Zee Learn Limited

Our Company was incorporated as a public limited company pursuant to a certificate of incorporation dated January 4, 2010 and with Company Identification Number L80301MH2010PLC198405

Registered Office: Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai, Maharasthra, India - 400018; Corporate Office: 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai – 400 053 Tel. No: +91-22-66971234; Fax: +91-22-24940069 Website:www.zeelearn.com Compliance Officer and Contact Person: Mr. Samir Raval; E-mail: [email protected]

Offering of 5,617,977 Global Depositary Receipts each representing 10 Share of par value `1 at an Offering Price of US$ 3.56 per Global Depositary Receipt.

Zee Learn Limited (the "Company", the "Issuer" or "ZLL") is offering 5,617,977 Global Depositary Receipts ("GDRs"), each representing Ten (10) equity share of our Company of nominal value `1 each (the "Shares"), at a price of US$ 3.56 per GDR ("Offering Price").

The GDRs will be issued in global form. The GDRs will be represented by a master global depositary receipt certificate (the"Master GDR Certificate"), in registered form, which will be deposited on or about the Closing Date with a common depositary for, and registered in the name of a common nominee of, Euroclear Bank S.A./N.V., ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream" or "Clearstream, Luxembourg"). Beneficial interests in the GDRs represented by the Master GDR Certificate will be shown on, and transfers thereof will be effected only through, book-entry records maintained by Euroclear and Clearstream, Luxembourg. Interests in the Master GDR will be exchangeable for GDRs in definitive form as set out in "Summary of Provisions relating to the GDRs while in Master Form" and "Transfer Restrictions"

The GDRs will be issued pursuant to a deposit agreement dated May 22, 2013 (the "Deposit Agreement"), dated the Closing Date (as defined below), between our Company and Deutsche Bank Trust Company Americas as depositary (the "Depositary"). Payment for the GDRs will be required on the Closing Date, which is expected to be May 22, 2013 (the "Closing Date"). Application has been made to list the GDRs on the official list of the Luxembourg Stock Exchange and to have the GDRs admitted to trading on the Euro MTF market (the "Market") of the Luxembourg Stock Exchange. The Shares of our Company are currently listed on the Bombay Stock Exchange Limited (the "BSE") and the National Stock Exchange of India Limited (the "NSE"). Our Company has undertaken to apply to the BSE and the NSE for approval for listing of the Shares represented by the GDRs.

The issue of the GDRs was authorised by a resolution of the Board of Directors passed on September 16, 2011 and by a resolution of the shareholders passed on October 19, 2011. Holders of GDRs ("Holders") will have no voting rights in respect of underlying Shares. See "Terms and Conditions of the Global Depositary Receipts" for a description of how rights attaching to Shares will be exercised by the Depositary.

The GDRs are of a specific nature and should only be bought and traded by investors who are particularly knowledgeable in investment matters. In making an investment decision, prospective investors must rely on their own examination of our Company and the terms of the Offering, including the risks involved.

FOR A DISCUSSION ON CERTAIN INVESTMENT CONSIDERATIONS RELATING TO THE GDRS, SEE "RISK FACTORS".

The GDRs are being offered outside the United States to non-U.S. persons in offshore transactions in reliance on Regulation S ("Regulation S") under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The GDRs and the Shares to be represented by the GDRs, have not been and will not be registered under the U.S. Securities Act 1933 as amended and may not be offered, sold or delivered within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. For a description of certain restrictions on offers, sales and transfers of the GDRs and the Shares, see "Subscription and Sale" and "Transfer Restrictions". The GDRs may not be offered or sold directly or indirectly in India or to, or for the account or benefit of, any resident of India, except as permitted by applicable Indian laws and regulations.

A copy of this Prospectus will be delivered to the Registrar of Companies, Maharashtra at Mumbai (the "Registrar of Companies"), the Reserve Bank of India (the "RBI"), the BSE, the NSE and the Securities and Exchange Board of India ("SEBI") for the purposes of record only.

LEAD MANAGER

First International Group PLC 61-63 Brook Street, London W1K 4HS, United Kingdom Prospectus dated May 22, 2013

TABLE OF CONTENTS

IMPORTANT INFORMATION ...... 3 ENFORCEABILITY OF CIVIL LIABILITIES ...... 5 PRESENTATION OF FINANCIAL INFORMATION ...... 6 FORWARD-LOOKING STATEMENTS ...... 7 GLOSSARY AND DEFINITIONS ...... 8 SUMMARY OF THE OFFERING ...... 13 SUMMARY OF BUSINESS ...... 16 SUMMARY OF FINANCIAL INFORMATION...... 20 RISK FACTORS ...... 24 PRICE RANGE OF SHARES ...... 44 EXCHANGE RATES ...... 46 USE OF PROCEEDS ...... 47 DESCRIPTION OF SHARE CAPITAL ...... 48 CAPITALISATION ...... 51 DIVIDEND POLICY...... 52 MANAGEMENT‘S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS...... 53 SUMMARY OF RESTRUCTURING OF OUR BUSINESS ...... 64 INDUSTRY OVERVIEW ...... 68 BUSINESS ...... 76 OVERVIEW OF LAW REGULATING EDUCATION SECTOR IN INDIA ...... 89 DIRECTORS AND MANAGEMENT ...... 94 LEGAL PROCEEDINGS ...... 105 THE INDIAN SECURITIES MARKET ...... 107 DESCRIPTION OF THE SHARES ...... 118 TERMS AND CONDITIONS OF THE GLOBAL DEPOSITARY RECIEPTS ...... 127 SUMMARY OF PROVISIONS RELATING TO THE GDRS WHILE IN MASTER FORM ...... 144 PLACEMENT AND SALE ...... 147 SELLING RESTRICTIONS ...... 148 TRANSFER RESTRICTIONS ...... 151 FOREIGN INVESTMENT AND EXCHANGE CONTROLS ...... 153 INDIAN REGULATORY APPROVALS AND FILINGS ...... 160 TAXATION ...... 161 GENERAL INFORMATION ...... 166 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IFRS ...... 169 FINANCIAL STATEMENTS ...... 173

IMPORTANT INFORMATION

The GDR Holders may withdraw the Shares represented by the GDRs only after listing of the Shares represented by the GDRs on the BSE and NSE and subsequent dematerialization of such Shares. We believe that such listings will occur within 45 days from the Closing Date but there is no guarantee that such listings will be granted. After the listings have occurred, a GDR Holder may request the Depositary to withdraw, from the depositary facility, the Shares represented by the GDRs held by the GDR Holder and to transfer such Shares in dematerialized form to the account of the GDR Holder with the NSDL or the CDSL.

The GDRs may not be offered or sold directly or indirectly in India or to, or for the account or benefit of, any resident of India except eligible domestic mutual funds subject to the rules, regulations and guidelines issued by the RBI and the SEBI. Erstwhile overseas corporate bodies ("OCBs"), as defined under applicable FEMA regulations, who are not eligible to invest in India and entities prohibited to buy, sell or deal in securities by the SEBI are not eligible to subscribe to GDRs.

This Prospectus has not been, and will not be, reviewed or approved by any statutory or regulatory authority in India or by any stock exchanges in India. The issue of the GDRs should not be construed as a public offer in India. This Prospectus does not comply with all the disclosure requirements prescribed by the SEBI in relation to a public issue of securities on the Indian stock exchanges.

A copy of the Prospectus will be delivered to the Registrar of Companies, Maharashtra at Mumbai, the Reserve Bank of India, the SEBI and the Indian Stock Exchanges where the Shares are listed, for record purposes only.

To the best of our knowledge and belief, having made all reasonable enquiries, we confirm that this document contains all information with respect to us, the GDRs and the Shares, which are material in the context of the issue and offering of the GDRs. The statements contained in this Prospectus relating to us, the GDRs and the Shares are, to the best of our knowledge and belief, in all material respects true and accurate and not misleading, the opinions and intentions expressed in this Prospectus with regard to us, the GDRs and the Shares are honestly held, have been reached after considering all relevant circumstances and information which is presently available to us, and are based on reasonable assumptions. To the best of our knowledge and belief, there are no other facts in relation to us, the GDRs and the Shares the omission of which would, in the context of the issue and offering of the GDRs, make any statement in this Prospectus misleading in any material respect and all reasonable enquiries have been made by us to ascertain such facts and to verify the accuracy of all such information and statements. Where information contained in this Prospectus includes extracts from summaries of information and data from various published and private sources, we accept responsibility for accurately reproducing such summaries and data. However, we have not independently verified the accuracy or material particulars of such information and do not make any other representation with respect to the same.

This Prospectus does not constitute an offer of, or an invitation by or on behalf of us or the Depositary or any of our or their respective affiliates or representatives to subscribe for or purchase, any of the GDRs in any jurisdiction where it is unlawful for such person to make such an offer or invitation. The distribution of this Prospectus and the offering of the GDRs in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by us to inform themselves about and to observe any such restrictions.

Neither the Depositary nor any of its respective affiliates or representatives has separately verified the information contained in this Prospectus. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Depositary or by any of its respective affiliates or representatives as to the accuracy or completeness of the information contained in this Prospectus or any other information supplied in connection with the GDRs or the Shares. Each person receiving this Prospectus acknowledges that such person has not relied on the Depositary in connection with its investigation of the accuracy of such information or its investment decision and each such person must rely on his own examination of us and the merits and risks involved in investing in the GDRs. Neither we, the Depositary nor any of our respective affiliates or representatives is making any representation to you regarding the legality of an investment by you under applicable laws. You should not construe anything in this Prospectus as legal, business or tax advice. You should consult your own advisors, as needed, to make your investment decision and to determine whether you are able lawfully to purchase the GDRs under applicable laws or regulations.

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No person is authorized to give any information or to make any representation not contained in this Prospectus and any information or representation not so contained must not be relied upon as having been authorized by or on our behalf. The delivery of this Prospectus at any time does not imply that the information contained in it is correct as at any time subsequent to its date.

Market and industry data

Market data and certain industry forecasts used throughout this Prospectus have been obtained from market research, publicly available information and industry publications and studies. Certain statistical information included herein relating to the industry has been reproduced from various trade and industry publications. Industry publications generally state that the information they contain has been obtained from sources believed to be reliable but that the accuracy and completeness of that information is not guaranteed. Where information contained in this Prospectus includes extracts from summaries of information and data from various published and private sources, our Company accepts responsibility for accurately reproducing such summaries and data. However, our Company has not independently verified the accuracy or material particulars of such information and does not make any other representation with respect to the same. Although, our Company believes industry data used in this Prospectus is reliable, it has not been verified by any independent source, and neither our Company nor the Lead Manager nor our Company.‘s or its respective affiliates and advisors are making any representation to any offeree or purchaser of the GDRs regarding the accuracy of that information.

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ENFORCEABILITY OF CIVIL LIABILITIES

Our Company is a limited liability public company incorporated under the laws of India. All our Company‘s directors and a subtantial majority of executive officers are residents of India and all or a substantial portion of the assets of our Company and such persons are located in India. As a result, it may not be possible for investors to effect service of process upon our Company or such persons in jurisdictions outside of India, or to enforce against them judgments obtained in courts outside of India.

In addition, India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. Recognition and enforcement of foreign judgments is provided for under section 13 and section 44A of the Code of Civil Procedure, 1908 (the "Civil Code"). Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court in any country or territory outside India which the Government has by notification declared to be a 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 nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty and is not applicable to arbitration awards.

