2010 has extended the time for providing additional margin of 4% on Rs. 7,500 million bank guarantee from April 30, 2010 to December 31, 2010

Note 2 Primary 1. First pari passu charge on all current assets of our Company; 2. First pari passu charge on revenues arising from the sale/ licensing of BCCI media rights agreement for events taking place during the period April 1,

2010 to March 31, 2014 by way of: (i) advertisement revenues generated on Neo Cricket from telecast of international matches-revenue (ii) domestic distribution revenues of Neo Sports-revenue (iii) international licensing revenues from licensing of media rights to international broadcasters and other licenses-revenue (iv) revenue generated from international distribution of Neo Cricket revenue;

3. First pari passu charge on all fixed assets of our Company;

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4. First pari passu charge on all fixed and current assets of Neo Sports Broadcast. Collateral 1. Hypothecation/ mortgage of block assets/ immovable properties situated at Nimbus Center- Andheri, Mumbai; 2. Personal guarantee by Mr. Harish Kanayalal Thawani; 3. Pledge of 17,245,102 Equity Shares of the Promoters of our Company; 4. Corporate guarantee by Neo Sports Broadcast, Zenith Sports Private Limited and Nimbus Sports International Pte. Ltd.

Other terms and conditions 1. Our Company shall keep the bank informed of the happening of any event which is likely to have an impact on the profit or business and more

particularly, if the monthly production or sale or profit is likely to be substantially lower than already indicated to the bank. Our Company shall also inform with reasons and the remedial steps proposed to be taken in that regard;

2. Our Company shall not pay any consideration by way of commission, brokerage, fees or in any other form to guarantors directly or indirectly; 3. Our Company shall not sell, assign, mortgage or otherwise dispose off any of the fixed assets charged to the bank without prior permission of the bank

in writing. Remark

As on the date of the filing of the Draft Red Herring Prospectus, the amount of additional margin money to be paid to the bank as per the sanction letter stands outstanding.

Note 3 Primary 1. Pari Passu charge on the revenues arising from the sales/ licensing of BCCI Media Rights for events taking place between April 1, 2010 to March 31,

2014, such as (i) advertisement revenues to be generated on Neo Cricket from telecast of international matches, (ii) domestic distribution revenues of Neo Sports Broadcast , (iii) international licensing revenues from licensing of media rights including worldwide radio rights and mobile rights to international broadcasters and other licensees, (iv) revenues from international distribution of Neo Cricket.

Collateral 1. Second pari passu charge on Nimbus Center, office premises owned by our Company; 2. First pari passu charge on all current assets of Neo Sports Broadcast as per the audited financial statements for the year ended March 31, 2009; 3. First pari passu charge on all fixed assets of the Company as on March 31, 2009; 4. Assignment of all insurance policies of one day/ T20 matches containing all applicable risk clauses to the satisfaction of the bank. Other terms and conditions 1. In case of any slippage in the asset classification of our Company’s accounts, the bank will have the discretion to have a nominee director on the board

of directors of our Company; 2. Our Company has agreed to strictly comply with all the terms and conditions of the received master rights agreement executed between our Company

and BCCI as on October 20, 2009; 3. No banking accounts shall be maintained with any other banks other than the member banks of the consortium relating to this facility; 4. Bank is entitled to transfer/ assign the whole or part of their rights and obligations with respect to this facility to other persons/ entities without notice to

our Company. 5. Company undertakes to inform the bank in case of any change in its capital structure. Note 4 1. This guarantee shall be specific and unequivocal as regards: (i) amount, (ii) period, (iii) beneficiary and (iv) purpose; and 2. The bank shall be entitled at any time, during the currency of the guarantee, to demand and recover any margin upto the full extent of 100% of the

guarantees and in default of the payment by our Company, the bank reserves the right to recover such margin by debiting any of the account of our Company and such debit shall be recoverable from our Company as their dues.

Other terms and conditions 1. Immovable properties owned by our Company (situated at Mumbai) and by Nimbus Corporation Limited, now known as Paramount (situated at

Bangalore); 2. Second charge on the entire present and future fixed assets of our Company 3. Second pari passu charge on the Nimbus Center, Andheri, Mumbai in favour of the Oriental Bank of Commerce; 4. Exclusive pledge of 300,000 shares (with face value of Rs. 5 each) of our Company. However, please note that post consolidation of equity shares of

Rs. 5 each into Equity Share of Rs. 10 each pursuant to the resolution passed at the extra ordinary general meeting held on June 26, 2007, the pledge now relates only to 300,000 shares of our Company.

5. Third party guarantee by Mr. Harish Kanayalal Thawani and Ms. Shobha Harish Thawani. Corporate Actions Certain corporate actions about which our Company is required to give due intimation to the Indian Bank include:

- Effect any change in the capital structure; - Permit any transfer of the controlling interest or make any drastic change in the management set up; - Formulate any scheme of amalgamation or reconstruction; - Declare dividend except out of the profits relating to that year, only after making due provisions and provided

further that no default had occurred in any repayment obligations;

176

- Create any charge, lien, encumbrance over its assets or any part thereof in favour of any financial institution, bank, company, firm or persons;

- Sell, assign, mortgage or otherwise dispose of any of the fixed assets charged to the bank; - Enter into any contractual obligation of a long term nature, affecting our company financially to a significant

extent; - Make further investment in subsidiary/ group companies either in the form of equity or loans and advances; - Invest in capital assets; - Extend financial guarantee; - Repay unsecured loans extended by the Promoters; - Undertake modernization/ expansion/ diversification/ new projects schemes; - Enter into any borrowing arrangements either secured or unsecured, with any other banks, financial institution and

company or otherwise or accept deposits apart from the arrangements indicated in the funds flow statements submitted to the bank from time to time and approved by the bank.

Certain corporate actions for which our Company requires prior written consent of the Union Bank of India include:

- Effect any change in the capital structure of our Company; - Formulate any scheme of amalgamation or reconstruction; - Enter into any borrowing arrangements either secured or unsecured with any other bank/ financial institution,

company or otherwise or accept deposits apart from the existing arrangement; - Undertake guarantee obligations on behalf of any other concern; - Declare dividend except out of the profits relating to that year, only after making due provisions and provided

further that no default had occurred in any repayment obligations and that our Company is able to maintain adequate working capital margin; the quantum of such dividend shall not exceed 20%. A due clearance from the bank i.e.; no objection from the bank must be obtained by furnishing all the required details;

- drastic changes in the management set up and shareholding pattern; - The bank shall be informed about the happening of any event which is likely to have a substantial effect on their

profits/ business. - Company shall not create charge on any/ all of the assets, other than the charges created/ to be created in favour of

the consortium banks for working capital facilities availed by our Company. Certain corporate actions for which our Company is required to give undertaking to the Oriental Bank of Commerce include:

- Our Company shall deal exclusively with the bank and shall not obtain nay financial assistance from any other source without prior approval of the bank in writing;

- Our Company shall not declare dividend in case the account with the bank is running irregular/ overdue due to any other reason;

- No change shall be affected in the promoter directors or in the core management team of our Company nor any merger/ acquisition/ amalgamation shall be done without express permission of the bank in writing;

- Not to take up any new project/ any fresh expansion without the prior written approval of the bank. - To keep the bank informed about the happening of any event which is likely to have a substantial effect on the

profits/ business of our Company; and - Not to create further charge, lien, encumbrance over the assets and properties of our Company to be charged to the

bank in favour of any other bank, financial institution, firm or person.

Corporate Guarantee given by our Company

Name of the guarantor

Nature of borrowing Amount sanctioned

(in millions)

Rate of interest

Tenure Security

Our Company Guarantee agreement dated January 11, 2010 entered into between our Company, NCWL, Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Ltd. This corporate guarantee has been given in pursuance of the loan note subscription agreement dated January 11, 2010 entered into between NCWL, Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Ltd.

USD 75 Our Company agrees to pay interest on each amount demanded of it under this guarantee from the date such amounts were due to be paid until actual payment thereof at the rate of 30% (compounded quarterly)

December 31, 2010 Our Company has not taken or received any security from NCWL or any other person in respect of their obligations under this guarantee.

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Note 1

The corporate guarantee provided by our Company in favour of NCWL was extended upto December 31, 2010. This would be done in view of the fact that tenure of the loan notes was extended upto December 31, 2010 by Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Ltd vide Amendment Agreement dated September 25, 2010. Corporate Guarantee given by our Company

Name of the guarantor

Nature of borrowing Amount sanctioned

(in millions)

Rate of interest

Tenure Security

Our Company

Corporate guarantee given by our Company on behalf of NSI to Indian Bank, Singapore,

USD 12.09 (inclusive of

interest)

- The guarantee and the indemnity attached is a continuing security and shall secure the balance owing to the bank from time to time by NSI.

Nil

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SECTION VI - LEGAL AND OTHER INFORMATION

Outstanding Litigation and Material Developments

Except as stated below there are no outstanding litigation, suits, criminal or civil prosecutions, proceedings or tax liabilities against our Company, our Subsidiaries, our Directors, our Promoter and our Group Companies and no outstanding material litigations involving companies other than our Company and our Subsidiaries, Promoter and Group Companies whose outcome could have a materially adverse effect on the position of our Company, and there are no defaults, non-payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions, defaults in dues payable to holders of any debenture, bonds and fixed deposits and arrears of preference shares issue by our Company and its Subsidiary, defaults in creation of full security as per terms of issue/other liabilities, proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of our Company and its Subsidiary and no disciplinary action has been taken by SEBI or any stock exchanges against our Company, its Subsidiary, its Promoters, Group Companies, joint venture and Directors.

I. Contingent liabilities not provided for as of March 31, 2010

The following table sets forth certain information relating to our contingent liabilities as of March 31, 2010 as per our consolidated financial statements:

Sr. No. Particulars As on March 31, 2010

(Rs. in million) 1. Outstanding Tax Litigation

(a) Company 17.84

2. Third party claims against our Company

(a) For a TV program 1.13

(b) By Doordarshan (including interest) 76.24

(c) Television logo 4.38

(d) IT related service contract 11.41

(e) BCCI 39.47

3. Counter claim against Via World Inc 8.51

4. Factoring Facility 103.38

II. Company

1. Outstanding litigations and material proceedings against our Company

Civil Cases filed against our Company

There is 1 (one) civil suit filed against our Company before the High Court of Bombay. The aggregate claim against our Company has been quantified as Rs. 4.38 million along with interest @ 18%. Via World Wide Inc. (VWW) filed a summary suit (No. 1061 of 2005) against our Company claiming an amount of Rs. 4.38 million with interest at the rate of 18% p.a. The claim arose out of the contract between VWW and our Company for designing of television logos by VWW for our Company. Since the delivery was not made in accordance with the specifications as provided by our Company, our Company withheld the payments under the said contract.

In response to the above claim, our Company has filed a counter claim in the High Court of Bombay for Rs.8.51 million with interest at the rate of 9% p.a. The Bombay High Court has granted to our Company an unconditional leave to defend the matter. The suit will be taken up for hearing in the usual course in chronological order.

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Criminal Cases filed against our Company A criminal complaint (no. 2110/ 1) has been filed by Hotel Rajdoot (P) Limited (“Complainant”) against our Company and Mr. Ranjan Kumar Kundam (Proprietor, M/s. Ace Leisure Consultant, Kolkata) before the Additional Chief Metropolitan Magistrate, New Delhi under Section 420 read with Sections 120-B of the Indian Penal Code, 1860 and Section 138 of the Negotiable Instruments Act, 1881. The Company and Mr. Ranjan Kumar Kundam are hereinafter collectively referred to as the “Accused”. It was alleged that the Accused booked with the Complainant 20 rooms and 4 suits for the period March 17, 2007 to March 22, 2007. The Complainant also alleged that Mr. Ranjan Kumar Kundam introduced himself as the authorised representative of the Company for the purpose of arranging the travel and boarding of the employees of the Company. Upon presentation of the total bill of Rs. 0.10 million by the Complainant, Mr. Ranjan Kumar Kundam refused to pay by cash and insisted on the payment by cheque. The dispute arose when the cheque, upon presentment to the bank, was dishonored due to insufficiency of funds in Mr. Ranjan’s account. Thereafter the Complainant tried to contact the Company, however the Company clarified that it had not authorized Mr. Ranjan to make any payment on behalf of itself. The Complainant served legal notice of demand dated July 21, 2007 to the Accused. On August 10, 2009 our Company was admitted to bail on furnishing a personal bond of Rs. 0.015 million. The court has also issued baillable warrants of Rs. 5,000 against Mr. Ranjan and the same were to be executed through SHO Hazrat Nizamuddin, as well as through Commissioner of Police, Kolkata, and returnable before September 22, 2010. The matter will come up for hearing in the due course of time.

Cases filed by our Company

1. Our Company filed Criminal Compliant No. 94/S/2002 in 2002 against Gold Cross Research Lab, Deepak

Vaidya, Sanjay Survana, Manhor Shetty (“Accused”) in Court of Metropolitan Magistrate at Bandra under section 138 of the Negotiable Instrument Act, 1881. Accused issued cheques amounting to Rs. 0.46 million for part payment of dues to our Company for advertisement telecasts which cheques were dishonoured. The said matter is pending for hearing and final disposal.

2. Our Company has filed an appeal (no. 794 of 2004) against Prasar Bharati Broadcasting Corporation (“Prasar Bharati”) in the year 2004 in the High Court of Bombay. The appeal arose out of an arbitration proceeding which was initiated by our Company against Prasar Bharati in the year 1997-1998 for wrongful termination of a contract entered into between our Company and Prasar Bharati, under which Prasar Bharati had granted to our Company commercial airtime rights of the television programme called ‘Superhit Muqabla’. In the arbitral award dated July 5, 2002, our Company was directed to pay a sum of Rs. 76.24 million alongwith interest at the rate of 18% with effect from September 1, 1998. Thereafter our Company challenged this arbitral award before the single judge bench of the High Court of Bombay, which ruled against our Company. Therefore our Company filed the present appeal before the High Court of Bombay. Our Company has deposited Rs. 30 million and a bank guarantee of Rs. 40 million in the High Court of Bombay, as a result of which the enforcement of the aforementioned arbitral award has been stayed.

3. Our Company filed an Arbitration Petition No. 194 of 2002 against Prasar Bharati Corporation (“Prasar Bharati”) in the year 2002, in the High Court of Bombay. The petition arose out of an arbitration proceeding initiated by our Company against Prasar Bharati under an agreement dated October 9, 2000 entered into between our Company and Prasar Bharati with regard to the production and telecast of a television programme called ‘Business Day’. Under the said agreement, our Company was required to provide a bank guarantee of Rs. 4.20 million in favour of Prasar Bharati.

Our Company seeks an injunction against Prasar Bharati from invoking the bank guarantee, pending the disposal of the arbitration proceedings and appointment of an arbitrator by the High Court of Bombay. The petition has been allowed and hence disposed off.

4. Our Company entered into an arbitration proceeding before Justice SC Agrawal against Prasar Bharati Broadcasting Corporation (“Prasar Bharati”). The dispute in the present case arose when Prasar Bharati attempted to invoke a bank guarantee of Rs. 4.20 million furnished by our Company pursuant to an agreement entered into between our Company and Prasar Bharati dated October 9, 2000 with regard to the production and telecast of a television programme called ‘Business Day’.

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The arbitral reference is yet to commence and Prasar Bharati has not yet filed a claim.

5. Our Company filed a summary suit (no. 2277 of 2002) against Contract Advertising India Private Limited and Uncle Chips Private Limited in the year 2002 in the High Court of Bombay. The dispute in the present case arose out of a contract entered into amongst our Company, Contract Advertising India Private Limited and Uncle Chips Private Limited for telecast of commercials on Doordarshan during the ICC World Cup, 1999. Our Company claims a sum of Rs. 1.20 million along with an interest on Rs. 0.71 million at the rate of 24% against the invoices raised on Contract Advertising India Private Limited and Uncle Chips Private Limited. On August 2, 2005, a decree for the aforesaid sum along with interest was passed against Uncle Chips Private Limited. The decree against Uncle Chips Private Limited was passed ex-parte and hence it needs to be transferred to New Delhi for execution. Contract Advertising India Private Limited has been granted leave to defend the suit. Accordingly, Contract Advertising India Private Limited has filed the written statement and pleadings in that respect have been completed. The suit against Contract Advertising India Private Limited stands adjourned for final hearing and disposal. The suit will be taken up for hearing in the usual course in chronological order.

6. Our Company filed a writ petition (no. 2446/ 2006) against the Union of India (“UOI”) and Sippy Films Private Limited (“Sippy Films”), in the year 2004, in the High Court of Bombay. The dispute in the present case arose out of a breach of an agreement entered into between our Company and Sippy Films for the marketing rights of a television programme called ‘Bandhan’. Our Company claims a sum of Rs. 20.36 million from Sippy Films with further interest of Rs.7.5 million and has filed an arbitration petition before the High Court of Bombay for appointment of an arbitrator. The arbitration petition was however dismissed against which our Company has filed the present writ petition before the High Court of Bombay. Accordingly, the High Court of Bombay appointed Mr. Ketan Parikh, Advocate as the presiding arbitrator for the dispute on December 2, 2008. The arbitration proceedings are ongoing and our Company has filed the rejoinder to the reply of UOI and Sippy Films. Our Company has also filed the examination-in-chief of Mr. Harish Thawani. Arbitration hearing was concluded on September 25, 2010. The Arbitrator will now pronounce the Award in due course. There is no date fixed for publication of the Award.

7. Our Company filed a Letters Patent Appeal (no.1327 of 2007) against Prasar Bharati Broadcasting Corporation (“Prasar Bharati”) and Union of India, in the year 2007. The present appeal arose out of a Writ Petition No. 7665 of 2007 which was filed by our Company along with BCCI seeking directions for Prasar Bharati to encrypt the transportation signals of Doordarshan from the Doordarshan New Delhi Kendra to the transmission towers throughout the country. Additionally our Company also requested Prasar Bharati to issue a notification specifying that Doordarshan signals transmitting the live broadcasting signals of sport events under the Sports Broadcasting (Mandatory Sharing with Prasar Bharati) Act, 2007 shall not be carried on by the cable networks. The petition sought a declaration from the court to the effect that the cable television networks and DTH operators do not have the right to carry on live broadcasting signals of sport events without obtaining licenses from our Company and BCCI. The present appeal was filed by our Company in the High Court of New Delhi, challenging the order dated November 5, 2007 dismissing the writ petition no. 7665 of 2007. The appeal was admitted, however no interim relief is granted. On the directions of the court, Prasar Bharati and our Company have conducted meetings to arrive at a consensus on the encryption modalities so as to assist the court in evaluating the merits of the matter.

8. Our Company filed a civil writ petition (no. 8458 of 2007) against Prasar Bharati Broadcasting Corporation (“Prasar Bharati”) and Union of India (“UOI”) in the year 2007 in the High Court of Delhi. The petition was filed by our Company along with BCCI challenging the classification of the test matches as ‘sporting events of national importance’ for the purposes of compulsory carriage by as envisaged under the Sports Broadcasting Signals (Mandatory sharing with Prasar Bharati) Act, 2007. The matter has been adjourned for final hearing along with the Letters Patent Appeal (no.1327 of 2007) as detailed in point 7 above.

9. Our Company along with Nimbus Sports (a division of our Company) filed a suit (no.1410 of 2009) against Zee Sports Limited (“Zee Sports”) in the year 2009, in the High Court of Bombay. The suit has been filed for recovery of a sum of Rs. 35.77 million along with the interest thereon at the rate of 18% p.a. from the date of the suit. These amounts are claimed under various invoices raised by our Company on Zee Sports in respect of the consideration payable by Zee Sports for producing the live coverage of events such as Federation Cup, National Football League, Challenger Trophy 2005 and the Asian Badminton Trophy 2005. Zee Sports has made some part payments; however the suit seeks recovery of the balance amount.

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The suit came up for hearing before the Prothonotary and Senior Master on December 8, 2009 when Zee Sports sought time to file the written statements. The case is now posted for hearing on November 23, 2010 to enable Zee Sports to file its written statement.

Tax proceedings involving our Company and our Subsidiaries

Assessment Year to

which the dispute

relates to

Parties/Matter reference number

Forum/Court Subject Matter of the dispute Status as of date

For Assessment Year 2001-2002

Nimbus Communications Limited vs. ACIT Appeal No. 8040M/04 filed under section 250 of the Income Tax Act, 1969 on November 6, 2004

ITAT

Our Company filed the income tax return for Rs.46.32 million, the assessment being based on the total income of Rs 71.21 million. The Assessing Officer (AO) however held that our Company is not entitled to deduction of Rs 24.89 million under section 80 HHF of Income Tax Act as claimed by our Company in respect of the adjustment of the profits of the its Television Division against the loss in our Company’s Marketing Media Division. Further the AO assessed a higher income by reducing the export turnover and increasing the total turnover. The IT department assessed the total tax liability of Rs.6.03 million without interest, and raised a demand for Rs. 2.66 million which was paid by our Company. A further penalty was levied for Rs.2.71 million which was also paid by our Company. Our Company challenged the said assessment order of the AO before the CIT (Appeals), which dismissed the appeal in an order dated August 23, 2004. However, CIT (A) waived the penalty. Our Company has challenged the above CIT(A) order dated 28/08/2004 before the ITAT vide Appeal No. 8040M/04 filed under section 250 of the Income Tax Act filed on November 6, 2004.

Since penalty of Rs.2.71 million was deleted by the CIT (A), we have received the refund of the same by adjustment against demand of Rs.0.53 million for the AY 03-04 and against demand of Rs.2.20 million for AY 2004-05). The matter was referred back to AO by ITAT vide their order dated November 7, 2007 to allow deduction under section 80HHC to the export Division after verifying whether separate accounts are maintained. A.O. has not passed any order in this regard. Even in the event that our Company does not get a favourable order, there would be no outflows as our Company has already made the payment of the demand order of the AO.

For Assessment Year 2003-

2004

Nimbus Communications Limited vs. ACIT Appeal No 2361 of 2007 filed under section 250 of the IT Act on March 23, 2007

ITAT Our Company filed its income tax return on November 28, 2003 for Rs.103.42 million. Assessment was completed on March 28, 2006 determining an income of Rs 117.32 million pursuant to which the IT department made an additional demand of Rs.32.14 million from our Company. Our Company challenged the said assessment of the AO before the CIT (Appeals). The CIT (Appeals) through its January 23, 2007 and February 27, 2007 orders partially allowed our Company’s

Penalty of Rs.0.75 million was deleted by CIT (Appeals). We received refund of Rs.0.84 million on July 21, 2010. Assessed income of Rs.11.73 Crore was reduced by Rs.48 Lakhs by CIT(A). ITAT further gave relief of Rs.11.91 Crore. Against the order of ITAT, the I.T. Department has filed an appeal to High Court vide Appeal Lodging No.1540/1110, a copy of which is available with the Company. A refund of Rs.6.04 million is

182

Assessment Year to

which the dispute

relates to



appeal by reducing the total income assessment to Rs.112.51 million from Rs.117.32 million. Accordingly, the demand was reduced from Rs.9.89 million to Rs. 7.42 million and finally via order dated May 28, 2008 the demand was further reduced to Rs 4.56 million. Our Company got relief in its Appeal before the ITAT vide its Order dated January 28, 2010.

pending to be received by the Company as on date.

For Assessment

Year 2004-05

Nimbus Communications Limited VS. AO

Appeal filed under section 253 of the IT Act

ITAT The Company filed the income tax return for Rs.55.24 million. The assessment was completed determining an income of Rs.59.07 million. The Company challenged the said assessment order before the CIT (Appeals) vide Appeal No IT 60/06-07. The Company got various reliefs before the Appeal before the CIT (A) and has filed an Appeal before ITAT vide Appeal no 6597/MUM 2009. Apart from the above, the AO had issued a notice under section 148 and had completed the reassessment proceedings for which Appeal has been filed before the CIT(A).

The Appeal is pending with ITAT in respect of the original assessment order regarding T.P. adjustment of Rs.12.51 lakhs as notional interest on debit balance. This point was in our favour in A.Y. 2003-04. No demand is payable. In respect of reassessment proceedings an Appeal is pending before ITAT regarding income from House Property which A.O. had estimated at Rs.0.33 million. The Company however has to received a refund of Rs.69,854 from the I.T. Department for this Assessment Year.


Nimbus Communications Limited VS. AO

Appeal filed under section 251 of the IT

Act

CIT (Appeals)

The income tax return was filed on October 10, 2005 declaring total income of Rs.35.73 million. The assessment was completed ex- parte under section 144 of the ITA and an order was received on December 17, 2008 determining income at Rs 129.65 million. The IT department made an additional demand of Rs 49.40 million. The Company got relief in its Appeal before the CIT (A) but has preferred as appeal to the ITAT for further relief.

Assessed income of Rs.12.96 crore was reduced to Rs.4.23 crore by CIT(A). We have filed appeal to ITAT on March 25, 2000 vide ITA No.2359/M/10 for relief on remaining points. After the assessment, we have paid tax of Rs.49.39 million in instalment and adjustment of Rs.6.03 million being refund of A.Y. 2007-08. As a result of various reliefs granted before the CIT (Appeals) the Company is due to receive a sum of Rs.15.60 million as refund for this year.


Nimbus Communications Limited vs. AO

CIT (Appeals)

The revised income tax return was filed by our Company on March 29, 2008 declaring total income of Rs. 33.44 million. The assessment was completed under section 143(3) of the ITA and draft order was received on November 30, 2009 determining income at Rs 72,632,920. Our Company has challenged the said assessment of the AO under section 144 C of the IT A and has filed an appeal before the Income Tax Dispute Resolution Panel.

Returned Income was Rs.33,436,493 The matter was referred to DRP by A.O. The Assessing Officer has assessed the income at Rs.48,019,930. However, the demand of Rs.17,931,765 is reduced to Rs.15,152,649 under section 154 after giving credit to TDS of Rs.23,66,752 which was not given earlier. An appeal is being filed before ITAT against T.P. adjustment and other issues.

183

Assessment Year to

which the dispute

relates to




Nirvana Televisions Ltd.

vs. AO

CIT (Appeals)

The income tax return was filed on October 30, 2007 declaring a total loss at Rs. 11.55 million. Our Company filed revised return of income on March 31, 2009 revising the total loss at Rs. 5.43 million. The assessment was completed under section 143(3) of the ITA and the order was issued on December 18, 2009 determining an income at Rs 3.36 million. The demand was then raised at Rs. 0.53 million. The Company has filed an appeal before the Hon’ble Commissioner of Income Tax (Appeals) challenging the said order which is still pending.

Outstanding proceedings initiated against our Company for economic offences There are no outstanding proceedings initiated against our Company for economic offences. Adverse findings in respect of our Company as regards compliance with the securities laws There are no adverse findings in respect to our Company as regards compliance with the securities laws. Details of past penalties imposed on our Company There are no past penalties as imposed on our Company.

Outstanding litigation defaults etc pertaining to matter likely to affect operations and finances of our Company, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act Except as disclosed in this section, there are no outstanding litigation defaults etc pertaining to matter likely to affect operations and finances of our Company, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act. Outstanding litigations against other companies whose outcome could have an adverse effect on our Company Except as disclosed in this section, there are no outstanding litigations against other companies whose outcome could have an adverse effect on our Company. Disciplinary action taken by the Board/Stock Exchanges against our Company There is no disciplinary action taken by the Board/Stock Exchanges against our Company. Threatened Litigation Our Company received a letter dated March 1, 2010 from Allen & Overy LLP, Singapore demanding payment of USD 226, 488.76 toward legal services rendered by them while acting as international counsel to the initial public offering by our Company. Our Company had entered into an agreement with Allen & Overy LLP, Deutsche Equities India Private Limited, Edelweiss Capital Limited and SSKI Corporate Finance Private Limited on June 12, 2007. The claim made by Allen & Overy LLP is towards the outstanding fees and disbursements for legal services rendered in connection with the initial public offering.

184

III. Directors of our Company Outstanding litigations and material proceedings involving the Directors of our Company

Except as disclosed herein, there are no outstanding proceedings involving the Directors.

Outstanding proceedings initiated against the Directors of our Company for economic offences There are no outstanding proceedings initiated against the Directors of our Company for economic offences. Criminal/civil proceedings against the Directors of our Company for any litigation towards tax liabilities

There are no criminal/civil proceedings against the Directors of our Company for any litigation towards tax liabilities.

Details of past penalties imposed on the Directors of our Company

There are no past penalties as imposed on the Directors of our Company.

Disciplinary action taken by the Board/Stock Exchanges against the Directors of our Company

There is no disciplinary action taken by the Board/Stock Exchanges against the Directors of our Company. IV. Promoters

Outstanding litigations and material proceedings involving the Promoters of our Company

Cases against the Promoters

1. Cases against Paramount Premila Navin Patel filed a suit against Rajni K. Pancholi and Nimbus Creative Corporation (now known as Paramount)* in 1995 in the High Court of Bombay (Suit No. 3505 of 1995) for the possession of ground floor premises ‘Kalyan Nivas’ situated at Khar, Mumbai. Nimbus Television and Sport (earlier division of our Company) had purchased the said property from Rajni K. Pancholi through a registered deed of conveyance. Premila Navin Patel seeks an order of eviction against Paramount from the property on the ground that the seller had no right to sell the property. Paramount is defending the suit and has filed its defense and has also taken possession of Kalyan Nivas property. The suit will be taken up for hearing in the usual course in chronological order. *Paramount was first established as an unregistered partnership as on October 12, 1992 with the name ‘Nimbus Creative Corporation’. It was converted to a public company incorporated under the Companies Act on January 29, 1999 with the name ‘Nimbus Creative Corporation Limited’. With effect from August 22, 2005, the name of the company was changed to ‘Paramount Corporation Limited’.

2. Other proceedings involving Promoters

Except as disclosed herein, there are no outstanding proceedings involving the Promoters.

Adverse findings in respect to the Promoters as regards compliance with the securities laws

There are no adverse findings in respect to the Promoters as regards compliance with the securities laws.

Details of past penalties imposed on the Promoters There are no past penalties as imposed on the Promoters.

Outstanding litigation defaults etc pertaining to matter likely to affect operations and finances of the Promoters, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act

Except as disclosed in this section, there are no outstanding litigation defaults etc pertaining to matter likely to affect operations and finances of our Promoters, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act.

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Outstanding litigations against other companies whose outcome could have an adverse effect on the Promoters

Except as disclosed in this section, there are no outstanding litigations against other companies whose outcome could have an adverse effect on the Promoters.

Disciplinary action taken by the Board/Stock Exchanges against the Promoters

There is no disciplinary action taken by the Board/Stock Exchanges against the Promoters.

Outstanding litigations, defaults/overdues or labour problems/closure faced by the Promoters

There are no outstanding litigations, defaults/overdues or labour problems/closure faced by the Promoters.

V. Group Companies

Neo Sports Broadcast

Cases filed against Neo Sports Broadcast

1. Sun Direct filed a petition (no. 243C of 2008) against Neo Sports Broadcast in the year 2008 before the LD.

TDSAT, challenging certain clauses of the DTH-RIO agreement entered into between Neo Sports Broadcast and Sun Direct. Pursuant to an order passed by LD TDSAT on December 18, 2008, Sun Direct and Neo Sports Broadcast signed an interconnection agreement dated January 13, 2009. LD TDSAT has disposed off the petition (vide order dated December 12, 2009 by referring the matter to TRAI for facilitation. A meeting has been held in TRAI on January 11, 2010 and both the parties had been asked to submit their comments to TRAI before February 3, 2010. After the last meeting with TRAI on July 28, 2010, Neo Sports Broadcast has filed its representation on unresolved issues. The matter will come up for hearing in due course of time.

2. Sun Direct filed a miscellaneous application (no.239 of 2010 in petition no. 250/ 2009) against Neo Sports

Broadcast before the TDSAT requesting TDSAT to settle the unresolved issues between the parties pending the final adjudication by TRAI. The dispute arose out of the DTH-RIO agreement entered into between Sun Direct and Neo Sports Broadcast.

The parties have been directed to file their written submissions by August 28, 2010, whereas TRAI has been directed to submit its views on the matter within a period of two weeks. Neo Sports Broadcast has filed its written submissions and the next date of hearing is scheduled on October 1, 2010.

3. Suvom Cable Communications (“Suvom Cable”) filed a suit (no. 179/ 10) against Neo Sports Broadcast before

the court of the Civil Judge, Dhenkanal, Orissa. Pursuant to an Interconnection Agreement dated October 31, 2007 and October 31, 2008 entered into between Neo Sports Broadcast and Suvom Cable, the latter was obligated to pay for 43 subscribers and later on for 125 subscribers, a total monthly subscription fee of Rs. 1601.75 and Rs. 4842 respectively to Neo Sports Broadcast in consideration for subscription of certain channels. Several notices were sent to Suvom Cable in this respect. However, instead of responding to the notice, Suvom Cable filed this present suit for declaration of the notice as null and void. The Civil Judge, Dhenkanal, Orissa has asked Neo Sports Broadcast to file its reply before the next date of hearing which is scheduled to be held on October 11, 2010.

In connection with the aforementioned suit, Suvom Cable has filed an interim application for temporary injunction against Neo Sports Broadcast whereby Neo Sports Broadcast has been directed to maintain status quo on the matter by the court. The case is pending hearing and due for hearing on October 11, 2010.

4. Tata Sky has filed a petition (no. 199C of 2008) against Neo Sports Broadcast in the year 2008 before the

TDSAT. Tata Sky claims that the relationship between Tata Sky and Neo Sports Broadcast should be governed by the provisions of the DTH-RIO agreement with effect from April 2008; however Neo Sports Broadcast has contended that the same should be governed with effect from September 2008. In addition to this, Tata Sky has also challenged certain clause of the said DTH-RIO agreement.

TDSAT has vide its order dated November 23, 2009 is referred the matter to TRAI for facilitation pursuant to which several meetings have been held between the parties. The parties are in the process of settling the dispute. The last date of hearing was September 9, 2010, on which date the matter was reserved for final orders.

5. Society of Catalysts (“SoC”) has filed a complaint (no. 35 of 2007) against all broadcasters including Neo

Sports Broadcast in the year 2007 before the Delhi State Commission. SoC being a society of consumers has

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contended that ‘paid channels’ should not be allowed to show advertisements, instead only the ‘free to air’ channels should be allowed to show the same.

Pursuant to this complaint, two writ (WP no. 8779 and 8780 of 2007) have been filed in the High Court of New Delhi challenging the jurisdiction of the Delhi State Commission. Hence the matter is pending before the Delhi State Commission until final orders (upholding jurisdiction) are passed by the High Court of New Delhi. There is no financial implication of this case.

Cases filed by Neo Sports Broadcast

1. Neo Sports Broadcast filed a contempt petition (MA 91 of 2009) against Hathway Cable & Datacom Private

Limited (“Hathway”) on July 22, 2009, before the TDSAT. The dispute arose out of an order dated May 13, 2009 passed by TDSAT in petition no. 209C of 2009 filed by Hathway, pursuant to which Neo Sports Broadcast had filed a suit against Hathway. TDSAT had ordered Hathway to submit the SLR within a period of two weeks from the date of the order and make payment to Neo Sports Broadcast after reconciliation of accounts, based upon the SLR. However since Hathway failed to provide the SLR, thereby violating the orders of the TDSAT, Neo Sports Broadcast filed the present contempt petition. On the last date of hearing Hathway was fined to the tune of Rs. 0.1 million and its managing director was instructed to appear personally. The final arguments of the parties were heard on September 6, 2010. However, the order of the TDSAT has been reserved till further notice.

2. Neo Sports Broadcast filed a petition (no. 2178/ 2008) in the year 2008 before the High Court of New Delhi,

against New Sanjay Cable & Ors. with respect to piracy during India-Australia/ India- England series and for appointment of a court commissioner. On November 6, 2009, Neo Sports Broadcast obtained John Doe orders against all cable operators restraining them for telecasting those channels without signing an agreement with Neo Sports Broadcast. In addition to this, raids were conducted on separate cable operators. Only one cable operator has signed the agreement with Neo Sports Broadcast and the matter is settled with him. With regard to the rest of them, the case is still pending. The next date of hearing is scheduled on October 21, 2010.

