Cinema Capital Venture Fund Scheme 1

CINEMA CAPITAL VENTURE FUND SCHEME 1 YOUR TICKET TO BLOCKBUSTER RETURNS CINEMA CAPITAL VENTURE FUND 1 CONTENTS The Indian Media and Entertainment Industry 4 Film Entertainment Industry 7 A Unique Investment Opportunity 7 World’s Fastest Growing Film & Entertainment Industry 9 Explosive Domestic Growth 11 Multiplex Growth 12 Global Market for Bollywood 14 Multiple Revenue Streams 15 Revenue Streams : Then and Now 15 Pre-selling of film rights 15 Risk Minimization 16 Block Buster Returns in the Last 2 Years 17 Film Industry Returns 19 Transparency and Corporatisation 22 Preferred Investment Destination 23 The Film Entertainment Industry Opportunity 25 Investment Strategy 26 Exit Options 27 Fund Summary 28 Why Cinema Capital Venture Fund? 29 Taxation 30 Fund Structure 31 Professional Advisors 32 CCVF Advisory Council 32 Key Management Team 32 Film Entertainment Industry – FAQs 33 CINEMA CAPITAL VENTURE FUND 2 "The Indian Media and Entertainment (M&E) industry is poised to enter a golden era. One of the largest markets in the world, the industry is seeing strong growth and has the potential to garner US$ 25 billion by 2012." PricewaterhouseCoopers - FICCI Industry Report CINEMA CAPITAL VENTURE FUND 3 The Indian Media and Entertainment Industry The Indian Media and Entertainment industry is one of the fastest growing in the world having doubled its size in the last 4 years. In 2007 alone it grew by 20% reaching an estimated size of INR 51,000 Crores. Film and television segments constitute almost 70% of the entire industry and are its key drivers. The Indian government accorded industry status to the film entertainment business in 2001. Film entertainment companies are now listed on Indian and International stock markets and have attracted significant private equity and venture capital from across the world. India’s leading corporate houses like Reliance, Birla and Mahindra have also entered this sector. Reputable banks and financial institutions now provide funding and insurance services to the industry. This transformation has contributed to the film industry segments rapid growth from approx. Rs 600 crores in 1999 to 9600 crores in 2007, an increase of 15 times in just 9 years. "From a global perspective, India has been ranked as the fastest growing market in the world for spend in M&E over the next five years." Eighth PricewaterhouseCoo- pers Global Entertainment and Media Outlook CINEMA CAPITAL VENTURE FUND 4 CINEMA CAPITAL VENTURE FUND Scheme 1 • Launches India’s first SEBI approved Venture Capital Fund focused on the Film and Entertainment Industry • Captures the immense growth opportunity of investing in the fastest growing entertainment economy in the world • Offers investors a first time opportunity of ‘ownership’ in film and entertainment ventures • Enjoys low correlation with other traditional asset classes, thereby providing investment diversification • Employs a “best of breed” strategy to deliver returns in a highly transparent and professional manner supported by industry experts in areas of media, film, legal, tax and finance • Seeks to deliver superior investment returns for its investors by building a diverse portfolio of richly valued companies in this fast growing industry "India has a relatively conducive and open regulatory environment for the M&E industry, unlike many other developed and emerging countries. This has been a significant factor for global M&E conglomerates to set up shop in India." Farokh Balsara, National Sector Leader, Media & Entertainment, Ernst & Young CINEMA CAPITAL VENTURE FUND 5 India is one of the four countries along with Brazil, Russia and China where there is significant opportunity for global media and entertainment companies to make money in the medium and long term. Favourable regulatory environment is one of the reasons that foreign companies find India more attractive than China. Credit Suisse Report on Global Entertainment 2007 CINEMA CAPITAL VENTURE FUND 6 Did you know? India sells 2.5 times more tickets than the US the second largest ticket sale market in the world Film Entertainment Industry — A Unique Investment Opportunity Market Opportunity The world’s largest and fastest growing film entertainment industry with 1100 films released and 3.5 billion tickets sold Industry has doubled in size in the last 4 years and is projected to double again by 2012 Multiplex and Digital Screens projected to grow 5 fold from 2350 currently to over 10,000 by 2012, coupled with higher ticket prices will lead to greater revenue growth India has the most favourable demographics to support a growing entertainment industry with over 60% of the population under 35 years A growing global market for the industry that is now reaching over 40 countries worldwide Risk minimization due to