The United States has not been declared by the Government to be a reciprocating territory for the purposes of section 44A of the Civil Code. However, the United Kingdom has been declared by the Government to be a reciprocating territory and the High Courts in England as the relevant superior courts. A judgment of a court in a jurisdiction which is not a reciprocating territory may be enforced only by a new suit upon the judgment and not by proceedings in execution.

Section 13 of the Civil Code provides that a foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon except: (i) where it has not been pronounced by a court of competent jurisdiction; (ii) where it has not been given on the merits of the case; (iii) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of India in cases where such law is applicable; (iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where it has been obtained by fraud; or (vi) where it sustains a claim founded on a breach of any law in force in India.

The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. 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 a foreign judgment if it viewed the amount of damages awarded as excessive or inconsistent with Indian practice. 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 pursuant to execution. Any judgment in a foreign currency would be converted into Indian Rupees on the date of the judgment and not on the date of the payment. Our Company cannot predict whether a suit brought in an Indian court will be disposed off in a timely manner or be subject to considerable delays.

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PRESENTATION OF FINANCIAL INFORMATION

In these Prospectus, unless otherwise specified or the context otherwise requires, all references to"India" are to the Republic of India and its territories and possessions; all references to the "U.S." and"United States" are references to the United States of America and its territories and possessions; all references to the"United Kingdom" are to the United Kingdom of Great Britain and Northern Ireland and its territories and possessions; and all references to the "Civil Code" or the "Code" are to the Indian Code of Civil Procedure, 1908, as amended.

Our Company prepares its financial statements in accordance with generally accepted accounting principles in India ("Indian GAAP"), which differ in certain respects from generally accepted accounting principles in other countries. Indian GAAP differs in certain significant respects from IFRS. For a comparison of accounting principles in India and accounting principles under International Financial Reporting Standards ("IFRS"), see "Summary of Significant Differences between Indian GAAP and IFRS". Our Company publishes its financial statements in Indian rupees.

Our Company‘s financial statements included in this Prospectus include its audited consolidated financial statements as of and for the Fiscal ended March 31, 2012(the "Audited Consolidated Financial Statements") and the audited standalone financial statements as of and for the Fiscal ended March 31, 2012 and March 31, 2011(the "Audited Standalone Financial Statements"). Our Company‘s financial information included in this Prospectus includes its unaudited unconsolidated financial information as of and for the nine months ended December 31, 2012 and 2011 (the "Unaudited Unconsolidated Financial Information"). Each of the Audited Consolidated Financial Statements, Audited Standalone Financial Statements and the Unaudited Unconsolidated Financial Information has been prepared in accordance with Indian GAAP. Any reference to the Audited Standalone Financial Statements for Fiscal 2011 shall be for the period from January 4, 2010 to March 31, 2011.

In this Prospectus, all references to "Indian rupees", "rupees"and "`" are to the legal currency of India and all references to "dollars", "USD","U.S. dollars" and "US$" are to the legal currency of the United States. Solely for the convenience of the reader, this Prospectus presents translations of certain rupee amounts into U.S. dollars at specified rates. This should not be construed as a representation that those Indian rupee or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Indian rupees, as the case may be, at any particular rate, or at all.

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FORWARD-LOOKING STATEMENTS

All statements contained in this Prospectus that are not statements of historical fact constitute "forward-looking statements" and involve risks and uncertainties. These statements relate to future estimates or events or our Company‘s future financial performance and include, but are not limited to, statements concerning:

 our ability to successfully implement strategy, growth and expansion plans and technological initiatives;  changes in government policies and regulatory actions that apply to or affect our business;  our ability to manage our growth in the Pre-school and K-12 segments;  our ability to increase enrolments, fees and our offerings;  the performance of the educational services sector in India;  the expected increase in expenditures on education in India;  market fluctuations and industry dynamics beyond our control;  changes in global economic, political and social conditions;  changes in laws, regulations, taxation or accounting standards or practices;  changes in prices or demand for products produced by us;  the ability of our franchisees to perform in accordance with contractual terms and specifications;  acquisitions and divestitures;  our dependence, ability to attract and retain key personnel including teachers;  our ability to compete effectively, particularly in new markets; and  other factors beyond our control.

Further more, in some cases, investors can identify forward-looking statements by terminology such as "may", "will", "could", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue" and the negative of such terms or other comparable terminology, but are not the exclusive means of identifying these statements. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, investors should specifically consider various factors, including the risks outlined in the section titled "Risk Factors". These factors may cause our Company‘s actual results to differ materially from any forward-looking statement. Except as required by law, our Company undertakes no obligation to update any forward-looking statements after the date of this Prospectus or to conform these statements to actual results or to changes in our Company‘s expectations.

The forward-looking statements contained in this Prospectus are based on the beliefs of our management, as well as the assumptions made by and information currently available to our management. Although our Company believes that the expectations reflected in such forward-looking statements are reasonable at this time, our Company cannot assure you that such expectations will prove to be correct. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. Important factors that could cause actual results to differ materially from our Company‘s expectations are contained in cautionary statements in this Prospectus, including, without limitation, in conjunction with the forward-looking statements include in this Prospectus and specifically under "Risk Factors" If any of these risks and uncertainties materialize, or if any of our Company‘s underlying assumptions prove to be incorrect, our Company‘s actual results of operations or financial condition could differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent written and oral forward-looking statements attributable to our Company are expressly qualified in their entirety by reference to these cautionary statements. Our Company does not intend, and assumes no obligation, to update any forward-looking statement contained in this Prospectus.

These risks and others described under "Risk Factors" are not exhaustive. Other sections of this Prospectus describe additional factors that could adversely affect our results of operations, financial condition, liquidity and the development of the industries in which we operate. New risks can emerge from time to time, and it is not possible for us to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any risks, or combination of risks and other factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results.

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GLOSSARY AND DEFINITIONS

Definitions of certain terms used in this Prospectus

The following list of defined terms is intended for the convenience of the reader only and is not exhaustive.

Term Description AGM Annual General Meeting

Agreement for Avoidance of Agreement for Avoidance of Double Taxation entered into by the Double Taxation Government of India with the country of residence of the non-resident investor

Articles/Articles of Association Articles of Association of our Company

AS Accounting Standard

Auditor / Statutory Auditor M/s MGB & Co., Chartered Accountants

Billion One thousand million

Board The board of directors of our Company

Brain Café/ Braincafé Science program formulated by our Company in collaboration with Gakken J Holdings Company Limited, Japan, named Brain Café for K-12 schools

BSE The BSE Limited (formerly known as the Bombay Stock Exchange Limited)

CAGR Compound Annual Growth Rate

CBSE The Central Board of Secondary Education

CDSL The Central Depository Services Limited

Chairman Chairman of the Board of Directors

CISCE The Council for Indian School Certificate Examinations

Civil Code The Code of Civil Procedure, 1908 of India

Clearing Systems Euroclear and Clearstream

Closing Date May 22, 2013

Common Depositary Deutsche Bank AG, London Branch

Companies Act Indian Companies Act, 1956

Company / "our Company" / Zee Learn Limited "the Company" / "we"/ "us" / "our"

Composite Scheme of Composite Scheme of Amalgamation and Arrangement between ETC Amalgamation and Networks Limited, Zee Entertainment Enterprises Limited and Zee Learn Arrangement Limited

Clearstream Clearstream Banking, société anonyme

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Term Description Conditions The terms and conditions of the GDRs

Crore Ten million; 100 lakh

Custodian Deutsche Bank AG, Mumbai Branch

DSRA Debt Service Reserve Account

Delisting Regulations Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, as amended

Deposit Agreement May 22, 2013

Depositary Deutsche Bank Trust Company Americas

Deposited Shares

Directors The directors of our Company

Dollar, USD, U.S. dollars, US$, United States dollar, the lawful currency of the United States of America $

DVPL / Subsidiary Digital Ventures Private Limited

EGM Extraordinary General Meeting

ESOP Scheme Employee Stock Option Scheme implemented by our Company

Euroclear Euroclear Bank S.A./N.V.

FDI Foreign direct investment

FEMA The Foreign Exchange Management Act, 1999 of India

FEM Transfer Regulations The Foreign Exchange Management (Transfer or Issue of Securities by a Person Resident Outside India) Regulations, 2000

FERA Foreign Exchange (Regulation) Act, 1973 of India

FIIA Foreign Investment Implementation Authority

FIIs Foreign Institutional Investors

FII Regulations SEBI (Foreign Institutional Investors) Regulations, 1995

Financial year/FY/ fiscal year Any period of twelve months ended March 31 of that particular year, unless otherwise stated

FIPB Foreign Investment Promotion Board, Ministry of Finance, Government of India

Five Year Plan The Government‘s economic development plans

Forward-looking statements Within the meaning of Section 27A of the Securities Act and Section 21E of the United States Securities Exchange Act of 1934

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Term Description FSMA The Financial Services and Markets Act 2000 (as amended) of England and Wales

GDR Exchange Luxembourg Stock Exchange

GDP Gross Domestic Product

Government The Government of India

Holder Person recorded in the register of holders as holder of a GDR

IAS International Accounting Standards

IB The International Baccalaureate

ICAI The Institute of Chartered Accountants of India

IDBI Industrial Development Bank of India

IFRS International Financial Reporting Standards

IGCSE International General Certificate of Secondary Education

Income Tax Act The Income Tax Act 1961 of India iLLUME An education proprietary pedagogy developed by our Company

India The Republic of India

Indian GAAP Generally accepted accounting principles followed in India

Indian Stock Exchanges Each of the BSE, the NSE and any other stock exchanges in India on which the Shares are listed from time to time

Insider Trading Regulations The SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended

Issuer Zee Learn Limited

K-12 Schools with classes from Kinder-garden to class 12

KG Kinder-garden

Kidzee Pre-schools operated under the brand name "Kidzee"

Lakh 100,000

Lead Manager First International Group PLC

LC Letter of credit

LIBOR London Interbank Offered Rate of interest

LIC Life Insurance Corporation of India

Listing Agreement The agreement under which the governing body of the BSE or NSE is

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Term Description empowered to suspend trading of or dealing in a listed security for breach of our Company‘s obligations under such agreement

Master Circular Master circulars published by the Reserve Bank of India

Memorandum/Memorandum of The memorandum of association of our Company Association

MHRD The Ministry of Human Resource Development, Government of India

Mount Litera Zee School, K-12 schools operated under the brand name Mount Litera Zee School MLZS

Mount Litera World Preschool Preschools operated under the brand name Mount Litera World Preschool

Mumbai The city of Mumbai, previously named Bombay

NCLT/ the "Tribunal" National Company Law Tribunal

Non-Residential Indian, "NRI" An individual of Indian nationality or origin residing outside India

NSDL The National Securities Depository Limited

NSE The National Stock Exchange of India Limited

Open Offer Public announcement to acquire additional shares by the acquirer in accordance with SEBI (Substantial Acquisition of Shares and Takeover Regulation), 2011. The acquirer has to make a public announcement if it acquires 25% or more of the shares or voting rights of the target company

Placing Agreement Agreement between our Company and the Lead Manager in connection with the Offering

Promoter Group Jayneer Capital Private Limited, Asian Satellite Broadcast Private Limited, Jayneer Enterprises LLP, Essel Media Ventures Private Limited, Essel Holdings Limited, Churu Trading Company Private Limited, Ganjam Trading Company Private Ltd, Prajatma Trading Co. Pvt Ltd, Veena Investment Pvt Ltd, Essel Infraprojects Limited, Ambience Business Services Pvt Ltd, Ashok Mathai Kurien, Sushila Goel and Premier Finance And Trading Co. Ltd.