3. Neo Sports Broadcast filed a miscellaneous application/ contempt petition (no. 138C/ 2010) against Sun Direct

in the TDSAT on May 11, 2010. Neo Sports has filed this petition on the grounds that Sun Direct was suo moto attempting to modify the Interconnect Agreement entered into between them on January 13, 2009 (“Interconnect Agreement”). Sun Direct made an attempt to discontinue the distribution of Neo Sports channel and continue distributing Neo Cricket without entering into a fresh Interconnect Agreement. Sun Direct also published public notices in violation of the Interconnect Regulations and the Interconnect Agreement.

4. Neo Sports Broadcast filed a petition (no. 137C of 2009) against Channel 9 Digital, Lucknow in the year 2009

before the TDSAT for the recovery of an outstanding amount of Rs. 1.6 million arising under an agreement entered into between Neo Sports Broadcast and Channel 9. On November 30, 2009, TDSAT has heard both the parties and ordered Channel 9 to pay the outstanding amount of Rs. 1.6 million alongwith interest at the rate of 12% per annum from May 5, 2009 till the date of filing of petition and interest at the same rate pendente lite till the date of recovery of the said amount. Pursuant to the order, Neo Sports Broadcast has filed an execution application in TDSAT for execution of the said order whereby a notice had been served upon Channel 9 for appearance on July 8, 2010. The matter has been listed for orders on October 22, 2010.

5. Neo Sports Broadcast filed an appeal (Civil Appeal No. 6247 of 2009) against Hathway Cable & Datacom

Private Limited (“Hathway”) before the Supreme Court of India on August 8, 2009 challenging a particular extract of the judgment and order dated May 13, 2009 passed by the TDSAT in Petition No. 209 (C) of 2008 which was filed by Hathway.

In Petition No. 209(C) it was, inter alia, contended by Hathway that under the terms of an agreement dated April 12, 2008 with Neo Sports Broadcast, the latter was to provide its signals in the whole territory of India to all existing networks of Hathway, including Hathway’s joint ventures and distributors, irrespective of whether such joint ventures and/or distributors had an existing subscription agreement with Neo Sports Broadcast as on April 12, 2008. Neo Sports Broadcast, on the other hand, contended that Gujarat Telelink Private Limited (“GTPL”) was a subsidiary and not a joint venture and/or distributor which had an existing subscription agreement with it and it did not form part of the agreement executed by Neo Sports Broadcast with Hathway.

The TDSAT pursuant to its order dated May 13, 2009, held, inter alia, the following (i) GTPL formed part of the agreement dated April 12, 2008 and therefore Neo Sports Broadcast was obliged to provide its signals to GTPL, and (ii) Hathway shall be required to make the payment of the amount due to Neo Sports Broadcast. Hathway has made the payment required under the above TDSAT order. Neo Sports Broadcast has filed the

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present appeal in the Supreme Court against the above order of the TDSAT. The appeal has been admitted and Hathway had been asked to file its reply. The matter will come up for hearing in due course in time.

6. Neo Sports Broadcast filed a suit (no.340/ 2010) against Rajesh Pradhan before the High Court of Bombay for

recovery of an outstanding amount of USD 83,445.68 alongwith interest at the rate of 15% from the date of filing of the suit till the recovery of the same. Pursuant to a Channel Distribution Agreement entered into between the parties on December 1, 2006, Mr. Rajesh Pradhan was required to pay a certain fees to Neo Sports. However, upon his failure to pay the said amount, Neo Sports filed the present suit against him. As on the last hearing which was held on January 11, 2010, summons are issued to Rajesh Pradhan and the service report is awaited. The matter will come up for hearing in the due course of time.

7. Neo Sports Broadcast filed a recovery suit (no. 200 C/ 2010) against Asia Net Vision before the TDSAT on

July 2, 2010 for recovery of an outstanding amount of Rs. 0.17 million alongwith interest. Pursuant to a Subscription Agreement dated October 8, 2007, entered into between Neo Sports Broadcast and Asia Net Vision, Asia Net Vision was required to make a monthly payment of Rs. 3,725 to Neo Sports, for the period October 8, 2007 to October 7, 2008. They were further required to make a monthly payment of Rs. 9,995 for the period October 8, 2008 to January 1, 2009, However, Asia Net Vision defaulted in the payment of Rs. 0.17 million for the period October 8, 2007 to May 25, 2010, as a result of which Neo Sports filed the present suit. TDSAT has directed the issue of fresh notice vide its order dated August 11, 2010. The case is pending hearing and due for hearing October 25, 2010.

8. Neo Sports Broadcast filed a recovery suit (no. 198C/ 2010) against International Vision before the TDSAT on

July 2, 2010 for recovery of an outstanding amount of Rs.0.36 million alongwith interest. Pursuant to a Subscription Agreement dated September 18, 2007 entered into between Neo Sports Broadcast and International Vision, International Vision was required to pay Neo Sports a monthly subscription fee of Rs.0.014 million for the year 2007-08, Rs. 0.015 million for the year 2009-09 and Rs.0.016 million for January, 2009 to September 2009. However, since International Vision defaulted in the payment of the aforementioned subscription fees, Neo Sports filed the present suit against them. TDSAT has directed the issue of fresh notice vide its order dated August 11, 2010. The case is pending hearing on October 18, 2010 for filing an application for service by publication.

9. Neo Sports Broadcast filed a recovery suit (no. 197 C/ 2010) against Sat Cable Vision before the TDSAT on

July 2, 2010 for recovery of an outstanding amount of Rs.0.28 million alongwith interest. Pursuant to a Subscription Agreement dated October 2, 2007 entered into between Neo Sports Broadcast and Sat Cable Vision, Sat Cable Vision was required to pay to Neo Sports a monthly subscription fee of Rs.0.018 million, subject to further modification. However since Sat Cable Vision defaulted in the payment of the aforesaid subscription fee, Neo Sports filed the present suit against them. The matter will come up for hearing in the due course of time.

10. Neo Sports Broadcast filed a petition (no. 202 C/ 2010) against Paramount Cable Network before the TDSAT

on July 2, 2010 for recovery of an outstanding amount of Rs.0.15 million alongwith interest at 24% per annum pendente lite. Pursuant to an Interconnection Agreement dated October 1, 2007 entered into between Neo Sports and Paramount Cable Network, the latter was required to pay to Neo Sports certain fees. However, since Paramount Cable Network defaulted in the payment as per the terms of the said agreement, Neo Sports filed the present petition against them. On September 20, 2010, Neo Sports filed its written submissions and the matter has been reserved for further orders on October 20, 2010.

11. Neo Sports Broadcast filed a petition (no.199 C/ 2010) against Bhadani Tel Cable before the TDSAT on July 2,

2010 for recovery of an outstanding amount of Rs.0.21 million alongwith interest. Pursuant to a Subscription Agreement dated September 27, 2007 entered into between Neo Sports Broadcast and Bhadani Tel Cable, the latter was required to pay Neo Sports a monthly subscription fee of Rs. 7,450 for the year 2007-08, Rs.7,748 for the year 2008-09 and Rs.8,290 payable from January, 2009 onwards. However, since Bhadani Tel Cable defaulted in the payment as per the terms of the said agreement, Neo Sports filed the present petition against them. The case was heard on September 27, 2010 and the TDSAT has fixed next date of hearing on October 28, 2010 for filing additional documents including invoices which have not been filed.

12. Neo Sports Broadcast filed a petition (no.201 C/ 2010) against Uttarbanga Cable Private Limited before the

TDSAT on July 2, 2010 for recovery of an outstanding amount of Rs. 0.19 million alongwith interest. Pursuant to a Subscription Agreement dated November 1, 2007 entered into between Neo Sports and Uttarbanga Cable Private Limited, the latter was required to make a monthly payment of Rs.31,141 to Neo Sports. However, since Uttarbanga Cable Private Limited defaulted in the payments for the period extending from November 1, 2007 to May 25, 2010, Neo Sports has filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated July 8, 2010. The case is pending hearing due on October 25, 2010.

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13. Neo Sports Broadcast filed a petition (no. 243 C/ 2010) against Jaisal Cable before the TDSAT on July 22,

2010 for recovery of an outstanding amount of Rs.0.25 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated September 6, 2007 entered into between Neo Sports and Jaisal Cables, the latter was required to make certain payments to Neo Sports. However since Jaisal Cables defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated September 9, 2010. The next date of hearing is scheduled on October 19, 2010.

14. Neo Sports Broadcast filed a petition (no.237 C/ 2010) against Shin Star Cable Network before the TDSAT on

July 21, 2010 for recovery of an outstanding amount of Rs.0.27 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated March 27, 2008 entered into between Neo Sports and Shin Star Cable Network, the latter was required to make certain payments to Neo Sports. However since Shin Star Cable Network defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the parties to file their respective reply and rejoinder before the next date of hearing which is scheduled to be held on October 19, 2010.

15. Neo Sports Broadcast filed a petition (no. 238 C/ 2010) against New GK Cable before the TDSAT on July 21,

2010 for recovery of an outstanding amount of Rs.0.25 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated September 15, 2007 entered into between Neo Sports and New GK Cable, the latter was required to make certain payments to Neo Sports. However since New GK Cable defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated September 9, 2010. The next date of hearing is scheduled on October 19, 2010.

16. Neo Sports Broadcast filed a petition (no. 241 C/ 2010) against Win Cable before the TDSAT on July 22, 2010

for recovery of an outstanding amount of Rs.0.26 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated September 29, 2007 entered into between Neo Sports and Win Cable, the latter was required to make certain payments to Neo Sports. However since Win Cable defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated September 9, 2010. The next date of hearing is scheduled on October 19, 2010.

17. Neo Sports Broadcast filed a petition (no. 239 C/ 2010) against Univision before the TDSAT on July 21, 2010

for recovery of an outstanding amount of Rs.0.24 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated October 16, 2008 entered into between Neo Sports and Univision, the latter was required to make certain payments to Neo Sports. However since Univision defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has vide its order dated September 6, 2010 directed Univision to appear in the next date of hearing which is scheduled to be held on October 5, 2010.

18. Neo Sports Broadcast filed a petition (no. 242 C/ 2010) against Sunny Cable Vision before the TDSAT on July 22, 2010 for recovery of an outstanding amount of Rs.0.15 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated March 25, 2008 entered into between Neo Sports and Sunny Cable Vision, the latter was required to make certain payments to Neo Sports. However since Sunny Cable Vision defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has vide its order dated September 9, 2010 directed the parties to file its reply and rejoinder before the next date of hearing which is scheduled to be held on October 19, 2010.

19. Neo Sports Broadcast filed a petition (no. 236 C/ 2010) against S&S Electronics before the TDSAT on July 21,

2010 for recovery of an outstanding amount of Rs.0.17 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated October 4, 2007 entered into between Neo Sports and S&S Electronics, the latter was required to make certain payments to Neo Sports. However since S&S Electronics defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has vide its order dated September 9, 2010 directed the parties to file its reply and rejoinder before the next date of hearing which is scheduled to be held on October 19, 2010.

20. Neo Sports Broadcast filed a petition (no. 235 C/ 2010) against Hitech Star Net before the TDSAT on July 21,

2010 for recovery of an outstanding amount of Rs.0.16 million alongwith interest at the rate of 24% pendente lite. Pursuant to a Subscription Agreement dated October 16, 2008 entered into between Neo Sports and Hitech Star, the latter was required to make certain payments to Neo Sports. However since Hitech Star Net defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has vide its order dated September 9, 2010 directed the parties to file its reply and rejoinder before the next date of hearing which is scheduled to be held on October 19, 2010.

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21. Neo Sports Broadcast filed a petition (no. 240 C/ 2010) against Panchmukti Network before the TDSAT on

July 21, 2010 for recovery of an outstanding amount of Rs.0.24 million alongwith interest at the rate of 24% pendente lite. Pursuant to a Subscription Agreement dated January 28, 2009, entered into between Neo Sports and Panchmukti Network, the latter was required to make certain payments to Neo Sports. However since Panchmukti Network defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated September 9, 2010. The next date of hearing is scheduled on October 19, 2010.

22. Neo Sports Broadcast filed a petition (no. 246 C/ 2010) against D Network before the TDSAT on July 27, 2010

for recovery of an outstanding amount of Rs.0.18 million alongwith interest at the rate of 24% pendente lite. Pursuant to a Subscription Agreement dated March 20, 2008, entered into between Neo Sports and D Network, the latter was required to make certain payments to Neo Sports. However since D Network defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated September 6, 2010. The next date of hearing is scheduled on October 19, 2010.

23. Neo Sports Broadcast filed a petition (no. 247 C/ 2010) against Sangavi Network before the TDSAT on July 27,

2010 for recovery of an outstanding amount of Rs. 0.15 million alongwith interest at the rate of 24% pendente lite. Pursuant to a Subscription Agreement dated March 28, 2008, entered into between Neo Sports and Sangavi Network, the latter was required to make certain payments to Neo Sports. However since Sangavi Network defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated September 9, 2010. The next date of hearing is scheduled on October 19, 2010.

24. Neo Sports Broadcast filed a petition (no. 204 C/ 2010) against Nice Cable before the TDSAT on July 5, 2010

for recovery of an outstanding amount of Rs. 0.83 million alongwith interest. Pursuant to an Interconnection Agreement dated September 10, 2007 entered into between Neo Sports and Nice Cable, the latter was required to make certain monthly payments to Neo Sports. However since Nice Cable defaulted in the payment of Rs. 0.83 million for the period September 15, 2007 to November 1, 2008, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated August 30, 2010.The next date of hearing is scheduled on October 6, 2010.

25. Neo Sports Broadcast filed a petition (no. 205 C/ 2010) against Bareilly Media before the TDSAT on July 5,

2010 for recovery of an outstanding amount of Rs.0.81 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated September 15, 2007 entered into between Neo Sports and Bareilly Media, the latter was required to make certain monthly payments to Neo Sports. However since Bareilly Media defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has vide its order dated August 30, 2010 directed Bareilly Media to file its reply before the next date of hearing. The Respondent has filed its reply and matter is listed on October 25, 2010 fo cross examination of witnesses.

26. Neo Sports Broadcast filed a petition (no. 107 C/ 2010) against Ajay Meru before the TDSAT on July 5, 2010

for recovery of an outstanding amount of Rs.0.92 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated April 11, 2008 entered into between Neo Sports and Ajay Meru, the latter was required to make certain monthly payments to Neo Sports. However since Ajay Meru defaulted in the said payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated August 30, 2010. The matter will come up for hearing on Ocotber 6, 2010.

27. Neo Sports Broadcast filed a petition (no. 203 C/ 2010) against Five Star Cable Network before the TDSAT on

July 5, 2010 for recovery of an outstanding amount of Rs.1.3 million alongwith interest. Pursuant to an Interconnection Agreement dated October 16, 2008 entered into between Neo Sports and Five Star Cable Network, the latter was required to make a monthly payment of Rs. 88,512 as subscription fee. However, since Five Star Cable Network defaulted in the aforesaid payment for the period from October 16, 2008 to November 15, 2009, Neo Sports filed the present petition against them. TDSAT vide its order dated September 20, 2010 has directed the issue of fresh notice. The next date of hearing is scheduled on October 20, 2010.

28. Neo Sports Broadcast filed a petition (no. 233 C/ 2010) against Temple City Cable Network before the TDSAT

on July 21, 2010 for recovery of an outstanding amount of Rs.0.45 million alongwith interest at the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated April 1, 2008 entered into between Neo Sports and Temple City Cable Network, the latter was required to make certain monthly payments to Neo Sports. However, since Temple City Cable Network defaulted in the aforesaid payments, Neo Sports filed the present petition against them. The case has been settled between the parties and as per instructions the matter has been withdrawn.

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29. Neo Sports Broadcast filed a petition (no. 234 C/ 2010) against Om Sai Cable before the TDSAT on July 21,

2010 for recovery of an outstanding amount of Rs.1.07 million alongwith interest. Pursuant to a Subscription Agreement dated April 1, 2008 and a subsequent agreement dated April 3, 2009 entered into between Neo Sports and Om Sai Cables, the latter was required to make certain payments to Neo Sports. However, since, Om Sai Cables has defaulted in the aforesaid payments; Neo Sports filed the present petition against them. The next date of hearing is scheduled on October 27, 2010.

30. Neo Sports Broadcast filed a petition (no. 232 C/ 2010) against Waltair Communication before the TDSAT on

July 21, 2010 for recovery of an outstanding amount of Rs.0.51 million alongwith interest the rate of 24% pendente lite. Pursuant to an Interconnection Agreement dated November 1, 2007 entered into between Neo Sports and Waltair Communication, the latter was required to make certain monthly payments to Neo Sports. However since Waltair Communication defaulted in the aforesaid payments, Neo Sports filed the present petition against them. The next date of hearing is scheduled on October 27, 2010.

31. Neo Sports Broadcast filed a petition (no. 226 C/ 2010) against Kavali Vision before the TDSAT on July 19,

2010 for recovery of an outstanding amount of Rs.0.25 million alongwith interest. Pursuant to a Subscription Agreement dated February 1, 2008 entered into between Neo Sports and Kavali Vision, the latter was required to make certain monthly payments to Neo Sports. However since Kavali Vision defaulted in the aforesaid payments, Neo Sports filed the present petition against them. TDSAT vide its order dated September 3, 2010, has directed the parties to file their reply/ rejoinder and appear before the court on the next date of hearing which is scheduled on October 4, 2010.

32. Neo Sports Broadcast filed a petition (no. 227 C/ 2010) against Sai Darshan Media Network Private Limited

before the TDSAT on July 19, 2010 for recovery of an outstanding amount of Rs.0.27 million alongwith interest. Pursuant to a Subscription Agreement dated January 1, 2008 entered into between Neo Sports and Sai Darshan Media Network Private Limited, the latter was required to make certain monthly payments to Neo Sports. However since Sai Darshan Media Network Private Limited defaulted in the aforesaid payments, Neo Sports filed the present petition against them. TDSAT has directed the issue of fresh notice vide its order dated July 20, 2010. The next date of hearing is scheduled on October 18, 2010.

33. Neo Sports Broadcast filed a petition (no. 225 C/ 2010) against City Cable Network before the TDSAT on July

19, 2010 for recovery of an outstanding amount of Rs.0.37 million alongwith interest. Pursuant to an Interconnection Agreement dated October 15, 2008 entered into between Neo Sports and City Cable Network, the latter was required to make certain monthly payments to Neo Sports. However since City Cable Network defaulted in the aforesaid payments, Neo Sports filed the present petition against them. TDSAT has directed the service of notice vide its order dated September 7, 2010. The next date of hearing is scheduled on October 18, 2010.

34. Neo Sports Broadcast filed a petition (no. 224 C/ 2010) against Worldgodly Dish Antenna before the TDSAT

on July 19, 2010 for recovery of an outstanding amount of Rs.0.23 million alongwith interest. Pursuant to a Subscription Agreement dated September 23, 2007 entered into between Neo Sports and Worldgodly Dish Antenna, the latter was required to make certain monthly payments to Neo Sports. However, since Worldgodly Dish Antenna defaulted in the aforesaid payments, Neo Sports Broadcast filed the present petition against them. TDSAT has vide its order dated September 7, 2010 declared that ex parte proceedings shall be held on October 26, 2010.

35. Neo Sports Broadcast filed an appeal (no. 10 C/ 2010) against Telecom Regulatory Authority of India ("TRAI")

before the TDSAT on September 18, 2010 for quashing or setting aside clause 4(1) of the Telecommunication Broadcasting and Cable Services (Fourth) (Addressable Systems) Tariff Order, 2010 issued by the TRAI.

Cases filed by Neo Sports Broadcast under section 138 of the Negotiable Instruments Act, 1881

Neo Sports Broadcast, from time to time, initiates criminal legal proceedings under Section 138 of the Negotiable Instruments Act, 1881 against cable operators. As on the date hereof, Neo Sports Broadcast has filed 26 such cases before various courts in India amounting to Rs. 4.7 million. The legal proceedings mentioned above are in the ordinary course of Neo Sports Broadcast’s business and does not have any material adverse affect on the financial position of the Company.

Other proceedings involving Neo Sports Broadcast

A notice was issued on June 17, 2008 by Director General of Investigation and Registration (“DGIR”) in response to a complaint made to the erstwhile Monopolies and Restrictive Trade Practices Commission

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(“MRTP”) against all broadcasters including Neo Sports Broadcast. The notice alleged that during April 2008 there was an increase of limit of advertisement time being shown by channels and that there is a cartelization among the broadcasters to show the advertisement at the same time. In response to the notice received from the DGIR, Neo Sports Broadcast filed its reply on December 29, 2008. Further, pursuant to the abolition of Monopolies and Restrictive Trade Practices Act, 1969, the said case is kept on hold and the next date of hearing is yet to be informed.

Adverse findings in respect to the Group Companies as regards compliance with the securities laws

There are no adverse findings in respect to the Group Companies as regards compliance with the securities laws.

Details of past penalties imposed on the Group Companies There are no past penalties as imposed on the Group Companies.

Outstanding litigation defaults, etc pertaining to matter likely to affect operations and finances of the Group Companies, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act

Except as disclosed in this section, there are no outstanding litigation defaults etc pertaining to matter likely to affect operations and finances of the Group Companies, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act.

Outstanding litigations against other companies whose outcome could have an adverse effect on the Group Companies Except as disclosed in this section, there are no outstanding litigations against other companies whose outcome could have an adverse effect on the Group Companies.

Disciplinary action taken by the Board/Stock Exchanges against the Group Companies

There is no disciplinary action taken by the Board/Stock Exchanges against the Group Companies.

Outstanding litigations, defaults/overdues or labour problems/closure faced by the Group Companies

There are no outstanding litigations, defaults/overdues or labour problems/closure faced by the Group Companies.

VI. Subsidiaries

Nirvana Television Limited Cases filed by Nirvana Television Limited A criminal complaint (no. 1424/SS/2004) was filed in 2004 by Nirvana Television Limited in the Metropolitan Magistrates 10th Court, Andheri, Mumbai against Ashok Shekhar, Proprietor of Shekhar TV & Video under section 138 of the Negotiable Instruments Act, 1881 for dishonor of cheques amounting to Rs 0.75 million. Ashok Shekhar had issued cheques for payment of dues under an agreement dated August 11, 2003 for co-production of a television serial called “Mujhe Meri Biwi Se Bachao” advertisement telecasts which was dishonoured. The matter is pending hearing before the Court. Nimbus Sport International Pte. Limited Cases filed by Nimbus Sport International Pte. Limited 1. NSI filed an arbitration petition (128 of 2009) under the SIAC Rules, 2007 against ARY Digital FZ LLC (ARY

Dubai). On June 22, 2007 NSI entered into an agreement to grant ARY Dubai broadcast rights in respect of select cricket matches. Pursuant to the agreement, ARY Dubai agreed to pay NSI, USD 0.38 million of which USD 0.27 million remains unpaid. NSI has commenced arbitration proceedings against ARY Dubai to recover the same.

192

In relation to the arbitration proceedings, a statement of claim has been filed by NSI on March, 10 2010 followed by a list of documents on May 21, 2010 in support of the claim. The arbitration hearing took place on July 19, 2010, however the award of the arbitrator is still pending.

2. NSI filed a suit (no. S507/ 2010/ V) against Zee Sports Limited and Zee Entertainment Enterprises Limited

(formerly known as Zee Telefilms Limited), before the High Court of Singapore. In August 2005, NSI entered into an agreement with Zee Sports Limited and Zee Telefilms Limited (collectively referred to as “Zee”) for grant of certain broadcast rights in consideration of a total sum of USD 3.5 million to be paid by Zee. Zee paid USD 3 million, however defaulted in the payment of the remaining USD 0.5 million.

NSI filed an application in the High Court of Singapore requesting for service of documents out of Singapore in order to enable NSI to pursue legal proceedings in Singapore. The High Court granted the application vide its order dated July 14, 2010 and it is in the process of serving the relevant documents in India.

3. NSI filed a suit against ARY Digital UK Limited (“ARY UK”) before the High Court of London. On March 1,

2006, NSI entered into a binding heads of agreement with ARY UK for grant of certain broadcast rights in consideration of a total sum of USD 7 million to be paid by ARY UK. ARY UK has however defaulted in the payment of USD 3.8 million.

Arbitration proceedings have been commenced and a notice of arbitration has been sent to ARY UK on May 26, 2010. The parties have approached the High Court of London vide claim no. 2010 Folio 814 dated July 9, 2010 for appointment of an arbitrator. The High Court vide its order dated September 8, 2010 appointed Sir Gavin Lightman as the sole arbitrator in respect of the arbitral proceedings. In light of said appointment, NSI intends to commence the arbitral proceedings forthwith.

4. NSI filed a claim of recovery (claim no. OCL01093) against Zee Sports Limited (“Zee”) before the Central

London County Court. In June 2005, NSI entered into an agreement with Zee to exploit certain broadcast rights for archive material in consideration of USD 0.17 to be paid by Zee. Zee has however defaulted in the payment of USD 0.12.

NSI filed a claim form against Zee on April 15, 2010. Claim forms and application to serve out have been lodged with the court and the court granted its permission on July 9, 2010. The claim form was served on Zee on July 19, 2010 (deemed date of service). Zee had been allowed time to file its acknowledgement of service, admission or defence before August 11, 2010, however the court has indicated that there is no response from Zee. On that basis, NSI will forthwith be applying for a summary judgement against Zee.

Tax litigations concerning Nimbus Sports International Pte. Ltd. (“NSI”)

1. NSI filed an appeal (no. 2423 to 2425/ DEL/ 08) against DDIT 2(2) International Taxation, under section 143

(3) of the Income Tax Act, 1961 for the assessment year 2002-2003, before the Income Tax Appellate Tribunal, New Delhi. NSI by virtue of incorporated in Singapore, is a tax resident of Singapore. On February 11, 2002, NSI entered into an agreement with Prasar Bharati for production of certain cricket events during the period 2002-2004. The appeal involves the taxability of the amount receivable by NSI from Prasar Bharati under this agreement as per the terms of the India-Singapore Tax Treaty (“Treaty”). NSI claims inter alia, that the receivables that NSI is entitled to are not liable to be taxed in India in the absence of any permanent establishment in India and hence claims a refund of withholding tax deducted by Prasar Bharati on the grounds that it is not subject to tax of Rs 23.16 million.

As against a refund claimed by NSI the assessing officer passed an order demanding the following tax: AY 2002-2003 - Rs.14.380 million AY 2004-05 – Rs.16.54 million AY 2005-06 – Rs.14.47 million

The aggregate demand including tax and interest/penalty is Rs. 56.96 million. The matter is currently pending before the Income Tax Appellate Tribunal and the next date of hearing is December 15, 2010.

2. The Assessing Officer has raised certain queries on the tax returns filed by NSI as on December 11, 2008 and subject to clearance of those queries he has issued a tax assessment. According to NSI, it has submitted a NIL tax return, whereas the department has determined taxable income as USD 0.67 million which has been offset

193

against carried forward loss of USD 2.7 million. NSI has filed its response on July 15, 2009 and has duly responded on May 26, 2010 to further queries of the department dated March 26, 2010. NSI is currently awaiting response from the tax department.

Nimbus Media Pte. Ltd. Cases filed by Nimbus Media Pte. Ltd. (“NMPL”) 1. NMPL has filed an arbitration application (no. 42 of 2010) against Zee Sports before the High Court of Bombay

for the appointment of a sole arbitrator under section 11 (6) (a) of the Arbitration and Conciliation Act, 1996. The dispute arose out of an agreement entered into between NMPL and Zee Sports in January 2004, pursuant to which NMPL agreed to render diverse services in the preparation and development of business strategy and channel concept to Zee Sports, including assistance in the setting up the Zee Sports channel. In consideration of the services so rendered, Zee Sports agreed to pay NMPL a total fee of USD 1 million. However, Zee Sports declined to make the payment so agreed, to NMPL. Zee Sports also refused to submit the dispute to the sole arbitrator nominated by NMPL. Therefore NMPL has filed this arbitration application before the High Court of Bombay requesting it to nominate a sole arbitrator in view of the disagreement between the parties.

Cases filed against NMPL 1. Max Media FZ LLC (“Max Media”) has filed a suit (no. 804 of 2008/ H) against NMPL before the High Court

of Republic of Singapore, in the year 2008. The dispute arose out of an agreement entered into between NMPL and Max Media (“Agreement”) pursuant to which NMPL had drawn down and retained an amount of USD 2.5 million under a bank guarantee issued by Max Media. Max Media claimed recovery for the sum of USD 1.79 million and accordingly initiated legal action against NMPL, in Singapore. In response to the claim filed by Max Media, NMPL filed a counter claim against Max Media for losses and damages resulting from the breach of the said Agreement. The judgment with respect to the suit has been delivered by the High Court of Singapore on January 26, 2010. The court ruled in favour of NMPL and dismissed the claim of Max Media. It was held that damages to be paid to NMPL are to be assessed by the registrar and the amount drawn under the first bank guarantee should be adjusted towards the default payments as well as towards the damages assessed by the registrar. On February 23, 2010, NMPL sought directions of the said High Court for the assessment proceedings, for which the court scheduled a hearing on March 16, 2010. Meanwhile Max Media approached the court for an order for stay of assessment proceedings pending the decision of the Court of Appeal. The said appeal was filed by Max Media on May 5, 2010, which was eventually heard on August 3, 2010. The Court of Appeal has dismissed the case of Max Media with costs and NMPL is allowed to proceed with the assessment of damages.

VII. Outstanding dues to small scale undertakings or any creditors

There are no dues over Rs.0.1 million to small scale undertakings or any creditors by our Company, which is outstanding for more than 30 days.

VIII. Material developments since the last balance sheet

Except as disclosed in the section titled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations as Reflected in the Financial Statements” on page 143 of this Draft Red Herring Prospectus, there are no material developments which would affect the business and operations of our Company and Subsidiaries.

194

Government and Other Approvals We have received the necessary consents, licenses, permissions and approvals from the Government and various governmental agencies required for our present business activities and except as mentioned below, no further major approvals are required for carrying on our present business activities or to undertake the Issue. We have also applied to the concerned governmental authorities for approvals as required to be obtained to continue our activities. Unless otherwise stated, these approvals are all valid as of the date of this Draft Red Herring Prospectus. For further details in this regard, see section titled “Regulations and Policies” on page 92 of this Draft Red Herring Prospectus. APPROVALS FOR THE ISSUE The following approvals have been obtained or will be obtained in connection with the Issue: Corporate Approvals 1. The Board has, pursuant to a circular resolution passed on March 25, 2010 authorized the Issue subject to the

approval by the shareholders of our Company under Section 81(1A) of the Companies Act, and such other authorities as may be necessary.

2. The shareholders of our Company have, pursuant to a resolution passed at an extraordinary general meeting

held on March 29, 2010, authorized the Board of Directors to decide the terms and conditions of the Issue. Approvals from the Stock Exchanges 1. In principle approval from the National Stock Exchange of India Limited dated [●].

2. In principle approval from the Bombay Stock Exchange Limited dated [●]. Approval cum Clarification Letter from the RBI Our Company intends to seek confirmation from the RBI before the filing of the Red Herring Prospectus to permit FIIs and NRIs to subscribe to equity shares in the Issue under the portfolio investment scheme. Further, our Company also intends to seek necessary approval from the RBI for transfer of the Equity Shares forming part of the Offer for Sale in the Issue. To that effect, we are in process of filing an application with the RBI for above purpose. Approval from FIPB Our Company received an approval from FIPB on May 19, 2010 for the following: a) To acquire 51% equity interest in Zenith Sports from Paramount (approval required under Press Note 3

(2009 Series) read with Press Note 2 (2009 Series) and Press Note 4 (2009 Series) issued by the Department of Industrial Policy and Promotion, Government of India, hereinafter referred to as “Press Note 2 of 2009”, “Press Note 3 of 2009” and “Press Note 4 of 2009” respectively); and

b) For investment by our Company of the proceeds raised under proposed initial public offering of our

Company to expand the broadcasting business of Neo Sports Broadcast. The investment will be made by our Company either directly into Neo Sports Broadcast or indirectly into Neo Sports Broadcast inter alia through Zenith Sports (approval required under Press Note 1 (2006 Series) issued by the Department of Industrial Policy and Promotion, Government of India, hereinafter referred to as “Press Note 1 of 2006”).

APPROVALS TO CARRY ON OUR BUSINESS We require various approvals to carry on our business in India. The approvals that we require include the following: Registrations/ Approvals obtained by our Company Tax Registrations/ Approvals S. No.

No./Description of Permit/License/Registration

Issuing Authority Date Validity

1. Permanent Account Number-AAACN3947L

Commissioner of Income Tax Department (Computer Operations)

- Until cancelled

195

2. Tax Deduction Account Number -MUMN10042E

National Securities Depositories Limited, India

May 17, 2004 Until cancelled

3. Professional Tax no. PT/R/1/25/6951 The Maharashtra State Tax on Professions Traders & Employments Act, 1975

- Until cancelled

4. Service Tax Registration No.: AAACN3947LST001

Office of the Assistant Commissioner of Service Tax Division, Mumbai

March 24, 2009 Until cancelled for change of services

Other Registrations/ Approvals S. No.



1. Registration No. KW007928 under the Bombay Shops and Establishments Act, 1948

Inspector, Bombay Shops and Establishments Act, 1948

September 20, 2001

December 31, 2010

2. Employees’ Provident Fund Registration No. MH/41890

Office of the Regional Provident Fund Commissioner

May 17, 1996 (w.e.f.

30.11.94)

Valid, until cancelled.

3. Employees State Insurance Registration No.: 31-29521-101/ B

Employees State Insurance Corporation April 12, 2007 Until cancelled

Registrations/ Approvals Obtained by the Indian Subsidiaries Approvals Obtained by Nirvana Television Limited Tax Registrations/ Approvals S. No.



1. Permanent Account Number AAACN8162B (formerly known as Nimbus Online Private Limited)


- Until cancelled

2. Tax Account Number MUMN10619A


July 8, 2004 Until cancelled

3. Professional Tax No. 99061600204P Profession Tax Officer, Registration Branch, Profession Tax Division, Mumbai

July 6, 2007 Until cancelled

4. Service Tax Registration No. AAACN8162BST001

Office of the Dy. Commissioner of Service Tax

December 16, 2004





1. Registration No. 760014878 under the Bombay Shops and Establishments Act, 1948


July 31, 2007 December 31, 2010

Approvals Obtained by Nimbus Motion Pictures (A.P) Pvt. Limited Tax Registrations/ Approvals S. No.



1. Permanent Account Number – AABCN6641C


- Until cancelled.

2. Tax Account Number-HYDN00841B National Securities Depositories Limited, India

- Until cancelled

196

Approvals Obtained by Nimbus Home Entertainment Private Limited Tax Registrations/ Approvals S. No.



1. Permanent Account Number AABCN6594L


- Until cancelled

2. Tax Account Number-MUMN15578D


- Until cancelled

3. Professional Tax No. 27770643847P Profession Tax Officer, Registration Branch, Profession Tax Division, Mumbai

December 1, 2008

Until cancelled




1. Registration No. 760033782 under the Bombay Shops and Establishments Act, 1948


January 14, 2008

December 31, 2010

2. Employees’ Provident Fund Registration No. - MH/211136

Office of the Regional Provident Fund Commissioner

July 17, 2008 Valid, until cancelled.

Registrations/ Approvals Obtained by Neo Sports Broadcast Business Approvals Approvals Obtained by Neo Sports Broadcast S. No.