growth of multiple revenue streams, pre-selling of film rights delivers profits even before the release of the film SOURCES : PRICEWATERHOUSECOOPERS, FICCI REPORT 2008, 2007 A.T. KEARNEY REPORT 2007 CINEMA CAPITAL VENTURE FUND 7 Did you know? Film production companies enjoy the highest valuation in the M & E Sector averaging 35-40 times earnings Industry Opportunity Low correlation with traditional asset classes, thereby providing investor portfolio diversification. Entertainment consumption relatively unaffected during times of recession Transparency and corporatisation in film entertainment companies resulting in attractive valuations Preferred destination for global and Indian corporates with over US$ 500 million Foreign Direct Investment in the last 12 months An opportunity to invest in an industry where almost 70% of the most successful companies in the sector are still privately held Film Main Hoon Na Om Shanti Om Director Farah Khan Farah Khan Year 2004 2007 Cast Shahrukh Khan, Sushmita Sen Shahrukh Khan, Deepika Padukone Production Red Chillies Entertainment Red Chillies Entertainment Budget 25+ crores 25+ crores Domestic Net Revs. 35.5 crores 86.35 crores NET BOX OFFICE REVENUE GROWTH OF 81% SOURCE: IBOSNETWORK.COM, MARKET ESTIMATES CINEMA CAPITAL VENTURE FUND 8 World’s Fastest Growing Film & Entertainment Industry Rate of Growth across key markets in the Global Film Entertainment Industry rowth in % G Rs Billion SOURCE: PWC/FICCI REPORT, 2008 Growth of the Indian Media and Entertainment Industry SOURCE: PWC/FICCI REPORT, 2008 CINEMA CAPITAL VENTURE FUND 9 Largest Film Industry Number of films made Number of tickets sold (In Billion) "Our growth rates are much higher than Hollywood's, but in value terms we are way below [the U.S. movie industry], But that will change as ticket prices—which now average less than $1 in India—swiftly catch up with the rac- ing Indian economy" Timmy Kandhari, Head of PWC's media and entertainment practice. CINEMA CAPITAL VENTURE FUND 10 Explosive Domestic Growth India has the most favourable demographics to support a fast growing entertainment industry with over 60% of the population under 35 years. Top 10 films - Domestic box-office revenues (2004) Top 10 films - Domestic box-office revenues (2007) NET REVENUE NET REVENUE RANK FILM NAME RANK FILM NAME (Rs. Crore) (Rs. Crore) 1 Veer Zaara 38.47 1 Welcome 72.98 2 Main Hoon Na 33.4 2 Om Shanti Om 69.96 3 Dhoom 29.5 3 Taare Zameen Par 59.71 4 Lakshya 27.86 4 Chak De India 53.73 5 Mujhse Shaadi Karogi 27.24 5 Guru (2007) 50.34 6 Khakee 27.1 6 Partner (2007) 50.16 7 Hum Tum 21.89 7 Heyy Babyy 42.75 8 Masti 21.49 8 Bhool Bhulaiyaa 40.61 9 Hulchul 20.68 9 Tara Rum Pum 34.29 10 Swades 16.88 10 Namastey London 29.63 264.51 504.16 SOURCE: IBOSNETWORK.COM Increase in domestic box-office revenues (Rs Crore) Increase of 91% in 3 years for top 10 films CINEMA CAPITAL VENTURE FUND 11 Multiplex Growth Multiplex and digital screens are going to grow five fold in the next 5 years, hugely increasing the domestic boxoffice revenue. Growth in the number of screens over the next 5 years Average ticket price in India (Rs) "India's multiplex bandwagon has gone beyond the metros to redefine entertainment in B and C class towns. "While the first phase (of the multiplex story) saw emergence of multiplexes in metros and now this growth is spreading to Tier 2 and 3 cities like Lucknow, Indore, Nasik, Aurangabad, Kanpur, Amritsar and so on," says Ajay Bijli, Managing Director, PVR Cinemas Outlook Business 2008 CINEMA CAPITAL VENTURE FUND 12 Three thousand six hundred shows per day, 1600 screens, Rs 22 crore gross earnings in the first three days, Rs13 crores net earnings internationally in the first one week. These are some of the numbers that the film, Race, has garnered since its release last week. DNA India May 2008 CINEMA CAPITAL VENTURE FUND 13 Did you know? 7 of the top 10 highest grossing Indian films in the US have come in the last two years Global Market for Bollywood Increase of US box-office revenues (US $ Mn) The Industry caters to a worldwide market of NRIs as well as local populations in over 40 countries. US $ Mn Increase of UK box-office revenues (£ sterling) £ Sterling Mn Only films which grossed more than $ 500,000 SOURCE: IBOSNETWORK.COM, BOXOFFICEINDIA.COM "The Bollywood segment of the UK market goes on growing. It is rare nowadays for the top 20 films each week not to feature at least one Bollywood title" Mark Batey, Chief Executive of the Federation of UK Distributors Association CINEMA CAPITAL VENTURE FUND 14 Multiple Revenue Streams • Film IPR (Intellectual Property Rights), is an asset that generates multiple revenue streams in perpetuity • Till the late 1980’s, 85-90% of a film’s entire revenue was dependent on domestic

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