Prospectus This prospectus filed with BSE and NSE

RBI Reserve Bank of India

Rupee, ` The lawful currency of India Registrar of Companies, RoC The Registrar of Companies, Maharashtra in Mumbai, located at 100 Everest Marine Drive, Mumbai 400 002

SCRA The Securities Contracts (Regulations) Act, 1956 of India

SCRR The Securities Contracts (Regulations) Rules, 1957 of India

SEBI The Securities and Exchange Board of India

SEBI ICDR Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended.

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Term Description

SEBI ESOP Guidelines Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended

Securities Act The United States Securities Act of 1933, as amended

Shares Fully-paid ordinary equity shares of our Company of par value of `1 each

SICA Sick Industrial Companies (Special Provisions) Act, 1985

Stock Options Stock options granted under the ESOP Scheme

STT Securities Transaction Tax, as defined under the Indian Finance Act, 2004

Subsidiary Digital Ventures Private Limited

SEBI Takeover Code SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 of India (as amended from time to time)

United States, U.S The United States of America, its territories and possessions, any State of the United States and the District of Columbia

ZICA Zee Institute of Creative Arts

ZIMA Zee Institute of Media Arts

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SUMMARY OF THE OFFERING

The following is a general summary of the terms of the GDRs. This summary is derived from and should be read in conjunction with, the full text of the Conditions and the Deposit Agreement made between our Company and the Depositary relating to the GDRs, which shall prevail to the extent of any inconsistency with the terms set out in this section. Capitalized terms used herein and not otherwise defined have the respective meanings given to such terms in the Conditions.

Term Description The "Issuer", the "Company" Zee Learn Limited, a public company incorporated in the Republic of India or "ZLL" with limited liability

The Offering An offer of 5,617,977 GDRs outside the United States in reliance on Regulation S, under the Securities Act and other applicable laws. The GDRs may not be offered or sold in India, except as permitted by applicable Indian laws and regulations.

The GDRs Global Depositary Receipts each representing ` 19.50 Share of nominal value of `1. The GDRs will be issued pursuant to the Deposit Agreement.

There are limitations on re-deposits of Shares that have been withdrawn from the GDR deposit facilities and on deposits of Shares acquired in the open market. The GDRs and the Shares represented thereby are subject to restrictions on transfer. See "Terms and Conditions of the Global Depositary Receipts" and "Transfer Restrictions".

The Shares The Shares underlying the GDRs will be equity shares with a nominal value of `1 each. The rights attaching to the Shares are described under "Description of the Shares".

Offering Price The GDRs are being offered at a price of US$ 3.56 per GDR (the "Offering Price").

Closing Date On or about May 22, 2013

Shares issued and outstanding Our Company had 263,010,249 equity shares of par value of `1 each, issued and immediately before and after outstanding immediately before the Offering. Following the Offering, the Offering 56,179,770 shares will be issued and outstanding.

Use of Proceeds The aggregate net proceeds of the Offering will be approximately US$ 19,999,998.12. Subject to compliance with, and as permitted under, applicable laws and regulations, including the RBI regulations, our Company intends to use the net proceeds of the Offering for meeting working capital requirements, content purchase and development, expansion of preschool centres and K-12 schools, loan repayment, and any other purpose as may be permitted under the guidelines and any other purposes as may be decided by our Company and as permitted by applicable laws and regulations from time to time.

Sale and withdrawal of Subject to the Deposit Agreement and the Conditions, a Holder may elect to Shares; Dematerialisation surrender all or part of its GDRs and hold the underlying Shares directly upon delivery of an executed order and payment of all necessary fees, expenses, taxes or governmental charges, provided that our Company has delivered to the Custodian physical share certificates or entitlements in scrip less form in respect of the Shares. The Shares underlying the GDRs may be withdrawn by Holders of the GDRs only after the listing of the underlying Shares on the Indian Stock Exchanges at which point the Shares may be dematerialized, and

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Term Description in accordance with the Deposit Agreement and Conditions. The dematerialisation process may take up to 45 days after listing. However, there is no guarantee that the listing of the Shares underlying the GDRs will be granted by the NSE and the BSE.

Taxation For a discussion of certain tax considerations relevant to an investment in the GDRs, see "Taxation".

Depositary Deutsche Bank Trust Company Americas, New York, United States of America.

Custodian Deutsche Bank AG, Mumbai Branch

Governing Law The Placing Agreement and the Deposit Agreement will be governed by English law.

Lock-up Arrangements Neither our Company nor its Subsidiary, nor any person acting on its or their behalf will, for a period of 90 days after the Closing Date, without the prior written consent of the Lead Manager, issue, offer, sell, contract to sell or otherwise dispose of (or publicly announce any such issuance, offer, sale or disposal) any Shares of our Company or securities convertible or exchangeable into or exercisable for Shares of our Company or warrants or other rights to purchase Shares of our Company or any security or financial product whose value is determined directly or indirectly by reference to the price of the Shares, including equity swaps, forward sales and options representing the right to receive any Shares.

Listing Application has been made for the GDRs to be admitted to listing on the Luxemburg Stock Exchange and to be admitted to trading on the Euro MTF Market of the Luxemburg Stock Exchange. The Luxemburg Stock Exchange assumes no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the GDRs to the Euro MTF market of the Luxemburg Stock Exchange is not to be taken as an indication of the merits of our Company, the existing Shares, the GDRs or the Shares represented thereby.

Payment and Settlement The GDRs have been accepted for clearance and settlement through the facilities of Euroclear or Clearstream against payment therefore in immediately available funds.

Euroclear, or Clearstream in no way undertakes to, and none of Euroclear or Clearstream shall have responsibility to, monitor or ascertain the compliance of any transactions in the GDRs or the underlying Shares with any selling or ownership restriction.

Voting Rights and Holders of GDRs will have no voting rights with respect to the Deposited Restrictions Shares. The Depositary will not exercise any voting rights in respect of the Deposited Shares unless it is required to do so by law. If so required, the Depositary will, at the direction of the Board of Directors of the Company (subject to the advice of legal counsel taken by the Depositary and the Company at the expense of the Company), either vote as directed by the Board of Directors of the Company or give a proxy or power of attorney to vote the Deposited Shares in favour of a Director of the Company or other person or vote in same manner as those shareholders designated by the Board of Directors of the Company. A valid corporate decision of the Company will bind the Depositary and the Holders notwithstanding these restrictions on

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Term Description voting rights. Dividends Holders of the GDRs will be entitled to receive, through the Depositary, amounts (if any) paid by our Company as dividends (net of withholding tax, if any) on the Shares underlying the GDRs after deduction of certain fees and expenses as provided in the Deposit Agreement, commencing with dividends, if any, declared with respect to our Company‘s financial year in which the Shares underlying the GDRs are allotted. Such dividends (if any) will be paid to the Depositary as soon as practicable after of the date of declaration thereof for the respective Holders in accordance with the terms of the Deposit Agreement. Holders of the GDRs must rely upon the procedures of the Depositary and the clearing and settlement systems of Euroclear and Clearstream, as the case may be, for distribution of such dividends (if any). These procedures are such that any dividends are likely to be paid to the Holders who held the GDRs on the record date set by the Depositary for any relevant dividend, as soon as practicable after payment thereof to the Depositary. See "Dividend Policy", "Description of the Shares" and "Terms and Conditions of the Global Depositary Receipts".

GDR Security Numbers ISIN: US9892181028 Common Code: 089975557

Capital Increase The increase in issued share capital of our Company (the "Capital Increase") through the issue of GDRs has been approved by the shareholders of our Company on October 19, 2011. All equity shares will be issued in the form of GDRs and will be issued by our Company to the Depositary on the Closing Date.

Risk Factors You should read "Risk Factors" for a discussion of factors that you should consider carefully before deciding to invest in the GDRs.

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SUMMARY OF BUSINESS

In this section any reference to "we", "us" or "our" refers to Zee Learn Limited. Unless stated otherwise, the financial data in this section is as per our unconsolidated financial information set forth elsewhere in this Prospectus.

The following information should be read together with the more detailed financial and other information and description of business included elsewhere in this Prospectus, including the information contained in the chapter titled "Risk Factors" beginning on page 24 of this Prospectus.

OVERVIEW

Introduction:

Our Company is one of the leading providers of educational services in India and is focusing on child development through various segments of the education business namely, (a) pre-schools, (b) K-12 schools, and (c) vocational training. Our Company is positioned to cater to the large unmet needs in the child development and education domain enabled by strong brands and increasing penetration through multiple channels of distribution. We operate through a combination of partnerships, franchising arrangements, and our Company‘s self-managed institutes. We also offer school solutions and co-curricular learning modules aimed at improving the conceptual understanding of students in various subjects including but not limited to Science and Grammar. Our Company is an ISO 9001:2008 certified company for design and development of various educational content upto 8th standard and deployment through multiple delivery mechanisms. We also provide (a) School Solutions; and (b) Vocational studies.

We are a part of the "Essel" group of companies. The Essel group is a recognized business house with a diverse set of businesses in media, packaging, entertainment, technology-enabled services, infrastructure development and education. Some of the other major companies of the Essel group include Essel Infraprojects Limited, Essel Propack Limited, Dish TV India Limited, Siti Cable Network Limited, Zee Entertainment Enterprises Limited and Zee News Limited. We believe that the "Zee" brand name has propelled our Company and continues to provide immense value to our growth and recognition of our pre-schools, K-12 schools and other service offerings.

Our History:

A brief history of our Company‘s education related business activities is as summarized in the following table, and, as better detailed hereinafter.

No Date Particulars 1 1994 Our Company‘s education related business activities were started as a division of Zee Telefilms Limited, (subsequently renamed as Zee Entertainment Enterprises Limited). 2 1999 Zee Telefilms Limited education related business activities were transferred to Zee Interactive Learning Systems Limited, a wholly owned subsidiary of Zee Telefilms Limited. 3 2008 Merger and amalgamation of ETC Networks Limited with Zee Interactive Learning Systems Limited, and consequently:  the business of ETC Networks Limited was merged and transferred to Zee Interactive Learning Systems Limited,  the resultant entity was engaged in the education as well as the media and entertainment business,  the resultant entity was renamed as ETC Networks Limited, and was listed on the BSE and NSE. 4 2010 Our Company was incorporated as a public limited company on January 4, 2010, with the name Zee Learn Limited. A composite scheme of amalgamation and arrangement provided for Merger of ETC Networks Ltd with Zee Entertainment Enterprises Limited with effect from March 31, 2010 and upon the aforesaid merger, demerger of education business undertaking of Zee Entertainment Enterprises Limited and the transfer / vesting of the business undertaking to Zee Learn Limited on and from April 1, 2010 (Appointed Date).

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No Date Particulars 5 2011 The scheme of amalgamation and arrangement for merger of Essel Entertainment Media Limited with our Company was approved by the High Court of Judicature at Bombay vide an order dated June 17, 2011, whereby the entire business of EEML was transferred to our Company. Pursuant to the aforesaid scheme being effective, DVPL became a wholly owned subsidiary of our Company.