No./Description of Permit/License Issuing Authority Date Validity

1. 017/1/2006-TV-(I) Permission to downlink non-news and current affairs satellite television channel named “Neo Sports+” (now known as “Neo Cricket”)

Ministry of Information & Broadcasting, Government of India

September 27, 2006

5 years

2. 016/1/2006-TV-(I) Permission to downlink non-news and current affairs satellite television channel named “Neo Sports”.


September 27, 2006

5 years

3. 1404/20(ii)/2006/TV-(I) Permission to uplink non-news television channel named “Neo Sports” and “Neo Sports+”.


September 27, 2006

10 years

5. IEC No. 0306022923 Importer-Exporter Certificate

Ministry of Commerce, Government of India

June 30, 2006 Until cancelled

Tax Registrations/ Approvals S. No.



1. Permanent Account Number -AACCN2854Q


March 17, 2006 Valid, until cancelled.

2. Tax Account Number - MUMN13882B


January 05, 2007


3. Professional Tax No. PT/E/1/1/29/18/9396

Profession Tax Officer, Enrollment Registration, Bandra, Mumbai

June 2, 2007 Until cancelled

4. Service Tax Registration No. AACCN2854QST001

Superintendent of Service Tax, Service Tax Division IV, Mumbai

March 23, 2007 (w.e.f. July 16,

2001)

Until cancelled for change of services

197

Registrations/ Approvals Obtained by Neo Broadcast Limited Applications made by Neo Broadcast but pending approval S. No.

No./Description of Permit/License Issuing Authority Date

1. Application for downlink non-news and current affairs satellite television channels named Neo Cinema, Neo Zindagi and Neo Sports2.


August 11, 2010

2. Application for uplink non-news and current affairs satellite television channels named Neo Cinema, Neo Zindagi and Neo Sports2.


August 11, 2010




1. Registration No. KW013844 under the Bombay Shops and Establishments Act, 1948

Inspector under the Bombay Shops and Establishments Act, 1948

February 3, 2007 December 31, 2010

2. Employees’ Provident Fund Registration No. MH/94647

Office of the Regional Provident Fund Commissioner, Mumbai

December 5, 2006 (w.e.f. September 1, 2006)

Until cancelled

INTELLECTUAL PROPERTY APPROVALS Trade Marks Our trademark “Nimbus” and its logo “N” are registered and owned by Nirvana Television Limited (erstwhile Nimbus Online Private Limited). We have entered into a trademark assignment agreement dated March 29, 2010 with Nirvana Television Limited, through which we are entitled to use the aforesaid trademarks along with our group exclusively and in perpetuity. Registered Trade Marks The following are the approvals received by our Company, Subsidiaries and Joint Venture under the Trademarks Act:

S.

No.

Description of Trade Mark Class Name of proprietor

that stands on Trade

Mark Registry

records

Application/

Registration

number

Date of

application

Status Whether

name change

has been

informed to

Trade Mark

Registry Proprietor: Nimbus Communications Limited

1. “Nirvana Entertainment” 9 Nimbus

Communications

Limited

1204391 June 6, 2003 Registered

N.A

2. “Nirvana Entertainment” 16 Nimbus

Communications

Limited

1204393 June 6, 2003 Registered N.A

198

3. “Nirvana Television” 9 Nimbus

Communications

Limited

1204392 June 6, 2003 Registered N.A

4. SUPER TWENTY 41 Nimbus

Communications

Limited

1591782 August 7, 2007 Registered N.A

5. NIRVANA RADIO 9 Nimbus Communications Limited

974548 December 1,

2000

Registered

Proprietor: Nirvana Television Limited (formerly known as Nimbus Online Private Limited)

6. NIMBUS 9 Nimbus Online

Private Limited

906896 March 1,

2000

Registered

(renewed

upto March

1, 2020)

Not known

7. NIMBUS 16 Nimbus Online Private

Limited

906899 March 1, 2000 Pending

renewal

Not known

8. “N”, NIMBUS (LOGO) 16 Nimbus Online Private Limited 906897 March 1,

2000 Registered

(renewed

upto March

1, 2020)

Not known

9. “N”, NIMBUS (LABEL) 9 Nimbus Online Private Limited 906898 March 1,

2000 Registered

(renewed

upto March

1, 2020)

Yes

10. SHOWBIZ 9 Nimbus Online Private Limited 908173 March 7,

2000

Renewed Yes

11. SHOWBIZ 16 Nimbus Online Private Limited 908174 March 7,

2000 Renewed Not known

12. nirvanazone 9 Nimbus Online Private Limited 908175 March 7,

2000 Registered

(renewed

upto March

7, 2020)

Not known

13. nirvana.co.in 9 Nimbus Online Private

Limited

971909 November 21, 2000 Registered Not known

14. NIRVANANET.CO.IN 9 Nimbus Online Private Limited 971911 November

21, 2000 Registered Not known

15. nirvanam ail.co.in 9 Nimbus Online Private Limited 971912 November


16. nirvanaguru.co.in 9 Nimbus Online Private Limited 971913 November


17. nirvanaclub. co. in 9 Nimbus Online Private Limited 971914 November


18. nirvananetwork.co.in 9 Nimbus Online Private Limited 971915 November


19. NIRVANACITIES CO.IN 9 Nimbus Online Private Limited 971916 November


20. NIRVANAGAMES.CO.IN 9 Nimbus Online Private Limited 971918 November


21. NIRVANANEWS.CO.IN 9 Nimbus Online Private Limited 971919 November


22. NIRVANATEAM.CO.IN 9 Nimbus Online Private Limited 971920 November


23. NIRVANAMEET.CO.IN 9 Nimbus Online Private Limited 971921 November


24. NIRVANAMOVIES. CO.IN 9 Nimbus Online Private Limited 971924 November


25. NIRVANAFLICK.CO.IN 9 Nimbus Online Private Limited 971925 November


26. NIRVANAREELS.CO.IN 9 Nimbus Online Private Limited 971926 November


27. NIRVANASPORT.CO.IN 9 Nimbus Online Private Limited 971927 November


199

28. NIRVANAMALL.CO.IN 9 Nimbus Online Private Limited 971928 November


29. NIRVANASHOP.CO.IN. 9 Nimbus Online Private Limited 971929 November


30. NIRVANASHOPPE.CO.IN 9 Nimbus Online Private Limited 971930 November


31. NIRVANAMUSIC.CO.IN 9 Nimbus Online Private Limited 971934 November


32. NIRVANASTYLE.CO.IN 9 Nimbus Online Private Limited 971935 November


33. nirvanabazaar.co.in (image) 9 Nimbus Online Private Limited 971936 November


34. NIRVANACITIES.COM 9 Nimbus Online Private Limited 971941 November


35. NIRVANALIFE.COM 9 Nimbus Online Private Limited 971942 November


36. NIRVANAFLICK.COM 9 Nimbus Online Private Limited 971943 November


37. nirvanaflicks.com 9 Nimbus Online Private Limited 971944 November


38. NIRVANASPORT.COM 9 Nimbus Online Private Limited 971945 November


39. NIRVANAMALLS. COM 9 Nimbus Online Private Limited 971946 November


40. nirvanashops.com 9 Nimbus Online Private Limited 971947 November


41. NIRVANASHOPPE.COM 9 Nimbus Online Private Limited 971948 November


42. NIRVANACHATS.COM 9 Nimbus Online Private Limited 971949 November


43. NIRVANASOUNDS.COM 9 Nimbus Online Private Limited 971950 November


44. NIRVANASTYLE.COM 9 Nimbus Online Private

Limited

971951 November 21, 2000 Registered Not known

45. Nirvana FM 9 Nimbus Online Private Limited 974546 December 1,

2000

Registered Not known

46. Radio Nirvana 9 Nimbus Online Private Limited 974547 December 1,

2000

Registered Not known

Proprietor: Neo Sports Broadcast Private Limited (formerly known as Nimbus Sports Broadcast Private Limited)

47. “MAXXSPORTS” 38 Nimbus Sports Broadcast Private Limited

1474207 July 28, 2006 Registered Yes



49. “MAXXCRICKET” 9 Nimbus Sports Broadcast Private Limited






52. “NEO SPORTS +” 42 Nimbus Sports Broadcast Private Limited

1495721 October 10,

2006

Registered Yes

200

Trademarks pending registration: The following are the pending trademark applications made by our Company, Subsidiaries and Joint Venture under the Trademarks Act:

S. No. Description of Trade Mark Class Name of proprietor

that stands on

Trade Mark

Registry records

Application/

Registration

number

Date of

Application

Status Whether

name

change has

been

informed

to Trade

Mark



Communications

Limited

1591779 August 7, 2007 Advertised

Before

Acceptance

N.A


Communications

Limited


Before

Acceptance

N.A


Communications

Limited


Before

Acceptance

N.A

Proprietor: Nirvana Television Limited (formerly known as Nimbus Online Private Limited)

4. nirvanazone. co. in 9 Nimbus Online

Private Limited

971910 November 21,

2000

Advertised

Before

Acceptance

Not known

5. HOTCHAAT.CO.IN 9 Nimbus Online Private Limited 971931 November 21,

2000

Exam rep

issued

Not known

6. NIRVANACHAT.CO.IN 9 Nimbus Online Private Limited 971932 November 21,

2000

Exam rep

issued

Not known

7. NIRVANASOUND.CO.IN 9 Nimbus Online Private Limited 971933 November 21,

2000

Exam rep

issued

Not known

8. NIRVANAMAILS.COM 9 Nimbus Online Private Limited 971940 November 21,

2000

Exam rep

issued

Not known



1474206 July 28, 2006 Advertised Before Acceptance

Yes



Yes


1474211 July 28, 2006 Advertised

Before

Acceptance

Yes



Before

Acceptance

Yes

13. “NEO SPORTS”

9 Nimbus Sports Broadcast Private Limited


Before

Acceptance

Yes

201




Before

Acceptance

Yes




Before

Acceptance

Yes




Before

Acceptance

Yes




Before

Acceptance

Yes

18. “NEO SPORTS” (LABEL)

Nimbus Sports Broadcast Private Limited

1495712 October 11,

2006

Advertised

Before

Acceptance

Yes

19. “NEO SPORTS” (LABEL)


1495713 October 10,

2006

Advertised

Before

Acceptance

Yes



1495714 October 10,

2006

Advertised

Before

Acceptance

Yes



1495715 October 10,

2006

Advertised

Before

Acceptance

Yes



1495716 October 10,

2006

Advertised

Before

Acceptance

Yes

23. “NEO CRICKET” 9 Nimbus Sports Broadcast Private Limited


Before

Acceptance

Yes



Before

Acceptance

Yes



Before

Acceptance

Yes



Before

Acceptance

Yes



Yes

28. “PRIME CRICKET” 9 Nimbus Sports Broadcast Private Limited


Yes



Yes



Yes



Yes

202



Yes

33. “PRIME SPORTS” 9 Nimbus Sports Broadcast Private Limited


Yes



Yes



Yes



Yes



Yes


1495717 October 10,

2006

Advertised Before Acceptance

Yes


1495718 October 10,

2006


Yes


1495719 October 10,

2006


Yes


1495720 October 10,

2006


Yes

Proprietor: Nimbus Home Entertainment Pvt. Ltd.

42. “SHOWTIME

VIDEO”

41 Nimbus Home Entertainment Pvt. Ltd.


Before

Acceptance

N.A

Proprietor: Neo Broadcast Limited (formerly known as Nirvana Adzone Limited

43. NEO CINEMA 9 Nirvana Adzone Limited 1988458 July 2, 2010 Pending Not known

44. NEO CINEMA 16 Nirvana Adzone Limited

1988459 July 2, 2010 Pending Not known









49. NEO SPORTS 2 9 Nirvana Adzone Limited












55. NEO ZINDAGI 9 Nirvana Adzone Limited












203

Trademarks that have received opposition: Opposition applications have been filed against the following trademarks owned by our Company, Subsidiaries and Joint Venture under the Trademarks Act: Copyright

Neo Sports Broadcast has registered for copyright protection for two variations of the logo “Neo Sports+” the details of which are as below.

Registrant Logo (artistic

work)

Author

(whose No-Objection Certificate

has been taken prior to

registration of copyright)

Registration

number

Date of registration

Neo Sports Broadcast Neo Sports + Jon William Griffin, Singapore A-81767/ 2007 December 31, 2007

Neo Sports Broadcast Neo Sports Jon William Griffin, Singapore A-81768/ 2007 December 31, 2007

S.

No.

Description of Trade

Mark

Class Name Of Proprietor

that stands on Trade

Mark Registry

Records

Application/

Registration

number

Date of

Application

Status Whether

name

change has

been

informed to

Trade

Mark


1. “Nirvana Television” 16 Nimbus Communications

Limited

1204394 June 6, 2003 Opposed N.A

2. ASIAN CHAMPIONS

LEAGUE

16 Nimbus Communications

Limited

1591783 August 7, 2007 Opposed N.A

3. ASIAN CHAMPIONS

LEAGUE


Limited


4. ASIAN CHAMPIONS

LEAGUE


Limited


5. ASIAN CHAMPIONS

LEAGUE


Limited




1474204 July 28, 2006 Opposed Yes

204

Other Regulatory and Statutory Disclosures

Authority for the Issue Corporate approvals Our Board of Directors has, pursuant to the circular resolution passed by the Board on March 25, 2010, authorised the Fresh Issue and Offer for Sale, subject to the approval by the shareholders of our Company under Section 81(1A) of the Companies Act. Our shareholders have, pursuant to a resolution dated March 29, 2010 under Section 81(1A) of the Companies Act, authorised the Fresh Issue and Offer for Sale at the extra ordinary general meeting of our Company. Further, our Board has, pursuant to resolutions passed at its meeting held on September 27, 2010 authorised our Company to take necessary action for filing of the Draft Red Herring Prospectus with SEBI in line with the decision taken earlier by the Board of Directors and shareholders in their respective meetings. Selling Shareholders have approved the Offer for Sale by the following resolutions: (i) Americorp Ventures Limited vide resolution passed at the meeting of its board held on September 22, 2010. (ii) CSI BD (Mauritius) vide resolution passed at the meeting of its board held on March 26, 2010. (iii) Funderburk Enterprises Limited vide resolution passed at the meeting of its board held on September 23, 2010. Approvals from lenders We have taken the requisite consents from all our lenders pursuant to the lending agreements whose details are referred to in the section titled “Financial Indebtedness” on page 173 of this Draft Red Herring Prospectus. Stock exchange approvals Our Company has obtained in-principle listing approvals dated [●] and [●] from the BSE and the NSE, respectively. [●] is the Designated Stock Exchange. Prohibition by SEBI and RBI or governmental authorities Our Company, Directors, Promoters, Promoter Group, Group Companies, Selling Shareholders and companies in which our Directors or Promoters are associated with as directors or promoters have not been prohibited from accessing or operating in capital markets under any order or direction and there are no proceedings in relation to violations of securities laws committed by our Promoters in the past or currently pending against our Promoters. Our Directors are not in any manner associated with the securities market and there has been no action taken by the SEBI against the Directors or any entity our Directors are involved in as promoters or directors. Neither our Company, our Promoter or their relatives (as defined in the Companies Act), Group Companies, nor our Directors, have been detained as wilful defaulters by the RBI or any other government authorities. Eligibility for the Issue We are eligible for the Issue under Regulation 26(2) of the SEBI ICDR Regulations which reads as follows: (2) “An issuer not satisfying any of the conditions stipulated in sub-regulation (1) may make an initial public offer if:

(a) (i) the issue is made through the book building process and the issuer undertakes to allot at least fifty per cent of the net offer to public to qualified institutional buyers and to refund full subscription monies if it fails to make allotment to the qualified institutional buyers;

OR

(ii) at least fifteen per cent. of the cost of the project is contributed by scheduled commercial banks or

public financial institutions, of which not less than ten per cent. shall come from the appraisers and

205

the issuer undertakes to allot at least ten per cent. of the net offer to public to qualified institutional buyers and to refund full subscription monies if it fails to make the allotment to the qualified institutional buyers;

AND

(b) (i) the minimum post-issue face value capital of the issuer is one hundred million rupees;

OR

(ii) the issuer undertakes to provide market-making for at least two years from the date of listing of the specified securities, subject to the following:

(A) the market makers offer buy and sell quotes for a minimum depth of three hundred specified

securities and ensure that the bid-ask spread for their quotes does not, at any time, exceed ten per cent;

(B) the inventory of the market makers, as on the date of allotment of the specified securities, shall be at least five per cent of the proposed issue.”

We are an unlisted Company not satisfying with the conditions specified in the Regulations 26(1) SEBI ICDR Regulations and are therefore required to meet both the conditions detailed in Clause (a) and Clause (b) of Regulation 26(2) of the SEBI ICDR Regulations. • We are complying with Regulation 26(2)(a)(i) of the SEBI ICDR Regulations and at least 50% of the Issue are

proposed to be allotted to QIBs and in the event we fail to do so, the full subscription monies shall be refunded to the Bidders.

• We are complying with Regulation 43(2) of the SEBI ICDR Regulations and Non-Institutional Bidders and

Retail Individual Bidders will be allocated not less than 15% and 35% of the Issue respectively. • We are also complying with Regulation 26(2)(b)(i) of the SEBI ICDR Regulations and the post-issue face value

capital of our Company shall be Rs. 755.41 million, which is more than the minimum requirement of Rs. 100 million.

Hence, we are eligible for the Issue under Regulation 26(2) of the SEBI ICDR Regulations. Further, in accordance with Regulation 26(4) of the SEBI ICDR Regulations, we shall ensure that the number of prospective allottees to whom the Equity Shares will be allotted will be not less than 1,000 otherwise the entire application money will be refunded forthwith. If such monies is not repaid within eight days after our Company and Selling Shareholders will become liable to repay, then our Company shall, on and from expiry of eight days, be liable to repay the monies, with interest at the rate of 15% p.a. on application monies as prescribed under section 73 of the Companies Act. Disclaimer Clause of SEBI AS REQUIRED, A COPY OF THE DRAFT RED HERRING PROSPECTUS HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGERS, EDELWEISS CAPITAL LIMITED, MACQUARIE CAPITAL ADVISERS (INDIA) PRIVATE LIMITED AND CENTRUM CAPITAL LIMITED AND CO-BOOK RUNNING LEAD MANAGER, PNB INVESTMENT SERVICES LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE THE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE OUR COMPANY IS PRIMARILY

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RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BOOK RUNNING LEAD MANAGERS AND CO-BOOK RUNNING LEAD MANAGER ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT OUR COMPANY AND THE SELLING SHAREHOLDERS DISCHARGE THEIR RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS, EDELWEISS CAPITAL LIMITED, MACQUARIE CAPITAL ADVISERS (INDIA) PRIVATE LIMITED, CENTRUM CAPITAL LIMITED AND CO-BOOK RUNNING LEAD MANAGER, PNB INVESTMENT SERVICES LIMITED HAS FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED SEPTEMBER 29, 2010 IN ACCORDANCE WITH THE 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 RED HERRING PROSPECTUS PERTAINING TO THE SAID ISSUE.

(II) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH OUR

COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE , PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY OUR COMPANY, WE CONFIRM THAT:

a) THE DRAFT RED HERRING PROSPECTUS FILED WITH SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE

REGULATIONS, GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE SEBI, THE CENTRAL GOVERNMENT OF INDIA AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

c) THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE, FAIR

AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

(III) WE CONFIRM THAT, BESIDES OURSELVES ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATIONS ARE VALID.

(IV) WHEN UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS - NOTED FOR COMPLIANCE.

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

(VI) WE CERTIFY THAT REGULATION 33 OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS.

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(VII) WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS' CONTRIBUTION AND SUBSCRIPTION FROM ALL FIRM ALLOTTEES WOULD BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS' CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS' CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO OUR COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE - NOT APPLICABLE.

(VIII) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF OUR COMPANY FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE 'MAIN OBJECTS' LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF OUR COMPANY AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

(IX) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION – NOTED FOR COMPLIANCE.

(X) WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE - NOT APPLICABLE.

(XI) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS:

• AN UNDERTAKING FROM OUR COMPANY THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER; AND

• AN UNDERTAKING FROM OUR COMPANY THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

(XII) WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION.

(XIII) WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE SEBI (ICDR) REGULATIONS, 2009, WHILE MAKING THE ISSUE.

(XIV) WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR OUR COMPANY, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS’ EXPERIENCE, ETC.

(XV) WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THIS DRAFT RED HERRING PROSPECTUS WHERE

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THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.” All legal requirements pertaining to the Issue will be complied with at the time of filing of the Red Herring Prospectus with the RoC in terms of Section 60B of the Companies Act. All legal requirements pertaining to the Issue will be complied with at the time of registration of the Prospectus with the RoC in terms of Section 60B of the Companies Act. The filing of the Draft Red Herring Prospectus does not, however, absolve our Company from any liabilities under Section 63 and Section 68 of the Companies Act or from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the proposed Issue. Similarly, the filing of the Draft Red Herring Prospectus does not absolve the Selling Shareholders from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the Offer for Sale. SEBI further reserves the right to take up at any point of time, with the BRLMs and Co-BRLM, any irregularities or lapses in the Draft Red Herring Prospectus. Caution - Disclaimer from our Company, the Selling Shareholders, Directors and the BRLMs and Co-BRLM Our Company, the Selling Shareholders, our Directors and the BRLMs and Co-BRLM accept no responsibility for statements made otherwise than in this Draft Red Herring Prospectus or in the advertisements or any other material issued by or at instance of the above mentioned entities and anyone placing reliance on any other source of information, including our website, www.nimbus.co.in would be doing so at his or her own risk. The Selling Shareholders, their directors, affiliates, associates and their respective directors and officers accept no responsibility for any statements made other than those made by it in this Draft Red Herring Prospectus about themselves and their holding of Equity Shares which are being offered through the Offer for Sale. None of the Selling Shareholder assumes any responsibility for any other statement including the statements made by the Company or by any other Selling Shareholder in the Draft Red Herring Prospectus. The BRLMs and Co-BRLM accepts no responsibility, save to the limited extent as provided in the Issue Agreement entered into among the BRLMs, Co-BRLM, the Selling Shareholders and our Company dated September 23, 2010 and the Underwriting Agreement to be entered into among the Underwriters, the Selling Shareholders and our Company. All information shall be made available by our Company, the Selling Shareholders, the BRLMs and Co-BRLM to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road show presentations, in research or sales reports or at Bidding Centres, etc. Our Company, the Selling Shareholders and the BRLMs and Co-BRLM shall not be liable to the Bidders for any failure in uploading the Bids due to faults in any software/hardware system or otherwise. Investors that bid in the Issue will be required to confirm and will be deemed to have represented to our Company, the Selling Shareholders, the Underwriters and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company and will not offer, sell, pledge or transfer the Equity Shares of our Company to any person who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company. Our Company, the Selling Shareholders, the Underwriters and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares of our Company. The BRLMs and Co-BRLM and their respective affiliates may engage in transactions with, and perform services for, our Company and their respective Group Companies, affiliates or associates or third parties in the ordinary course of business and have engaged, or may in future engage, in commercial banking and investment banking transactions with our Company and their respective Group Companies, affiliates or associates or third parties, for which they have received, and may in future receive, compensation. Disclaimer in Respect of Jurisdiction This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are majors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in shares, Indian mutual funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under the applicable trust law and who are authorised under their constitution to hold and invest in shares, permitted insurance companies and pension funds and to permitted non residents including Eligible NRIs, Foreign Institutional Investors (“FIIs”) and other eligible foreign investors. This Draft Red Herring Prospectus does not, however, constitute an invitation to subscribe to Equity Shares offered hereby in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation

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in such jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform him of or herself about and to observe, any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Mumbai, Maharashtra, India only. No action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that the Draft Red Herring Prospectus has been filed with SEBI for observations. Accordingly, the Equity Shares, represented thereby may not be offered or sold, directly or indirectly, and this Draft Red Herring Prospectus may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Draft Red Herring Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in our affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date. The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Each purchaser that is acquiring the Equity Shares, by its acceptance of this Draft Red Herring Prospectus and of the Equity Shares will be deemed to have acknowledged, represented to and agreed with our Company, the Selling Shareholders, the BRLMs and Co-BRLM that it has received a copy of this Draft Red Herring Prospectus and such other information as it deems necessary to make an informed investment decision and that: (1) the purchaser is authorized to consummate the purchase of the Equity Shares in compliance with all applicable

laws and regulations; (2) the purchaser acknowledges that the Equity Shares have not been and will not be registered under the

Securities Act or with any securities regulatory authority of any State of the United States and are subject to restrictions on transfer;

(3) the purchaser is purchasing the Equity Shares in an offshore transaction meeting the requirements of Rule 903

of Regulation S under the Securities Act; (4) the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the Equity Shares,

was located outside the United States at the time the buy order for such Equity Shares was originated and continues to be located outside the United States and has not purchased such Equity Shares for the account or benefit of any person in the United Sates or entered into any arrangement for the transfer of such Equity Shares or any economic interest therein to any person in the United States;

(5) the purchaser is not an affiliate of our Company or a person acting on behalf of our affiliate; (6) the purchaser understands that such Equity Shares (to the extent they are in certificated form), unless our

Company determine otherwise in accordance with applicable law, will bear a legend substantially to the following effect:

THE EQUITY SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES

(7) our Company will not recognize any offer, sale, pledge or other transfer of such Equity Shares made other than

in compliance with the above-stated restrictions; and

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(8) the purchaser acknowledges that our Company, the Selling Shareholders, the BRLMs, Co-BRLM, their respective affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that, if any of such acknowledgements, representations and agreements deemed to have been made by virtue of its purchase of such Equity Shares are no longer accurate, it will promptly notify our Company, and if it is acquiring any of such Equity Shares as a fiduciary or agent for one or more accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of such account.

Each person in a Member State of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State") who receives any communication in respect of, or who acquires any Equity Shares under, the offers contemplated in this Draft Red Herring Prospectus will be deemed to have represented, warranted and agreed to and with each BRLM and Co-BRLM, our Company and the Selling Shareholders that: 1. it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article

2(1)(e) of the Prospectus Directive; and 2. in the case of any Equity Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of

the Prospectus Directive, (i) the Equity Shares acquired by it in the placement have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of the BRLMs and Co-BRLM has been given to the offer or resale; or (ii) where Equity Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those Equity Shares to it is not treated under the Prospectus Directive as having been made to such persons.

For the purposes of this provision, the expression an "offer of Equity Shares to the public" in relation to any of the Equity Shares in any Relevant Member States means the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Equity Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. In addition, until 40 days after the first date upon which the securities were bona fide offered to the public, an offer of the Equity Shares within the United States by a dealer may violate the registration requirements of the Securities Act. Disclaimer Clause of the NSE As required, a copy of this Draft Red Herring Prospectus has been submitted to NSE. The Disclaimer Clause as intimated by NSE to us, post-scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus, prior to the RoC filings. Disclaimer Clause of the BSE As required, a copy of this Draft Red Herring Prospectus has been submitted to BSE. The Disclaimer Clause as intimated by BSE to us, post-scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus, prior to the RoC filings. Filing A copy of the Draft Red Herring Prospectus has been filed with SEBI at the Corporation Finance Department, Securities and Exchange Board of India, SEBI Bhawan, C - 4A, "G" Block, Bandra Kurla Complex, Bandra (East), Mumbai — 400 051, India. A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 60B of the Companies Act, would be delivered for registration to the RoC having its office at Everest, 100 Marine Drive, Mumbai 400 002, Maharashtra, India and a copy of the Prospectus required to be filed under Section 60 of the Companies Act would be delivered for registration to the RoC. Listing Applications will be made to the NSE and BSE for permission of listing of Equity Shares and for an official quotation of the Equity Shares. [●] is the Designated Stock Exchange with which the basis of allocation will be finalised for the Issue.

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If the permission to deal in and for an official quotation of the Equity Shares is not granted by any of the Stock Exchanges, our Company and the Selling Shareholders (to the extent the funds have been placed within its control and disposal) shall forthwith repay, without interest, all moneys received from the applicants in pursuance of the Red Herring Prospectus. If such money is not repaid within 8 days after the Company and the Selling Shareholders becomes liable to repay it, then our Company and the Selling Shareholders shall, on and from expiry of eight days, be liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the Companies Act. Our Company and the Selling Shareholders shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at both the Stock Exchanges mentioned above are taken within 12 (twelve) Working Days of Bid/Issue Closing Date. IMPERSONATION Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies 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 five years.”

Consents Consents in writing of: (a) the Directors, the Company Secretary and Compliance Officer, the Auditors, Bankers to the Company and Bankers to the Issue; and (b) Book Running Lead Managers and Co- Book Running Lead Manager to the Issue, and Syndicate Member, Escrow Collection Bankers, Registrar to the Issue, Legal Counsel to the Company, Legal Counsel to the Underwriters, International Legal Counsel to the Underwriters, to act in their respective capacities, have been obtained and will be filed along with a copy of the Red Herring Prospectus with the RoC, as required under Section 60B of the Companies Act and such consents will not be withdrawn up to the time of delivery of the Red Herring Prospectus with RoC. Consents of the Auditors, Deloitte Haskins & Sells, Chartered Accountants, for inclusion of their report on accounts to the restated financials in the form and context in which they appear in this Draft Red Herring Prospectus and such consent will not be withdrawn up to the time of delivery of the Red Herring Prospectus with RoC. SARA & Associates, Chartered Accountants, has given its written consent to include the statement of tax benefits accruing to our Company and its members. M/s. Anil Masand & Company, Chartered Accountants, have given their written consent to the inclusion of their report on the financial statements relating to Neo Sports Broadcast in the form and context in which it appears in this Draft Red Herring Prospectus and such consent and report will not be withdrawn up to the time of delivery of the Red Herring Prospectus for registration with the RoC. Expert Opinion Except the report of [●] in respect of the IPO grading of this Issue annexed herewith, our Company has not obtained any expert opinions. The above expert has provided its written consent to act as an “expert” to this Issue. The certificate and the opinion stated above form a part of the section titled “Material Contracts and Documents for Inspection” on page 279 of this Draft Red Herring Prospectus. Issue Expenses The expenses for this Issue include lead management fees, underwriting and selling commission, registrar's fees, advertisement and marketing expenses, printing and distribution expenses, IPO Grading expenses, legal fees, SEBI filing fees, bidding software expenses, depository charges and listing fees to the Stock Exchanges. The details of the estimated Issue expenses are set forth below.

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Activity Rs. (in million)

% of the Issue Expenses

% of total Issue Size

Lead management fees [●] [●] [●] Underwriting and selling commission [●] [●] [●] Registrar's fees and to the legal advisors [●] [●] [●] Advertisement and marketing expenses [●] [●] [●] SCSB commission [●] [●] [●] Printing and distribution expenses [●] [●] [●] IPO Grading expenses [●] [●] [●] Others – SEBI filing fees, listing fees etc. [●] [●] [●]

Lead Management, selling commission would be shared by our Company and Selling Shareholders on a pro rata basis as mutually agreed. All other expenses shall be borne by our Company. Fees Payable to the Book Running Lead Managers, Co- Book Running Lead Manager and Syndicate Members The total fees payable to the Book Running Lead Managers, Co- Book Running Lead Manager and Syndicate Members (including underwriting commission and selling commission) will be as stated in the Engagement Letter between our Company, Selling Shareholders and BRLMs dated September 23, 2010 and the Engagement Letter between our Company, Selling Shareholders and Co-BRLM dated September 22, 2010, copies of which is available for inspection at the corporate office of our Company. Fees Payable to the Registrar to the Issue The fees payable to the Registrar to the Issue including fees for processing of application, data entry, printing of CAN/refund order, preparation of refund data on magnetic tape, printing of bulk mailing register, etc. will be as per the MoU dated September 23, 2010 between our Company, the Selling Shareholders and the Registrar to the Issue signed with our Company and the Selling Shareholders, a copy of which is available for inspection at the registered office of our Company. The Registrar to the Issue will be reimbursed for all out-of-pocket expenses including cost of stationery, postage, stamp duty and communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable them to send refund orders or allotment advice by registered post/speed post/under certificate of posting. Particulars regarding Public or Rights Issues during the Last 10 Years There have been no public or rights issue by our Company during the last 10 years. Issues otherwise than for Cash Except as stated in the sections titled “Capital Structure” on page 23 of this Draft Red Herring Prospectus, our Company has not issued any Equity Shares for consideration otherwise than for cash. Commission and Brokerage paid on Previous Issues of our Equity Shares Since this is the initial public issue of the Equity Shares, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to public subscription for any of our Company’s Equity Shares since inception. Promise vs. Performance - Last Three Issues There has not been any previous public issue of our Equity Shares. Promise vs. Performance - Last Issue of Group Companies None of our Group Companies have made any public or rights issues in the last 10 years preceding the date of this Draft Red Herring Prospectus. Outstanding Debentures, Bond, or Preference Shares As on the date of filing this Draft Red Herring Prospectus, our Company does not have any redeemable preference shares, debentures or bonds outstanding.

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Partly Paid-Up Shares As on the date of filing this Draft Red Herring Prospectus, our Company does not have any partly paid-up shares. Stock Market Data of our Equity Shares The Equity Shares are not listed on any stock exchange and thus there is no stock market data for the same. Mechanism for Redressal of Investor Grievances The Memorandum of Understanding between the Registrar to the Issue and our Company will provide for retention of records with the Registrar to the Issue for a period of at least six months from the last date of dispatch of letters of allotment, demat credit, refund orders to enable the investors to approach the Registrar to the Issue for redressal of their grievances. All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, application number, number of Equity Shares applied for, amount paid on application, Depository Participant, and the bank branch or collection center where the application was submitted. All grievances relating to the ASBA process may be addressed to the SCSBs, giving full details such as name, address of the applicant, application number, number of Equity Shares applied for, amount paid on application and the Designated Branch or the collection centre of the SCSBs where the Bid cum Application Form was submitted by the ASBA Bidders. Disposal of Investor Grievances by our Company We estimate that the average time required by our Company or the Registrar to the Issue or the SCSBs in case of ASBA Bidders for the redressal of routine investor grievances shall be 10 Working Days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, our Company will seek to redress these complaints as expeditiously as possible. We have appointed Mr. Parthasarathy Iyengar, Company Secretary as the Compliance Officer and he may be contacted in case of any pre-Issue or post-Issue related problems at the following address: Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India. Tel: +91 22 2635 2000; Fax: +91 22 2635 2123; Email: [email protected] Mechanism for Redressal of Investor Grievances by Group Companies None of our Group Companies is listed on any stock exchange. Changes in Auditors in last three years There has been no change in the auditors of our Company in the last three years. Capitalisation of Reserves or Profits last five years We have not capitalised our reserves or profits at any time during the last five years. Revaluation of Assets Except for revaluation of assets in August, 1994 and March, 2008, our Company did not revalue its assets. Servicing behaviour Except as disclosed in the sections titled “History and Certain Corporate Matters”, “Financial Indebtedness” and “Financial Statements” on pages 100, 173 and 142, respectively of this Draft Red Herring Prospectus, there has been no default in payment of statutory dues or of interest or principal in respect of our borrowings or deposits. Please see the sections titled “Financial Indebtedness” and “Financial Statements” on pages 173 and 142,

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respectively of this Draft Red Herring Prospectus, for details of borrowings of our Company. Tax Implications Successful Bidders will be subject to capital gains tax on any resale of the Equity Shares at applicable rates, depending on the duration for which the investors have held the Equity Shares prior to such resale and whether the Equity Shares are sold on the Stock Exchanges. For details, see the section titled “Statement of Tax Benefits” on page 54 of this Draft Red Herring Prospectus.