Our Company‘s education related business activities were initiated in 1994 as a division of Zee Telefilms Limited (now known as Zee Entertainment Enterprises Limited).This division was thereafter, in Fiscal 1999, transferred to Zee Interactive Learning Systems Limited, a wholly owned subsidiary of Zee Telefilms Limited. Pursuant to a scheme of amalgamation of ETC Networks Limited with Zee Interactive Learning Systems Limited, as approved by the Bombay High Court vide an order dated January 11, 2008, the business of ETC Networks Limited was merged and transferred to Zee Interactive Learning Systems Limited and the resultant entity was engaged in the education as well as the media and entertainment business. Post merger the resultant entity was renamed as ETC Networks Limited, and was listed on the BSE and NSE.

Pursuant to a composite scheme of amalgamation and arrangement between ETC Networks Limited, Zee Entertainment Enterprises Limited, our Company, (as approved by the Bombay High Court vide an order dated July 16, 2010) and their respective shareholders, the education business of Zee Entertainment Enterprises Limited and ETC Networks Limited, was transferred to our Company. Accordingly, our Company commenced its operations in 2010 pursuant to the scheme effected on August 30, 2010.

Pursuant to a scheme of amalgamation between Essel Entertainment Media Limited ("EEML") with our Company (as approved by the Bombay High Court vide an order dated June 17, 2011), the entire business (including equity investments in DVPL), properties (including intellectual property rights, if any) and liabilities of EEML were transferred to our Company.

Brands and Products:

Our Company provides the following educational services in India catering to various segments of the education business namely:

Pre-schools

Our portfolio consists of various brands through which we offer a wide spectrum of educational services. We believe that our flagship pre-school brand, namely Kidzee is a recognized brand in pre-schools in India spread across 340 cities and is considered to be one of the largest pre-schools. Kidzee is also recognised as one of the largest playschools chains in India and has around 1211 such centres. For our Kidzee pre-schools we have developed our own proprietary pedagogy (namely teaching processes), under the name "iLLUME", which is an education program independently validated by M S University, Baroda, in January 2010 Kidzee has been awarded with the "Best Franchisor in Pre-school Education" award in 2004 and 2005; for the Fiscal 2010, Kidzee was awarded by Franchise Plus as the "Franchisor of the Year" in the general franchisee segment.

Additionally, within the pre-school space, we have commenced operations of two premium pre-school schools aimed at the higher income bracket through self-operated pre-schools at Mumbai under the Mount Litera World Preschool brand.

K-12 schools

We also have a chain of K-12 schools across India under the Mount Litera Zee School brand.Our K-12 schools under the brand Mount Litera Zee School brand that comprise of schools under two models, namely (a) franchisee schools; and (b) management schools. As on December 31, 2012 we had 54 operational franchisee schools and 2 schools under management.

We have internally developed our own proprietary pedagogy for our K-12 schools. "Litera Octave" is an integrated educational model that has been refined through to extensive research and development integrating various components such as content, infrastructure, classroom design, assessment and systems that impact the child during his/her learning and development in school.

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We also manage K-12 Schools and have such schools at Bhatinda and Nagothane and propose to have similar schools at places including Nagpur, Karnal, Patiala, Marmugao, and Mumbai.

School solutions

Our Company has, in collaboration with Gakken J Holdings Company Limited, Japan, a leading company in the education industry, formulated a science program titled Braincafé for K-12 schools which is aimed at improving the conceptual understanding of students by providing hands on experiment tools. The Braincafe program is currently used by students in various K-12 schools in the country including schools under the brand Mount Litera Zee School.

Vocational Training

Our vocational education programs are operated through two brands, namely, (i) Zee Institute of Media Arts ("ZIMA"), and, (ii) Zee Institute of Creative Arts ("ZICA") for various courses in media and classical and digital animation training academies through affiliation with recognised universities. We have 32 centres for ZICA spread over 16 cities while we have 1 centre for ZIMA. For some of the current courses being offered under the ZICA and ZIMA brands, we have been affiliated with Himgiri Zee University and Annamalai University. Under the ZICA program, we offer courses varying between 6-36 months, which include bachelors‘ degrees in science and fine arts; certificate courses in 3D motion graphics, 3D character design and sculpting; diploma courses in 3D Graphics; and advanced courses in Maya character animation. Under ZIMA, we offer programs in direction, cinematography, editing, sound, film animation, visual effects and the training in specialized software such as Autodesk, Smoke and Flame. The courses offered at ZIMA range between 2 to 24 months and include diploma courses in film making, direction, advertising film making, cinematography, executive producers for film and television, editing, acting, voicing and television presentation, sound and writing.

The details pertaining to segmentation of various verticals is provided in the table below:

Age of students Certifications from courses (in years) Pre School 2-4 -- K-12 4-18 Certificate for secondary or senior secondary education Vocational courses 18-24 Diploma and Graduation Certificates in various disciplines

On November 5, 2012, Zee Entertainment Enterprises Limited has launched a channel in the education domain in the name and style of 'ZeeQ'. Recognising our Company‘s expertise in the education sector and our capability and expertise in the education domain, it proposes to enter into an agreement with our company to manage and to distribute and market the channel. The services to be provided include content acquisition, content production, editing and quality control, channel programming, distribution management, marketing and promotion. It is expected to be a fun learning destination imparting knowledge and life skills. It would also help in child development while inculcating values and helping children choose the right career and lifestyle. It would be one of the first edutainment and multi-platform television channel. ZeeQ will also have a presence on television, internet and mobiles.

Advanced training facilities for teachers

Revenue Details:

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revenues, profit before tax and profit after tax are as follows: (`in million) Particulars Period ended Period ended Half Year Ended March 31,2012 March 31,2011 September 30,2012 Revenues Sale of Education al Goods and Equipments 264.08 176.82 186.28 Education and Other Services 345.95 250.66 235.49 Profit/(Loss) Before Tax (274.10) 25.42 (58.64) Profit/(Loss) After Tax (275.79) 18.52 (58.64)

Research and Development

We have a dedicated team of 60 members for reach and development of content pertaining to our various offerings. The content team augments the delivery of educational services through creating e-Content, lecture notes, learning resources, lesson plans, activity plans, learning manipulative, and assessments for the schools, pre-schools, and skill development programs. We ensure that the learning experience created in the various classrooms is based on well-researched content and teaching-learning strategies. We also research on creating new educational products and services based on market requirements and trends. The team has policymakers, instructional designers, classroom teachers, subject matter experts, content developers, product/program designers, and copy editors.

Awards and Recognition a) iLLUME Validation

"iLLUME" is the proprietary pedagogy of Kidzee. iLLUME was independently validated by M S University, Baroda in January 2010. b) Collaboration with OMEP

Our Company was honored by being chosen as the sole India Representative at OMEP World Congress in August 2010. We were chosen for our education philosophy and for having the widest footprint in early childhood education and care in the country. c) Awards

Kidzee was adjudged the winner of the "Franchisor of the Year" in Fiscal 2010 by Franchise Plus, a leading business opportunity publication. We have also received recognition for being adjudged the "Best Franchisor in Pre-school Education" in the fiscal years 2005 and 2004.

We have been ranked first in unique company initiatives for "India‘s Best Companies to work for in 2012". We have also been awarded the Bloomberg UTV CXO award 2011 for "Best Implementation of Student and Faculty Engagement Solutions" for our web-based information systems.

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SUMMARY OF FINANCIAL INFORMATION

The following selected financial information of our Company for the Fiscal 2012 and 2011 should be read in conjunction with the respective Audited Consolidated Financial Statements and the schedules and notes thereto, Audited Standalone Financial Statements and the schedules and notes thereto, as well as the Unaudited Unconsolidated Financial Information, each included elsewhere in this Prospectus.

The selected audited standalone profit and loss account of our Company for the Fiscal ended March 31, 2012 and March 31, 2011and the selected audited standalone balance sheet of our Company for the Fiscal ended March 31, 2012 and March 31, 2011 set forth below have been derived from the Audited Standalone Financial Statements, which have been prepared in accordance with Indian GAAP and have been audited by MGB& Co. Any reference to the Audited Standalone Financial Statements for Fiscal 2011 shall be for the period from January 4, 2010 to March 31, 2011.

Neither the information set forth below nor the format in which it is presented should be viewed as comparable to information prepared in accordance with International Accounting Standards ("IAS"), IFRS or any other accounting principles. Indian GAAP differs in certain material respects from IAS and IFRS. For a discussion of significant differences between Indian GAAP and IFRS, see "Summary of Significant Differences between Indian GAAP and IFRS".

Summary Audited Standalone Balance Sheet

(`in million) As at As at March As at March September 31, 2012 31, 2011 30, 2012* EQUITY AND LIABILITIES Shareholder's Funds Share Capital 262.74 122.74 262.74 Reserves and Surplus 1,139.91 527.58 1,081.27 1,402.65 650.32 1344.01 Non-Current Liabilities Long-Term Borrowings 584.32 416.00 725.00 Long-Term Provisions 9.58 3.87 10.39 Other Long-Term Liabilities 3.05 1.57 1.00 596.95 421.44 736.39 Current Liabilities Trade Payables 176.24 80.54 36.10 Other Current Liabilities 593.05 225.19 684.77 Short-Term Provisions 3.79 5.04 3.87 773.08 310.77 724.74 Total 2,772.68 1,382.53 2,805.14 ASSETS Non-Current Assets Fixed Assets Tangible assets 81.16 32.53 136.89 Intangible assets 27.52 13.17 20.49 Capital work-in-progress 0.86 0.63 0.86 Intangible assets under development 195.98 112.95 255.96 305.52 159.28 414.2 Non-Current Investments 0.11 0.01 1,060.10 Deferred Tax Assets (net) 13.25 13.25 13.25 Long-Term Loans and Advances 1,177.75 1,060.10 1,017.05 Other Non-Current Assets 25.34 15.72 8.10 1,216.45 1,089.08 2098.5

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As at As at March As at March September 31, 2012 31, 2011 30, 2012* Current Assets Inventories 87.29 46.15 87.85 Trade Receivables 42.77 31.00 61.70 Cash and Bank Balances 71.81 43.96 73.60 Short-Term Loans and Advances 1,048.20 11.72 68.19 Other Current Assets 0.64 1.34 1.09 1,250.71 134.17 292.43 Total 2,772.68 1,382.53 2,805.14

* The unaudited balance sheet for half yearly was prepared in September 2012 and, therefore, there is no balance sheet as of December 2012.

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Summary of Standalone Statement of Profit and Loss (`in million) 9 months period 12 months period 12 months period ending ending March 31, ending March December 31, 2012 31, 2011 2012 (Audited) (Audited) (Un audited)* Revenue Revenue from Operations 610.03 427.48 636.46 Other Income 9.09 9.51 11.84 Total 619.12 436.99 648.3 Expenses Cost of materials 142.03 89.49 151.24 Operational expenses 31.08 24.64 28.36 Employee benefits expense 251.61 129.58 242.80 Other expenses 403.07 159.05 277.32 Finance cost 35.23 1.28 41.06 Depreciation &amortization expense 30.21 7.53 46.23 Total 893.23 411.57 787.01 Profit / (Loss) before tax (274.1) 25.42 (138.71) Tax expense: - 7.78 Current tax- Current year 1.68 - - Earlier years - (0.88) Deferred tax Profit / (Loss) for the year (275.79) 18.52 (138.71) Earnings per equity share of face value of `1 each Basic and Diluted (1.05) 0.19 (0.53)

*(Limited reviewed)

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Standalone Audited Cash flow Statement (`in million) As at March 31, 2012 As at March 31, 2011 A. Cash Flow from Operating Activities Net Profit/ (Loss) before tax (274.11) 25.42 Adjustments for: Depreciation / Amortisation 30.21 7.53 Interest Income (5.61) (6.35) Net gain on exchange difference (0.07) - Interest expense 30.10 1.28 Provision for doubtful debts (net) (3.78) 1.22 Loss on sale / discard of fixed assets 1.34 0.03 Operating Profit before Working Capital (221.92) 29.13 Changes Adjustments for: Decrease / (Increase) in trade and other receivables (95.55) (119.02) Decrease / (Increase) in Inventories (41.14) (17.06) Increase / (Decrease) in Trade and other payables 166.37 34.24 Cash Generated from Operations (192.24) (72.71) Direct Taxes paid (5.31) (5.88)

Net Cash from Operating Activities (A) (197.56) (78.59)

B. Cash Flow from Investing Activities Purchase of fixed assets (including Capital Work in (182.27) (116.19) Progress) Sale of fixed assets 0.04 0.01 Interest received 3.76 6.35 Investments in bank deposits (having original (7.07) (15.72) maturity of more than 12 months)

Net Cash from Investing Activities (B) (185.54) (125.55)

C. Cash Flow from Financing Activities Proceeds from Issue of Share capital - 0.50 Proceeds from Inter corporate Deposits 372.92 41.00 Repayment of Inter corporate deposits (155.00) (0.19) Proceeds from borrowings 325.00 - Repayment of borrowings (125.00) - Interest paid (6.98) (0.22) Net Cash from Financing Activities ( C ) 410.94 41.09

Net Changes in Cash and Cash Equivalent 27.85 (163.05) (A+B+C) Cash and Cash Equivalents at the beginning of the 43.96 207.01 year Cash and Cash Equivalents at the end of the 71.81 43.96 period Components of cash and cash equivalents Cash in hand 0.06 0.09 Balance with Scheduled Banks in - Current Accounts 60.96 23.46 - Fixed Deposits 10.79 20.41 Total cash and cash equivalents 71.81 43.96

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RISK FACTORS

An investment in the GDRs involves a high degree of risk. You should carefully consider all the information in this Prospectus, including the risks and uncertainties described below. 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 the GDRs could decline and you may lose all or part of your investment. The financial and other related implications of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However, there are risk factors where the impact is not financially quantifiable and hence is not disclosed. Any potential investor in, or purchaser of, the GDRs should pay particular attention to the fact that we are governed in India by a legal and regulatory environment, which, in some respects, may differ from that which prevails in other countries.

Unless otherwise stated, the financial information used in this section is derived from our audited consolidated financial statements prepared under Indian GAAP.

A. Risks in relation to our Company, our Company's brands and our operations

1. Any controversy that affects the "Essel" group of companies may have an adverse effect on our Company.

We are a part of the "Essel" group of companies. The Essel group is a recognized business house with a diverse portfolio of assets in media, packaging, entertainment, technology-enabled services, infrastructure development and education. We use the "Zee" brand name which has propelled our Company in its growth and continues to add value to service offerings. Any event that has a negative effect on the image of the group or on the groups' brand name may have an adverse effect on our business, such as the recent controversy in which an Essel Group entity was named by a leading industrialist for seeking subscription to advertisement space in lieu of suppressing news against a certain company.

Such news may negate our current marketing efforts, which in turn may affect our brands and in turn our offerings. Any such negative perception of the Essel Group may adversely affect our operations and profitability.

2. Failure to maintain recognition of our existing brands, and/or our inability to attract students and franchisees for our pre-schools, K-12 schools, vocational studies institutes and school solutions may adversely affect our operations and profitability.

We have managed to attract a large number of students in the past with the student enrollment in the Kidzee schools increasing at a rate of 29.89% and 22.31% for Fiscal 2012 and Fiscal 2011, respectively. Our ability to attract franchisees and/or students at our pre-schools, K-12 schools and vocational studies institutes depends on the recognition of our brands. The reputation and recognition of our Kidzee brand has contributed primarily to our growth and results of operations. Maintaining and enhancing recognition for our Kidzee brand along with our other existing brands, namely Mount Litera Zee School, Brain Café, Zee Institute of Media Arts and Zee Institute of Creative Arts is critical to ensure our growth and profitability.

Similarly, the success of our new offerings such as premium pre-schools under the Mount Litera World Preschool brand would depend upon the recognition and credibility of such brands and on our existing brands. Besides our marketing initiatives for our brands we would also need to maintain the quality of our teaching staff, curriculum, education modules and other services offered at our pre-schools, K-12 schools and vocational studies institutes. We cannot assure you that our current marketing efforts will be successful in promoting our brands. Failure to maintain recognition of our existing brands, and/or our inability to attract students and franchisees for our pre-schools, schools, vocational studies institutes and school solutions may affect our operations and profitability.

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3. If our franchisees fail to comply with teaching and course manuals, maintaining the school premises and operating the school in accordance with the standards prescribed by us, our reputation and the profitability of our pre-schools and K-12 schools franchises could be adversely affected.

Currently, most of our Kidzee play schools and majority of our K-12 schools are operated through franchise arrangements. The enrollment of students in our schools, therefore, is dependent upon our franchisees continuing to adhere to the standards prescribed by us and compliance with teaching methodologies and other instructions that are provided by us from time to time. While we believe our use of franchisees' is an important aspect of our business model, it also presents a number of challenges such as limited influence and supervision over the franchisees.

Our franchisees are independent operators and have a significant amount of flexibility in running their operations. All learning centres are required to follow our detailed operational guidelines, which we update regularly based on proven best practices developed at our directly-operated learning centres. Our staff also systematically monitors the quality of franchised learning centres. In spite of these measures, we have limited ability to directly control the quality of their services and employees. Consequently, franchisees may not successfully operate learning centres in a manner consistent with our standards and requirements or may not adequately hire and train teachers and other learning centre personnel. While we ultimately can take action to terminate franchises that do not comply with our standards, we may not be able to identify problems and take adequate actions quickly enough and, as a result, our image and reputation may suffer and our business and results of operations could be materially and adversely affected.

Since a substantial number of our Kidzee and Mount Litera Zee School work on a franchisee model, it may be difficult for us to ensure that our franchisees operate their businesses consistent with our standards. If these franchisees provide diminished quality of service to their customers, our brand, reputation and goodwill may suffer. Although we conduct periodic audits and quality checks on our franchisees to ensure quality, any failure by a franchisee to comply with teaching and course manuals, maintaining the school premises and operating the school in accordance with the standards prescribed by us, could result in lower enrollments, withdrawal of students and erosion or loss of our brand equity, which in turn could adversely affect our reputation, operations and profitability.

Franchisees, may from time to time disagree with our business strategies or our interpretation of rights and obligations under the franchise agreements. This may lead to disputes with our franchisees, which could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, if one or more of these franchisees were to become insolvent or otherwise were unwilling or unable to pay us their fees, it could affect our financial condition and results of operations.

4. We enter into management agreements with third parties to manage the operation of their schools. If such third party schools are not profitable, it may have an adverse effect on our revenues.

We enter into management agreements with trusts, societies, and/or organizations which are responsible for the operation of the schools. Our Company assists such organizations with the day to day operations including teacher and principal recruitment and training, providing brand name, school management software, multimedia content, student kits and classroom infrastructure including furniture, fixture and equipments. These organizations are required to establish, manage and conduct our school program by constitution of a school management committee, wherein our Company reserves a right to have a representation in the composition of the committee. In the event such schools are not profitable, it may have an effect on our revenues.

5. We rely on our franchisees, and if our franchisees do not manage their franchisee in accordance with the terms of our agreement or indulge in malpractices, our growth and success may be affected.

We earn a major part of our operating revenues from our franchisees. Part of our business strategy

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depends on the successful franchising of various educational institutions. We may not be able to identify suitable franchisees or we may not adequately manage our existing franchisees. Although, we have developed criteria to evaluate and screen prospective franchisees, we cannot be certain that the franchisees we select will have the business acumen or financial resources necessary to operate successful franchises.

We conduct audits on our franchisees in order to maintain consistency amongst various franchisees and to keep a check on various malpractices including, but not limited to, plagiarising our Company's intellectual property by copying course content or under reporting the number of enrollments. If one or more of these franchisees were to become insolvent or otherwise were unwilling or unable to pay us their fees or indulge in malpractices, it could adversely affect our financial condition and results of operations.

6. In the past, our Company has incurred losses from operations before other income, finance costs, taxes and negative cash flows. If our Company continues to incur losses and/or its operating performance does not improve in the future, our results of operations and profitability could be adversely affected.

For the Fiscal ending March 31, 2012 and for the six (6) month period ending September 30, 2012, our Company incurred a loss before tax of `274.10 million and `58.64 million, respectively, and loss after tax of `275.79 million and 58.64 million, respectively. If our Company is unable to improve its operating performance and regain profitability, its business, prospects, results of operations and financial conditions could be adversely affected. The losses for the aforesaid periods were primarily on account of significant expenditure incurred by our Company in connection with (i) our current expansion plans for Fiscal 2012 (ii) brand building exercise, and (iii) establishment of the Brain Café program and costs related thereto.

We have experienced negative cash flows from operating activities as detailed below:

(`in million) Particulars Year ended March Year ended March 31, 2012 31, 2011 Operating (Loss)/Profit before Working Capital Changes (221.92) 29.12 Cash absorbed from operations (192.24) (72.71) Net cash from operating activities (197.56) (78.59)

For further details in connection with negative cash flows, please see "Financial Statements". Negative cash flows over extended periods, or significant negative cash flows in the short term could materially impact our ability to operate our business and implement our growth plans. As a result, our business, financial condition and results of operations could be materially and adversely affected.

7. If a substantial number of our franchisees cannot or will not continue their business relationship when their franchise agreements with us expire, our business may suffer.

Our franchise agreements generally have terms ranging from six years for pre-schools to twelve years for K-12 schools, and our franchisees may not be willing or able to renew their franchise agreements with us. For example, franchisees may decide not to renew due to low sales volumes or high costs, or may be unable to renew due to failure to secure lease renewals. In order for a franchisee to renew its franchise agreement with us, it typically must pay a franchise fee, student kits, furniture and infrastructure provided by us and a royalty on student admissions and fees collected. If a substantial number of our franchisees cannot or do not renew their franchise agreements with us, the size of our network may decrease, we may be unable to maintain awareness of our brand and we may not be able to successfully execute our expansion strategy due to which our business and results of operations could be materially and adversely affected.

8. We have limited experience in managing and running self managed pre-schools, which could affect the profitability of our newly launched premium playschool under the brand Mount Litera

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World Preschool and our existing brand Kidzee. We also have limited experience in managing operations of K-12 schools which could affect our ability to obtain additional management contracts of similar K-12 schools.

Up to Fiscal 2012, a majority of the pre-schools and K-12 schools were operated under franchise arrangements. In 2011, we have established our first premium playschool at Mumbai under the brand Mount Litera World Preschool, which is aimed at offering premium pre-school services. In Fiscal 2012, we also forayed into our own Kidzee in Thane. We also manage K-12 Schools at Bhatinda and Nagothane and propose to have similar schools at various locations including, Patiala, Marmugao and Mumbai. To ensure steady revenues from the aforesaid ventures, we will be required to invest significantly in marketing and brand building.