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SECTION VII - OFFERING INFORMATION

Terms of the Issue The Equity Shares being issued through the Issue are subject to the provisions of the Companies Act, our Memorandum and Articles of Association, the terms of the Draft Red Herring Prospectus, Red Herring Prospectus, the Prospectus, Bid cum Application Form, ASBA Bid cum Application Forms, the Revision Form, ASBA Revision Form, the CAN and other terms and conditions as may be incorporated in other documents/ certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws as applicable, guidelines, notifications, rules and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, the Government of India, Stock Exchanges, RoC, RBI, FIPB and/or other authorities, as in force on the date of the Issue and to the extent applicable. Compliance with SEBI ICDR Regulations Our Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time. Ranking of Equity Shares The Equity Shares being issued shall be subject to the provisions of our Memorandum and Articles of Association and shall rank pari passu with the existing Equity Shares of our Company including rights in respect of dividend. The Allottees in receipt of Allotment of Equity Shares under this Issue will be entitled to dividends and other corporate benefits, if any, declared by our Company after the date of Allotment. For further details, please see the section titled “Description of Equity Shares and main provisions of Articles of Association of our Company” on page 258 of this Draft Red Herring Prospectus. Payment of dividend to the transferees pursuant to the Offer for Sale In accordance with the provisions of the Companies Act, the transferees shall be entitled to the dividend for the entire year in the event our Company declares dividend. For further details, please see the section titled “Dividend Policy” on page 141 of this Draft Red Herring Prospectus. Mode of Payment of Dividend Our Company shall pay dividends to its shareholders in accordance with the provisions of the Companies Act, the Articles of Association, the SEBI ICDR Regulations and the provisions of the listing agreement. Face Value and Issue Price The face value of the Equity Shares is Rs. 10 each and the Floor Price is Rs. [●] per Equity Share and the Cap Price is Rs. [●] per Equity Share. At any given point of time there shall be only one denomination for the Equity Shares. The Price Band and the minimum Bid lot size for the Issue will be decided by our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM, advertised in all editions of [●] in English, Hindi and of [●] in Marathi at least two Working Days prior to the Bid/Issue Opening Date. Rights of the Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights post-Issue: • Right to receive dividend, if declared; • Right to attend general meetings and exercise voting powers, unless prohibited by law; • Right to vote on a poll either in person or by proxy; • Right to receive offers for rights shares and be allotted bonus shares, if announced; • Right to receive surplus on liquidation subject to any statutory and other preferential claims being satisfied; • Right of free transferability of Equity Shares; and • Such other rights, as may be available to a shareholder of a listed public company under the Companies Act, the

terms of the listing agreement executed with the Stock Exchanges, and our Company’s Memorandum and Articles of Association.

For a detailed description of the main provisions of our Articles of Association relating to voting rights, dividend, forfeiture and lien and/or consolidation/splitting, please refer to the section titled “Description of Equity Shares and main provisions of Articles of Association of our Company” on page 258 of this Draft Red Herring Prospectus.

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Market Lot and Trading Lot In terms of Section 68B of the Companies Act, the Equity Shares shall be allotted only in dematerialised form. As per the SEBI ICDR Regulations, the trading of our Equity Shares shall only be in dematerialised form. Since trading of our Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allotment in this Issue will be only in electronic form in multiples of one (1) Equity Share subject to a minimum Allotment of [●] Equity Shares. Further, as per the provisions of the SEBI ICDR Regulations, the trading of the Equity Shares shall be in dematerialised form only. Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allocation of Equity Shares and Allotment in this Offer will be in electronic form in multiples of [●] Equity Share, subject to a minimum Allotment of [●] Equity Shares. The Price Band and the minimum bid lot will be decided by the Selling Shareholders and our Company in consultation with the BRLMs and the Co-BRLM, including the relevant financial ratios computed for both the Cap Price and the Floor Price, which shall be published in English and Hindi national newspapers and one Marathi newspaper, each with wide circulation, being the newspapers in which the pre-Offer advertisements were published, at least two working days prior to the Bid/Issue Opening Date. Nomination Facility to Investor In accordance with Section 109A of the Companies Act, the sole or first Bidder, along with other joint Bidders, may nominate any one person in whom, in the event of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of Equity Share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Registered Office/ corporate office of our Company or to the Registrar and transfer agents of our Company. In accordance with Section 109B of the Companies Act, any Person who becomes a nominee by virtue of Section 109A of the Companies Act, shall upon the production of such evidence as may be required by the Board, elect either: • To register himself or herself as the holder of the Equity Shares; or • To make such transfer of the Equity Shares, as the deceased holder could have made. Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Since the Allotment of Equity Shares in the Issue will be made only in dematerialised form, there is no need to make a separate nomination with our Company. Nominations registered with respective depository participant of the applicant would prevail. If the investors require changing their nomination, they are requested to inform their respective depository participant. Joint Holders Where two or more persons are registered as the holders of the Equity Shares, they shall be entitled to hold the same as joint tenants with benefits of survivorship. Bid/ Issue Period Bidders may submit their bid only in the bid period. The Bid/ Issue Opening Date is [●] and the Bid/ Issue Closing Date is [●]. Provided that Anchor Investors are required to submit their Bids on the Anchor Investors Bidding Date. Jurisdiction Exclusive jurisdiction for the purpose of this Issue is with the competent courts/authorities in Mumbai, Maharashtra.

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The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Minimum Subscription If the Issuer does not receive the minimum subscription of ninety per cent of the Fresh Issue including devolvement of Underwriters, within 60 days from the Bid/Issue Closing Date, the Issuer shall forthwith refund the entire subscription amount received. If there is a delay beyond eight days after we become liable to pay the amount, amount with interest as per Section 73 of the Companies Act. Further, in accordance with sub-regulation (4) of Regulation 26 of the SEBI ICDR Regulations we shall ensure that the number of prospective Allottees to whom the Equity Shares will be allotted will be not less than 1,000. The requirement for minimum subscription is not applicable to the Offer for Sale. In case of under-subscription in the Issue, the Equity Shares in the Fresh Issue will be issued prior to the sale of Equity Shares in the Offer for Sale. However, upon the receipt of minimum subscription of 90% of the Fresh Issue; the balance subscription shall be first satisfied from the sale of Equity Shares in the Offer for Sale. Any expense incurred by our Company on behalf of the Selling Shareholders with regard to refunds, interest for delays, etc. for the Equity Shares being offered through the Offer for Sale, will be reimbursed by the Selling Shareholders to our Company, in proportion to the Equity Shares contributed by the Selling Shareholders to the Issue. Further, in accordance with Regulation 26(4) of the SEBI ICDR Regulations, our Company shall ensure that the number of prospective allottees to whom the Equity Shares will be Allotted will be not less than 1,000. If at least 50% of this Issue cannot be Allotted to QIBs, then the entire application money will be refunded forthwith. Arrangement for disposal of Odd Lots There are no arrangements for disposal of odd lots. Application by Eligible NRIs, FVCI, FIIs and Sub-Accounts It is to be distinctly understood that there is no reservation for NRIs, FVCI and FIIs, Sub-Accounts. The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Restriction on transfer of shares Except for lock-in of the pre-Issue Equity Shares and Promoter‘s minimum contribution in the Issue as detailed in “Capital Structure” on page 23 of this Draft Red Herring Prospectus and as provided in our Articles as detailed in “Description of Equity Shares and main provisions of Articles of Association of our Company” on page 258 of this Draft Red Herring Prospectus, there are no restrictions on transfers and transmission of shares and on their consolidation/ splitting.

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Equity Shares in Dematerialised Form only Investors should note that Allotment of Equity Shares to all successful Bidders will only be in the dematerialised form. Bidders will not have the option of Allotment of the Equity Shares in this Issue in physical form. The Equity Shares on Allotment shall be traded only in the dematerialised segment of the Stock Exchanges.

Withdrawal of the Issue Our Company and/or the Selling Shareholders, in consultation with the Book Running Lead Managers, Co- Book Running Lead Manager, if required in terms of their engagement letters, reserves the right not to proceed with the Issue anytime after the Bid Opening Date but before the Allotment of Equity Shares in accordance with SEBI ICDR Regulations. Provided, that in such an event, we will give the reason thereof within two days of deciding , by way of a public notice in the same newspapers where the pre-issue advertisement had appeared. The BRLMs and Co-BRLM, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one day of receipt of such notification. The Stock Exchanges shall also be informed promptly. Further, in the event of withdrawal of the Issue and subsequently, plans of an IPO by our Company, a draft red herring prospectus will be submitted again for observations of the SEBI. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment and (ii) the final RoC approval of the Prospectus after it is filed with the RoC.

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Issue Structure

Public Issue of 22,050,000 Equity Shares of Rs. 10 each for cash at a price of Rs.[●] per Equity Share (including a share premium of Rs.[●] per Equity Share) of our Company aggregating Rs.[●] million. The Issue comprises a Fresh Issue of 14,040,000 Equity Shares aggregating Rs.[●] million and an Offer for Sale of 8,010,000 Equity Shares aggregating Rs.[●] million by the Selling Shareholders. The Issue shall constitute 29.19% of the post-Issue capital of our Company. In case of under-subscription in the Issue, the Equity Shares in the Fresh Issue will be issued prior to the sale of Equity Shares in the Offer for Sale. However, upon the receipt of minimum subscription of 90% of the Fresh Issue; the balance subscription shall be first satisfied from the sale of Equity Shares in the Offer for Sale. If at least 50% of the Issue cannot be allotted to QIBs, then the entire application money shall be refunded forthwith. The Issue is being made through a Book Building Process.

QIBs(1) Non-Institutional Bidders

Retail Individual Bidders

Number of Equity Shares available for allocation(2)

At least 11,025,000 Equity Shares or Issue Size less allocation to Non-Institutional Bidders and Retail Individual Bidders.

Not less than 3,307,500 Equity Shares or the Issue size less allocation to QIB Bidders and Retail Individual Bidders shall be available for allocation.

Not less than 7,717,500 Equity Shares or the Issue size less allocation to QIB Bidders and Non-Institutional Bidders shall be available for allocation.

Percentage of Issue Size available for Allotment/allocation

At least 50% of Issue Size.

Not less than 15% of Issue or the Issue less allocation to QIB Bidders and Retail Individual Bidders shall be available for allocation.

Not less than 35% of the Issue or the Issue less allocation to QIB Bidders and Non-Institutional Bidders shall be available for allocation.

Basis of Allotment/allocation if respective category is oversubscribed

Proportionate as follows: (a) 551,250 Equity Shares shall be allocated on a proportionate basis to Mutual Funds only; and (b) 10,473,750 Equity Shares shall be allotted on a proportionate basis to all QIBs including Mutual Funds receiving allocation as per (a) above.

Proportionate Proportionate

Minimum Bid

Such number of Equity Shares that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares thereafter.

Such number of Equity Shares that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares thereafter.

[●] Equity Shares

Maximum Bid

Such number of Equity Shares in multiples of [●] not exceeding the size of the Issue, subject to applicable limits.

Such number of Equity Shares in multiples of [●] exceeding the size of the Issue subject to applicable limits.

Such number of Equity Shares in multiples of [●] so as to ensure that the Bid Amount does not exceed Rs. 100,000.

Mode of Allotment Compulsorily in dematerialised form.

Compulsorily in dematerialised form.

Compulsorily in dematerialised form.

Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter.

[●] Equity Shares and in multiples of [●] Equity Shares thereafter.

[●] Equity Shares and in multiples of [●] Equity Shares thereafter.

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QIBs(1) Non-Institutional Bidders

Retail Individual Bidders

Allotment Lot [●] Equity Shares and in multiples of 1 Equity Share thereafter

[●] Equity Shares and in multiples of 1 Equity Share thereafter

[●] Equity Shares and in multiples of 1 Equity Share thereafter

Trading Lot One Equity Share One Equity Share One Equity Share

Who can Apply (3)

Public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, Mutual Funds registered with SEBI, FIIs and sub-accounts registered with SEBI other than a sub-account which is a foreign corporate or a foreign individual, venture capital funds registered with SEBI, multilateral and bilateral development financial institution, state industrial development corporations, permitted insurance companies registered with Insurance Regulatory and Development Authority, provident funds (subject to applicable law) with minimum corpus of Rs. 250,000,000 and pension funds with minimum corpus of Rs. 250,000,000 in accordance with applicable law and National Investment Fund set up by Government of India and insurance funds set up and managed by the army, navy or air force of the Union of India.

Resident Indian individuals, Eligible NRIs, HUF (in the name of karta), companies, corporate bodies, scientific institutions, societies, trusts, sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals.

Resident Indian individuals, Eligible NRIs and HUF (in the name of Karta) applying for Equity Shares such that the Bid Amount does not exceed Rs. 100,000.

Terms of Payment

Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Members.

Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Members (4).

Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Members (4).

Margin amount Full Bid Amount on Bidding

Full Bid Amount on bidding.

Full Bid Amount on bidding.

(1) Our Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be available for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds, at or above the price at which allocation is done to Anchor Investors. For further details, please see the section titled “Issue Procedure” on page 224 of this Draft Red Herring Prospectus. Allocation to Anchor Investors shall be on a discretionary basis subject to minimum two Anchor Investors. An Anchor Investor shall make an application of at least Rs. 100 million. Further, Anchor Investors shall pay the Bid Amount at the time of submission of the application form by

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the Anchor Investor. (2) Subject to valid Bids being received at or above the Issue Price. The Issue is being made through the Book

Building Process wherein at least 50% of the Issue will be allocated on a proportionate basis to QIBs, out of the QIB Portion 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. If at least 50% of the Issue cannot be allotted to QIBs, then the entire application money will be refunded forthwith. However, if the aggregate demand from Mutual Funds is less than 551,250 Equity Shares, the balance Equity Shares available for Allotment in the Mutual Fund Portion will be added to the QIB Portion and allocated proportionately to the QIB Bidders in proportion to their Bids. Further, not less than 15% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. Under-subscription, if any, in any category, except the QIB Portion, would be allowed to be met with spill-over from any other category or combination of categories at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM.

(3) In case the Bid cum Application Form is submitted in joint names, the investors should ensure that the

demat account is also held in the same joint names and are in the same sequence in which they appear in the Bid cum Application Form.

(4) In case of ASBA Bidders, the SCSBs shall be authorised to block such funds in the bank account of the ASBA

Bidder that are specified in the ASBA Bid cum Application Form.

Letters of Allotment, Refund Orders or Instructions to SCSBs in case of ASBA Bidders Our Company shall credit the Equity Shares to the valid beneficiary account with its Depository Participants within two Working Days from the date of the Allotment to all successful Allottees including ASBA Bidders which in any event shall not exceed 12 Working days of the Bid/Issue Closing Date. Please note that only Bidders having a bank account at any of the 68 centres where the clearing houses for the ECS as notified by the RBI are eligible to receive refunds or payment through electronic transfer of funds. For all other Bidders, including Bidders having bank accounts in the said 68 centres who have not updated their bank particulars along with the nine-digit MICR code, the refund orders shall be dispatched within 12 Working Days of the Bidding/Issue Closing Date “Under Certificate of Posting” for refund orders less than or equal to Rs. 1,500 and through speed post/registered post for refund orders exceeding Rs. 1,500. In case of ASBA Bidders, the Registrar to the Issue shall instruct the SCSBs to unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA for withdrawn, rejected or unsuccessful or partially successful ASBAs within 12 Working Days of the Bid/Issue Closing Date. Interest in case of Delay in Dispatch of Allotment Letters/ Refund Orders or Instructions to SCSBs In accordance with the Companies Act, the requirements of the Stock Exchanges and SEBI ICDR Regulations, our Company undertakes that: • Allotment shall be made only in dematerialised form within 12 Working Days from the Bid/ Issue Closing

Date; • Dispatch of refund orders, except for Bidders who can receive refunds through Direct Credit, NEFT, RTGS

or ECS, shall be done within 12 Working Days from the Bid/Issue Closing Date; • Instructions to SCSBs to unblock the funds in the relevant ASBA Account for withdrawn rejected or

unsuccessful Bids shall be made within 12 Working Days of the Bid/Issue Closing Date. • It shall pay interest at 15% p.a. if the allotment letters/ refund orders have not been dispatched to the

applicants or if, in a case where the refund or portion thereof is made in electronic manner through Direct Credit, NEFT, RTGS or ECS, the refund instructions have not been given to the clearing system in the disclosed manner within 12 Working Days from the Bid/Issue Closing Date or if instructions to SCSBs to unblock funds in the ASBA Accounts are not given within 12 Working Days of the Bid/Issue Closing Date.

Our Company will provide adequate funds required for dispatch of refund orders or Allotment advice to the Registrar to the Issue. Refunds will be made by cheques, pay orders or demand drafts drawn on any one or more of the Escrow Collection Banks/ Refund Banker(s) and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

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In case of ASBA Bidders, the SCSBs will unblock funds in the ASBA Account to the extent of the refund to be made based on instructions received from the Registrar to the Issue. Any expense incurred by our Company on behalf of the Selling Shareholders with regard to refund orders or Allotment advice pertaining to the Equity Shares being offered through the Offer for Sale will be reimbursed by the Selling Shareholders to our Company in the proportion of the Equity Shares contributed by the Selling Shareholders to the Issue. Bid/Issue Programme

BID/ISSUE OPENS ON [●]* BID/ISSUE CLOSES ON [●]##

* Our Company may consider participation by Anchor Investors. The Anchor Investor Bid/Issue date shall be one Working Day prior to Bid/ Issue Opening Date. ##Our Company may consider closing the Bid/Issue Period for QIBs one day prior to the Bid/Issue Closing Date. Bids and any revision in Bids shall be accepted only between 10 a.m. and 5 p.m. (Indian Standard Time) during the Bidding/ Issue Period as mentioned above at the Bidding Centres mentioned on the Bid cum Application Form except that on the Bid Closing Date, Bids shall be accepted only between 10 a.m. and 3 p.m. On the Bid / Issue Closing Date, the Bids and shall be uploaded until (i) 4.00 p.m. in case of Bids by QIB Bidders, Non-Institutional Bidders where the Bid Amount is in excess of Rs. 100,000 and (ii) until 5.00 p.m. or such extended time as permitted by the NSE and the BSE, in case of Bids by Retail Individual Bidders, where the Bid Amount is up to Rs. 100,000. It is clarified that the Bids not uploaded in the book would be rejected. Bids by the ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the NSE and the BSE. Due to limitation of time available for uploading the Bids on the Bid/ Issue Closing Date, the Bidders are advised to submit their Bids one day prior to the Bid/ Issue Closing Date and, in any case, no later than the times mentioned above on the Bid/ Issue Closing Date. All times mentioned in the Draft Red Herring Prospectus is Indian Standard Time. Bidders are cautioned that in the event a large number of Bids are received on the Bid/ Issue Closing Date, as is typically experienced in public offerings, some Bids may not get uploaded due to lack of sufficient time. Such Bids that cannot be uploaded will not be considered for allocation under the Issue. Bids will be accepted only on Working Days, i.e., Monday to Friday (excluding any public holiday). On the Bid/Issue Closing Date, extension of time may be granted by the Stock Exchanges only for uploading the Bids received by Retail Individual Bidders, after taking into account the total number of Bids received up to the closure of timings for acceptance of Bid cum Application Forms and ASBA Bid cum Application Form as stated herein and reported by the BRLMs and Co-BRLM to the Stock Exchange within half an hour of such closure. In case of discrepancy in the data entered in the electronic book vis-à-vis the data contained in the physical Bid form, for a particular bidder, the details as per physical application form of that Bidder may be taken as the final data for the purpose of allotment. Our Company and the Selling Shareholders, in consultation with the BRLMs, and Co-BRLM reserves the right to revise the Price Band during the Bid/Issue Period in accordance with the SEBI ICDR Regulations provided that the Cap Price is less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not exceed 20% on the either side i.e. the floor price can move up or down to the extent of 20% of the floor price. In case of revision in the Price Band, the Issue Period will be extended for three additional working days after revision of Price Band subject to the Bidding Period/Issue Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bidding Period/Issue Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by indicating the change on the websites of the BRLMs and Co-BRLM and at the terminals of the Syndicate. Withdrawal of the Issue Our Company and/or the Selling Shareholders, in consultation with the Book Running Lead Managers, Co- Book Running Lead Manager, if required in terms of their engagement letters, reserves the right not to proceed with the Issue anytime after the Bid Opening Date but before the Allotment of Equity Shares in accordance with SEBI ICDR Regulations. Provided, that in such an event, we will give the reason thereof within two days of the Bid/Issue Closing Date by way of a public notice in the same newspapers where the pre-issue advertisement had appeared. The BRLMs and Co-BRLM, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one day of receipt of such notification. The Stock Exchanges shall also be informed promptly. Further, in the event of withdrawal of the Issue and subsequently, plans of an IPO by our

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Company, a draft red herring prospectus will be submitted again for observations of the SEBI. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment and (ii) the final RoC approval of the Prospectus after it is filed with the RoC.

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Issue Procedure

This section applies to all Bidders. All Bidders other then Anchor Investors can participate in the Issue through the ASBA process. ASBA Bidders should note that the ASBA process involves application procedures that are different from the procedure applicable to Bidders other than the ASBA Bidders. Bidders applying through the ASBA process should carefully read the provisions applicable to such applications before making their application through the ASBA process. Please note that all Bidders are required to pay the full Bid Amount or instruct the relevant SCSB to block the full Bid Amount along with the application. Our Company and the BRLMs are not liable for any amendments, modifications or changes in applicable laws or regulations, which may occur after the date of the Draft Red Herring Prospectus. Book Building Procedure The Issue is being made under sub-regulation (2) (a) (i) and (2) (b) (i) of Regulation 26 of the SEBI ICDR Regulations, and through the Book Building Process, wherein atleast 50% of the Issue shall be allocated on a proportionate basis to QIB Portion. Provided that our Company may allocate up to 30% of the QIB portion to the Anchor Investors on discretionary basis (“Anchor Investor Portion”). At least one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds only. If atleast 50% of the Issue cannot be allocated to the QIBs then the entire application money will be refunded forthwith. Further, not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders and not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders, subject to valid Bids being received at or above the Issue Price. Allocation to Anchor Investors shall be on a discretionary basis and not on a proportionate basis. Our Company may, in consultation with the Selling Shareholders, BRLMs and Co-BRLMs, consider participation by Anchor Investors in the Issue for [●] Equity Shares in accordance with the applicable SEBI ICDR Regulations. Only QIBs can participate in the Anchor Investor Portion. Under-subscription, if any, in any category, except the QIB Portion, would be allowed to be met with spill-over from any other category or combination of categories at the discretion of our Company and the Selling Shareholders in consultation with the BRLMs, Co-BRLM and the Designated Stock Exchange. Any Bidder other then Anchor Investors may participate in this Issue through the ASBA process by providing the details of their respective bank accounts in which the corresponding Bid amounts will be blocked by SCSBs. All Bidders other than ASBA Bidders are required to submit their Bids through the Syndicate or their affiliates. ASBA Bidders are required to submit their Bids to the SCSBs. Investors should note that Allotment of Equity Shares to all successful Bidders will be only in the dematerialised form. In case DP ID, Client ID and PAN entered into the electronic bidding system of the stock exchanges by the syndicate members do not match with the DP ID, Client ID and PAN available in the depository database, the application is liable to be rejected. Bidders will not have the option of being Allotted Equity Shares in physical form. The Equity Shares on Allotment shall be traded only on the dematerialised segment of the Stock Exchanges. With effect from August 16, 2010, the demat accounts for Bidders for which PAN details have not been verified shall be 'suspended credit' and no credit of Equity Shares pursuant to the Issue shall be made into accounts of such bidders. Further, our Company, Selling Shareholders, BRLMs and the Co-BRLM are not liable to inform the investors of any amendments or modifications or changes in applicable laws or regulations which may occur after the date of the Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits under applicable laws, regulations or approvals. Bidders are advised to make their own enquiries about the limits applicable to them. Bid cum Application Form Bidders shall use only the specified Bid cum Application Form bearing the stamp of a member of the Syndicate or Designated Branch for the purpose of making a Bid in terms of the Red Herring Prospectus. Before being issued to Bidders, the Bid cum Application Form (except in relation to ASBA Bidders) shall be serially numbered. ASBA Bidders shall submit the ASBA Bid cum Application Form either in physical or electronic form (through the internet banking facility available with the SCSBs or such other electronically enabled mechanism for Bidding) to the SCSB authorizing blocking funds that are available in the bank account specified in the ASBA Bid cum

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Application Form used by ASBA Bidders. ASBA bid-cum application forms can be downloaded and printed from websites of the NSE and BSE. The ASBA forms so downloaded shall have a unique application number and can be used for making ASBA applications. The Bid cum Application Form shall contain information about the Bidder and the price and number of Equity Shares that the Bidder wishes to Bid for. Bidders shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered multiple Bids. On filing of the Prospectus with the RoC, the Bid cum Application Form shall be treated as a valid application form. On completion and submission of the Bid cum Application Form to a member of the Syndicate (and in the case of an ASBA Bid cum Application Form, to the SCSB), the Bidder is deemed to have authorised our Company and the Selling Shareholders to make the necessary changes in the Red Herring Prospectus and the Bid cum Application Form as would be required under the SEBI ICDR Regulations and other applicable laws, for filing the Prospectus with the RoC and as would be required by SEBI and/or the RoC after such filing, without prior or subsequent notice of such changes to the Bidder. The prescribed colour of the Bid cum Application Form for various categories is as follows:

Category Colour of Bid cum Application Form

including ASBA Bid cum Application Form

Resident Indians and Eligible NRIs applying on a non-repatriation basis White Non-residents including Eligible NRIs, FVCIs and FIIs applying on a repatriation basis, excluding Anchor Investors

Blue

Anchor Investors* White *Bid cum Application Forms for Anchor Investors will be made available at our Registered Office and with the members of the Syndicate. Who can Bid? • Indian nationals resident in India who are not minors in single or joint names (not more than three); • Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder should specify that

the Bid is being made in the name of the HUF in the Bid cum Application Form as follows: “Name of Sole or First Bidder: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta”. Bids by HUFs would be considered at par with those from individuals;

• Companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in equity shares;

• Mutual Funds registered with SEBI; • Eligible NRIs on a repatriation basis or on a non repatriation basis subject to applicable laws NRIs, other

than Eligible NRIs, are not permitted to participate in this Issue; • Indian financial institutions, commercial banks (excluding foreign banks), regional rural banks, co-

operative banks (subject to RBI regulations and the SEBI ICDR Regulations and other laws, as applicable); • FIIs and their sub-accounts registered with SEBI, other than a sub-account which is a foreign corporate or

foreign individual in the QIB Portion; • Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals only under

the Non-Institutional Bidders category. • Venture capital funds registered with SEBI; • Foreign Venture Capital Investors registered with SEBI; • State Industrial Development Corporations; • Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law

relating to trusts/societies and who are authorised under their respective constitutions to hold and invest in equity shares;

• Scientific and/or industrial research organisations authorised to invest in equity shares; • Insurance Companies registered with Insurance Regulatory and Development Authority; • Provident Funds with a minimum corpus of Rs. 250 million and who are authorised under their constitution

to hold and invest in equity shares; • Pension Funds with a minimum corpus of Rs. 250 million and who are authorised under their constitution

to hold and invest in equity shares; • National Investment Fund; • Insurance funds set up and managed by army, navy or air force of the Union of India; and

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• Multilateral and Bilateral Development Financial Institutions. In accordance with the FEMA and the regulations framed thereunder, OCBs cannot participate in this Issue. Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law. Participation by Associates of BRLMs, Co-BRLM and Syndicate Members The BRLMs, Co-BRLM and the Syndicate Members shall not be entitled to subscribe to this Issue in any manner except towards fulfilling their underwriting obligations, as stated in the Prospectus. However, associates and affiliates of the BRLMs, Co-BRLM and the Syndicate Members or any persons related to them are entitled to subscribe for Equity Shares in the Issue, including in the QIB Portion and Non-Institutional Portion where the allocation is on a proportionate basis. Such Bidding and subscription may be on their own account or on behalf of their clients. However, the BRLMs, Co-BRLM and Syndicate Members and persons related to the BRLMs, Co-BRLM and the Syndicate Members shall not be allowed to subscribe to the Anchor Investor Portion. Bids by Mutual Funds As per the SEBI ICDR Regulations, 5% of the QIB Portion (excluding the Anchor Investor Portion), has been specifically reserved for Mutual Funds for Allotment on a proportionate basis. An eligible Bid by a Mutual Fund in the Mutual Fund Portion shall first be considered for allocation proportionately in the Mutual Fund Portion. In the event demand in the Mutual Fund Portion is greater than 551,250 Equity Shares, allocation shall be made to Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by Mutual Funds shall be available for allocation proportionately, after excluding the allocation in the Mutual Fund Portion, in the QIB Portion.

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds subject to valid Bids being received at or above the price at which allocation is being done to Anchor Investors.

As per the current regulations, the following restrictions are applicable for investments by mutual funds:

No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity related instruments of any company provided that the limit of 10% shall not be applicable for investments in index funds or sector or industry specific funds. No Mutual Fund under all its schemes should own over 10% of any company’s paid-up share capital carrying voting rights.

The Bids made by asset management companies or custodians of Mutual Funds shall clearly indicate the name of the concerned scheme for which application is being made.

Multiple applications

In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. Bids by Non Residents including Eligible NRIs and FIIs on a repatriation basis There is no reservation for Eligible NRIs or FIIs or FVCIs registered with SEBI. Such Eligible NRIs, FIIs and FVCIs registered with SEBI will be treated on the same basis as other categories for the purpose of allocation. Bids by Eligible NRIs 1. Bid cum Application Forms for Eligible NRIs applying on a repatriation basis (blue in colour) will be

available at our Registered Office and with the members of the Syndicate. 2. Only such applications as are accompanied by payment in freely convertible foreign exchange shall be

considered for Allotment. Eligible NRIs who intend to make payment through Non Resident Ordinary (“NRO”) accounts or by debits to their Non-Resident External (“NRE”) or Foreign Currency Non-Resident (“FCNR”) accounts should use the application form meant for Resident Indians (white in color).

3. Only such applications as are accompanied by payment in freely convertible foreign exchange or by debits to their Non-Resident External (“NRE”) or Foreign Currency Non-Resident (“FCNR”) accounts shall be

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considered for Allotment on repatriation basis. Eligible NRIs who intend to make payment through Non Resident Ordinary (“NRO”) accounts should use the application form meant for Resident Indians (white in color) and the allotment made, if any, shall be on a non-repatriation basis.

Bids by Eligible NRIs for a Bid Amount of up to Rs. 100,000 would be considered under the Retail Portion for the purposes of allocation and Bids for a Bid Amount of more than Rs. 100,000 would be considered under Non-Institutional Portion for the purposes of allocation. Bids by FIIs As per current regulations, the following restrictions are applicable for investments by FIIs: The issue of Equity Shares to a single FII should not exceed 10% of our post-Issue issued capital (i.e. 10% of 75,541,870 Equity Shares). In respect of an FII investing in our Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of our total issued capital or 5% of our total issued capital in case such sub-account is a foreign corporate or an individual. FII investment up to 49% in the Company has been approved by our Board vide resolution dated January 10, 2010 and by our shareholders vide special resolution dated March 18, 2010. Subject to compliance with all applicable Indian laws, rules, regulations guidelines and approvals in terms of regulation 15A(1) of the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations 1995, as amended (the “SEBI FII Regulations”), an FII, as defined in the SEBI FII Regulations, may issue, deal or hold, offshore derivative instruments (defined under the SEBI FII Regulations as any instrument, by whatever name called, which is issued overseas by an FII against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, as its underlying) directly or indirectly, only in the event (i) such offshore derivative instruments are issued only to persons who are regulated by an appropriate regulatory authority; and (ii) such offshore derivative instruments are issued after compliance with ‘know your client’ norms. The FII is also required to ensure that no further issue or transfer of any offshore derivative instrument issued by it is made to any persons that are not regulated by an appropriate foreign regulatory authority as defined under the SEBI ICDR Regulations. Associates and affiliates of the Underwriters, including the BRLMs, Co-BRLM and the Syndicate Members that are FIIs may issue offshore derivative instruments against Equity Shares Allotted to them in the Issue. Any such offshore derivative instrument does not constitute any obligation of, claim on or an interest in, the Company. Bids by SEBI-registered Venture Capital Funds and Foreign Venture Capital Investors

The SEBI (Venture Capital Funds) Regulations, 1996 and the SEBI (Foreign Venture Capital Investor) Regulations, 2000, each, as amended, prescribe investment restrictions on Venture Capital Funds and FVCIs respectively registered with the SEBI. Accordingly, the holding in any company by any individual venture capital fund or FVCI registered with the SEBI should not exceed 25% of the corpus of the venture capital fund or FVCI. However, venture capital funds or FVCIs can invest only upto 33.33% of the investible funds by way of subscription to an initial public offer. Bids by Anchor Investors

Our Company and Selling Shareholders may consider participation by Anchor Investors in the QIB Portion for up to 30% of the QIB Portion in accordance with the SEBI ICDR Regulations. Only QIBs as defined in Regulation 2(1)(zd) of the SEBI ICDR Regulations and not otherwise excluded pursuant to Schedule XI of the SEBI ICDR Regulations are eligible to invest. The QIB Portion shall be reduced in proportion to the allocation under the Anchor Investor Portion. In the event of under-subscription in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion. In accordance with the SEBI ICDR Regulations, the key terms for participation in the Anchor Investor Portion are provided below.

(a) Anchor Investors Bid cum Application Forms will be made available for the Anchor Investor Portion at our

Registered Office, and with the members of the Syndicate.

(b) The Bid must be for a minimum of such number of Equity Shares so that the Anchor Investor Bid Amount is at least Rs.100 million. A Bid cannot be submitted for more than 30% of the QIB Portion. In case of a Mutual Fund registered with SEBI, separate Bids by individual schemes of a Mutual Fund will be aggregated to determine the minimum application size of Rs. 100 million.

(c) One-third of the Anchor Investor Portion shall be reserved for allocation to domestic Mutual Funds.

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(d) The Bidding for Anchor Investors shall open one Working Day before the Bid/Issue Opening Date and shall

be completed on the same day.

(e) Our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM shall finalize allocation to the Anchor Investors on a discretionary basis, provided that the minimum number of Allottees in the Anchor Investor Portion shall not be less than:

• two, where the allocation under Anchor Investor Portion is up to Rs. 2,500 million; and • five, where the allocation under Anchor Investor Portion is over Rs. 2,500 million.

(f) Allocation to Anchor Investors shall be completed on the Anchor Investor Bidding Date. The number of

Equity Shares allocated to Anchor Investors and the price at which the allocation is made, shall be made available in public domain by the BRLMs and Co-BRLM before the Bid/Issue Opening Date.

(g) Anchor Investors cannot withdraw their Bids after the Anchor Investor Bidding Date. (h) Anchor Investors shall pay entire Bid Amount at the time of submission of the Anchor Investor Bid. In the

event the Issue Price is greater than the Anchor Investor Issue Price, the additional amount being the difference between the Issue Price and the Anchor Investor Issue Price shall be paid by the Anchor Investors by the pay-in-date. In the event the Issue Price is lower than the Anchor Investor Issue Price, the Allotment to Anchor Investors shall be at the higher price i.e. the Anchor Investor Issue Price.

(i) The Equity Shares Allotted in the Anchor Investor Portion shall be locked-in for a period of 30 days from the date of Allotment.

(j) None of the BRLMs, Co-BRLM or any person related to the BRLMs, Co-BRLM, Promoters, Promoter Group and the Selling Shareholders shall participate in the Anchor Investor Portion. The parameters for selection of the Anchor Investors shall be clearly identified by the BRLMs , Co-BRLM and shall be made available as part of the records of the BRLMs and Co-BRLM for inspection by SEBI.

(k) Bids made by QIBs under both the Anchor Investor Portion and the QIB Portion shall not be considered as multiple Bids.

(l) The instruments for payment into the Escrow Account should be drawn in favour of:

a. In case of Resident Anchor Investors: [ ] b. In case of Non-Resident Anchor Investors: [ ]

Additional details, if any, regarding participation in the Issue under the Anchor Investor Portion shall be disclosed in the advertisement for the Price Band which shall be published by our Company in an English national newspaper and a Hindi national newspaper, each with wide circulation at least two Working Days prior to the Bid/Issue Opening Date. Bids by Insurance Companies In case of the Bids made by insurance companies registered with the Insurance Regulatory and Development Authority, a certified copy of certificate of registration issued by the Insurance Regulatory and Development Authority must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to reject such Bids in whole or in part without assigning reasons thereof. Bids made by Provident Funds In case of the Bids made by provident funds, subject to applicable law, with minimum corpus of Rs. 250 million and pension funds with minimum corpus of Rs. 250 million, a certified copy of certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof. Bids under Power of Attorney In case of Bids made pursuant to a power of attorney by limited companies, corporate bodies, registered societies, FIIs, Mutual Funds, insurance companies and provident funds with minimum corpus of Rs. 250 million (subject to applicable law) and pension funds with a minimum corpus of Rs. 250 million a certified copy of the power of

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attorney or the relevant resolution or authority, as the case may be, along with a certified copy of the memorandum of association and articles of association and/or bye laws must be lodged with the Bid cum Application Form. Failing this, our Company and the Selling Shareholders reserve the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In addition to the above, certain additional documents are required to be submitted by the following entities: a) With respect to Bids by FVCIs, FIIs and Mutual Funds, a certified copy of their SEBI registration

certificate must be lodged along with the Bid cum Application Form.

b) With respect to Bids by insurance companies registered with the Insurance Regulatory and Development Authority, in addition to the above, a certified copy of the certificate of registration issued by the Insurance Regulatory and Development Authority must be lodged with the Bid cum Application Form.

c) With respect to Bids made by provident funds with minimum corpus of Rs. 250 million (subject to

applicable law) and pension funds with a minimum corpus of Rs. 250 million, a certified copy of a certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum Application Form.

In case of an ASBA Bid pursuant to a power of attorney, a certified copy of the power of attorney must be lodged along with the ASBA Form. Failing this, our Company and Selling Shareholders in consultation with the BRLMs and Co-BRLMs, reserves the right to reject such Bids. Our Company and the Selling Shareholders, in their absolute discretion, reserves the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid cum Application form or the ASBA Form, subject to such terms and conditions that our Company, the Selling Shareholders and the BRLMs and Co-BRLM may deem fit. The above information is given for the benefit of the Bidders. Our Company, the Selling Shareholders and the BRLMs and Co-BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that any Bid from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in this Draft Red Herring Prospectus. Our Company, the Selling Shareholders and the BRLMs and Co-BRLM do not accept any responsibility for the completeness and accuracy of the information stated above. Maximum and Minimum Bid Size (a) For Retail Individual Bidders: The Bid must be for a minimum of [•] Equity Shares and in multiples

thereof, so as to ensure that the Bid Amount payable by the Bidder does not exceed Rs. 100,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Amount does not exceed Rs. 100,000. If the Bid Amount is over Rs. 100,000 due to revision of the Bid or revision of the Price Band or on exercise of the option to be Bid at the Cut-Off Price, the Bid would be considered for allocation under the Non-Institutional Portion. The option to Bid at the Cut-Off Price is given only to the Retail Individual Bidders, indicating their agreement to Bid and purchase at the final Issue Price as determined at the end of the Book Building Process.

(b) For Other Bidders (Non-Institutional Bidders and QIBs excluding Anchor Investors): The Bid must

be for a minimum of such number of Equity Shares in multiples of [●] such that the Bid Amount exceeds Rs. 100,000. A Bid cannot be submitted for more than the Issue Size. However, the maximum Bid by a QIB investor should not exceed the investment limits prescribed for them by applicable laws.

In case of revision in Bids, Non-Institutional Bidders who are individuals have to ensure that the Bid Amount is greater than Rs. 100,000 for being considered for allocation in the Non-Institutional Portion. If the Bid Amount reduces to Rs. 100,000 or less due to a revision in Bids or revision of the Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Retail Portion would be considered for allocation under the Retail Portion. Non-Institutional Bidders and QIBs are not allowed to Bid at the Cut-Off Price. A QIB Bidder cannot withdraw its Bid after the Bid/ Issue Closing Date.

(c) For Bidders in the Anchor Investor Portion: The Bid must be for a minimum of such number of Equity

Shares in multiples of [•] such that the Bid Amount at least Rs. 100 million. Bids by Anchor Investors under the Anchor Investor Portion and the QIB Portion shall not be considered as multiple Bids. Under the

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Anchor Investor Portion, a Bid cannot be submitted for more than 30% of the QIB Portion. Anchor Investors cannot withdraw their Bids after the Anchor Investor Bid/Issue Opening Date.

Information for the Bidders: (a) The Red Herring Prospectus will be filed by our Company and the Selling Shareholders with the RoC at least

three days before the Bid/ Issue Opening Date. (b) Our Company, the BRLMs and the Co-BRLM shall declare the Bid Opening Date and Bid Closing Date in

the Red Herring Prospectus to be registered with the RoC and also publish the same in two (2) national daily newspapers (one each in English and Hindi) and one (1) Marathi daily newspaper, each with wide circulation. Further, the Price Band and minimum bid lot size shall be disclosed atleast two (2) Working Days prior to Bid/Issue Opening Date in two (2) national newspapers (one each in English and Hindi) and one (1) Marathi newspaper, each with wide circulation. This advertisement, subject to the provisions of Section 66 of the Companies Act, shall be in the format prescribed in Part A of Schedule XIII of the SEBI ICDR Regulations.

(c) Copies of the Bid cum Application Form and the Red Herring Prospectus will be available with the members of the Syndicate. Any investor (who is eligible to invest in our Equity Shares) who would like to obtain the Red Herring Prospectus and/or the Bid cum Application Form can obtain the same from our Registered Office or from any of the members of the Syndicate. ASBA Bid cum Application Forms can be obtained by Bidders from the SCSBs and electronic ASBA Bid cum Application Forms shall be available on the websites of SCSBs. ASBA Bid cum Application Forms can be downloaded from the website of Stock Exchanges as well. Furthermore, the SCSBs shall ensure that the abridged prospectus is made available on their websites.

The members of the Syndicate (in accordance with the terms of the Syndicate Agreement) and the Designated Branches shall accept Bids from the Bidder during the Bid/Issue Period in accordance with the terms of the Red Herring Prospectus, provided that the BRLMs and Co-BRLM shall accept the Bids from the Anchor Investors only on the Anchor Investor Bidding Date. (d) Eligible Bidders who are interested in subscribing for the Equity Shares should approach any of the BRLMs,

Co-BRLM or the Syndicate Members or their authorized agent(s) to register their Bids. Eligible Bidders can approach the Designated Branches to register their Bids under the ASBA process.

(e) The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum Application Forms

should bear the stamp of the members of the Syndicate or Designated Branch. Bid cum Application Forms (except electronic ASBA Bid cum Application Forms), which do not bear the stamp of a member of the Syndicate or the Designated Branch, are liable to be rejected.

Bidders should note that in case the PAN, the DP ID and Client ID mentioned in the Bid cum Application form and entered into the electronic bidding system of the Stock Exchanges by the Syndicate Members do not match with PAN, the DP ID and Client ID available in the depository database, the Bid cum Application form is liable to be rejected. Information specific to ASBA Bidders: a) ASBA Bidders who would like to obtain the Red Herring Prospectus and/or the ASBA Form can obtain the

same from the Designated Branches. ASBA Bidders can also obtain a copy of the Red Herring Prospectus and/or the ASBA Form in electronic form on the websites of the SCSBs.

b) The Bids should be submitted to the SCSBs on the prescribed ASBA Form. SCSBs may provide the

electronic mode of bidding either through an internet enabled bidding and banking facility or such other secured, electronically enabled mechanism for bidding and blocking funds in the ASBA Account.

c) The SCSBs shall accept Bids only during the Bidding Period and only from the ASBA Bidders. d) The Book Running Lead Managers and the Co-Book Running Lead Manager shall ensure that adequate

arrangements are made to circulate copies of the Red Herring Prospectus and ASBA Form to the SCSBs. The SCSBs will then make available such copies to investors intending to apply in this Offer through the ASBA process. Additionally, the BRLMs and Co-BRLMs shall ensure that the SCSBs are provided with soft copies of the abridged prospectus as well as the ASBA Forms and that the same are made available on the websites of the SCSBs.

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e) The ASBA Form shall bear the stamp of the SCSBs and/or the Designated Branch, and if not, the same shall be rejected (other than electronic).

f) ASBA Bidders shall correctly mention the bank account number in the ASBA Form and should ensure that

funds equal to the Bid Amount are available in the bank account maintained with the SCSB before submitting the ASBA Form to the respective Designated Branch. In case the amount available in the bank account specified in the ASBA Form is insufficient for blocking the amount equivalent to the Bid Amount, the SCSB shall reject the application.

g) If the ASBA Account holder is different from the ASBA Bidder, the ASBA Form should be signed by the

account holder as provided in the ASBA Form. h) ASBA Bidders shall correctly mention their PAN, DP ID and Client ID in the ASBA Form. For the purpose

of evaluating the validity of Bids, the demographic details of ASBA Bidders shall be derived from the DP ID and Client ID as entered into the bidding system of the stock exchanges by the concerned SCSBs.

INSTRUCTIONS FOR COMPLETING THE BID CUM APPLICATION FORM AND ASBA FORMS Bids and revisions of Bids must be: 1. Made only in the prescribed Bid cum Application Form or Revision Form, as applicable. 2. Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained in

the Bid cum Application Form or in the Revision Form. Bidders must provide details of valid and active DP-ID, client ID and PAN clearly and without error. Invalid accounts, suspended accounts or where such account is classified as invalid or suspended may not be considered for Allotment. Incomplete Bid cum Application Forms or Revision Forms are liable to be rejected. Bidders should note that the members of the Syndicate and/or the SCSBs (as appropriate) will not be liable for errors in data entry due to incomplete or illegible Bid cum Application Forms or Revision Forms.

3. Bids through ASBA must be:

Made only in the prescribed ASBA Form (if submitted in physical mode) or the electronic mode. Made in single name or in joint names (not more than three, and in the same order as their details

appear with the Depository Participant). Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions

contained in the Red Herring Prospectus and in the ASBA Form. For a minimum of [●] Equity Shares and in multiples of [●] Equity Shares thereafter subject to a

maximum of [●] Equity Shares. Bid by an ASBA Bidder falling under the Retail Individual Bidder category cannot exceed [●] Equity Shares in order to ensure that the Bid Amount blocked in the ASBA Account does not exceed Rs. 100,000.

4. Information provided by the Bidders will be uploaded in the online IPO system by the members of the

Syndicate and the SCSBs, as the case may be, and the electronic data will be used to make allocation/Allotment. Bidders are advised to ensure that the details are correct and legible.

5. For Retail Individual Bidders (including Eligible NRIs), the Bid must be for a minimum of [●] Equity Shares and in multiples thereof subject to a maximum Bid Amount of Rs. 100,000. In case the Bid Amount is over Rs. 100,000 due to revision of the Bid or revision of the Price Band or on exercise of Cut-off option, the Bid would be considered for allocation under the Non-Institutional Bidders portion. The option to Bid at cut-off price is an option given only to the Retail Individual Bidders indicating their agreement to Bid and purchase at the final Issue Price as determined at the end of the Book Building Process.

6. For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of Equity

Shares in multiples of [●] such that the Bid Amount exceeds Rs. 100,000. Anchor Investors must ensure that their Bids are for such number of Equity Shares that the Bid Amount is at least Rs. 100 million. Bids cannot be made for over the Issue size. With respect to Anchor Investors, the Bid cannot be over the Anchor Investor Portion.

7. Bids by Eligible NRIs, FVCIs and FIIs on a repatriation basis shall be in the names of individuals, or in the names of such FIIs, respectively, but not in the names of minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees.

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8. In a single name or in joint names (not more than three, and in the same order as their Depository Participant details).

9. Thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the

Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official seal.

10. ASBA Bidders should correctly mention the ASBA Account number and ensure that funds equal to the Bid Amount are available in the ASBA Account before submitting the ASBA Form to the Designated Branch, otherwise the concerned SCSB shall reject the Bid.

11. If the ASBA Account holder is different from the ASBA Bidder, the ASBA Form should be signed by the ASBA Account holder, in accordance with the instructions provided in the ASBA Form.

12. Bidders should correctly mention their DP ID and Client ID in the Bid-Cum-Application Form, or the

ASBA Form, as the case may be. For the purpose of evaluating the validity of Bids, the Demographic Details of Bidders shall be derived from the DP ID and Client ID mentioned in the Bid cum Application Form, or the ASBA Form, as the case may be.

13. For ASBA Bidders, the Bids in physical mode should be submitted to the SCSBs on the prescribed ASBA

Form. SCSBs may provide the electronic mode of bidding either through an internet enabled bidding and banking facility or such other secured, electronically enabled mechanism for bidding and blocking funds in the ASBA Account.

14. ASBA Forms should bear the stamp of the Syndicate Member and/or Designated Branch. ASBA Forms

which do not bear the stamp will be rejected.

Submission of Bid cum Application Form All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee cheques or drafts shall be submitted to the members of the Syndicate or their affiliates at the time of submission of the Bid. With respect to ASBA Bidders, the ASBA Bid cum Application Form or the ASBA Revision Form shall be submitted to the Designated Branches. ASBA Bidders shall submit the ASBA Bid cum Application Form either in physical or electronic form (through the internet banking facility available with the SCSBs or such other electronically enabled mechanism for Bidding) to the SCSB authorizing blocking funds that are available in the bank account specified in the ASBA Bid cum Application Form used by ASBA Bidders. No separate receipts shall be issued for the money payable on the submission of Bid cum Application Form or Revision Form. However, the collection centre of the members of the Syndicate or the SCSB, as the case may be, will acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum Application Form for the records of the Bidder. GENERAL INSTRUCTIONS Dos:

(a) Check if you are eligible to apply as per the terms of the Red Herring Prospectus under applicable laws, rules

and regulations; (b) Ensure that you have Bid within the Price Band; (c) Read all the instructions carefully and complete the Resident Bid cum Application Form (white in colour),

the Non-Resident Bid cum Application Form (blue in colour), the Anchor Investor Bid cum Application Form (white in colour), as the case may be;

(d) Ensure that the details about Depository Participant and Beneficiary Account are correct, and the Beneficiary

Account is activated, as Allotment of Equity Shares will be in the dematerialized form only; (e) Ensure that the Bids are submitted at the Bidding centres only on forms bearing the stamp of a member of the

Syndicate;

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(f) Ensure that the full Bid Amount is paid for Bids submitted to the members of the Syndicate and funds equivalent to the Bid Amount are blocked by the SCSBs in case of Bids submitted through the ASBA process;

(g) Ensure that you request for and have received a TRS for all your Bid options; (h) Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed and

obtain a revised TRS; (i) Except for Bids (i) on behalf of the Central or State Government and the officials appointed by the courts,

and (ii) (subject to SEBI circular dated April 3, 2008) from the residents of the state of Sikkim, each of the Bidders should mention their PAN allotted under the I.T. Act. Applications in which the PAN is not matching with one entered by the Syndicate or the SCSB in the Bidding terminal and PAN as available with depositories for a given DP ID and client ID is liable to be rejected;

(j) Ensure that the Demographic Details (as defined below) are updated, true and correct in all respects; and (k) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in which

the beneficiary account is held with the Depository Participant. If the Bid cum Application Form is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the Bid cum Application Form.

Don’ts:

(a) Do not Bid for lower than the minimum Bid size; (b) Do not submit a Bid without payment of the entire Bid Amount;

(c) Do not Bid/revise the Bid to less than the Floor Price or higher than the Cap Price; (d) Do not Bid on another Bid cum Application Form after you have submitted a Bid to the members of the

Syndicate; (e) Do not pay the Bid Amount in cash, by money order or by postal order or by stockinvest; (f) Do not send Bid cum Application Forms by post; instead submit the same to a member of the Syndicate, as

applicable; (g) Do not Bid at the Cut-off Price (for QIB Bidders and Non-Institutional Bidders);

(h) Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceed the Issue size and/or

investment limit or maximum number of Equity Shares that can be held under applicable laws or regulations or the maximum amount permissible under applicable regulations;

(i) Do not Bid for amount exceeding Rs. 100,000 in case of a Bid by Retail Individual Bidders;

(j) Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground.

(k) Do not submit incorrect details of DP ID, Client ID and PAN or give details of demat account which is

suspended or for which such details cannot be verified by the Registrar. INSTRUCTIONS SPECIFIC TO ASBA BIDDERS Do’s: a) Check if you are eligible to Bid under ASBA. b) Ensure that you use the ASBA Form specified for the purposes of ASBA. c) Read all the instructions carefully and complete the ASBA Form. d) Ensure that your ASBA Form is submitted at a Designated Branch where the ASBA Account is placed and not

to the Escrow Collecting Banks (assuming that such bank is not a SCSB), to our Company or the Registrar to

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the Issue or the BRLMs and Co-BRLM. e) Ensure that the ASBA Form is signed by the ASBA Account holder in case the ASBA Bidder is not the account

holder. f) Ensure that you have mentioned the correct ASBA Account number in the ASBA Form. g) Ensure that you have funds equal to the number of Equity Shares bid for available in the ASBA h) Account before submitting the ASBA Form to the Designated Branch. i) Ensure that you have correctly checked the authorisation box in the ASBA Form, or have otherwise provided an

authorisation to the SCSB via the electronic mode, for the Designated Branch to block funds in the ASBA Account equivalent to the Bid Amount mentioned in the ASBA Form.

j) Ensure that you receive an acknowledgement from the Designated Branch for the submission of your ASBA

Form. k) Ensure that the name(s) given in the ASBA Form is exactly the same as the name(s) in which the beneficiary

account is held with the Depository Participant. In case the ASBA Form is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the ASBA Form.

l) Ensure that the demographic details are updated, true and correct in all respects Don'ts: a) Do not Bid on another ASBA Form or on a Bid-Cum-Application Form after you have submitted a Bid to a

Designated Branch. b) Payment of Bid Amounts in any mode other than through blocking of Bid Amounts in the ASBA Accounts

shall not be accepted under the ASBA. c) Do not send your physical ASBA Form by post. Instead submit the same to a Designated Branch. d) Do not submit more than five ASBA Bid cum Application Forms per bank account; e) Do not instruct your respective banker to release the funds blocked in the ASBA account under the ASBA

process f) QIBs and Non-Institutional Bidders should not Bid at Cut-Off Price g) Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the size of the Issue

and/or the investment limit or maximum number of Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations

h) Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground. Method and Process of Bidding (a) Our Company, the Selling Shareholders and the BRLMs and Co-BRLM shall declare the Bid/Issue Opening

Date and Bid/Issue Closing Date at the time of filing the Red Herring Prospectus with the RoC and also publish the same in widely circulated national newspapers (one each in English, Hindi and Marathi newspapers), at least two Working Days prior to the Bid/Issue Opening Date.

(b) The Price Band and the minimum Bid lot size for the Issue will be decided by our Company and the Selling

Shareholders in consultation with the BRLMs and Co-BRLM, and advertised in an English national newspaper, a Hindi national newspaper, and a Marathi daily newspaper each with wide circulation, at least two Working Days prior to the Bid/Issue Opening Date.

(c) The BRLMs and the Co-BRLM shall accept Bids from the Anchor Investors on the Anchor Investor Bidding Date, i.e. one Working Day prior to the Bid/Issue Opening Date. Bidders, except Anchor Investors who are interested in subscribing to the Equity Shares should approach any of the members of the Syndicate, their

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authorized agents or SCSBs to register their Bids, during the Bid/Issue Period. The members of the Syndicate shall accept Bids from the all Bidders and shall have the right to vet the Bids, during the Bid/Issue Period in accordance with the terms of the Syndicate Agreement and the Red Herring Prospectus. Bidders who wish to use the ASBA process should approach the Designated Branches of the SCSBs to register their Bids.

(d) The BRLMs and the Co-BRLM shall accept Bids from the Anchor Investors on the Anchor Investor Bidding

Date i.e. one Working Day prior to the Bid Opening Date. Bids by Anchor Investors under the Anchor Investor Portion and the QIB Portion shall not be considered as multiple Bids.

(e) The Bid/Issue Period shall be for a minimum of three Working Days and not exceeding 10 Working Days

(including the days for which the Issue is open in case of revision in Price Band). If the Price Band is revised, the revised Price Band and the Bid/Issue Period will be published in an English daily national newspaper, a Hindi daily national newspaper and a Marathi daily newspaper, each with wide circulation, together with an indication of such change on the websites of the BRLMs, Co-BRLM and SCSBs and at the terminals of the Syndicate Members.

(f) Each Bid cum Application Form will give the Bidder the choice to Bid for up to three optional prices (for details see “Bids at Different Price Levels” below, within the Price Band and specify the demand (i.e., the number of Equity Shares Bid for) in each option. The price and demand options submitted by the Bidder in the Bid cum Application Form will be treated as optional demands from the Bidder and will not be cumulated. After determination of the Issue Price, the maximum number of Equity Shares Bid for by a Bidder at or above the Issue Price will be considered for allocation/Allotment and the rest of the Bid(s), irrespective of the Bid Amount, will become automatically invalid.

(g) The Bidder cannot bid on another Bid cum Application Form or ASBA Form after Bids on one Bid cum Application Form or ASBA Form have been submitted to the members of Syndicate or SCSBs, as the case may be. Submission of a second Bid cum Application Form or ASBA Form to the members of Syndicate or SCSB will be treated as multiple Bids and is liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time prior to the allocation of Equity Shares or Allotment. However, the Bidder can revise the Bid through the Revision Form, the procedure for which is detailed under the paragraph entitled “Build up of the Book and Revision of Bids”. Provided that Bids submitted by a QIB in the Anchor Investor Portion and in the Net QIB Portion will not be considered as Multiple Bids.

(h) Except in relation to the Bids received from the Anchor Investors, the members of the Syndicate or the SCSBs will enter each Bid option into the electronic Bidding system as a separate Bid and generate a Transaction Registration Slip (“TRS”), for each price and demand option and shall, on demand, give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for each Bid cum Application Form or ASBA Form.

(i) With respect to ASBA Bidders, on receipt of the ASBA Bid cum Application Form, submitted whether in

physical or electronic mode, the Designated Branch of the SCSB shall verify if sufficient funds equal to the Bid Amount are available in the ASBA Account, as mentioned in the ASBA Bid cum Application Form, prior to uploading such Bids with the Stock Exchanges. If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB shall reject such Bids and shall not upload such Bids with the Stock Exchanges. If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the Bid Amount mentioned in the ASBA Bid cum Application Form and will enter each Bid option into the electronic bidding system as a separate Bid.

(j) Along with the Bid cum Application Form, all Bidders will make payment in the manner described under the paragraph titled “Payment Instructions” on page 237.

(k) The Bid Amount shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment and

consequent transfer of the Bid Amount against the Allotted Equity Shares to the Public Issue Account, or until withdrawal/failure of the Issue or until withdrawal/rejection of the ASBA Form, as the case may be. Once the Basis of Allotment is finalized, the Registrar to the Issue shall send an appropriate request to the Controlling Branch of the SCSB for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful ASBA Bidders to the Public Issue Account. In case of withdrawal/failure of the Issue, the blocked amount shall be unblocked on receipt of such information from the Registrar to the Issue.

Bids at Different Price Levels and Revision of Bids (a) The Price Band and the minimum Bid lot size shall be decided by our Company and the Selling Shareholders

in consultation with the BRLMs, Co-BRLM and advertised at least two Working Days prior to the Bid/Issue

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Opening Date, in an English national newspaper, a Hindi national newspaper and a Marathi daily newspaper each with wide circulation.

(b) Our Company and the Selling Shareholders in consultation with the BRLMs, Co-BRLM reserve the right to

revise the Price Band during the Bid/Issue Period in accordance with the SEBI ICDR Regulations. The Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not exceed 20% on either side i.e. the floor price can move upward or downward to the extent of 20% of the floor price disclosed at least two Working Days prior to the Bid/Issue Opening Date and the Cap Price will be revised accordingly.

(c) In case of revision in the Price Band, the Bid/Issue Period will be extended for at least three additional

Working Days after revision of Price Band subject to a maximum of 10 Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a public notice in an English national newspaper and a Hindi national newspaper, each with wide circulation and also by indicating the change on the websites of the BRLMs, Co-BRLM and SCSBs and at the terminals of the Syndicate Members.

(d) Our Company and the Selling Shareholders in consultation with the BRLMs and Co-BRLM can finalize the

Issue Price and Anchor Investor Issue Price within the Price Band in accordance with this section, without the prior approval of or intimation to the Bidders.

(e) The Bidder can Bid at any price within the Price Band. The Bidder has to Bid for the desired number of

Equity Shares at a specific price. Retail Individual Bidders may Bid at Cut-off Price. However, Bidding at Cut-off Price is prohibited for QIB or Non-Institutional Bidders and such Bids from QIBs and Non-Institutional Bidders shall be rejected.

(f) Retail Individual Bidders who Bid at the Cut-off Price agree that they shall purchase the Equity Shares at any

price within the Price Band. Retail Individual Bidders bidding at Cut-off Price shall deposit the Bid Amount based on the Cap Price with the members of the Syndicate. In case of ASBA Bidders bidding at Cut-off Price, the ASBA Bidders shall instruct the SCSBs to block an amount based on the Cap Price. In the event the Bid Amount is higher than the subscription amount payable by the Retail Individual Bidders who Bid at Cut-off Price, the Retail Individual Bidders who Bid at Cut-off Price shall receive the refund of the excess amounts from the Escrow Account(s).

(g) In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had Bid

at Cut-off Price could either (i) revise their Bid or (ii) make additional payment based on the revised Cap Price (such that the total amount i.e., original Bid Amount plus additional payment does not exceed Rs. 100,000 for Retail Individual Bidders, if the Bidder wants to continue to Bid at Cut-off Price), with the Syndicate Member to whom the original Bid was submitted. In case the total amount (i.e., original Bid Amount plus additional payment) exceeds Rs. 100,000 for Retail Individual Bidders bidding at the Cut-off Price the Bid will be considered for allocation under the Non-Institutional Portion in terms of the Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the Cap Price prior to revision, the number of Equity Shares Bid for shall be adjusted downwards for the purpose of Allotment, such that no additional payment would be required from the Bidder and the Bidder is deemed to have approved such revised Bid at Cut-off Price.

(h) In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders who have

Bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of Bidding would be refunded from the Escrow Account(s).

(i) Our Company and the Selling Shareholders in consultation with the BRLMs and Co-BRLM shall decide the

minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of Rs. 5,000 to Rs. 7,000. In the event of any revision in the Price Band, whether upward or downward, the minimum application size shall remain [•] Equity Shares irrespective of whether the Bid Amount payable on such minimum application is not in the range of Rs. 5,000 to Rs. 7,000.

Bidder’s Depository Account and Bank Account Details Bidders should note that on the basis of Bidder’s Permanent Account Number, Depository Participant’s name, DP ID number and beneficiary account number provided by them in the Bid cum Application Form and as entered into the electronic bidding system of the Stock Exchanges by the members of the Syndicate and the SCSBs as the case may be, the Registrar to the Issue will obtain from the Depository the demographic details including the Bidder’s address, occupation and bank account details including the nine-digit Magnetic Ink Character Recognition

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(“MICR”) code as appearing on a cheque leaf (‘Demographic Details’). These Demographic Details would be used for giving refunds and allocation advice (including through physical refund warrants, direct credit, NECS and RTGS) to the Bidders. Hence, Bidders are advised to immediately update their bank account details, PAN and Demographic Details as appearing on the records of the Depository Participant and ensure that they are true and correct. Failure to do so could result in delays in dispatch/credit of refunds to Bidders at the Bidders sole risk and neither the BRLMs, Co-BRLM nor the Registrar to the Issue or the Escrow Collection Banks or the SCSBs or our Company nor the Selling Shareholders shall have any responsibility and undertake any liability for the same. Hence, Bidders should carefully fill in their depository account details in the Bid cum Application Form. Please note that in case the DP ID, Client ID and PAN mentioned in the Bid cum Application Form and entered into the electronic Bidding system of the Stock Exchanges by the members of the Syndicate, do not match with the DP ID, Client ID and PAN available in the depositories’ database, such Bid cum Application Form is liable to be rejected. IT IS MANDATORY FOR ALL THE BIDDERS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR PAN, DP ID NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT THE PERMANENT ACCOUNT NUMBER GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS PROVIDED IN THE DEPOSITORY ACCOUNT. IF THE BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM APPLICATION FORM. By signing the Bid cum Application Form, the Bidder would be deemed to have authorised the Depositories to provide, on request, to the Registrar to the Issue, the required Demographic Details as available on its records. Refund Orders (where refunds are not being made electronically)/allotment advice/CANs would be mailed at the address of the Bidder as per the Demographic Details received from the Depositories. Bidders may note that delivery of refund orders/allotment advice/CANs may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Bidder in the Bid cum Application Form would be used only to ensure dispatch of refund orders. Any such delay shall be at the Bidders sole risk and neither our Company, the Selling Shareholders nor Escrow Collection Banks nor the BRLMs, Co-BRLM nor the Registrar to the Issue shall be liable to compensate the Bidder for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay. In case of refunds through electronic modes as detailed in the Red Herring Prospectus, Bidders may note that refunds may be delayed if bank particulars obtained from the Depository Participant are incorrect. In case no corresponding record is available with the Depositories, which matches the three parameters, namely, Bidders PAN (in case of joint Bids, PAN of first applicant), the DP ID and the beneficiary’s identity, such Bids are liable to be rejected. PAYMENT INSTRUCTIONS Escrow Mechanism for Bidders other than ASBA Bidders Our Company, the Selling Shareholders and the Syndicate shall open Escrow Accounts with one or more Escrow Collection Bank(s) in whose favour the Bidders shall make out the cheque or demand draft in respect of his or her Bid and/or revision of the Bid. Cheques or demand drafts received for the full Bid Amount from Bidders in a certain category would be deposited in the Escrow Account. The Escrow Collection Banks will act in terms of the Red Herring Prospectus and the Escrow Agreement. The Escrow Collection Banks for and on behalf of the Bidders shall maintain the monies in the Escrow Account(s) until the Designated Date. The Escrow Collection Banks shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow Collection Banks shall transfer the funds represented by allocation of Equity Shares (other than ASBA funds with the SCSBs) from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account with the Bankers to the Issue. The balance amount after transfer to the Public Issue Account shall be transferred to the Refund Account. Payments of refund to the Bidders shall also be made from the Refund Account are per the terms of the Escrow Agreement and the Red Herring Prospectus. The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an arrangement between our Company, the Selling Shareholders, the Syndicate, the Escrow Collection Banks and the Registrar to the Issue to facilitate collections from the Bidders.

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Payment into Escrow Account(s) for Bidders other than ASBA Bidders Each Bidder (other than ASBA Bidders) shall draw a cheque or demand draft or remit the funds electronically through the RTGS mechanism for the entire Bid Amount as per the following terms:

(a) The Bidders shall, with the submission of the Bid cum Application Form, draw a payment instrument for the entire Bid Amount in favour of the Escrow Account(s) and submit the same to the member of the Syndicate. Bid cum Application Forms accompanied by cash, stockinvest, money order or postal order shall not be accepted.

(b) The instruments for payment into the Escrow Account(s) should be drawn in favour of:

• In case of Resident QIB Bidders: “Escrow Account- Nimbus Communication Limited - Public Issue-QIB-R”

• In case of Non Resident QIB Bidders: “Escrow Account-Nimbus Communication Limited - Public

Issue-QIB-NR”

• In case of Resident Retail and Non-Institutional Bidders: “Escrow Account-Nimbus Communication Limited- Public Issue-R”

• In case of Non-Resident Retail and Non-Institutional Bidders: “Escrow Account- Nimbus

Communication Limited - Public Issue-NR”

(c) In the event of Issue Price being higher than the price at which allocation is made to Anchor Investors, the Anchor Investors shall be required to pay such additional amount to the extent of shortfall between the price at which allocation is made to them and the Issue Price within two Working Days of the Bid/Issue Closing Date. If the Issue Price is lower than the price at which allocation is made to Anchor Investors, the amount in excess of the Issue Price paid by Anchor Investors shall not be refunded to them (or unblocked in their ASBA Accounts, in case of ASBA Bids).

(d) Our Company, the Selling Shareholders in consultation with the BRLMs and Co-BRLM, in their absolute discretion, shall decide the list of Anchor Investors to whom the provisional CAN or CAN shall be sent, pursuant to which the details of the Equity Shares allocated to them in their respective names shall be notified to such Anchor Investors. The payment instruments for payment into the Escrow Account(s) should be drawn in favour of: • In case of resident Anchor Investors: “Escrow Account-Nimbus Communication Limited Public Issue-

Anchor Investor-R ”

• In case of non-resident Anchor Investors: “Escrow Account-Nimbus Communication Limited Public Issue-Anchor Investor-NR ”

(e) In case of Bids by NRIs applying on repatriation basis, the payments must be made through Indian Rupee

drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in NRE Accounts or FCNR Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance. Payment will not be accepted out of NRO Account of Non-Resident Bidder bidding on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to NRE Account or FCNR Account.

(f) In case of Bids by NRIs applying on non-repatriation basis, the payments may be made out of an NRO

Account of a Non-Resident Bidder.

(g) In case of Bids by FIIs or FVCIs the payment should be made out of funds held in a Special Rupee Account along with documentary evidence in support of the remittance. Payment by drafts should be accompanied by a bank certificate confirming that the draft has been issued by debiting the Special Rupee Account.

(h) The monies deposited in the Escrow Account(s) will be held for the benefit of the Bidders until the

Designated Date.

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(i) On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow Account(s) as per the terms of the Escrow Agreement into the Public Issue Account with the Bankers to the Issue.

(j) Within 12 Working Days from the Bid/Issue Closing Date, the Registrar to the Issue shall dispatch all

refund amounts payable to unsuccessful Bidders and also the excess amount paid on Bidding, if any, after adjusting for allocation/Allotment to the Bidders.

(k) Payments should be made by cheque, or demand draft drawn on any bank (including a cooperative Bank),

which is situated at, and is a member of or sub-member of the bankers’ clearing house located at the centre where the Bid cum Application Form is submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. Cash, stockinvest, money orders or postal orders will not be accepted.

(l) In case clear funds are not available in the Escrow Accounts as per final certificates from the Escrow

Collection Banks, such Bids are liable to be rejected.

(m) Bidders are advised to mention the number of the Bid cum Application Form on the reverse of the cheque/demand draft to avoid misuse of instruments submitted along with the Bid cum Application Form.