Our revenue and profitability from the new ventures depend on, among other things, the number of students we can attract to our self-managed schools and the fee structure for students at such schools. If the self-managed schools are unable to generate sufficient revenue to offset operating costs, or if we are unable to effectively achieve resource sharing among the learning centres to reduce costs, our results of operations will be adversely affected.

9. Failure, (i) to develop new teaching methodologies, (ii) to evolve our existing teacher and student modules and introduce new courses and service offerings to suit changing economies, trends and requirements, or, (iii) to meet parents’ expectations, could adversely affect our operations, profitability and competitive position.

Our business is significantly dependent upon the content and organization of our teacher modules and student curriculum and programs. In order to sustain student enrollments and our profitability, we need to develop and evolve our course and service offerings. Such changes would be done on the basis of new market demands and change in trends relevant to our business, including but not limited to, the types of courses that are popular among students, effective teaching methods and physical infrastructure at our schools and institutes. To further grow our business, we intend to continue evolving our existing courses, developing new courses and service offerings and explore adopting innovative teaching methods to meet changing expectations of students and parents. However, operational, logistical, regulatory or other bottlenecks could delay or prevent the introduction of one or more of our new courses and services or our adoption of new teaching methods. Moreover, if our new courses and service offerings do not match the quality or popularity of those developed by our competitors or achieve widespread market acceptance, we may lose market share which in turn could adversely affect our profitability.

10. The continued recognition of our K-12 schools depends upon the ability of such schools to maintain affiliations/accreditations from recognized education boards such as the Central Board of Secondary Education, ("CBSE"), the Council for Indian School Certificate Examinations, ("CISCE") and/or the International Baccalaureate, ("IB"), and to adhere to the requirements prescribed by such boards.

As at December 31, 2012, our company has 54 operational Mount Litera Zee Schools with about 10,000 students. The recognition of our K-12 schools and student enrollments significantly depends upon such schools being able to obtain and maintain accreditations/affiliations with recognized education boards such as CBSE, CISCE and/or IB. In order to obtain such accreditations and affiliations, such schools must comply with certain parameters and by-laws of such education boards which typically include conditions in connection with (a) minimum area of the school; (b) facilities provided at such school; (c) period of leasehold rights over the school property; and (d) the organizational and management structure of such schools. Such education boards typically have the right to withdraw their affiliation if, in their view, any school fails to meet the requirements prescribed by them from time to time. Failure of such schools to obtain and/or maintain such accreditations and/or affiliations from recognized education boards could affect our reputation, credibility, operations and profitability.

11. If we and/or our franchisees are not able to continue to hire, train and retain qualified teachers and administrative staff, we may not be able to maintain consistent quality in education and

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management throughout all our institutions which would materially and adversely affect our brand, business and results of operations.

Qualified teachers and administrative staff are critical to maintain the quality of our courses at all our institutions and thereby maintain our brand and reputation. There are a limited number of teachers with the necessary experience and proficiency in their respective subjects to teach our courses in the local markets in which we operate. We and our franchisees also seek to hire committed and dedicated, qualified and well trained teachers who are capable of delivering high quality instructions. We must also provide continuous training to our teachers so that they can stay abreast of changes in key trends necessary to effectively teach our courses, including admissions and assessment tests and university admissions standards.

The success of our pre-schools and K-12 Schools depends on training and development of our teaching staff. We provide training on a regular basis to our teachers at various training sessions which help us to improve our quality and delivery standards. If we are unable to continue to provide adequate training and development to our pre-school teachers, or at all, it may adversely affect the quality of our teaching services' which may have an adverse impact on our business.

If our competitors offer better salaries and incentives for teaching staff than those offered in our schools and institutes, we may face significant levels of attrition. We may not be able to hire, train and retain an adequate number of qualified teachers to keep pace with our anticipated growth while maintaining consistent teaching quality across many different schools and institutes and programs in different geographic locations. Shortages of qualified teachers or decreases in the quality of our instruction, whether actual or perceived, in one or more of our markets, may have a material and adverse effect on our reputation and/or business. In addition, the level of compensation required to hire and retain qualified teachers may in the future reach levels that could materially and adversely affect our profitability and profit margins.

12. Expansion of private education, increased competition and the availability to parents of larger number of competitive services at competitive fees could adversely affect the fees that we charge for our services, which in turn would adversely affect our profitability.

The private education sector in India is expected to continue growing due to demand for quality education, along with an increase in income levels.

If the number of pre-schools in India increases, we may face competition from other pre-schools on various factors including fees. Since parents are usually sensitive towards increase in tuition fees, we may be forced to benchmark our fees as per the market standards. We may lose our flexibility to decide the fees for our pre-schools, which in turn may have a material adverse affect on our business and revenues. If the number of schools increases, we may face increasing competition from other schools on various factors including enrolments. If the enrolments in the K-12 schools to which we provide educational services decreases, it may adversely affect our revenues and profitability.

13. We may be exposed to litigation or other liabilities in the course of our business

We are exposed to potential legal and other claims or disputes in the course of our business, including contractual disputes and other liability claims. We take legal advice in respect of such claims and, where relevant, make provisions and disclosure regarding such claims in our consolidated financial statements. Although, we seek to minimize the risk of such claims arising, and their impact if they do arise, such claims will arise from time to time and could adversely affect our business, results of operations or financial condition and performance.

14. Our functioning and profitability may in the future be adversely affected by the introduction of compulsory statutory and/or regulatory parameters.

We are not in a position to predict whether any legislation, regulations, guidelines etc. will be passed or made effective in the future by any statutory or regulatory authority to regulate activities in the

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education sector. Any such legislation may affect, inter-alia, our operating costs and timelines. For example, a regulation or legislation providing mandatory guidelines regarding functioning, operation, opening of pre-schools, providing educational services, enrolment of students and chargeable fee may be introduced. Such guidelines could adversely affect us in, inter-alia, the following ways:

(a) Functioning of pre-schools: We may be subjected to certain standards for functioning of our pre-schools which may impose requirements like minimum area for classrooms, basic infrastructure requirements and inclusion of additional facilities like medical aid, cafeteria, recreation facility etc. In such circumstances, we may have to either relocate our pre-schools or we may have to add these facilities by incurring additional cost.

(b) Educational services to K-12 schools: We may be required to register our Company with a state government for providing educational services. Further, the Government may prescribe and restrict the services that may be outsourced by K-12 schools to companies such as us.

(c) Enrolment of students: We may be subjected to restrictions in terms of student enrolments per class. Though we believe we maintain a healthy student teacher classroom ratio, any restriction in this regard would affect our ability to further enroll students, forcing us to add additional classrooms and faculty to adhere to such requirements.

(d) Fees: We may be subjected to restrictions on the fees that can be charged by us for some or all of our services.

The Right to Education Bill was introduced as part of the 86th Amendment in the Indian Constitution which provides that it is the duty of the Government to provide free and compulsory education to all students from the ages of 6-14. It also provides for reservation of up to 25 per cent. for EWS students in the neighborhood (as per the Indian census definition) in private unaided schools. We cannot be sure how such regulation, if enacted, will be enforced. If the fees that we charge are capped or we have to provide free education to certain students (for which we will be compensated by the Government), it may have an adverse effect on our business, results of operations or financial condition and performance

15. If our Company or our franchisees are unable to maintain or renew leases and/or licenses in a timely manner and on commercially favourable terms or at all for rented premises where our Company or our pre-schools and K-12 schools operate from, our business and operations may be adversely affected.

We typically enter into lease agreements for our premises. If any of our occupation arrangements are terminated or not renewed on favorable conditions or at all, we may be required to relocate our operations from such premises and/or may be unable to acquire new premises in a timely favorable manner or at all. The time and cost involved in any such relocation could adversely affect our operations, profitability and reputation.

We may not be able to assess or identify certain risks and liabilities associated with irregularities in the title of the properties occupied by us. Some of our immovable properties used for our operations have one or more irregularities in title, inter alia including inadequate stamping and/or non-registration of deeds and/or agreements. If we do not derive, or are unable to obtain clear title to these properties and consequently are unable to carry out our operations in connection with such property, in a timely manner, our financial position, profitability and operations may be adversely affected.

A significant number of our Kidzee franchisees operate from rented properties. Students at our pre- school franchises are usually from areas in and around the location of our pre-schools and K-12 schools. If any of our franchisees occupation arrangements are terminated or not renewed on acceptable conditions, our franchisees may be required to relocate such pre-schools and/or K-12 schools or may be forced to close down some of these schools, which may affect the number of students enrolled in such pre-schools and K-12 schools. Any reduction in the number of students enrolled with our franchises would impair the growth of our business and network and which in turn may adversely affect our revenue and profits.

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16. Strong competition in the business of pre-schools and K-12 schools could decrease our market share and compel us to reduce our franchisee/student fees.

The education sector in India is largely unorganized and the business of pre-schools is highly fragmented and competitive. In addition to competition from organized players in the pre-school business, we face competition from unorganized players in the market. In our pre-school segment, our competition includes Euro Kids, Kangaroo Kids, Mother's Pride, Tree House, Apple Kids, Little Millennium, Bachpan, Shemrock and DRS Kids. In our K-12 school segment we face competition from traditional school chains such as Delhi Public School, DAV schools and Jesuit schools as well as from relatively newer entrants such as Millennium Schools and Ryan's International. Some of our competitors may have greater brand recall, larger financial and other resources than we have, which may enable them to compete against us more effectively for future enrolments. We may also face competition from new entrants. We may not be able to compete successfully against current or future competitors and may have to reduce our student and/or franchisee fees or increase our spending in order to retain our franchisees, students and teachers. This may have an adverse impact on our enrolments, revenues and profitability. Further, the shift in the teaching methods from traditional model to virtual model, use of technology for digitizing the content adds to the competition. Any newer technology can be disruptive for our Company's pre-school and K-12 school business and can increase competition in the market.

17. Our business is seasonal in nature which is susceptible to the risk of enrolments being lower than expected.

Our business is linked to the academic cycle. Historically, our enrolments in the pre-schools and K-12 schools have been higher during the first and fourth quarter of a Fiscal year. As a result of this, any data regarding enrolments may not be comparable or a meaningful indicator of our future enrolments. It is possible that in certain time periods our enrolments may be below expectations. Such analysis of our enrolments on specific time periods, for example monthly or quarterly basis, may be perceived as negative indicator of our growth, which may adversely impact the market price of our Shares.

18. We depend on the intellectual property created by us, such as our course content, curriculum and teaching methodologies and our brands. Any failure to protect our intellectual property rights may adversely affect our competitive position, business, financial condition and results of operations.

We rely on trademark laws to protect and to regulate the use of our proprietary intellectual property rights, which is critical to our business. We routinely enter into confidentiality agreements with employees, consultants and third parties to protect our proprietary know-how. However, if such agreements are breached, they may not provide meaningful protection or may not provide adequate remedies.

We believe that one of our core competencies is in designing and developing educational modules which are suited to the requirements of students and match up to their preferred learning patterns and aptitude. For our Kidzee pre-schools we have developed our own proprietary pedagogy (namely teaching processes), under the name "iLLUME", which is an education pedagogy independently validated by M S University, Baroda, in January 2010. Our proprietary K-12 education model, "Litera Octave" is an integrated educational model that has been developed pursuant to extensive research and development integrating various components such as content, infrastructure, classroom design, assessment and systems that impact the child during his/her learning and development in school. We neither have any system or mechanism to track the sale of such course materials in open market nor can we effectively restrict duplication of the material. Hence, the course material may be easily availed, copied and distributed by outsiders. We cannot assure you that we can contain plagiarism of our course material. If our course material is plagiarized, it may adversely affect our results of operations and competitive position.