Payment by cash/ stockinvest/ money order Payment through cash/ stockinvest/ money order shall not be accepted in this Issue. Payment mechanism for ASBA Bidders The ASBA Bidders shall specify the bank account number in the ASBA Bid cum Application Form and the SCSB shall block an amount equivalent to the Bid Amount in the bank account specified in the ASBA Bid cum Application Form. The SCSB shall keep the Bid Amount in the relevant bank account blocked until withdrawal/rejection of the ASBA Bid or receipt of instructions from the Registrar to unblock the Bid Amount. In the event of withdrawal or rejection of the ASBA Bid cum Application Form, failure of the Issue or for unsuccessful ASBA Bid cum Application Forms, the Registrar shall give instructions to the SCSB to unblock the Bid Amount in the relevant bank account and the SCSBs shall unblock the Bid Amount on receipt of such instruction. The Bid Amount shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment and consequent transfer of the Bid Amount to the Public Issue Account, or until withdrawal/failure of the Issue or until rejection of the ASBA Bid, as the case may be. Other Instructions Joint Bids in case of Individuals Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments will be made out in favour of the Bidder whose name appears first in the Bid cum Application Form or Revision Form. All communications will be addressed to the First Bidder and will be dispatched to his or her address as per the Demographic Details received from the Depository. Multiple Bids A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares required. Two or more Bids will be deemed to be multiple Bids if the sole or first Bidder is one and the same. In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. Bids by QIBs under the Anchor Investor Portion and QIB Portion (excluding Anchor Investor Portion) will not be considered as multiple Bids. After Bidding on an ASBA Bid cum Application Form either in physical or electronic mode, where such ASBA Bid has been submitted to the Designated Branches of SCSBs and uploaded with the Stock Exchanges, an ASBA Bidder cannot Bid, either in physical or electronic mode, on another ASBA Bid cum Application Form or a non-ASBA Bid cum Application Form. Submission of a second Bid cum Application Form, whether an ASBA Bid cum Application Form, to either the same or to another Designated Branch of the SCSB, or a Non-ASBA Bid cum Application Form, will be treated as multiple Bids and will be liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time prior to the allocation or Allotment of Equity Shares in this Issue. However,

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the ASBA Bidder can revise the Bid through the Revision Form, the procedure for which is detailed in “-Build up of the Book and Revision of Bids”. More than one ASBA Bidder may Bid for Equity Shares using the same ASBA Account, provided that the SCSBs shall not accept a total of more than five ASBA Bid cum Application Forms from such ASBA Bidders with respect to any single ASBA Account. Our Company and the Selling Shareholders reserve the right to reject, in their absolute discretion, all or any multiple Bids in any or all categories. A check will be carried out for the same PAN. In cases where the PAN is same, such Bids will be treated as multiple applications. ‘PAN’ or ‘GIR’ Number Except for Bids on behalf of the Central or State Government, residents of Sikkim and the officials appointed by the courts, the Bidders, or in the case of a Bid in joint names, each of the Bidders, should mention his/her PAN allotted under the I.T. Act. In accordance with the SEBI ICDR Regulations, the PAN would be the sole identification number for participants transacting in the securities market, irrespective of the amount of transaction. Any Bid cum Application Form without the PAN is liable to be rejected. It is to be specifically noted that Bidders should not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground. Right to Reject Bids In case of QIB Bidders Bidding in the QIB Portion, the Syndicate, may reject Bids provided that such rejection shall be made at the time of acceptance of the Bid and the reasons for rejecting the same shall be provided to such Bidder in writing. In case of Non-Institutional Bidders and Retail Individual Bidders, our Company and the Selling Shareholders have the right to reject Bids based only on technical grounds and/or as specified in the Red Herring Prospectus. However, our Company and the Selling Shareholders in consultation with the BRLMs and Co-BRLM, reserve the right to reject any Bid received from Anchor Investors without assigning any reasons. Consequent refunds shall be made through any of the modes described in the Red Herring Prospectus and will be sent to the Bidder’s address at the Bidder’s risk. With respect to ASBA Bids, the Designated Branches of the SCSBs shall have the right to reject ASBA Bids if at the time of blocking the Bid Amount in the Bidder’s bank account, the respective Designated Branch of the SCSB ascertains that sufficient funds are not available in the Bidder’s bank account maintained with the SCSB. Subsequent to the acceptance of the ASBA Bid by the SCSB, our Company and the Selling Shareholders would have a right to reject the ASBA Bids only on technical grounds and/or as specified in this Red Herring Prospectus. The Bidders may note that in case the DP ID, Beneficiary Account Number and PAN mentioned in the Bid cum Application Form and as entered into the electronic Bidding system of the Stock Exchanges by the members of the Syndicate and the SCSBs, as the case may be, do not match with the DP ID, Beneficiary Account Number and PAN available in the depository database, the Bid is liable to be rejected. Grounds for Technical Rejections Bidders should note that incomplete Bid cum Application Forms and Bid cum Application Forms that are not legible will be rejected by the members of the Syndicate or SCSBs. Bidders are advised to note that Bids are liable to be rejected among other things, on the following technical grounds: 1. Amount paid does not tally with the Bid Amount. With respect to ASBA Bids, the amounts mentioned in the

ASBA Bid cum Application Form does not tally with the amount payable for the value of the Equity Shares Bid for;

2. Age of first Bidder not given;

3. Application on plain paper; 4. In case of partnership firms, Equity Shares may be registered in the names of the individual partners and no

firm as such shall be entitled to apply;

5. Bid by persons not competent to contract under the Indian Contract Act, 1872, as amended, including minors;

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6. PAN not stated (except for Bids on behalf of the Central or State Government, residents of Sikkim and the

officials appointed by the courts);

7. GIR number furnished instead of PAN; 8. Bids for lower number of Equity Shares than specified for that category of investors; 9. Bids at a price less than the Floor Price; 10. Bids at a price over the Cap Price; 11. Bids at Cut off Price by Non-Institutional Bidders and QIB Bidders; 12. Submission of more than five ASBA Bid cum Application Forms per ASBA Account; 13. Bids for number of Equity Shares which are not in multiples of [●]; 14. Category not ticked; 15. Multiple Bids as described in the Red Herring Prospectus; 16. In case of Bids under power of attorney or by limited companies, corporate, trust etc., relevant documents not

being submitted; 17. Bids accompanied by cash, stockinvest, money order or postal order; 18. Signature of sole and/or joint Bidders missing. In addition, with respect to ASBA Bids, the Bid cum

Application form not being signed by the account holders, if the account holder is different from the Bidder; 19. Bid cum Application Form does not have the stamp of the BRLMs and Co-BRLM, the Syndicate Members or

Designated Branches (except for electronic ASBA Bids); 20. Bid cum Application Form does not have Bidder’s depository account details or the details given are

incomplete or incorrect; 21. Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid cum

Application Form, Bid/Issue Opening Date advertisement and the Red Herring Prospectus and as per the instructions in the Red Herring Prospectus and the Bid cum Application Forms;

22. In case no corresponding record is available with the Depositories that matches three parameters namely,

PAN (in case of joint Bids, PAN of the first applicant), the DP ID and the beneficiary’s account number;

23. With respect to ASBA Bids, inadequate funds in the bank account to block the Bid Amount specified in the ASBA Bid cum Application Form at the time of blocking such Bid Amount in the bank account;

24. Bids for amounts greater than the maximum permissible amounts prescribed by applicable law; 25. Bids by OCBs; 26. Bids by persons in the United States; 27. Bids where clear funds are not available in the Escrow Accounts as per the final certificate from the Escrow

Collection Banks; 28. Bids or revision thereof by QIB Bidders and Non-Institutional Bidders uploaded after 4.00 P.M. on the

Bid/Issue Closing Date; 29. Bids by persons prohibited from buying, selling or dealing in the shares directly or indirectly by SEBI or any

other regulatory authority; 30. Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable laws, rules,

regulations, guidelines and approvals; and

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31. Bids that do not comply with the securities laws of their respective jurisdictions.

32. Authorisation for blocking funds in the ASBA Account not ticked or provided; Electronic Registration of Bids (a) The members of the Syndicate and the SCSBs will register the Bids received, except Bids received from

Anchor Investors, using the online facilities of the Stock Exchanges. Details of Bids in the Anchor Investor Portion will not be registered on the online facilities of the Stock Exchanges. There will be at least one online connectivity in each city, where the Stock Exchanges are located in India and where such Bids are being accepted. The BRLMs and Co-BRLM, our Company, the Selling Shareholders and the Registrar to the Issue are not responsible for any acts, mistakes or errors or omission and commissions in relation to (i) the Bids accepted by the Syndicate Members and the SCSBs, (ii) the Bids uploaded by the Syndicate Members and the SCSBs, (iii) the Bids accepted but not uploaded by the Syndicate Members and the SCSBs or (iv) with respect to ASBA Bids, Bids accepted and uploaded without blocking funds in the ASBA Accounts. However, the members of the Syndicate and/or the SCSBs shall be responsible for any errors in the Bid details uploaded by them. It shall be presumed that for the Bids uploaded by the SCSBs, the Bid Amount has been blocked in the relevant ASBA Account.

(b) The Stock Exchanges will offer a screen-based facility for registering such Bids for the Issue. This facility

will be available on the terminals of the members of the Syndicate and their authorized agents and the SCSBs during the Bid/Issue Period. The Syndicate Members and the Designated Branches of the SCSBs can also set up facilities for off-line electronic registration of Bids subject to the condition that it will subsequently upload the off-line data file into the on-line facilities for book building on a regular basis.

(c) On the Bid/Issue Closing Date, the members of the Syndicate and the Designated Branches of the SCSBs shall upload the Bids until such time as may be permitted by the Stock Exchanges. This information will be available with the BRLMs and Co-BRLM on a regular basis. In order to ensure that the data uploaded is accurate, the Syndicate may be permitted one Working Day after the Bid/Issue Closing Date to amend some of the data fields (currently DP ID, Client ID) entered by them in the electronic bidding system. Bidders are cautioned that a high inflow of Bids typically experienced on the last Working Day of the Bidding may lead to some Bids received on the last Working Day not being uploaded due to lack of sufficient uploading time, and such Bids that could not uploaded will not be considered for allocation. Bids will only be accepted on Monday to Friday (excluding any public holiday).

(d) Based on the aggregate demand and price for Bids registered on the electronic facilities of the Stock

Exchanges a graphical representation of consolidated demand and price would be made available at the bidding centres and at the websites of each of the Stock Exchanges during the Bid/Issue Period along with category wise details.

(e) At the time of registering each Bid, the members of the Syndicate or the Designated Branches of the SCSBs

in case of ASBA Bids shall enter the following details of the Bidder in the electronic system:

• Name of the Company.

• Bid cum Application number. • Investor Category – Individual, Corporate, non-institutional, qualified institutional buyer, Eligible

NRI, FII, or Mutual Fund, financial institutions, insurance companies, etc.

• PAN of the first applicant. • Depository Participant Identity (“DP ID”).

• Beneficiary account number of the Bidder

• Numbers of Equity Shares Bid for.

• Price option.

• Cheque amount.

• Cheque number.

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(f) A system generated TRS, on demand, will be given to the Bidder as a proof of the registration of each of the Bidding options. It is the Bidder’s responsibility to obtain the TRS from the members of the Syndicate or Designated Branches. The registration of the Bid by the member of the Syndicate or the Designated Branches does not guarantee that the Equity Shares shall be allocated/Allotted.

(g) Such TRS will be non-negotiable and by itself will not create any obligation of any kind. (h) In case of QIB Bidders (other than QIBs Bidding through ASBA), the members of the Syndicate have a right

to accept the Bid or reject it. However, such rejection shall be made at the time of receiving the Bid and only after assigning a reason for such rejection in writing. In case of Non-Institutional Bidders and Retail Individual Bidders, Bids may be rejected only on technical grounds. Furthermore, the SCSBs shall have no right to reject Bids except on technical grounds.

(i) The permission given by the Stock Exchanges to use their network and software of the online IPO system

should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by our Company and/or the BRLMs and Co-BRLM are cleared or approved by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of our Company our Promoters, our management or any scheme or project of our Company nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of the Red Herring Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges.

(j) Only Bids that are uploaded on the online IPO system of the Stock Exchanges shall be considered for

allocation/Allotment. The members of the Syndicate shall be given one Working Day after the Bid/Issue Closing Date to verify the information uploaded on the online IPO system during the Bidding Period after which the Registrar to the Issue shall proceed with the Allotment of Equity Shares.

(k) Details of Bids in the Anchor Investor Portion will not be registered on the on-line facilities of the electronic

facilities of the Stock Exchanges. Build up of the book and revision of Bids (a) Bids received from various Bidders through the members of the Syndicate and the SCSBs shall be

electronically uploaded to the Stock Exchanges’ mainframe on a regular basis. (b) The book gets built up at various price levels. This information will be available with the BRLMs and Co-

BRLM at the end of the Bidding Period. (c) During the Bid/Issue Period, any Bidder who has registered his or her interest in the Equity Shares at a

particular price level is free to revise his or her Bid within the Price Band using the printed Revision Form, which is a part of the Bid cum Application Form.

(d) Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the

Revision Form. Apart from mentioning the revised options in the Revision Form, the Bidder must also mention the details of all the options in his or her Bid cum Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in the Bid cum Application Form and such Bidder is changing only one of the options in the Revision Form, he must still fill the details of the other two options that are not being revised, in the Revision Form. The members of the Syndicate and the Designated Branches will not accept incomplete or inaccurate Revision Forms.

(e) The Bidder can make this revision any number of times during the Bid/Issue Period. However, for any

revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate or the Designated Branch of the SCSB through whom such Bidder had placed the original Bid. Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made only in such Revision Form or copies thereof.

(f) Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the incremental amount, if any, to be paid on account of the upward revision of the Bid. Retail Individual Bidders Bidding in such categories should note that the revised amount should not exceed Rs. 100,000. The excess amount, if any, resulting from downward revision of the Bid would be returned to the Bidder at the

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time of refund in accordance with the terms of the Red Herring Prospectus. With respect to ASBA Bids, if revision of the Bids results in an incremental amount, the relevant SCSB shall block the additional Bid amount. In case of Bids other than ASBA Bids, the members of the Syndicate shall collect the payment in the form of cheque or demand draft if any, to be paid on account of the upward revision of the Bid at the time of one or more revisions. In such cases the members of the Syndicate will revise the earlier Bid details with the revised Bid and provide the cheque or demand draft number of the new payment instrument in the electronic book. The Registrar will reconcile the Bid data and consider the revised Bid data for preparing the basis of Allotment.

(g) When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and will, on demand,

receive a revised TRS from the members of the Syndicate or Designated Branches, as applicable. It is the responsibility of the Bidder to request for and obtain the revised TRS, which will act as proof of his or her having revised the previous Bid.

Withdrawal of ASBA Bids

ASBA Bidders can withdraw their Bids during the Bidding Period by submitting a request for the same to the SCSBs who shall do the requisite, including deletion of details of the withdrawn ASBA Form from the electronic bidding system of the Stock Exchanges and unblocking of the funds in the ASBA Account. In case an ASBA Bidder (other than a QIB bidding through an ASBA Form) wishes to withdraw the Bid after the Bid Closing Date, the same can be done by submitting a withdrawal request to the Registrar to the Issue. The Registrar to the Issue shall delete the withdrawn Bid from the Bid file and give instruction to the SCSB for unblocking the ASBA Account after finalization of the ‘Basis of Allocation’. Price Discovery and Allocation (a) Based on the demand generated at various price levels, our Company and the Selling Shareholders in

consultation with the BRLMs and Co-BRLM shall finalize the Issue Price.

(b) Allocation to Anchor Investors shall be at the discretion of our Company and the Selling Shareholders in consultation with the BRLMs and Co-BRLM, subject to compliance with the SEBI ICDR Regulations. In the event of under-subscription in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion. The number of Equity Shares allocated to Anchor Investors and the price at which the allocation is made, shall be made available in public domain by the BRLMs and Co-BRLM before the Bid/Issue Opening Date.

(c) The allocation to QIBs will be at least 50% of the Issue and allocation to Non-Institutional and Retail

Individual Bidders will be not less than 15% and 35% of the Issue, respectively, on a proportionate basis, in a manner specified in the SEBI ICDR Regulations and the Draft Red Herring Prospectus, in consultation with the Designated Stock Exchange, subject to valid bids being received at or above the Issue Price.

(d) Under-subscription, if any, in the Non-Institutional Portion and Retail Portion may be met with spill over

from any other category at the sole discretion of our Company and the Selling Shareholders in consultation with the BRLMs and Co-BRLM.

(e) In the event of an oversubscription in the Net QIB Portion, all QIBs who have submitted Bids above the Issue Price in the QIB Portion shall be allocated Equity Shares on a proportionate basis for up to 95% of the Net QIB Portion. In the event of an oversubscription in the Non-Institutional Portion and Retail Portion, allocation shall be made on a proportionate basis.

(f) Any oversubscription to the extent of 10% of this Issue can be retained for the purpose of rounding off and

making allotments in minimum lots, while finalising the ‘Basis of Allocation’.

(g) Allocation to Non-Residents, including Eligible NRIs, FIIs and foreign venture capital funds registered with SEBI, applying on repatriation basis will be subject to applicable law.

(h) The BRLMs and Co-BRLM in consultation with our Company and the Selling Shareholders shall notify the

members of the Syndicate of the Issue Price and allocations to Anchor Investors, where the full Bid Amount has not been collected from the Anchor Investors due to the Issue Price being higher than the Anchor Investor Issue Price.

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(i) Our Company and the Selling Shareholders reserve the right to cancel the Issue any time after the Bid/Issue Opening Date, but before the Allotment without assigning any reasons whatsoever. In terms of the SEBI ICDR Regulations, QIB Bidders Bidding in the QIB Portion shall not be allowed to withdraw their Bid after the Bid/Issue Closing Date. Further, Anchor Investors shall not be allowed to withdraw their Bid after the Anchor Investor Bidding Date.

(j) The Basis of Allotment shall be put on the website of the Registrar to the Issue.

(k) Bids received from ASBA Bidders will be considered at par with Bids received from other QIBs, Non-

Institutional Bidders and Retail Individual Bidders. No preference shall be given to ASBA Bidders vis-à-vis other QIBs, Retail Individual Bidders and Non-Institutional Bidders or vice versa. The ‘Basis of Allocation’ to such valid ASBA Bidders will be that applicable to QIBs, Non-Institutional Bidders and Retail Individual Bidders.

Signing of Underwriting Agreement and RoC Filing (a) Our Company, the Selling Shareholders, the BRLMs, Co-BRLM and the Syndicate Members shall enter

into an Underwriting Agreement on or immediately after the finalisation of the Issue Price. (b) After signing the Underwriting Agreement, our Company will update and file the updated Red Herring

Prospectus with the RoC in terms of Section 60B of the Companies Act, which then would be termed the ‘Prospectus’. The Prospectus will contain details of the Issue Price, Issue size, underwriting arrangements and will be complete in all material respects.

Pre-Issue Advertisement Subject to Section 66 of the Companies Act, our Company shall, after registering the Red Herring Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI ICDR Regulations, in an English national newspaper, a Hindi national newspaper and a Marathi daily newspaper (which is also the regional newspaper), each with wide circulation. Advertisement regarding Issue Price and Prospectus Our Company and the Selling Shareholders will issue a statutory advertisement after the filing of the Prospectus with the RoC. This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the Issue Price. Any material updates between the date of the Red Herring Prospectus and the date of Prospectus will be included in such statutory advertisement. Notice to Anchor Investors: Allotment Reconciliation and Revised CANs After the Anchor Investor Bidding Date, a physical book will be prepared by the Registrar on the basis of the Bid cum Application Forms received in the Anchor Investor Portion. Based on the physical book and at the discretion of our Company, the Selling Shareholders and the BRLMs and Co-BRLM, selected Anchor Investors may be sent a CAN, within two Working Days of the Anchor Investor Bidding Date, indicating the number of Equity Shares that may be allocated to them. This provisional CAN and the final allocation is subject to (a) the physical application being valid in all respect along with receipt of stipulated documents, (b) the Issue Price being finalised at a price not higher than the Anchor Investor Issue Price, and (c) Allotment. In the event of a technical rejection or in the event the Issue Price is higher than the Anchor Investor Issue Price, a revised CAN will be sent to Anchor Investors. The price of Equity Shares in such revised CAN may be different from that specified in the earlier CAN. Anchor Investors should note that they shall be required to pay any additional amount, being the difference between the Issue Price and the Anchor Investor Issue Price, as indicated in the revised CAN, if any, by the pay-in date specified in the revised CAN, for any increased price of Equity Shares. The pay-in date in the revised CAN shall not be later than two Working Days after the Bid/Issue Closing Date. Any revised CAN, if issued, will supersede in entirety the earlier CAN. BASIS OF ALLOTMENT A. For Retail Individual Bidders

• Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped

together to determine the total demand under this category. The allocation to all the successful Retail Individual Bidders will be made at the Issue Price.

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• The Issue size less allocation to Non-Institutional and QIB Bidders shall be available for allocation to Retail Individual Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.

• If the aggregate demand in this category is less than or equal to 7,717,500 Equity Shares at or

above the Issue Price, full allocation shall be made to the Retail Individual Bidders to the extent of their valid Bids.

• If the aggregate demand in this category is greater than 7,717,500 Equity Shares at or above the

Issue Price, the allocation shall be made on a proportionate basis subject to a minimum of 7,717,500 Equity Shares and the allocation shall take place in accordance with the procedure mentioned herein.

B. For Non-Institutional Bidders

• Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together

to determine the total demand under this category. The allocation to all successful Non-Institutional Bidders will be made at the Issue Price.

• The Issue size less allocation to QIBs and Retail Portion shall be available for allocation to Non-

Institutional Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.

• If the aggregate demand in this category is less than or equal to 3,307,500 Equity Shares at or

above the Issue Price, full allocation shall be made to Non-Institutional Bidders to the extent of their demand.

• In case the aggregate demand in this category is greater than 3,307,500 Equity Shares at or above

the Issue Price, allocation shall be made on a proportionate basis subject to a minimum of 3,307,500 Equity Shares. For the method of proportionate basis of allocation refer below.

C. For QIBs (Excluding Anchor Investor Portion)

• Bids received from the QIB Bidders, at or above the Issue Price shall be grouped together to

determine the total demand under this portion. The allocation to all the QIB Bidders will be made at the Issue Price.

• The QIB Portion shall be available for allocation to QIB Bidders who have Bid in the Issue at a

price that is equal to or greater than the Issue Price. • Allocation shall be undertaken in the following manner:

(a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be determined as follows:

(i) In the event that Mutual Fund Bids exceeds 5% of the QIB Portion (excluding

the Anchor Investor Portion), allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion (excluding Anchor Investor Portion).

(ii) In the event that the aggregate demand from Mutual Funds is less than 5% of the

QIB Portion (excluding the Anchor Investor Portion) then all Mutual Funds shall get full allocation to the extent of valid Bids received above the Issue Price.

(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds

shall be available for allocation to all QIB Bidders as set out in (b) below.

(b) In the second instance allocation to all QIBs shall be determined as follows:

(i) In the event that the oversubscription in the Net QIB Portion, all QIB Bidders who have submitted Bids above the Issue Price shall be allotted Equity Shares on a proportionate basis for up to 95% of the QIB Portion i.e. Net QIB Portion

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(ii) Mutual Funds, who have received allocation as per (a) above, for less than the

number of Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders.

(iii) Under-subscription below 5% of the QIB Portion (excluding the Anchor

Investor Portion), if any, from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis.

• The aggregate allocation to QIB Bidders shall not be less than 11,025,000 Equity Shares.

D. For Anchor Investors

• Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will be at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM, subject to compliance with the following requirements:

(i) not more than 30% of the QIB Portion will be allocated to Anchor Investors.

(ii) one-third of the Anchor Investor Portion reserved for domestic Mutual Funds, subject to

valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to Anchor Investors; and

(iii) Allocation to Anchor Investors shall be on a discretionary basis and subject to a minimum number of two Anchor Investors for allocation upto Rs. 2,500 million and minimum number of five Anchor Investors for allocation more than Rs. 2,500 million.

• The number of Equity Shares Allotted to Anchor Investors at the Anchor Investor Issue Price,

shall be made available in the public domain by the BRLMs and Co-BRLM before the Bid Opening Date.

The Book Running Lead Managers, Co- Book Running Lead Manager, the Registrar to the Issue and the Designated Stock Exchange shall ensure that the ‘Basis of Allotment’ is finalized in a fair and proper manner in accordance with the SEBI ICDR Regulations. The drawing of lots (where required) to finalize the ‘Basis of Allotment’ shall be done in the presence of a public representative on the governing board of the Designated Stock Exchange.

Procedure and Time of Schedule for Allotment and demat Credit of Equity Shares This Issue will be conducted through the Book Building Process’ pursuant to which the members of the Syndicate will accept Bids for the Equity Shares during the Bidding Period. The Bidding Period will commence on [●] and expire on [●]. Following the expiration of the Bidding Period, our Company and the Selling Shareholders, in consultation with Book Running Lead Managers, Co- Book Running Lead Manager, will determine the Issue Price, and, in consultation with Book Running Lead Managers, Co- Book Running Lead Manager, the ‘Basis of Allotment’ and entitlement to Allotment based on the Bids received and subject to confirmation by the Stock Exchange(s). The SEBI ICDR Regulations require our Company to complete the Allotment to successful Bidders within 12 Working Days of the expiration of the Bidding Period. The Equity Shares will then be Allotted and credited to the investors’ demat accounts maintained with the relevant Depository Participant. Upon approval by the Stock Exchanges, the Equity Shares will be listed and trading will commence. Method of Proportionate Basis of Allotment in the Issue Except in relation to Anchor Investors, in the event of the Issue being over-subscribed, our Company and the Selling Shareholders shall finalise the basis of allocation in consultation with the Designated Stock Exchange. The Executive Director (or any other senior official nominated by them) of the Designated Stock Exchange along with the BRLMs, Co-BRLM and the Registrar to the Issue shall be responsible for ensuring that the basis of allocation is finalised in a fair and proper manner. Except in relation to Anchor Investors, the allocation shall be made in marketable lots, on a proportionate basis as explained below: a) Bidders will be categorised according to the number of Equity Shares applied for.

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b) The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of the over-subscription ratio.

c) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate basis,

which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of the over-subscription ratio.

d) In all Bids where the proportionate allocation is less than [•] Equity Shares per Bidder, the allocation shall

be made as follows: • The successful Bidders out of the total Bidders for a category shall be determined by draw of lots

in a manner such that the total number of Equity Shares allotted in that category is as far as possible equal to the number of Equity Shares calculated in accordance with (b) above; and

• Each successful Bidder shall be allotted a minimum of [•] Equity Shares.

e) If the proportionate allocation to a Bidder is a number that is more than [•] but is not a multiple of 1 (which

is the marketable lot), the decimal would be rounded off to the higher whole number if that decimal is 0.5 or higher. If that number is lower than 0.5 it would be rounded off to the lower whole number. Allocation to all in such categories would be arrived at after such rounding off.

f) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares

allotted to the Bidders in that category, the remaining Equity Shares available for allocation shall be first adjusted against any other category, where the allotted shares are not sufficient for proportionate allocation to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such adjustment will be added to the category comprising Bidders applying for minimum number of Equity Shares.

g) Subject to valid Bids being received, allocation of Equity Shares to Anchor Investors will be at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs and Co-BRLM.

h) Investors should note that the Equity Shares will be allocated to all successful Bidders in dematerialised

form only. Bidders will not have the option of being allocated Equity Shares in physical form. Illustration of Allotment to QIBs (other than Anchor Investors) and Mutual Funds (“MF”) 1. Issue details

Particulars Issue details Issue size 200 million Equity Shares Allocation to QIB (at least 50% of the Issue) 100 million Equity Shares Of which: a. Reservation For Mutual Funds, (5%) 5 million Equity Shares b. Balance for all QIBs including Mutual Funds 95million Equity Shares Number of QIB applicants 10 Number of Equity Shares applied for 500 million Equity Shares

2. Details of QIB Bids

S. No. Type of QIBs No. of shares bid for (in million) 1. A1 50 2. A2 20 3. A3 130 4. A4 50 5. A5 50 6. MF1 40 7. MF2 40 8. MF3 80 9. MF4 20 10. MF5 20 TOTAL 500

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* A1-A5: (QIBs other than Mutual Funds), MF1-MF5 (QIBs which are Mutual Funds)

3. Details of Allotment to QIBs Bidders

Type of QIB

Shares bid for

Allocation of 5% Equity Shares to MF proportionately

(see note 2 below)

Allocation of balance 95% Equity Shares to QIBs proportionately

(see note 4 below)

Aggregate allocation to

Mutual Funds

(I) (II) (III) (IV) (V) (Number of equity shares in million)

A1 50 0 9.60 0 A2 20 0 3.84 0 A3 130 0 24.95 0 A4 50 0 9.60 0 A5 50 0 9.60 0

MF1 40 1 7.48 8.48 MF2 40 1 7.48 8.48 MF3 80 2 14.97 16.97 MF4 20 0.5 3.74 4.24 MF5 20 0.5 3.74 4.24

500 6 95 42.42

Notes: 1. The illustration presumes compliance with the requirements specified in this Draft Red Herring Prospectus in the

section titled “Issue Structure” at page 219 of this Draft Red Herring Prospectus. 2. Out of 100 million Equity Shares allocated to QIBs, 5 million (i.e., 5%) will be Allotted on a proportionate basis

among five Mutual Fund applicants who applied for 200 million Equity Shares in the QIB Portion. 3. The balance 9.5 million Equity Shares i.e., 100-5 will be Allotted on a proportionate basis among 10 QIB Bidders

who applied for 500 million Equity Shares (including 5 Mutual Fund applicants who applied for 200 million Equity Shares).

4. The figures in the fourth column entitled “Allocation of balance 95 million Equity Shares to QIBs proportionately”

in the above illustration are arrived at as explained below: • For QIBs other than Mutual Funds (A1 to A5) = Number of Equity Shares Bid for × 95/495 • For Mutual Funds (MF1 to MF5) = (No. of shares bid for (i.e., in column II of the table above) less Equity Shares

Allotted (i.e., column III of the table above) × 95/495 • The numerator and denominator for arriving at the allocation of 95 million Equity Shares to the 10 QIBs are

reduced by 5 million shares, which have already been Allotted to Mutual Funds in the manner specified in column III of the table above.

Method of Proportionate Basis of Allotment in the Issue Except in relation to Anchor Investors, in the event of the Issue being over-subscribed, our Company and the Selling Shareholders shall finalise the basis of Allotment in consultation with the Designated Stock Exchange. The Executive Director (or any other senior official nominated by them) of the Designated Stock Exchange along with the BRLMs, Co-BRLM and the Registrar to the Issue shall be responsible for ensuring that the basis of Allotment is finalised in a fair and proper manner. Issuance of Allotment Advice (a) On approval of the basis of Allotment by the Designated Stock Exchange and on Allotment by the Board of

Directors or any committee constituted thereof, the Registrar to the Issue shall send to the members of the Syndicate and SCSBs a list of their Bidders who have been Allotted Equity Shares in the Issue. For Anchor Investors, see “Notice to Anchor Investors: Allotment/Reconciliation and Revised CANs.”

(b) The Registrar to the Issue will then dispatch an allotment advice to the Bidders who have been Allotted Equity Shares in this Issue.

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Bidders who have been Allotted Equity Shares shall receive the allotment advice from the Registrar to the Issue. Designated Date and Allotment of Equity Shares • Our Company will ensure that (i) Allotment of Equity Shares; (ii) credit to successful Bidder’s depository

account will be completed within 12 Working Days of the Bid/Issue Closing Date. • In accordance with the SEBI ICDR Regulations, Equity Shares will be issued and Allotment shall be made

only in the dematerialised form to the Allottees. Allottees will have the option to re-materialise the Equity Shares so Allotted as per the provisions of the Companies Act and the Depositories Act.

Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be Allotted to them pursuant to this Issue. With effect from August 16, 2010, the demat accounts for Bidders for which PAN details have not been verified shall be 'suspended credit' and no credit of Equity Shares pursuant to the Issue shall be made into accounts of such bidders Equity Shares in Dematerialised Form with NSDL or CDSL As per the provisions of Section 68B of the Companies Act, the Allotment of Equity Shares in this Issue shall be only in a dematerialised form, (i.e., not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode). In this context, two agreements have been signed among our Company, the respective Depositories and the Registrar to the Issue: • Agreement dated April 6, 2000, between NSDL, our Company and the Registrar to the Issue; • Agreement dated March 22, 2000, between CDSL, our Company and the Registrar to the Issue. Bids from any Bidder without relevant details of his or her depository account are liable to be rejected. (a) A Bidder applying for Equity Shares must have at least one valid beneficiary account with either of the

Depository Participants of either NSDL or CDSL prior to making the Bid. (b) The Bidder must necessarily fill in the details (including the PAN, Beneficiary Account Number and

Depository Participant’s identification number) appearing in the Bid cum Application Form or Revision Form.

(c) Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary account

(with the Depository Participant) of the Bidder. (d) Names in the Bid cum Application Form or Revision Form should be identical to those appearing in the

account details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository.

(e) If incomplete or incorrect details are given under the heading ‘Bidders Depository Account Details’ in the

Bid cum Application Form or Revision Form, it is liable to be rejected. (f) The Bidder is responsible for the correctness of his or her Demographic Details given in the Bid cum

Application Form vis-à-vis those with his or her Depository Participant. (g) Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity

with NSDL and CDSL. The Stock Exchanges where the Equity Shares are proposed to be listed have electronic connectivity with CDSL and NSDL.

(h) Trading in the Equity Shares would be in dematerialised form only, on the demat segment of the respective

Stock Exchanges. Communications All future communications in connection with Bids made in this Issue should be addressed to the Registrar to the Issue quoting the full name of the sole or First Bidder, Bid cum Application Form number, PAN, Bidders depository

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account details, number of Equity Shares applied for, date of Bid cum Application Form, name and address of the member of the Syndicate where the Bid was submitted and cheque or draft number and issuing bank thereof or with respect to ASBA Bids, the bank account number in which an amount equivalent to the Bid Amount was blocked. Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary accounts, refund orders etc. In case of ASBA Bids submitted with the Designated Branches, Bidders can contact the relevant Designated Branch. Impersonation Attention of the Bidders is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, reproduced below: “Any person who: (a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares

therein, or (b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other

person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.” Payment of Refund Bidders other than ASBA Bidders must note that on the basis of the DP ID, beneficiary account number as entered into the stock exchange system, the Registrar to the Issue will obtain, from the Depositories, the Bidders’ bank account details, including the MICR code. Hence Bidders are advised to immediately update their bank account details as appearing on the records of the Depository Participant. Failure to do so could result in delays in dispatch of refund order or refunds through electronic transfer of funds, as applicable, and any such delay shall be at the Bidders’ sole risk and neither our Company the Selling Shareholders, the Registrar to the Issue, Escrow Collection Bank(s), Bankers to the Issue nor the BRLMs and Co-BRLM shall be liable to compensate the Bidders for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay. In the case of Bids from Eligible NRIs and FIIs, refunds, dividends and other distributions, if any, will normally be payable in Indian Rupees only and net of bank charges and/or commission. Where so desired, such payments in Indian Rupees will be converted into US Dollars or any other freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the time of remittance and will be dispatched by registered post. Our Company and the Selling Shareholders will not be responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency. Mode of Refunds For Bidders other than ASBA Bidders The payment of refund, if any, for Bidders other than ASBA Bidders would be done through any of the following modes: 1. NECS – Payment of refund would be done through NECS for Bidders having an account at any of the

centres specified by the RBI. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code from the Depositories.

2. Direct Credit – Bidders having bank accounts with the Refund Bank, as per the Demographic Details received from the Depositories shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank for the same would be borne by our Company and the Selling Shareholders in proportion to the number of Equity Shares offered by them in the Issue..

3. RTGS – Bidders having a bank account with a bank branch which is RTGS enabled as per the information available on the website of RBI and whose refund amount exceeds Rs. 1 million, shall be eligible to receive refund through RTGS, provided the Demographic Details downloaded from the Depositories contain the nine digit MICR code of the Bidder’s bank which can be mapped with the RBI data to obtain the corresponding Indian Financial System Code (“IFSC”). Charges, if any, levied by the Refund Bank for the

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same would be borne by our Company and the Selling Shareholders in proportion to the number of Equity Shares offered by them in the Issue. Charges, if any, levied by the Bidder’s bank receiving the credit would be borne by the Bidder.

4. NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT wherever the Bidders’ bank branch is NEFT enabled and has been assigned the IFSC, which can be linked to an MICR code of that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date prior to the date of payment of refund, duly mapped with an MICR code. Wherever the Bidders have registered their MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the Bidders through this method. The process flow in respect of refunds by way of NEFT is at an evolving stage and hence use of NEFT is subject to operational feasibility, cost and process efficiency and the past experience of the Registrars to the Issue. In the event NEFT is not operationally feasible, the payment of refunds would be made through any one of the other modes as discussed in this section.

5. For all other Bidders, including those who have not updated their bank particulars with the MICR code, the

refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn on the Refund Bank and payable at par at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centers will be payable by the Bidders.

Unblocking of ASBA Account Once the ‘Basis of Allocation’ is finalized, the Registrar to the Issue shall send an appropriate request to the Controlling Branches for unblocking the ASBA Accounts and for the transfer of requisite amount to the Public Issue Account. On the basis of instructions from the Registrar to the Issue, the SCSBs shall transfer the requisite amount against each successful ASBA Bidder to the Public Issue Account and shall unblock excess amount, if any in the ASBA Account. However, the Bid Amount may be unblocked in the ASBA Account prior to receipt of intimation from the Registrar to the Issue by the Controlling Branch regarding finalisation of the ‘Basis of Allocation’, in the event of withdrawal/failure of the Issue or withdrawal (except in case of a QIB bidding through an ASBA Form) or rejection of the ASBA Bid, as the case may be. Disposal of Applications and Application Moneys and Interest in case of Delay With respect to Bidders other than ASBA Bidders, our Company and the Selling Shareholders shall ensure dispatch of Allotment advice, refund orders (except for Bidders who receive refunds through electronic transfer of funds) and give benefit to the beneficiary account with Depository Participants and submit the documents pertaining to the Allotment to the Stock Exchanges after the Allotment of Equity Shares. In case of Bidders who receive refunds through NECS, NEFT, direct credit or RTGS, the refund instructions will be given to the clearing system within 12 Working Days from the Bid/Issue Closing Date. A suitable communication shall be sent to the Bidders receiving refunds through this mode within 12 Working Days from the Bid/Issue Closing Date, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund. Our Company shall use best efforts to ensure that all steps for completion of the necessary formalities for listing is completed and trading commences within 12 Working Days of the Bid/Issue Closing Date at all the Stock Exchanges where the Equity Shares are proposed to be listed. In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI ICDR Regulations, our Company and the Selling Shareholders further undertake that: • Allotment of Equity Shares shall be made only in dematerialised form, including the credit of Allotted

Equity Shares to the beneficiary accounts of the Depository Participants, within 12 Working Days of the Bid/Issue Closing Date;

• With respect to Bidders other than ASBA Bidders, dispatch of refund orders or in a case where the refund

or portion thereof is made in electronic manner, the refund instructions are given to the clearing system within 12 Working Days from the Bid/Issue Closing Date would be ensured. With respect to the ASBA Bidders’ instructions for unblocking of the ASBA Bidder’s bank account shall be made within 12 Working Days from the Bid/Issue Closing Date; and

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• Our Company shall pay interest at 15% per annum for any delay beyond the time period as mentioned

above, if Allotment is not made and refund orders are not dispatched or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner and/or demat credits are not made to investors from the day the Company and the Selling Shareholders become liable to repay. If such money is not repaid within eight days from the day the Company and the Selling Shareholders become liable to repay, the Company, the Selling Shareholders and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under sub-section (2) and (2A) of section 73 of the Companies Act.

Letters of Allotment or Refund Orders or instructions to the SCSBs Our Company on behalf of itself and the Selling Shareholders shall ensure dispatch of refund orders, if any, of value up to Rs. 1,500, under certificate of posting, and shall dispatch refund orders above Rs. 1,500, if any, by registered or speed post at the sole or first Bidder’s sole risk within 12 Working Days from the Bid/Issue Closing Date. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post, intimating them about the mode of credit of refund within 12 Working Days from Bid/Issue Closing Date. In case of ASBA Bidders, the Registrar to the Issue shall instruct the relevant SCSB to unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within 12 Working Days of the Bid/Issue Closing Date, which shall be duly completed after the receipt of such instruction from the Registrar. Interest in case of delay in dispatch of Allotment Letters or Refund Orders/instruction to SCSB by the Registrar to the Issue Allotment of Equity Shares in the Issue, including the credit of Allotted Equity Shares to the beneficiary accounts of the Depository Participants, shall be made not later than 12 Working Days of the Bid/Issue Closing Date. Our Company further agrees that it shall pay interest at the rate of 15% per annum if the allotment letters or refund orders have not been dispatched to the Bidders or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given in the disclosed manner within eight days from the day the Company becomes liable to repay. If such money is not repaid within eight days from the day the Company becomes liable to repay, the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under sub-section (2) and (2A) of section 73 of the Companies Act. Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by our Company as a Refund Bank and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders. Undertakings by our Company Our Company undertakes the following: • That the complaints received in respect of this Issue shall be attended to by our Company expeditiously and

satisfactorily; • That all steps for completion of the necessary formalities for listing and commencement of trading at all the

Stock Exchanges where the Equity Shares are proposed to be listed will be completed within 12 Working Days of the Bid/Issue Closing Date;

• That our Company shall apply in advance for the listing of Equity Shares;

• That funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be

made available to the Registrar to the Issue by the Company; • That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to

the applicant within 12 Working Days from the Bid/Issue Closing Date, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund;

• That the certificates of the securities/refund orders to Eligible NRIs shall be dispatched within specified

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time; • That no further issue of Equity Shares shall be made until the Equity Shares offered through the Red

Herring Prospectus are listed or until the Bid monies are refunded on account of non-listing, under-subscription etc.; and

• Those adequate arrangements shall be made to collect all ASBA and to consider them similar to non-ASBA applications while finalizing the basis of allotment.

• That the Equity Shares are free and clear of all liens or encumbrances and shall be allotted to the Allottees

within the specified time; • That it shall be ensured that dispatch of share certificates/refund orders and demat credit is completed and

the allotment and listing documents shall be submitted to the Stock Exchanges within 12 Working Days of the date of closure of the Issue;

• That we shall pay interest of 15% per annum if such monies is not repaid within eight days after our

Company and Selling Shareholders will become liable to repay, then our Company shall, on and from expiry of eight days, be liable to repay the monies, with interest at the rate of 15% p.a. on application monies as prescribed under section 73 of the Companies Act.

• That the Offer for Sale Proceeds shall be transferred to the Selling Shareholders at the time at which release of these funds is permitted under applicable laws and regulations, including after receipt of listing approval for listing and trading of the Equity Shares from all Stock Exchanges where listing has been sought.

Our Company and the Selling Shareholders shall not have recourse to the Issue Proceeds until the final approval for listing and trading of the Equity Shares from all the Stock Exchanges where listing is sought has been received. Undertakings by the Selling Shareholders Each of the Selling Shareholders severally and not jointly undertakes that: • The Equity Shares comprised in the Offer for Sale have been held by the Selling Shareholders for more than

one year as at the date of this Draft Red Herring Prospectus. • The Equity Shares comprised in the Offer for Sale are free and clear of any liens and encumbrances. • They shall not access the proceeds of the sale of the Equity Shares comprised in the Offer for Sale unless and

until listing approval has been granted from the stock exchanges for which permission in this regard has been applied for by the Company, for trading on the stock exchanges of the Equity Shares of the Company.

• Complaints received in respect of each Selling Shareholder’s Equity Shares included in the Offer for Sale shall

be dealt with by such Selling Shareholder expeditiously and satisfactorily. Each of the Selling Shareholders has authorised the Compliance Officer and Registrar to the Issue to redress complaints, if any, from investors in relation to their respective Equity Shares included in the Offer for Sale.

Withdrawal of the Issue Our Company and/or the Selling Shareholders in consultation with the BRLMs and Co-BRLM, reserve the right not to proceed with the Issue anytime after the Bid/Issue Opening Date but before the Allotment of Equity Shares. In such an event our Company would issue a public notice in the newspapers within two days, in which the pre-Issue advertisements were published, providing reasons for not proceeding with the Issue. The BRLMs and Co-BRLM, through the Registrar, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one Working Day from the day of receipt of such notification. Our Company shall also promptly inform the Stock Exchanges on which the Equity Shares are proposed to be listed. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for only after Allotment, and (ii) the final RoC approval of the Prospectus after it is filed with the RoC. In the event our Company and/or the Selling Shareholders in consultation with the BRLMs and Co-BRLM, if required in terms of their engagement letters, withdraws the Issue after the Bid/Issue Closing Date, a fresh offer document will be filed with SEBI in the event we subsequently decide to proceed with the initial public offering.

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Utilisation of Issue Proceeds The Board of Directors certifies that: • All monies received in the Issue shall be credited/transferred to a separate bank account other than the bank

account referred to in sub-section (3) of Section 73 of the Companies Act; • Details of all monies utilised out of Issue shall be disclosed, and continue to be disclosed until the time any

part of the Issue proceeds remains unutilised, under an appropriate head in our balance sheet indicating the purpose for which such monies have been utilised;

• Details of all unutilised monies out of the Issue, if any shall be disclosed under an appropriate separate head in the balance sheet indicating the form in which such unutilised monies have been invested.

• Our Company shall comply with the requirements of Clause 49 of the listing agreement in relation to the disclosure and monitoring of the utilization of the Net Proceeds; and

• Our Company shall not have recourse to the proceeds of the Issue until the approval for trading of the

Equity Shares from the Stock Exchanges has been received.

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Restriction on foreign ownership of Indian Securities Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of GoI and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted in all sectors of Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such investment. As per current foreign investment policies, foreign investment in media rights and film industry is permitted under the automatic route in relation to investments by person resident outside India. By way of Circular No. 53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to shares of an Indian company in a public offer without the prior approval of the RBI, so long as the price of the equity shares to be issued is not less than the price at which the equity shares are issued to residents. Transfers of equity shares previously required the prior approval of the FIPB. However, vide a RBI circular dated October 4, 2004 issued by the RBI, the transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i) the activities of the investee company are under the automatic route under the foreign direct investment (FDI) Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (ii) the non-resident shareholding is within the sectoral limits under the FDI policy, and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI. Foreign Investment in Media-Entertainment and broadcasting sector: Foreign investment in the media and entertainment sector is regulated by the relevant provisions of the FDI Manual (“FDI Manual”), the Foreign Exchange Management (Transfer of Issue of Security by a person Resident Outside India) Regulations, 2000 (“FEMA Regulations”), the relevant Press Notes issued by the Secretariat for Industrial Assistance, GoI and the Consolidated Foreign Direct Investment Policy issued by the Department of Industrial Policy and Promotion Ministry of Commerce and Industry Government of India. FEMA Regulations Annexure B of the FEMA Regulations provides that 100% investment can be made by persons resident outside India in media and entertainment sector under item 16 (“films”) and item 21 (“any other sector/activity not included in Annexure A”). While FDI in broadcasting is covered under Annexure A of the FEMA Regulations under activities for which automatic route of RBI for investment from person resident outside India is not available. FDI Manual Item No. 6(f) of Annexure I to the said FDI Manual outlines the sectoral caps in relation to Up-linking a Non News and Current Affairs TV Channel. 100% investment by non resident Indians is allowed in this sector subject to obtaining a prior approval of FIPB and such investments are subject to conditions as laid down by Ministry of Information and Broadcasting (for details see our section “Regulations and Policies” on page 92 of this DRHP) Press Note 1 of 2006 Under the revised guidelines for Up-linking notified on 2.12.2005, the Government has decided to allow FDI in the Up-linking of TV Channels as under:

a) FDI up to 49% would be permitted with prior approval of the Government for setting up Uplinking HUB/ Teleports;

b) FDI up to 100% would be allowed with prior approval of the Government for Up-linking a Non-News &

Current Affairs TV Channel;

c) FDI (including investment by Foreign Institutional Investors (FIIs) up to 26% would be permitted with prior approval of the Government for Up-linking a News & Current Affairs TV Channel subject to the condition that the portfolio investment in the form of FII/ NRI deposits shall not be “persons acting in concert” with FDI investors, as defined in the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Our Company permitted to uplink the channel shall certify the continued compliance of this requirement through our Company Secretary at the end of each financial year.

Note:

• As per the existing policy of the Government of India, OCBs cannot participate in this Issue. • Non-residents such as FVCIs, multilateral and bilateral development financial institutions are not permitted

to participate in the Issue.

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The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold only outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.

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SECTION VIII - DESCRIPTION OF EQUITY SHARES AND MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF OUR COMPANY

Pursuant to Schedule II of the Companies Act and the SEBI ICDR Regulations, the main provisions of the Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please note that each provision herein below is numbered as per the corresponding article number in the Articles of Association and capitalized/defined terms herein have the same meaning given to them in the Articles of Association. Table ‘A’ Article 1 provides that:

No regulations contained in Table A, in the First Schedule to the Companies Act, 1956, or in Schedule to any previous Companies Act, shall apply to this Company, but the regulation for the management of the company and for the observance of the members thereof and their representatives, shall subject to any exercise of the statutory powers of the Company with reference to the repeal or alteration of, or addition to its regulations by special resolution, as prescribed by the said Companies Act, 1956, be such as contained in these Articles.

Share Capital Article 3 provides that:

The Authorized share capital of the Company shall be as per paragraph V of the memorandum of association of the Company with rights to alter the same in whatever way as deemed fit by the Company. The Company may increase the authorized capital which may consist of equity and / or preference shares as the company in general meeting may determine in accordance with the law for the time being in force relating to companies with power to increase or reduce such capital from time to time, in accordance with the regulations of the Company and the legislative provisions for the time being force in this behalf and with power to divide the shares in the capital for the time being into equity share capital or preference share capital and to attach thereto respectively and preferential, qualified, privileges or conditions and to vary, modify and abrogate the same in such manner as may be determined by or in accordance with these presents.

Article 4 provides that:

Except so far as otherwise provided by the conditions if issue or by these presents, any capital raised by the creation of new shares shall be considered as part of the existing capital, and shall be subject to the provisions herein contained, with reference to the payment of calls and installments, forfeiture, lien, surrender, transfer and transmission, voting and otherwise.

Redeemable preference shares: Article 6 provides that:

(a) no such shares shall be redeemed expect out of the profits of the Company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purpose of the redemption;

(b) no such shares shall be redeemed unless they are fully paid; (c) the premium, if any, payable on redemption must have been provided for out of the profits of the

Company or the Company’s share premium account before the shares are redeemed; (d) where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there

shall out of profits which would otherwise have been available for dividend, be transformed to a reserve fund, to be called the “Capital Redemption Reserve Account”, a sum equal to the nominal amount of the shares redeemed and the provisions of the Act relating to the reduction of the share capital of the Company shall, except as provided in section 80 of the Act, apply as if the Capital Redemption Reserve Account were paid-up share Capital of the Company.

Other shares: Article 7 provides:

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The Company shall have the power to issue cumulative convertible preference shares or such other kind of preference shares, whether redeemable or not and whether partly or fully convertible, subject to the provisions of the Act and any such guidelines or regulations issued by any regulatory authorities and the resolution authorizing such issue shall prescribe the manner, terms and conditions of payment of dividend, repayment or conversion. Share and Share Certificates: Articles 11, 12, 13 and 14 provide that: 1. The Company shall cause to be kept a Register and index of members holding shares in physical and

dematerialised form in any media as permitted by law including any form of electronic media in accordance with sections 150 and 151 of the Act. The Company shall be entitled to keep in any state or country outside India a branch register of members resident in that State or country.

2. The shares in the capital shall be numbered progressively according to their several denominations.

Provided however that the provisions relating to progressive numbering shall not apply to the shares of the Company which have been dematerialised.

3. (a) Where at any time after the expiry of two years from the formation of the Company or at any time after the expiry of one year from the allotment of shares in the Company made for the first time after its formation whichever is earlier, it is proposed to increase the subscribed capital of the Company by allotment of further shares, capital, then such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of the Company, in proportion, as nearly as circumstances admit, to the capital paid up on these shares offered and limiting a time not being less than thirty days from the date of the offer within which the offer, if not accepted, will be deemed to have been declined. The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any person and the notice referred to above shall contain a statement of this right. After the expiry of the time specified in the notice is given that he declines to accept the shares offered, the Board may dispose of them in such manner as they think most beneficial to the Company. (b) Notwithstanding anything contained in the preceding sub-clause, the Company may:

(i) by a Special Resolution; or

(ii) where no such Special Resolution is passed, if the votes cast (whether on a show of hands, or on a poll, as the case may be) in favour of the proposal contained in the resolution moved in that general meeting (including the casting vote, if any, of the Chairman) by Members who being entitles and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf, that the proposal is most beneficial to the Company. The offer of further shares to any person or persons, and such person or persons may or may not include the persons who at the date of the offer, are the holders or the equity shares of the Company.

(c) Nothing in sub-clause (a) above shall be deemed to extend the time within which the offer should be accepted or to authorize any person to exercise the right of renunciation for a second time on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation. (d) Notwithstanding anything contained in sub-clause (a) above, but subject, however, to section 81(3) of the Act, the Company may increase its subscribed capital on exercise of an option attached to the debentures issued or loans raised by the Company to convert such debentures or loans into shares, or to subscribe for shares in the Company. Provided that the terms of issue of such debentures or the terms of such loans include a term provided for such option and such term: a) Either has been approved by the Central Government before the issue of the debentures or the

raising of the loans or is in conformity with rules; if any, made by, that Government in this behalf; and

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b) In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the Company in general meeting before the issue of the loans.

Transfer and transmission of shares: Article 14 provides that:

Subject to the provisions of these Articles and of the Act, the shares (including any shares forming part of any increased capital of the Company) shall be under the control of the Directors, who may allot or otherwise dispose of the same to such persons, the shares (including any shares forming part of any increased capital of the Company) shall be under the control of the Directors, who may allot or otherwise dispose of the same to such persons, in such proportion, on such terms and conditions and at such times as the Directors think fit and subject to the sanction of the Company in General Meeting with full power, to give any person the option to call for or be allotted shares of any class of the Company either (subject to the provisions of Sections 78 and 79 of the Act) at a premium or at par or at a discount and such consideration as the Directors think fit and any shares which may so be allotted may be issued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without the sanction of the company in the general meeting. The Board shall cause to be filed the returns as to allotment provided for in section 75 of the Act.


Pursuant to provisions of Section 79A of the Act, the Company shall have power to issue sweat equity shares to employees or Directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions by whatever name called.


Pursuant to provisions of Section 77, 77A, 77AA and 77B of the Act, and other regulations or guidelines as may be specified or notified by any regulatory authority from time to time, the Company shall have power to purchase its own shares and other specified securities.


Subject to the other provisions in the Articles and the provisions contained in any regulations, guidelines and circulars issued from time to time by any regulatory authorities, the Company may issue shares with differential rights as to dividends, voting, payments, etc. on such terms and conditions as the Board of Directors may deem fit.


Pursuant to provisions of Section 109A of the Act every holder of shares or debentures of the Company may at any time nominate in the prescribed manner a person to whom his or her shares or debentures of the Company shall vest in the event of his death.


Any application signed by or on behalf of any applicant for shares in the Company, followed by an allotment of any shares therein, shall be an acceptance of shares within the meaning of these Articles, and every person who thus or otherwise accepts any shares and whose name is on the Register shall for the purpose of these Articles, be a Member.

Shares at the disposal of the Director: Article 21 provides that:

The money (if any) which the Board shall, on the allotment of any shares being made by them, require or direct to be paid by way of deposit, call or otherwise, in respect of any shares allotted by them, shall immediately on the insertion of the name of the allottee in the Register of Members as the name of the

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holder of such shares, become a debt due to and recoverable by the Company from the allottee thereof, and shall be paid by him accordingly.


Every Member, or his heirs, executors or administrators official assignees, receiver or liquidator shall pay to the Company the portion of the capital represented by the time being, remain unpaid thereon, in such amount , at such time or times, in such manner as the Board shall from time to time in accordance with the Company’s regulations require or fix the payment thereof.

Share Certificate: Article 23 provides that:

a) Every Member or allottee of shares be entitled without payment, to receive one certificate specifying the

name of the person in whose favour it is issues, the shares to which it relates and the amount paid-up thereon. Such certificate shall be issued only in pursuance of a resolution passed by the Board on surrender to the company of its letter of allotment or its fractional coupons of requisite value, save in cases of issue against letters of acceptance or of renunciation or in cases of issue of bonus shares. Every such certificate shall be issued under the seal of the company, which shall be affixed in the presence of two Directors or persons acting on behalf of the directors under a duly registered power of attorney and the secretary or some other person appointed by the board of for the other person shall a person other than a managing or a whole-time director. Particulars of every share certificate issued shall be entered in the Register of Members against the name of the person to whom it has been issued indicating the date of issue.

b) Any two or more joint allottees of a share, for the purpose of this Article, be treated as a single member, and the certificate of any share, which may be the subject of joint ownership, may be delivered to anyone of such joint owners on behalf of all of them. For any further certificate the board shall be entitled, but shall not be bound, to prescribe a charge not exceeding Rupee one. The Company shall comply with the provisions of Section 113 of the Act.

c) A Director may sign a share certificate by affixing his signature thereon by means of any machine, equipment or other mechanical means, such as engraving in metal or lithography, but not by means of a rubber stamp, provided that the Director shall be responsible for the safe custody of such machine, equipment or other material used for the purpose.

Underwriting and Brokerage: Article 28 and 29 provide that:

Subject to the provisions of Section 76 of the Act, the Company may at any time pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares or debentures in the Company, but so that the commission shall not exceed in the case of shares five percent of the price at which the shares are issued and in the case of debentures two and half percent of the price at which the debentures are issued. Such commission may be satisfied by payment of cash or by allotment of fully or partly paid shares or partly in one way and partly in the other. The Company may pay a reasonable sum for brokerage.

Company’s Lien on shares/debentures: Article 42 provides that:

The Company shall have a first and paramount lien upon all the shares (other than fully paid up shares) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof, for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares, and no equitable interest in any shares shall be created except upon the footing and upon the condition that Article 32 hereof is to have full effect. Any such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed the registration of a transfer of shares shall operate as a waiver of the Company’s lien, if any, on such shares. The Directors may at any time declare any share wholly or in part to be exempt from the provisions of this clause.

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The provisions of these Articles shall mutatis mutandis apply to the debentures of the Company.


For the purpose of enforcing such lien the Board may sell the shares subject thereto in such manner as they shall think fit, and for that purpose may cause to be issued a duplicate certificate in respect of such shares and may authorise one of their number to execute a transfer be made until such period as aforesaid shall have arrived, and until notice in writing of the intention to sell shall have been served on such member or his representatives and default shall have been made by him or them in payment, fulfillment or discharge of such debts, liabilities or engagements for fourteen days after such notice.


The net proceeds of any such sale shall be received by the Company and applied in or towards payment or such part of the amount in respect of which the lien exists as is presently payable and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the persons entitled to the shares at the date of the sale.

Forfeiture and Surrender: Article 45 provides that:

If any member fails to pay any call or installment of a call on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the Board may at any time thereafter, during such time as the call or installment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.


The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or places on and at which such call or installment and such interest thereon at such rate not exceeding fifteen percent annum as the Directors shall determine from the day on which such call or installment ought to have been paid and expenses as aforesaid are to be paid. The notice shall also state that, in the event of the non-payment at or before the time and at the place appointed, the shares in respect of which the call was made or installment is payable, will be liable to be forfeited.


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


When any share shall have been so forfeited shall be given to the member in whose name its stood immediately prior to the forfeiture, and an entry of the forfeiture, with the date thereof, shall forthwith be made in the Register of Members, but not forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.


Any share so forfeited shall be the property of the Company, and may be sold, re-alloted, or otherwise disposed of, either to the original holder thereof or to any other person upon such terms and in such manner as the Board shall think fit.


Any member whose shares have been forfeited shall notwithstanding the forfeiture, be liable to pay and

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shall forthwith pay to the Company, on demand all calls, installments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture, together with interest thereon from the time of the forfeiture until payment, at such rate not exceeding fifteen percent per annum as the Board may determine and the Board may enforce the payment thereof, if it thinks fit.


The forfeiture of a share involve extinction, at the time of the forfeiture, of all interest in and all claims and demands against the Company in respect of the share and all other rights incidental to the share, except only such of those rights as by these Articles are expressly saved.


A declaration in writing that the declarant is a Director or Secretary of the Company and that a share in the Company has been duly forfeited in accordance with these Articles on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share.


Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers hereinabove given, the Board may appoint some person to execute an instrument or transfer of the shares sold and cause the purchaser’s name to be entered in the Register in respect of the shares sold, and the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the purchase money, and after his name has been entered in the Register in respect of such shares, the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.


Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting member) stand cancelled ad become null and void and of no effect, and the Directors shall be entitled to issue a duplicate certificate or certificates in respect of the said shares to the person or persons entitled thereto. Article 55 provides that:

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

Transfer and transmission of shares: Article 56 provides that:

The Company shall keep a “Register of Transfers” and therein will be fairly and distinctly entered particulars of or every transmission of any share.


Shares in the Company may be transferred by an instrument in writing in the prescribed form and shall be duly stamped and delivered to the Company within the prescribed period and all the provisions of Section 108 of the Companies Act, and statutory modification thereof for the time being shall be duly complied with in respect of all transfer of shares and registration thereof.


The instrument of Transfer duly stamped and executed by the Transferor and the Transferee shall be delivered to the Company in accordance with the provision of the Act. The instrument of Transfer shall be accompanied by such evidence as the Board may require proving the title of Transferor and his right to transfer the shares and every registered instrument of Transfer shall remain in the custody of the Company until destroyed by order of the Board. The transferor shall be deemed to be the holder of such shares until the name of the Transferee shall have been entered in the Register of Members in respect thereof. Before the registration of a transfer the certificate or certificates of the shares must be delivered to the Company.

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The Board shall have power on giving not less than seven days previous notice by advertisement in some newspaper circulating in the district in which the office of the Company is situate to close the Transfer Books, the Register of Members of Register of Debentures-holders at such time or times and for such period or periods, not exceeding thirty days of a time and not exceeding in the aggregate forty-five days in each year.


Subject to the provisions of Section 111A of the Act, the Securities Contracts (Regulation) Act, 1956 and any applicable regulation including any requirement under the listing agreements with the stock exchange, the Board, may decline to register or acknowledge any transfer of shares, whether, fully paid or not (notwithstanding that the proposed transferee be already a member), but in such cases, it shall, within one month from the date on which the instrument of transfer was lodged with the Company, send to the transferee and the transferor notice of the refusal to register such transfer. Registration of a transfer of shares shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except a lien on the shares.


Where in the case of partly paid shares, an application for registration is made by the transferor; the company shall give notice of the application to the transferee in accordance with the provisions of section 110 of the Act.


In the case of the death of any one or more of the persons named in the Register of Members as the joint-holders of any share, the survivor or survivors shall be the only persons recognised by the Company as having any title to or interest in such share, but nothing herein contained shall be taken to release the estate of a deceased Joint-holder from any liability on shares held by him jointly with any other person.


The executors or administrators or holders of a succession certificate or the legal representatives of a deceased member (not being one or two or more joint-holders) shall be the only person recognised by the company as having any title to the shares registered in the name of such member, and the Company shall not be bound to recognise such executors or administrators or holders at a succession certificate or the legal representatives unless such executors or administrators or legal representatives shall have first obtained probate or letter of administrator or succession certificate, as the case may be, from a duly constituted Court in the Union of India; provided that in any case where the Board in its absolute discretion think fit, the Board may dispense with production of probate of letter of administration or succession certificate, upon such term as to indemnity or otherwise as the Board in absolute discretion may thing necessary an under a Article 61 register the name of any person who claims to be absolutely entitled to the shares standing in the name of a deceased member, as a member. Similarly in liquidation of a body corporate which is a member of this Company the official Assignee, Liquidator/or Receiver appointed by a duly constituted court in the Union of India shall be the only person recognised by the Company as having title to the share registered in the name of such member.

Article 63A provides that:

No fees shall be charged for registration of transfer, transmission, probate, succession certificate and letters of administration, certificate of death or marriage, power of attorney or similar other document.


No share shall in any circumstances be transferred to any infant, insolvent or person of unsound mind. Article 65 provides that:

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Subject to the provisions of the Act and Articles 58 and 59 any person becoming entitled to shares in consequences of the death, lunacy, bankruptcy or insolvency of any member, or by any lawful means other than by a transfer in accordance with these Articles, may, with the consent of the Board (which it shall not be under any obligation to give), upon producing such evidence that he sustains the character in respect of which her proposes to act under this Articles or of such title as the Board thinks sufficient, either by registering himself as the holder of the shares or elect to have some person nominated by him and approved by the Board registered as such holder of the shares or elect to have some person nominated by him and approved by the Board registered as such holder provided nevertheless, that if such person shall elect to have his nominee an instrument of transfer in accordance with the provisions herein contained and until he does so, he shall not be released from any liability in respect of the shares.


A person entitled to a share by transmission shall, subject to the right of the Directors to retain such dividends or money as hereinafter provided, be entitled to receive and may give a discharge for, any dividends or other moneys payable in respect of the share.


There shall be paid to the Company, in respect of the transfer or transmission of any number of shares to the same party, such fee if any, as the Directors may require. The Board may however in its absolute discretion wholly or partly waive payment of the fee aforesaid generally or in specific case of cases, as it may deem fit.


The Company shall incur no liability or responsibility whatsoever in consequences of its registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the Register of Members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares, not withstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer, and may have entered such notice, or referred thereto, in any book of the Company and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title or interest, or be under any liability whatsoever for refusing or neglecting so to do though it may have been entered or referred to in some book of the Company, but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect thereto if, the Board shall so think fit.

Borrowing Powers: Article 70 provides that:

Subject to the provisions of Sections 292 and 293 of the Act the Board may, from time to time at its discretion by a resolution passed at a meeting of the Board, accept deposits from members either in advance of calls or otherwise and generally raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. Provided, however, where the moneys to be borrowed together with the moneys already borrows (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) exceed the aggregate of the paid capital of the Company and its free reserves (not being reserves set apart for any specific purpose) the Board shall not borrow such moneys without the consent of the Company in General Meeting.


Subject to the provisions of Articles 68 hereof, the payment of repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms and conditions in all respects as the Special Resolution shall prescribe including by the issue of debentures or debenture stock of the Company, charged upon all or any part of the property of the Company (both present and future), including its uncalled capital for the time being and debentures, debenture stock and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.


Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and

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may be issued on condition that they shall be convertible into shares of any denomination, and with privileges and conditions as to redemption, surrender, drawing, allotment of shares and attending (but not voting) at general meetings, appointment of Directors and otherwise, debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in general meeting accorded by a Special Resolution.


The Board shall cause a proper register to be kept in accordance with the provisions of Section 143 of the Act of all mortgages, debentures and charges, specifically affecting the property of the Company and shall cause the requirements of Sections 118, 125 and 127 to 144 (both inclusive) of the Act in that behalf to be duly complied with, so far as they fail to be complied with by the Board.


The Company shall, if at any time it issues debentures keep a Register and index of Debentures-holders in accordance with Section 152 of the Act. The Company shall have the power to keep in any State or country outside India a branch Register of Debenture-holders resident in that State or country.

Conversion of shares into stocks and reconversion: Article 78 provides that:

The Company in general meeting may convert any paid up shares, into stock; and when any shares shall have been converted into stock, the several holders of such interest, in the same manner and subject to the same regulations as, and subject to which shares from which the stock arise might have been transferred, if no such conversion had taken place, or as near thereto as circumstances will admit. The Company may at any time reconvert any stock into paid-up shares of any denomination.


The holders of stock shall according to the amount of stock held by them, have the same rights, privileges and advantages as regards dividends, voting at meetings of the Company, and other matters, including the right to sell or transfer in whole or in part the stock held by them, as if they held the shares from which the stock arose; but no such privilege or advantage (except participation in the dividends and profits of the Company and in the asses on winding-up) shall be conferred by an amount of stock which would not, if existing in shares, have conferred that privilege or advantage.

Member’s Meeting: Article 80 provides that:

The Company shall in each year hold a General Meeting as its Annual General Meeting in addition to any other meetings in that year. All General Meetings other than Annual General Meeting shall be held within eighteen months from the date of incorporation of the Company and the next Annual General Meeting shall be held within six months after the expiry of the financial year in which the first Annual General Meeting was held and thereafter an Annual General Meeting of the Company shall be held within six months after the expiry of each financial year, provided that not more than fifteen months shall lapse between the date of one Annual General Meeting and that of the next. Nothing contained in the foregoing provisions shall be taken as affecting the right conferred upon the Registrar of Companies under the provisions of section 166(1) of the Act to extend the time within which any Annual General Meeting may be held. Every Annual General Meeting shall be called for a time during business hour, on a day that is not a public holiday, and shall be held at the office of the Company or at some other place within a city in which the office of the Company is situate as the Board may determine and the notices calling the Meeting shall specify it as the Annual General Meeting. The Company may in any one Annual General Meeting fix the time for its subsequent Annual General Meetings. Every Members of the Company shall be entitled to attend either in person or by proxy and the auditor of the Company there shall be on the table the directors report and audited statement of accounts, auditors’ report (if not already incorporated in the audited statement of accounts) the proxy register with proxies and the Register of Directors shareholdings which latter register shall remain open and accessible during the continuance of the meeting. The Board shall cause to be prepared the annual list of members, Summary of the share capital, balance sheet and profit and loss account and forward the same to the registrar in accordance with Sections 159, 161 and 220 of the Act.

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The Board may, whenever it think fit, call an Extraordinary General Meeting and it shall do so upon a requisition in writing by any member or members holding in the aggregate not less than one-tenth of such of the paid-up capital as at that date carries the right of voting in regard to the matter in respect of which the requisition has been made.


Any valid requisition so made by members must state the object or objects of the meeting proposed to be called, and must be signed by the requisitionists and be deposited at the office provided that such requisition may consist of several documents in like form each signed by one or more requisitionists.


Upon receipt of any such requisition, the Board shall forthwith call an Extraordinary General Meeting, and if they do not proceed within twenty-one days from the date of the requisition being deposited at the office to cause a meeting to be called on a day not later than forty-five days from the date of deposit of the requisition, the requisitionists, or such of their number as represent either a majority in value of the paid-up share capital held by all of them or not less than one-tenth of such of the paid-up share capital of the Company as is referred to in Section 169(4) of the Act, whichever is less, may themselves call the meeting, but in either case any meeting so called shall be held within three months from the date of the delivery of the requisition as aforesaid.


Any meeting called upon the foregoing Articles by the requisitionists shall be called in the same manner, as nearly as possible, as that in which meetings are to be called by the Board.


At least twenty-one days notice of every General Meeting, Annual or Extraordinary, and by whomsoever called specifying the day, place and hour of meeting, and the general nature of the business to be transacted thereat, shall be given in the manner hereinafter provided, to such persons as these Articles entitled to receive notice from the Company. Provided that in the case of an Annual general Meeting with the consent in writing of all the members entitled to vote thereat and in case of any other meeting, with the consent of members holding not less than 95 percent or such part of the paid-up share capital of the Company as gives a right to vote at the meeting, a meeting may be convened by a shorter notice. In the case of an Annual General Meeting if any business other than (i) the consideration of the Accounts, Balance sheets and Reports of the Board of Directors and Auditors, (ii) the appointment of Directors in place of those retiring, (iv) the appointment of, and fixing of the remuneration of the Auditors, is to be transacted and in the case of any other Meeting in any event there shall be annexed to the notice of the meeting a statement setting out all material facts concerning each such item of business, including in particular the nature of the concern or interest, if any, therein of every Director, and the manager (if any). Where any such item of special business relates to, or affects any other company, the extend of share holding interest in other company of every Director, and the manager, if any, of the Company shall also be set out in the statement if the extent of such shareholding interest is not less than 20 percent of the paid-up share capital of that other Company. Where any item of business consists of the according of approval to any document by the meeting, the time and place where the document can be inspected shall be specified in the statement aforesaid.


The accidental omission to give any such notice as aforesaid to any of the members, or the non-receipt thereof, shall not invalidate any resolution passed at any such meeting.


No General Meeting, Annual or Extraordinary, shall be competent to enter upon discuss or transact any business which has not been mentioned in the notice or notices upon which it was convened.


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Five members present in person shall be a quorum for a General Meeting. Article 88 provides that:

A body corporate Central Government, State Government, Public Trustee being members shall be deemed to be personally present if they are represented in accordance with Section 187, 187A and 187B of the Act.