We also depend upon our trademarks and logos to promote our schools, institutes and school solutions. Any failure to protect our intellectual property rights may adversely affect our competitive position

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business, financial condition and results of our operations. We have registered trademarks and logos in respect to our business. If any of our unregistered intellectual property rights are registered by a third party, we may not be able to make use of such intellectual property rights in connection with our business and consequently, we may be unable to capitalize on the brand recognition associated with our Company. Until such time that we receive registered trademarks, we can only seek relief against "passing off". Accordingly, we may be required to invest significant resources in developing a new brand. Further, the intellectual property protection obtained by us may be inadequate and/or we may be unable to detect any unauthorized use of such intellectual property and/or that we may need to undertake expensive and time-consuming litigation to protect our intellectual property rights, all of which may have a material adverse effect on us.

19. We may be exposed to infringement claims on intellectual property rights by third parties, which could be costly and time-consuming to defend and may adversely affect our results of operation and financial condition.

Third parties may intentionally or inadvertently infringe our intellectual property rights. Third parties may challenge intellectual property rights held by us and our current patent and trademark applications may not proceed to registration. Third parties, including our competitors, may in the future make claims or initiate litigation that assert trademark and other intellectual property rights in brand names that are relevant to us. As we continue to expand our operations, the risk of such claims may increase. In such matters, claims may be made directly against our Company. Regardless of the merit of any of these claims, each can be time-consuming, result in costly litigation and divert the attention of our management personnel.

To resolve any claims made against us, we may be required to develop alternative non-infringing intellectual property rights or obtain a license for the use of relevant intellectual property, each of which would be costly and time consuming. If any infringement or other intellectual property-based claim made against us by any third party was successful, or if we failed to develop non-infringing technology or license the proprietary rights on commercially reasonable terms and conditions, we would be unable to continue using such intellectual property and our business, results of operations and financial condition could be adversely affected.

20. If we are unable to train and develop our teaching staff at our pre-schools, it may have an adverse impact on our business.

The success of our pre-schools and K-12 Schools depends on training and development of our teaching staff. We provide training on a regular basis to our teachers at various training sessions which help us to improve our quality and delivery standards. If we are unable to continue to provide adequate training and development to our pre-school teachers, or at all, it may adversely affect the quality of our teaching services, which may have an adverse impact on our business.

21. The license granted by Gakken J Holdings Company Limited, Japan ("Gakken") to open and operate Gakken Science experiment classrooms within India is non-exclusive.

Zee Learn Gakken Science Academy, a venture of our Company in collaboration with Gakken has promoted the Braincafé science module which is a four level concept builder program for students of class III to VIII. The program runs in schools as a supplement to the regular curriculum and aims at bringing about a better understanding, application and appreciation of science. As at December 31, 2012, a total of 649 schools have signed-up for implementing the Braincafé module of which 240 schools have already implemented the said module.

The aforesaid program has been developed pursuant to a non-exclusive license to open and operate the Gakken Science experiment classrooms within India pursuant to the Gakken Agreement. Although, pursuant to a letter dated October 20, 2010, Gakken confirmed our appointment as an exclusive partner in India for the aforesaid program for the term of the agreement, we may continue to be open for competition, in case Gakken does not honor its commitment given through the letter dated October 20, 2010 for exclusivity.

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22. Our indebtedness, conditions and restrictions imposed by our financing arrangements including a failure to obtain additional capital in the future could adversely affect our ability to conduct our business and operations or could adversely affect our ability to grow.

We have entered into various agreements with banks and financial institutions for long-term borrowings of `875 million. These facilities contain restrictive covenants, including, but not limited to, requirements that we obtain written consent from lenders prior to incurring further debt, creating further encumbrances on our assets, disposing of assets outside the ordinary course of business, effecting any scheme of amalgamation or restructuring, undertaking guarantee obligations, declaring dividends, incurring capital expenditures beyond certain limits, undertaking new projects or making investments. In addition, our loan agreement contains financial covenants that require us to maintain, among other things, a specified debt-equity ratio, debt-service-cover ratio and fixed-asset-coverage- ratio. There can be no assurance that we will be able to comply with these financial or other covenants or that we will be able to obtain the consents necessary to take the actions we believe are required to operate and grow our business. Certain of our loans may be called at any time by our lenders pursuant to terms of the relevant agreements. An event of default under any debt instrument, if not cured or waived, could have a material adverse effect on us.

We may, from time to time, need additional financing in order to fund our future growth, more particularly for setting up more self-operated pre-schools and K-12 schools in order to expand our network. The amount, timing, cost and terms of such additional financing will vary primarily depending on the timing, location of our pre-schools and the expected profitability of our operations. If such financing is not available on favorable terms or at all, we may not be able to fully implement our growth strategy in a timely and cost efficient manner.

We cannot assure you that our business will generate sufficient cash to enable us to service our debt or to fund our other liquidity needs. In addition, we may need to refinance all or a portion of our debt on or before maturity. We cannot assure you that we will be able to refinance any of our debt on commercially reasonable terms or at all. We have historically depended upon our Promoter Group/Essel group entities to provide financing assistance and providing guarantees, where required, to our Company. For further details please refer to the section titled "Financial Statements". There can be no assurance that we would be able to avail such financial assistance in future from our Promoter Group/Essel group entities in a timely manner or at all.

23. If we are unable to obtain, maintain or renew our statutory and regulatory licenses and approvals, our business may be materially and adversely affected.

We are required to obtain statutory and regulatory license and approval for our operations which vary from state to state in India, including but not limited to, statutory and regulatory licenses and approvals for our pre-schools, Shop and Establishment Act.

Our franchisees must obtain and maintain certain licenses and approvals for the schools operated by them. We and such franchisees may not receive such licenses and approvals or renewal of such licenses and approvals may not happen in the time frame anticipated by us or at all. We and our franchisees may also be faced with investigations and inquiries from various governmental authorities for not obtaining licenses and approvals. Any decision to not apply for the approvals and permits and inability to obtain or renew the approvals and permits on time or at all, may affect our business and result of operations.

24. Difference in regulatory policies or legislation between different states which govern K-12 schools may add to our operational costs.

Education is a matter of concurrent legislation. Hence, both the state governments as well as the central government are empowered to enact legislation on this matter. Since we provide educational services to K-12 schools, we expose ourselves to such regulatory impositions as may arise in future. The state governments may introduce different policies or laws regarding educational services. There might be a situation where K-12 schools situated in different states are subject to different policies, regulations or laws. These may add to our operational costs in connection with providing and monitoring the relevant services which in turn may affect our business and result of operations.

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25. Our Company may suffer from uninsured losses.

Our business and assets could suffer damage from fire, misappropriation or other causes, resulting in losses, which may not be fully compensated by insurance. In addition, there are certain types of losses, such as those from claims or litigation or natural disasters, which may be uninsured, uninsurable or are not insurable at a reasonable premium. Our Company has taken out insurance policies, as deemed necessary and generally undertaken by companies in this industry, covering property, equipment, furniture fixtures, leasehold improvements for loss due to, among others, earthquake, fire and shock, terrorism, flood, material damage to electronic equipment, employee fidelity coverage and all risk coverage for portable equipment. We have not undertaken any insurance for students studying at institutions managed by us. Our Company also has personal accident insurance policies and medi-claim insurance policies for its employees.

We cannot assure you that the kind and level of insurance maintained by us is adequate. Any damage suffered by us in respect of uninsured events would not be covered by such insurance policies and we would bear the effect of such losses. We cannot assure you that any claim under the insurance policies maintained by us will be honoured fully or on time. Should an uninsured loss or a loss in excess of insured limits occur, we would lose the capital invested in and the anticipated revenue from the affected property or business. We would also remain liable for any debt or other financial obligation related to that property or business. Any of these losses could adversely affect our business and financial condition. We cannot provide any assurance that adequate insurance coverage may continue to be available in the future on reasonable terms or at all. Our insurers could also disclaim coverage of future claims. Any of these actions could also adversely affect our business.

Any payments we make to cover any losses, damages or liabilities or any delays we experience in receiving appropriate payments from our insurers could have an adverse effect on our business, financial condition and results of operations.

26. Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

We have not paid dividend since incorporation and there can be no assurance that dividend will be paid in future. Our ability to pay dividend in future will depend on the earnings, financial condition, cash flow, working capital requirements and capital expenditure. Any future determination as to the declaration and payment of dividend will be at the discretion of our Board and will depend on factors that our Board deems relevant, including among others, our results of future earnings, financial condition, cash requirement, business prospects and any other financing arrangement.

27. Our Company has in the past entered into related party transactions and may continue to do so in the future.

Our Company has in the past entered into transactions with certain of our Company's Promoters / Directors / entities promoted by Promoters and/or subsidiaries. Furthermore, it is likely that our Company may enter into related party transactions in the future as well. While our Company believes that all such transactions have been / would be conducted on an arm's length basis, we can provide no assurance that it could not have achieved more favourable terms had such transactions not been entered into with related parties.

28. If we lose one or more of our key personnel or senior management, our operations and business may suffer.

Our business depends on our ability to attract and retain highly qualified personnel. We face significant competition in attracting and retaining personnel who possess the skill sets that we seek. In addition, key personnel may leave us and subsequently compete against us. We compete for such personnel with

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other companies, including, new entrants into this industry, in particular foreign entrants, academic institutions and government entities and cannot provide any assurance that we will be successful in hiring or retaining such qualified and experienced personnel.

The inability to hire or retain such qualified and experienced personnel may materially and adversely affect our business, results of operations and financial condition. In particular, we are heavily dependent upon our senior management in relation to their expertise in the education industry and the relationships cultivated by them. The departure of any of our senior management could materially adversely affect our business, financial condition and results of operations. Inability to attract and retain appropriately qualified or experienced managerial personnel, or the loss of key personnel could adversely affect our business, prospects, results of operations and financial condition.

29. If any of our contingent liabilities materialise, our liquidity, business, prospects, financial condition and results of operations could be affected to that extent.

As of March 31, 2012 and March 31, 2011, our aggregate contingent liabilities consist of liability due to various claims against our Company not acknowledged as debts and disputed indirect tax demands amounting to `6.98 million and `5.4 million, respectively and `19.81 million and `19.81, respectively. In the event that any of these contingent liabilities materialize, our results of operation and financial condition may be affected to that extent.

The contingent liabilities of our Company, which were not provided for are given below: (`in million) Particulars As of March 31, 2012 As of March 31, 2011 Claims against Company not acknowledged as 6.98 5.44 debts Disputed Indirect tax demands 19.81 19.81 Corporate guarantee for subsidiary to the 11.14 - extent of loans availed/outstanding Total 37.93 25.25

If any of the contingent liabilities specified above materialise, our liquidity, business, prospects, financial condition and results of operations could be adversely affected. For further details in connection with our contingent liabilities, please see the section titled "Financial Statements".

30. Our Promoter Group has significant control on our Company, which enables them to influence the outcome of matters submitted to shareholders for approval.

As of March 31, 2013, our Promoter Group collectively held 72.89% of our paid-up equity share capital. Our Promoter Group has the ability to control our business including matters relating to any sale of all or substantially all of our assets, the timing and distribution of dividends and the election or termination of appointment of our officers and directors. This control could delay, defer or prevent a change in control of our Company, impede a merger, consolidation, takeover or other business combination involving our Company or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company even if it is in our Company's best interest. .