If at the expiration of half an hour from the time appointed for holding a meeting of the Company, a quorum shall not be present, the meeting if convened by or upon the requisition of members, shall stand dissolved, but in any other case the meeting shall stand adjourned to the same day in the next week or if that day is public holiday until the next succeeding day which is not a public holiday at the same time and place or to such other day and at such other time and place in the city or town in which the Office of the Company is for the time being situate, as the Board may determine, and if at such adjourned meeting a quorum is not present at the expiration of half an hour from the time appointed for holding the meeting, the members present shall be quorum and may transact the business for which the meeting was called.


The Chairman (if any) of the Directors shall be entitled to take the chair at every General Meeting, whether Annual or extraordinary. If there be no such chairman of the Directors, or if at any meeting he shall not be present within fifteen minutes of the time appointed for holding such meeting or if he shall be unable or unwilling to take the chair then the members present shall elect another Directors as Chairman, and if no Director be present shall elect another Director as Chairman, and if no Director be present or if all the Director present decline to take the chair, then the members present shall elect one of their number to be chairman.


No business shall be discussed at any General Meeting except the election of a Chairman, whilst the chair is vacant.


The Chairman with the consent of the members or on his own volition (suo moto) bona fide in the interest of the meeting may adjourn any meeting from time to time and from place to place (in Bombay), but not business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting form which the adjournment took place, unless a fresh notice is served as per the provisions of the Act stating therein, the business to be transacted.


At any General Meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or any declaration of the results of the show of hands) ordered to be taken by the Chairman of the Meeting on this own motion or ordered to be taken by him on a demand made in that behalf by any member or members present in person or by proxy and holding shares in the Company which confer a power to vote on the resolution not being less than one-tenth of the total voting power in respect of the resolution has on a show of hands, been carried or carried unanimously or by a particular majority or lost, any entry to that effect in the minute book of the Company shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favor of or against that resolution.


In the case of any equality of votes, the Chairman shall both on a show of hands and at a poll (if any) have a casting vote in addition to the vote or votes to which he may be entitled as a member.


If a poll is demanded as aforesaid the same shall subject to Article 99 be taken at such time (not later than forty-eight hours from time when the demand was made) and place in the city or town in which the office

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of the Company is for the time being situate and either by open voting or by ballot, as the Chairman shall direct, and either at once or after an interval or adjournment, or otherwise, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll may be withdraw at any time by the person or persons who made the demand.


Where a poll is to be taken, the Chairman of the meeting shall appoint two scrutineers to scrutinize the vote given on the poll and to report thereon to him. One of the scrutineers so appointed shall always be a member, (not being an officer or employee of the Company) present at the meeting, provided such a member is available and willing to be appointed. The Chairman shall have power at any time before the result of the poll is declared to remove scrutineers from office and fill vacancies in the vacancies in the office of scrutineers arising from such removal or from any other cause.


Any poll duly demanded on the election of Chairman of a meeting or any question of adjournment shall be taken at the meeting forthwith.


Without prejudice to the provisions contained in these Articles concerning passing of the resolutions in the general meeting the company may pass resolution by means of a postal ballot instead of transacting the business in general meeting in the manner and to the extent permitted by the act.


The demand for a poll except on the question of the election of the Chairman and of an adjournment shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded.

Votes of Members: Article 100 provides that:

No member shall be entitled to vote either personally or by proxy at any General Meeting or Meeting of a class of shareholders either upon a show of hands or upon a poll in respect of any shares registered his name on which any calls or other sums presently payable by him have not been paid or in regard to which the company has, and has exercised, any right or lien.


Subject to the provisions of these Articles and without prejudice to any special privileges, or restrictions as to voting for the time being attached to any class of shares for the time being forming part of the capital of the Company, every member, not disqualified by the last preceding Article shall be entitled to be present, and to speak and vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. Provided, however if any preference share holder be present at any meeting of the Company, as provided in clause (b) of sub-section (2) of section 87, he shall have a right to vote only on resolution placed before the meeting which directly, affect the rights attached of his preference shares.


On a poll taken at a meeting of the Company a member entitled to more than one vote, or his proxy or other person entitled to vote for him as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes he uses.


A Member of unsound mind or in respect of whom an order has been made any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll by his committee or other legal guardian, and any such committee or guardian may, on poll vote by proxy. If any member be a minor the vote in respect of his share or shares shall be by his guardian, or any one of his guardians if more than one, to be selected

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in case of dispute by the Chairman of the meeting.


If there be joint registered holders of any shares, any one of such persons may vote at any meeting or may appoint another person (whether a member or not) as his proxy in respect of such shares, as if he were solely entitled thereto but the proxy so appointed shall not have any right to speak at the meeting and, if more than one of the said persons so present sent whose name stands higher on the Register shall alone be entitled to speak and to vote in respect of such shares, but the other or others of the joint holders shall be entitled to be present at the meeting. Several executors or administrators of a deceased member in whose name shares stand, shall for the purpose of these Articles be deemed joint holders thereof.


Subject to the provisions of these Articles votes may be given either personally or by proxy. A body corporate, Central of Sate Government being a member may vote either by a proxy or by representatives duly authorized in accordance with Sections 187 and 187A of the Act and such representatives shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf of the body corporate authority which he represents as that body could exercise if it were an individual member. Provided further that the shares held by trustees shall be represented in accordance with Section 187B of the Act and the public trustee entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf of the trust which he represents as if he was an individual member.


Any person entitled under Article 63 to transfer any share may vote at any General Meeting in respect thereof in the same manner as if he were the registered holder of such shares, provided that forty-eight hours at least before the time of holding the meeting or adjourned meeting, as the case may be, at which he proposes to vote he shall satisfy the Directors of his right to transfer such shares and give such indemnity (if any) as the Directors may require or the Director shall have previously admitted his right to vote at such meeting in respect thereof.


Every proxy (whether a member or not) shall be appointed in writing under the hand of the appointer or his attorney, or if such appointer is a body corporate, Central of State Government, under the common seal of such corporation of Government or be signed by an officer or any attorney duly authorized by the body corporate or the Government and any Committee or guardian may appoint such proxy. The proxy so appointed shall not have any right to speak at the meetings.


An instrument of proxy may appoint a proxy either for the purpose of a particular meeting specified in the instrument and any adjournment thereof or it may appoint for the purpose of every meeting of the Company, or of every meeting to be held before a date specified in the instrument and every adjournment of any such meeting.


A member present by proxy shall be entitled to vote only on a poll. Article 110 provides that:

The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarised and certified copy of that power of authority, shall be deposited at the office not later than forty-eight hours before the time for holding the meeting at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of twelve months from the date of its execution.


Every instrument of proxy whether for a specified meeting or otherwise shall, as nearly as circumstances

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will admit, be in any of the forms set out in Schedule IX of the Act.


A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death, insanity, winding up or liquidation of the principal, or revocation of the proxy or of any power of attorney under which such proxy was signed, or the transfer of the share in respect of which the vote is given, provided that no intimation in writing of such event shall have been received at the office before the meeting.


No, objection shall be made to the validity of any vote, except at any meeting or poll at which such vote shall be tendered, and every vote whether given personally or by proxy, not disallowed at such meeting or poll shall be deemed valid for all purposes of such meeting or poll whatsoever.


The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting. The Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll.

Minutes of Meeting: Article 115 provides that:

1. The Company shall cause minutes of all proceedings of every General Meeting to be kept by making within thirty days of the conclusion of every such meeting concerned, entries thereof in books kept of that purpose with their pages consecutively numbered.

2. Each page of every such book shall be initialed or signed and the last page of the record of proceedings of each meeting in such book shall be dated and signed by the Chairman of the same meeting within aforesaid period of thirty days or in the event of the death or inability of that Chairman within that period, by a Director duly authorized by the Board for the purpose.

3. In no case the minutes of proceedings of a meeting shall be attached to any such book as aforesaid by pasting or otherwise.

4. The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.

5. All appointments of officers made at any meeting aforesaid shall be included in the minutes of the meeting.

6. Nothing herein contained shall require or be deemed to require the inclusion in any such minutes of any matter which in the opinion of the Chairman of the meeting (a) is or could reasonable be regarded as defamatory of any person, or (b) is irrelevant or immaterial to the proceedings, or (c) is detrimental to the interests of the Company. The Chairman of the meeting shall exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the aforesaid grounds.

7. Any such minutes shall be evidence of the proceedings recorded therein.

8. The book containing the minutes of proceedings of General Meeting shall be kept at the office of the Company and shall be open during business hours, for such periods not being less in the aggregate then two hours in each day as the Directors determine, to the inspection of any member without charge.

Directors: Article 116 provides that:

Until otherwise determined by the Company in the General Meeting the Company and subject to the provisions of section 252 of the Act, the number of Directors, including Debenture Directors (but excluding Alternate Directors) shall not be less than three or more than twelve of which two-thirds shall retire by rotation in accordance with the provisions of Section 255 of the Act.

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Notwithstanding anything to the contrary contained in these Articles so long as any monies remain owing by the Company to the Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI), The Industrial Credit Investment Corporation of India Limited (ICICI), The Industrial Reconstruction Corporation of India Limited (IRCI), Life Insurance Corporation of India (LIC), Unit Trust of India (UTI), General Insurance Corporation of India (GIC), National Assurance Company Limited (NIC), The Oriental Fire and General Insurance Company Limited (OFGI), The New India Assurance Company Limited (NIA), United India Insurance Company Limited (UI) or a State Financial Corporation or any financial institution owned or controlled by the Central Government or a State Government or State Government by themselves (each of the above is hereinafter in this Article referred to “the Corporation”) out of any loans/debenture assistance granted by them to the Company or so long as the Corporation holds or continues to hold debentures/shares in the Company as a result of underwriting or by direct subscription or private placement, or so long as any liability of the Company arising out of any guarantee furnished by the Corporation on behalf of the Company remains outstanding, the Corporation shall have a right to appoint from time to time, any person or persons as a Director or Directors, whole-time or non-whole-time, (which Director or Directors, is/are hereinafter referred to as “Nominee Director/s”) on the Board of the Company and to remove from such office any person or persons so appointed and to appoint any person or persons in his on their place/s. The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At the option of the Corporation such Nominee Director/s shall not be required to hold any share qualification in the Company. Also at the option of the Corporation such Nominee Director/s shall not be able to retirement by rotation of Directors. The Company agrees that if the Board of Directors of the Company has constituted or proposes to constitute any management committee or other committee(s) it shall, if so required by the Corporation include the Nominee Director as a member of such management committee or other committee(s). Subject as aforesaid, the Nominee Director/s shall be entitled to the same rights and privileges and be subject to the same obligations as any other Director of the Company.

The Nominee Director/s so appointed shall hold the said office only so long as any moneys remain owing by the Company to the Corporation or so long as the Corporation holds or continues to hold debentures/shares in the Company as a result of underwriting or by writing or by direct subscription or private placement or in liability of the Company arising out of the guarantee is outstanding and the Nominee Director/s so appointed in exercise of the said power shall ipso facto vacate such office immediately the moneys owing by the Company to the Corporation are paid off or on the Corporation ceasing to hold Debentures/shares in the Company or on the satisfaction of the liability of the Company arising out of the guarantee furnished by the Corporation. The Nominee Director’s appointed under this Article shall be entitled to receive all notices of and attend all General Meeting, Board Meetings and of meetings of the Committee of which the Nominee Director/s is/are member/s as also the minutes of such meetings. The Corporation shall be entitled to receive all such notices and minutes. The Nominees Director/s shall be entitled to the same sitting fees, commission, remuneration and expenses as are applicable to other Directors of the Company. The Company shall pay the sitting fee and other expenses to the Nominee Director/s directly, but the commission, remuneration or other monies and fees to which the Nominee Director/s is entitled shall accrue due to the Corporation and shall accordingly be paid by the Company directly to the Corporation. Provided that if any such Nominee Director/s is an officer of the Corporation the sitting fees, in relation to such Nominee Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation. Any expenses that may be incurred by the Corporation or such Nominee Director/s in connection with their appointment or directorship shall also be paid or reimbursed by the Company to the Corporation, or as the case may be to such Nominee Director/s. Provided also that in the event of the Nominee Director/s being appointed as whole time Director/s such Nominee Director/s shall exercise such powers and duties as may be approved by the Corporation and have such rights as are usually exercised or available to a whole time Director in the management of the affairs of the Company. Such whole time Director/s shall be entitled to receive such remuneration fees, commission, and monies as may be approved by the Corporation.

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It is provided by the trust deed, securing or otherwise, in connection with any issue of debentures of the Company, that any person or persons shall have power to nominate a Director of the Company, then in the case of any and every such issue of debentures, the person or persons having such power may exercise such power from time to time by the person or persons in whom for the time to time and appoint a Director accordingly. Any Director so appointed is herein referred to as “Debenture Director”. A Debenture Director may be removed from office at any time by the person or persons in whom for the time being is vested the power under which he was appointed in his place. A Debenture Director shall not be bound to hold any qualification shares.


The Company shall, subject to the provisions of the Act and any agreement, be entitled to agree with any Government, person, firm or body corporate that he or it shall have the right to appoint his or its nominee on the Board of Directors of the Company upon such terms and conditions as the Company may deem fit. Such nominee and their successors in office appointed under this Article shall be called “Special Directors” of the Company.

Manager: Article 142 provides that:

At every Annual General Meeting of the Company, one third of such of the Directors for the time being as are liable to retire by rotation or if their number is not three or a multiple of three, the number nearest to one-third shall retire from office. The Debenture Directors, if any, shall not be subject to retirement under this clause and shall not be taken into account in determining the rotation of retirement or the number of Directors to retire.

Proceedings of the Board of Directors: Article 150 provides that:

The Directors may meet together as a Board for the dispatch of business from time to time, and shall so meet at least once in every three months and at least four such meetings shall be held in every year. Subject to the provisions of these Articles and other relevant Articles, the Directors may regulate their proceedings, as they think fit. The Board shall hold meetings as often as may be deemed necessary. The meetings of the Board of Directors or a committee of the Directors may be held in person or may hold meetings by videoconference, conference telephone connection or by facsimile transmissions addressed to the Chairman, or by such other means as are permitted by law and approved by the Board of Directors from time to time. When a Board meeting is held through videoconference, conference telephone connection or by facsimile transmission, the views expressed therein shall be treated as votes in favour of or against a particular resolution. A resolution passed at any meeting held in compliance with this Article and recorded in writing signed by the Chairman, shall be as valid and effective as if it had been passed at a meeting of the Directors (or a committee or the Directors as the case may be) which had been duly convened and held.


Seven days prior notice or such period as may be prescribed by any regulatory authorities from time to time, for the meeting of the Board shall be given in writing to every director at his usual address in India or abroad. In case of a Director residing abroad, the notice may be sent by email, telex or cable or any other mode of communication as the case may be.


Subject to section 287 of the Act, the quorum for a meeting of the Board shall be one-third of its total strength (excluding Directors, if any, whose places may be vacant at the time and any fraction contained in that one-third being rounded off as one) or two Directors, whichever is higher, provided that where at any time the number of interested Directors exceeds or is equal to two-thirds of the total strength the number of the remaining Directors, that is to say, the number of Directors who are not interested, present at the

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meeting being not less than two, shall he the quorum during such time.


If a meeting of the Board could not be held for want of quorum then the meeting shall automatically stand adjourned to such other date and time (if any) as may be fixed by the Chairman not being later than seven days from the date originally fixed for the meeting.


The Secretary shall, as and when directed by the Directors to do so, convene a meeting of the Board by giving a notice in writing to every other Director.


The Directors, may from time to time elect from among their number a Chairman of the Board and determine the period for which he is to hold office, If at any meeting of the Board, the Chairman is not present within fifteen minutes after the time appointed for holding the same, the Directors present may choose one of their number to be Chairman of the Meeting.

Dividends: Article 169 provides that:

The profits of the Company, subject to any special rights relating thereto created or authorized to be created by these Articles and subject to the provisions of these Articles, shall be divisible among the members in proportion to the amount of capital paid-up or credited as paid-up on the shares held by them respectively.


The Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.


No dividend shall be declared or paid otherwise by the company for any financial year out of profits for that year arrived at after providing for depreciation in accordance with the provisions of section 205 of the Act except after the transfer to the reserves of the company of such percentage of its profits for that year as may be prescribed or out of the profits of Company for nay previous financial year or years arrived at after providing for depreciation in accordance with these provisions and remaining undistributed or out of both provided that.

(a) If the company has not provided for depreciation for any previous financial year of year it shall

before declaring or paying a dividend for any financial year, provide for such depreciation out of the profits of the financial year or out of the profits of any other previous financial year or years.

(b) If the company has incurred any loss in any previous financial year or years the amount of loss or

an amount which is equal to the amounts provided for depreciation for that year or those years whichever is less shall be set off against the profits of the Company for the year for which the dividend is proposed to be declared or paid or against the profits of the company for any previous financial year or years arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section (2) of section 205 of the act or against both.


The Board may, from time to time, pay the members such interim dividend as in their judgment the position, of the company justifies.


Where capital is paid in advance or calls, such capital may carry interest but shall not in respect thereof confer a right to dividend or participate in profits.

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All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but if any share is issued on terms providing that is shall rank for dividend as from a particular date, such share shall rank for dividend accordingly.


The Board may transfer the dividends payable upon shares in respect of which any person is, under Article 65 entitled to become a Member, or which any person under that Article is entitled to transfer, until such person shall become a member in respect of such shares or shall duly transfer the same subject to the provisions of the companies act, 1956, and as provided for in Article 180.


Any one or several persons who are registered as the joint-holders of any share may give effectual receipts

for all dividends or bonus and payments on account of dividends or bonus or other moneys payable in respect of such shares.


No member shall be entitled to receive payment of any interest or dividend in respect of his shares, whilst any money may be due or owing from him to the Company in respect of such share of shares or otherwise, however, either alone or jointly with any other person or persons, and the board may deduct from the interest or dividend payable to any member all sums of money so due from him to the Company.


A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer.


Unless otherwise directed any dividend may be paid by cheque or warrant or by a pay slip or receipt having, the force of a cheque or warrant sent through the post to the registered address of the member or person entitled or in case of joint-holders to that one of them first named in the register in respect of the joint holdings. Every such cheque or warrant, shall be made payable to the order of the person to whom it is sent. The company shall not be liable or responsible for any cheque or warrant of payslip or receipt lost in transmission, or for any dividend lost to the member or person entitled thereto by the forged endorsement of any cheque or warrant, or the forged signature on any payslip or receipt or the fraudulent recovery of the dividend by any other means. Provided that Company may transfer the dividend through ECS or any other electronics mode or other systems as may be allowed from time to time.


a) If the company has declared a dividend but which has not been paid within 30 days or within such days as may be prescribed from time to time, than from the date of declaration to any shareholder entitled to the payment of the dividend the company shall within 7 days from the date of expiry of the said period of 30 days or such other days as may be prescribed, transfer the amount of dividend which remains unpaid within the said period of 30 days to a special account to be opened in that behalf in any scheduled bank called “the unpaid dividend account of Nimbus Communications Limited.

b) Any money transferred to the unpaid dividend account of the Company which remains unpaid or unclaimed for a period of seven years from the date of such transfer, shall be transferred by the company to the credit of the Investors Education and Protection Fund or any other fund as may be prescribed.


No unpaid dividend shall bear interest as against the company subject to the provisions of the companies act, 1956. No unclaimed dividend shall be forfeited by the board unless the claim thereto becomes barred by law and the company shall comply with all the provisions of section 205A and 205C of the Companies

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Act in respect of unclaimed or unpaid dividend.


Any General Meeting declaring a dividend may on the recommendation of the Directors make a call on the members of such amount as the meeting fixes but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so arranged between the company and the member, be set off against the calls.


(a) The Company in General Meeting may resolve that any moneys, investment or other assets forming part of the undivided profits of the company standing to the credit of the reserve fund, or any capital redemption reserve account, or in the hands of the company and available for dividend (or representing premium received on the issue of shares and standing to the credit of the share premium account) be capitalized and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalized fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide, any unissued shares or debentures or towards payment of the uncalled liability on any issued shares or debenture or debenture-stock and that such distribution or payment shall be accepted by such share holders in full satisfaction of their interest in the said capitalized sum, provided that a Share Premium Account and a Capital Redemption Reserve Account may, for the purpose of this Article, only be applied in the paying of any unissued shares to be issued to members of the Company as fully paid bonus shares. Provided that Company shall comply with the provisions of the Act, these Articles and regulations number 96 and 97 contained in Table A of Schedule I of the Act.

(b) A General Meeting may resolve that the surplus moneys arising from the realization of any capital assets of

the company, or any investments representing the same, or any other undistributed profits of the company not subject to charge for income-tax be distributed among the members on the footing that they receive the same as capital.

(c) For the purpose of giving effect to any resolution under the preceding paragraphs of this Article the Board

may settle any difficult which may arise in regard to the distribution as it thinks expedient and in particular may issue fractional certificates, and may fix the value for distribution of any specific assets and may determine that such cash payments shall be made to any members upon the footing of the value so fixed or that fraction of less value than Rs. 10 may be disregarded in order to adjust the rights of all parties and may vest any such cash or specific assets in trustees upon such trusts for the person entitled to the dividend or capitalised fund as may seem expedient to the Board. Where requisite, a proper contract shall be delivered to the Registered for registration in accordance with Section 75 of the Companies Act, 1956 and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalised fund, and such appointment shall be effective.

(d) Notwithstanding anything contained in forgoing provisions relating or concerning dividend. The statutory amendments, if any, shall prevail over the aforesaid articles.

Accounts:

The company shall keep at the office or at such other place in India as the Board thinks fit proper Books of Account in accordance with Section 209 of the Act with respect to:

(a) All sums of money received and expended by the company and the matters in respect of which the receipts and expenditure take place.

(b) All sales and purchases of goods by the company. (c) The assets and liabilities of the company.


Where the board decides to keep all or any of the Books of Account at any place other than the office of the Company, the company shall within seven days of the decision file with the registrar a notice in writing giving the full address of that other place.

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The Company shall preserve in good order the Books of Accounts relating to a period of not less than eight years preceding the current year together with the vouchers relevant to any entry in such books of account. Where the company has branch office, whether in or outside India, the company shall be deemed to have complied with this Article if proper books of account relating to the transaction effected at the branch office are kept at the branch office and proper summarized returns, made upto date, at intervals of not more than three months, are sent by the branch office to the company at its office or other place in India, at which the company’s book of accounts are kept as aforesaid.

The books of account shall give a true and fair view of the state of affairs of the company or branch office as the case may be, and explain its transactions. The books of account and other books and papers shall be open to inspection by any Director during business hours.


The Board shall from time to time determine whether and to what extent and at what times and places and under what conditions as regulations the accounts and books of the company or any of them shall be open to the inspection of members not being Directors and no member (not being a Director) shall have any right of inspecting any account or books or document of the Company except as conferred by law or authorized by the board.


The Directors shall from time to time, in accordance with sections 210, 211, 212, 215, 216 and 217 of the Act cause to be prepared and to be laid before the company in general meeting, such balance sheets profit and loss accounts and reports as are required by these sections.


A copy of every such profit and loss account and balance sheet (including the auditor’s report and every other document required by law to be annexed or attached to the balance sheet) or a statement containing the salient features of such documents in the prescribed from as provided under the provisions of section 219 of the companies act, 1956, shall at least 21 days before the meeting at which the same are to be laid before the members, be sent to the members of the company to trustees for the holders of debentures and to all persons entitled to receive notices of General Meeting of the Company. Provided that if the copies of the documents aforesaid are sent less than twenty-one days before the date of the meeting they shall notwithstanding the fact, be deemed to have been duly sent if it is so agreed by all members entitled to vote at the meeting.


Every account of the company when audited and approved by a general meeting shall be conclusive except as regards any error discovered therein within three months next after the approval thereof whenever any such errors is discovered within that period the account shall forthwith be corrected, and henceforth shall be conclusive.

Auditors: Article 190 provides that:

Auditors shall be appointed and their rights and duties regulated in accordance with sections 224 to 233 of the act.

Documents and Notices: Article 192 provides that:

1. A document or notice may be served or given by the company on any member either personally or by sending it post to him to his registered address or (if he has no registered address in India) to the address, if any, in India supplied by him to the company for serving documents or notices on him.

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2. Where a document or notice is sent by post, service of the document or notice shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document or notice, provided that where a member has intimated to the company in advance that documents or notices should be sent to him under a certificate of posting or by registered post with or without acknowledgement due and has deposited with the company a sum sufficient to defray the expenses of doing so, service of the document or notice shall not be deemed to be effected unless it is sent in the manner intimated by the member, and, such service shall be deemed to have been effected in the case of a notice of a meeting, at the expiration of forty-eight hours after the letter containing the document or notice is posted and in any other case, at the time at which the letter would be delivered in the ordinary course of post.

Winding up: Article 200 provides that:

The Liquidator on any winding-up (whether voluntary, under supervision or compulsory) may, with the sanction of a special resolution, but subject to the rights attached to any preference share capital, divide among the contributories in specie any part of the assets of the company and may with the like sanction, vest any part of the assets of the company in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction shall think fit.

Indemnity and Responsibility: Article 201 provides that:

Every officer or agent for the time being of the company shall be indemnified out of the assets of the company against all liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or discharged or in connection with any application under section 633 of the act in which relief is granted to him by the company.

Secrecy clause: Article 202 provides that:

(a) Every director, Manager, Auditor, Treasurer, Trustee, member of a committee, officer, servant, agent, accountant or other person employed in the business of the company shall if so required by the Directors, before entering upon his duties, sign a declaration pledging himself to observe strict secrecy respecting all transactions and affairs of the company with the customers and that state of the accounts with individuals and in matters relating thereto, and shall by such declaration pledge himself not to reveal any of the matters which may come to his knowledge in the discharge of his duties except when required to do so by the Directors or by law or by the person to whom such matters relate and except so far as may be necessary in order to comply with any of the provisions in these presents contained.

(b) No member shall be entitled to visit or inspect any works of the company without the permission of the Directors or to require discovery of or any information respecting any details of the Company’s trading, or any matter which is or may be in the nature of a trade secret, mystery of trade, secret process or any other matter which may, relate to the conduct of the business of the company and which in the opinion of the Directors it would be inexpedient in the interest or the company to disclose.

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SECTION IX - OTHER INFORMATION

Material Contracts and Documents for Inspection

The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or entered into more than two years before the date of this Draft Red Herring Prospectus) which are or may be deemed material have been entered or to be entered into by our Company. These contracts, copies of which have been attached to the copy of this Draft Red Herring Prospectus, delivered to the RoC for registration and also the documents for inspection referred to hereunder, may be inspected at the registered office of our Company situated at Nimbus Centre, Oberoi Complex, Andheri (W), Mumbai – 400 053, Maharashtra, India, from 10 a.m. to 5 p.m. on Working Days from the date of this Draft Red Herring Prospectus until the Bid/Issue Closing Date. Material Contracts 1. Engagement letter dated September 23, 2010 issued by Edelweiss Capital Limited, Macquarie Capital Advisers

(India) Private Limited and Centrum Capital Limited to our Company and the Selling Shareholders for appointment of as BRLMs.

2. Engagement letter dated September 22, 2010 issued by PNB Investment Services Limited to our Company and the Selling Shareholders for appointment of as Co- BRLM.

3. Issue Agreement dated September 23, 2010 amongst our Company, the Selling Shareholders and the BRLMs and Co-BRLM.

4. MoU dated September 23, 2010 amongst our Company and the Selling Shareholders with Registrar to the Issue.

5. Escrow Agreement dated [●] amongst our Company, the Selling Shareholders, the BRLMs, Co-BRLM, Escrow Collection Banks, and the Registrar to the Issue.

6. Syndicate Agreement dated [●] amongst our Company, the Selling Shareholders, the BRLMs, Co-BRLM and Syndicate Members.

7. Underwriting Agreement dated [●] amongst our Company, the Selling Shareholders, the BRLMs, Co-BRLM and the Syndicate Members.

8. Agreement among NSDL our Company and the Registrar to the Issue, dated April 6, 2000. 9. Agreement among CDSL, our Company and the Registrar to the Issue, dated March 22, 2000. Material Documents 1. Our Memorandum and Articles of Association as amended till date. 2. Shareholder's resolution dated March 29, 2010 and circular resolution passed by the Board dated March 25,

2010 in relation to this Issue and other related matters passed by our Company. 3. Board resolution from Americorp Ventures Limited, CSI BD (Mauritius) and Funderburk Enterprises

Limited dated September 22, 2010, March 26, 2010 and September 23, 2010, in relation to the Offer for Sale and other related matters passed by the Selling Shareholders.

4. Board resolution dated June 16, 2008 and shareholders resolution dated September 29, 2008, for the appointment of Mr. Harish Kanayalal Thawani as a whole time director and as the Executive Chairman of our Company.

5. Board resolution dated June 16, 2008 and shareholders resolution dated September 29, 2008, for the appointment of Dr. Akash Chandra Khurana as a whole time director and as the Vice Chairman of our Company;

6. Statement of Tax Benefits from SARA & Associates, Chartered Accountants dated September 23, 2010. 7. Report of the Auditors from Deloitte Haskins & Sells, Chartered Accountants, prepared as per Indian GAAP and

mentioned in this Draft Red Herring Prospectus. 8. Consents of the Auditors, Deloitte Haskins & Sells, Chartered Accountants, for inclusion of their report on

restated financial statements in the form and context in which they appear in this Draft Red Herring Prospectus. 9. Consent of M/s. Anil Masand & Company, Chartered Accountants, for inclusion of their report on the

financial statements relating to Neo Sports Broadcast in the form and context in which it appears in this Draft Red Herring Prospectus.

10. Copies of annual reports of our Company for 2010, 2009, 2008, 2007 and 2006. 11. Consents of IPO Grading Agency, Bankers to our Company, BRLMs, Co-BRLM, Syndicate Members,

Registrar to the Issue, Banker to the Issue, Domestic Legal Counsel to our Company, Domestic Legal Counsel to the Underwriter, International Legal Counsel to the Underwriter, Directors of our Company, Company Secretary and Compliance Officer, as referred to, in their respective capacities.

12. ESOP Scheme 2007 of our Company. 13. Certificate from M/s. Chordiya Naveen & Co. Chartered Accountants dated September 25, 2010 for amount

deployed as of August 31, 2010 for obtaining bank guarantee. 14. Certificate from M/s. Chordiya Naveen & Co. Chartered Accountants dated September 25, 2010 for amount

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deployed as of August 31, 2010 for geographic expansion of Neo Cricket in North America 15. Applications dated [●] for in-principle listing approvals from BSE and NSE, respectively. 16. In-principle listing approvals from BSE and NSE dated [●] and [●], respectively. 17. Due diligence certificate to SEBI from Edelweiss Capital Limited, Macquarie Capital Advisers (India) Private

Limited and Centrum Capital Limited as BRLMs and PNB Investment Services Limited as Co-BRLM dated September 29, 2010.

18. SEBI interim observation letter ([●]) dated [●] and our reply to the same dated [●]. 19. IPO Grading Report by [●] dated [●]. 20. Report on Restated Financial Statement of Neo Sports Broadcast Private Limited from M/s Anil Masand &

Co., Chartered Accountants, in the form and context in which it appears in this Draft Red Herring Prospectus.

Shareholders’ agreements

1. Shareholders’ agreement dated September 18, 2002 between our Company, Transatlantic Corporation Limited, Mr. Harish Kanayalal Thawani, Ms. Shobha Thawani and Paramount (then known as ‘Nimbus Creative Corporation Limited’)

2. Addendum shareholders’ agreement dated February 28, 2005 between our Company, Americorp Ventures Limited, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount (then known as ‘Nimbus Creative Corporation Limited’) and Transatlantic Corporation Limited and termination agreement between Americorp Ventures Limited, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount dated March 29, 2010.

3. Share subscription and shareholders’ agreement dated August 4, 2005 between 3i Sports Media (Mauritius) Limited (then known as 3i (Mauritius) Investments 2 Technology Limited), our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani and Paramount (then known as “Nimbus Creative Corporation Limited”).

4. The Restated and Amended Subscription and Shareholders’ Agreement between our Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani, Paramount, Funderburk Enterprises Limited, 3i Sports Media (Mauritius) Limited and CSI BD (Mauritius) dated March 6, 2009 and Supplemental Restated and Amended Subscription and Shareholders dated May 22, 2009, termination agreement between Company, Mr. Harish Kanayalal Thawani, Ms. Shobha Harish Thawani, Paramount, Funderburk Enterprises Limited, 3i Sports Media (Mauritius) Limited and CSI BD (Mauritius) dated March 31, 2010 and amendment termination agreement dated September 29, 2010.

5. Loan Note Subscription Agreement dated January 11, 2010 entered into between our Company, Nimbus Communications Worldwide Limited, Funderburk and 3i and amendment agreement to the Loan Note agreement dated September 25, 2010.

6. Ancillary agreement dated January 11, 2010 between our Company, Harish Kanayalal Thawani, Shobha Thawani, Paramount, Funderburk Enterprises Limited and 3i Sports Media (Mauritius) Limited.

7. Subscription and shareholders’ agreement between Neo Sports Broadcast, Harish Kanayalal Thawani, Shobha Thawani, Paramount, Funderburk Enterprises Limited, Zenith Sports Private Limited and our Company dated April 14, 2009.

8. Put option agreement between Funderburk Enterprises Limited and our Company dated April 14, 2009. 9. Further Subscription Agreement between our Company, Harish Kanayalal Thawani, Shobha Harish Thawani,

Paramount and Funderburk Enterprises Limited dated April 14, 2009. 10. Agreement dated March 27, 2006 between our Company, Paramount and Zenith Sports Private Limited for

conduct of broadcasting business through Nimbus Sports Broadcast Private Limited (now known as ’Neo Sports Broadcast Private Limited’).

11. Subscription agreement entered into between our Company, Promoters and Brand Equity Treaties Ltd. dated March 9, 2010.

12. Subscription agreement entered into between Neo Sports Broadcast, Promoters and Bennett Coleman & Co. Ltd dated March 8, 2010.

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Declaration

Each of the undersigned Selling Shareholder, certifies that all statements made by it in this Draft Red Herring Prospectus about itself or its holding of Equity Shares which are being offered through the Offer for Sale, are true and correct. Each Selling Shareholder further certifies that other than as stated in this Draft Red Herring Prospectus, all approvals and permissions, if any, required by us towards the Offer for Sale have been obtained, are currently valid and have been complied with. Each Selling Shareholder assumes no responsibility for any other statement including the statements made by the Company or by any other Selling Shareholder in the Draft Red Herring Prospectus.

Signed by Americorp Ventures Limited ________________________ Signed by CSI BD (Mauritius) ________________________ Signed by Funderburk Enterprises Limited ______________________ Signed by Purshotamdas Naraindas Budhrani ________________________

Signed by Harichandra Naraindas Budhrani __________________________

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Declaration We, the Directors, certify that all the relevant provisions of the Companies Act, 1956 and the guidelines/ regulations issued by the GOI or the SEBI, established under Section 3 of the SEBI Act, 1992, as the case may be, have been complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies Act, the SEBI Act, 1992 or rules made or regulations issued there under, as the case may be and that all approvals and permissions required to carry on business of our Company have been obtained, are currently valid and have been complied with. We further certify that all statements in this Draft Red Herring Prospectus are true and correct.

Signed by all the Directors of our Company Sr. No. Name of directors Signature

1. HARISH KANAYALAL THAWANI

2. AKASH CHANDRA KHURANA

3. SHOBHA HARISH THAWANI

4. KISHORE MANOHAR MUSALE

5. SUPRATIM SUBIMAL BASU

6. RANJAN KAPUR

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ANNEXURE I – IPO GRADING REPORT

[REPORT OF THE IPO GRADING AGENCY SHALL BE ANNEXED AT THE RED HERRING PROSPECTUS STAGE]

Crystal (022) - 6614 [email protected]