31. We are vulnerable to failures of our information technology systems, which could adversely affect our business.

Our information technology systems are a critical part of our business and help us manage processes and records. Any technical failures associated with our information technology systems, including those caused by computer viruses and other unauthorized tampering, may cause interruptions in our ability to provide services to our clients. In such an event interruption of our operations may have an adverse impact on our business and operations.

32. Our business and activities will be regulated by the Competition Act, 2002 ("Competition Act") and any application of the Competition Act to us could have an adverse effect on our business,

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financial condition and results of operations.

The Competition Act is designed to prevent business practices that have an appreciable adverse effect on competition in India. Under the Competition Act, any arrangement, understanding or action in concert between enterprises, whether formal or informal, which causes or is likely to cause an appreciable adverse effect on competition in India is void and attracts substantial monetary penalties. Any agreement which directly or indirectly determines purchase or sale prices, limits or controls production, shares the market by way of geographical area, market or number of customers in the market is presumed to have an appreciable adverse effect on competition.

Effective June 1, 2011, all combinations have to be notified to the CCI within 30 days of the execution of any agreement or other document for any acquisition of assets, shares, voting rights or control of an enterprise under the Competition Act. If we are affected, directly or indirectly, by any provision of the Companies Act, or its application or interpretation, including any enforcement proceedings initiated by the Competition Commission and any adverse publicity that may be generated because of the scrutiny or prosecution by the Competition Commission of India, it may have a material adverse effect on our business, financial condition and operation.

B. Risks in relation to Investment in Indian Companies

33. 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 has been adversely affected by the current global economic uncertainties and liquidity crisis, volatility in interest rates, currency exchange rates, commodity and electricity prices, Government regulations and policies, adverse conditions affecting agriculture, and various other factors. Risk management techniques by banks and lenders in such circumstances could affect the availability of funds in the future or the withdrawal of our existing credit facilities. A slowdown in the Indian economy could adversely affect our business, including our ability to implement our strategy and consider future expansion plans. 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 a slowdown or recession in the economic growth of other major countries, especially the United States, would have an impact on the growth of the Indian economy, and the Government policy may change in response to such conditions. While the Government has generally been keen on encouraging private participation in the industrial sector, any adverse change in policy could result in a further 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 industrial development. Any downturn in the macroeconomic environment in India could materially and adversely affect the price of the Shares and the GDRs and our business, financial condition and results of operations.

34. Political instability or changes in the Government could delay the further liberalization of the Indian economy and adversely affect economic conditions in India generally and our business

Our business may be affected by changes in Government policy, taxation, social and civil unrest and other political, economic and other developments in or affecting India. Since 1991, successive Governments have pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. Nevertheless, the roles of the Government and State Governments in the Indian economy as producers, consumers and regulators have remained significant. A significant change in India‘s economic liberalization and deregulation policies could adversely affect business and economic conditions in India generally, and our business in particular, if new restrictions on the private sector are introduced or if existing restrictions are increased.

35. If regional hostilities, terrorist attacks or social unrest or conflicts involving India could affect the financial markets in India and adversely affect our business.

The Asian region has from time to time experienced instances of civil unrest, terrorist attacks and hostilities among neighbouring countries. Since early 2003, there have been military hostilities and

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civil unrest in Afghanistan and Iraq. Military activity or terrorist attacks in India in the future could influence the Indian economy by creating a greater perception that investments in Indian companies involve higher degrees of risk. These hostilities and tensions could lead to political or economic instability in India and a possible adverse effect on the Indian economy, our Company‘s business, its future financial performance and on the market for securities of Indian companies, including the Shares.

Furthermore, India has also experienced social unrest in some parts of the country. If such tensions occur in other parts of the country, leading to overall political and economic instability, it could have an adverse effect on our Company‘s business, future financial performance and the market for the Shares.

36. Financial instability in other countries could disrupt Indian financial markets and our Company’s business and have an adverse effect on the market for the Shares

The Indian financial markets and the Indian economy are influenced by economic and market conditions in other countries, particularly emerging market countries in Asia. Financial turmoil in Asia, Latin America, Russia and elsewhere in the world in recent years has had limited impact on the Indian economy. Although economic conditions are different in each country, investors‘ reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets due to negative economic development such as rising fiscal or trade deficit or a default on sovereign debt in emerging markets may cause volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. This in turn could negatively impact on the movement of exchange rates and interest rates in India. Any significant financial disruption could have an adverse effect on our Company‘s business, future financial performance and the market for the Shares.

37. If inflation were to rise in India, our Company might not be able to increase the prices of its products in order to pass costs on to its customers and our Company’s profits might decline

As of March 31, 2012, inflation based on the wholesale price index inflation rate in India was 7.69% compared to 9.68% as of March 31, 2011. However, the rate of inflation may rise in the future and our Company may not be able to pass these costs on to its customers by increasing the price our Company charges for its products. If this occurs, our Company‘s profits may decline.

38. Investors may have difficulty enforcing foreign judgments against our Company or its management

The enforcement by investors of civil liabilities, including the ability to effect service of process and to enforce judgments obtained in courts outside of India may be affected adversely by the fact that we are incorporated under the laws of the Republic of India, and most of our executive officers and directors reside in India. All of our assets and most of the assets of our executive officers and directors are also located in India. As a result, it may be difficult to effect service of process upon us and any of these persons outside of India or to enforce judgments obtained against us and these persons, in courts outside of India.

Section 44A of the Civil Code, as amended, provides that where a foreign judgment has been rendered by a court in any country or territory outside India, which the Government has by notification declared to be a 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. The United Kingdom has been declared by the Government to be a reciprocating territory for the purposes of Section 44A. However, the United States has not been declared by the Government to be a reciprocating territory for the purposes of Section 44A. A judgment of a court in the United States may be enforced in India only by a suit upon the judgment, subject to Section 13 of the Civil Code, and not by proceedings in execution.

The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. Generally, there are considerable delays in the

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disposal of suits by Indian courts. 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 judgments if it viewed the amount of damages awarded as excessive or inconsistent with Indian practice. A party seeking to enforce a foreign judgment in India is required to obtain prior approval from the RBI under FEMA to repatriate any amount recovered. See the section titled "Enforcement of Civil Liabilities"

39. There may be less company information available in Indian securities markets than in securities markets in other more developed countries

There is a difference between the level of regulation, disclosure and monitoring of the Indian securities markets and the activities of investors, brokers and other participants and that of markets in the United States and other more developed economies. SEBI is responsible for ensuring and improving disclosure and other regulatory standards for the Indian securities markets. SEBI has issued regulations and guidelines on disclosure requirements, insider trading and other matters. There may, however, be less publicly available information about Indian companies than is regularly made available by public companies in more developed economies. As a result investors may have access to less information about the business, results of operations and financial conditions of our Company and of the competitors that also are listed on the BSE and the NSE and other stock exchanges in India than investors may have in the case of companies subject to the reporting requirements of other, more developed countries.

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

Legal principles relating to 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 than as a shareholder of a corporation in another jurisdiction.

41. A slowdown in economic growth in India could cause our Company’s business to suffer

Our Company‘s performance and growth are dependent on the health of the Indian economy. The economy could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalisation policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, commodity and energy prices and various other factors. Any slowdown in the Indian economy may adversely impact our Company‘s business and financial performance and the price of the Shares.

The Indian securities markets are smaller than securities markets in more developed economies. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. These exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the market price and liquidity of the Shares could be adversely affected.

42. Natural calamities could have a negative impact on the Indian economy and cause our Company’s business to suffer.

India has experienced natural calamities such as earthquakes, tsunami, floods and drought in the past few years. The extent and severity of these natural disasters determine their impact on the Indian economy. In addition, prolonged spells of below normal rainfall or other natural calamities could have a negative impact on the Indian economy, adversely affecting our Company‘s business and the price of

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the Shares.

Pandemic disease, caused by a virus such as H5N1 (the ‗avian flu‘ virus), or H1N1 (the ‗swine flu‘ virus), could have a severe adverse effect on our Company‘s business. The potential impact of such a pandemic on our Company‘s results of operations and financial position is highly speculative, and would depend on numerous factors, including: . the rate of contagion if and when that occurs; . the regions of the world most affected; . the effectiveness of treatment of the infected population; . our Company‘s insurance coverage and related exclusions; . the possible macroeconomic effects of a pandemic on our Company‘s business; . the effect of lapses and surrenders of existing policies, as well as sales of new policies.

43. Any downgrading of India’s debt rating by an independent international rating agency may harm our Company’s ability to raise debt financing and have an impact and the trading price of the GDRs and the Shares

Any adverse revisions to India‘s credit ratings for domestic and international debt by international rating agencies may adversely affect our ability to raise additional financing and the interest rates and other commercial terms on which such additional financing is available. This could have an adverse effect on our business, financial condition, results of operations and future financial performance and our ability to obtain financing to fund our growth, as well as the trading price of the GDRs and the Shares.

44. Trade deficits could have a negative effect on our business and the trading price of the Shares.

India‗s trade relationships with other countries can influence Indian economic conditions. If India's trade deficits increase or become unmanageable, the Indian economy, and consequently our business, future financial performance and the trading price of the Shares could be adversely affected.

45. The market value of your investment may fluctuate due to the volatility of the Indian securities markets

Indian securities markets are more volatile than the securities markets in certain countries which are members of the OECD. Indian stock exchanges have, in the past, experienced substantial fluctuations in the prices of listed securities.

Despite increased annual turnover of equity, commodity, and currency products on the Indian stock exchanges in recent years, these stock exchanges (including the BSE and the NSE) have experienced problems which, if such or similar problems were to continue or recur, could affect the market price and liquidity of the securities of Indian companies, including the Shares. These problems have included temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of 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, stock exchanges and other regulatory bodies, which in some cases may have a negative effect on market sentiment.

46. Significant differences exist between Indian GAAP and International Accounting Standards ("IAS")/ International Financial Reporting Standards ("IFRS"), which may be material to the financial information prepared and presented in accordance with Indian GAAP contained in this Prospectus. If our Company is mandated to adopt IFRS in preparing our financial statements, the same could have a materially affect the presentation of our financial statements.

As stated in the reports of our Auditors included in this Prospectus, the financial statements included in this Prospectus are prepared and presented in conformity with Indian GAAP. Our Company is not required, and no attempt has been made, to reconcile any of the information given in this Prospectus to any other principles or to base it on any other standards. Indian GAAP differs from accounting

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principles and auditing standards with which prospective investors may be familiar in other countries, such as IAS/IFRS. Significant differences exist between Indian GAAP and IAS/IFRS, which may be material to the financial information prepared and presented in accordance with Indian GAAP contained in this Prospectus. Our Company is not required, and has made no attempt, to quantify the effect of any of those differences. In making an investment decision, potential investors must rely upon their own examination of our Company, the "Description of the Shares" and the financial information contained in this Prospectus.

47. Companies operating in India are subject to a variety of central and State Government taxes and surcharges

Tax and other levies imposed by the Government and State Governments that affect our tax liability include:(a) income tax; (b) excise duty; (c) value added tax; (d) turnover tax; (e) service tax; and (f) other special taxes and surcharges, which are introduced on a temporary or permanent basis from time to time.

The Government and State Government tax scheme in India is extensive and subject to change from time to time. The statutory corporate income tax in India currently includes a 5.0% surcharge and a 3.0% education cess, resulting in an effective tax rate of 32.445%. The provisions of the Indian Income Tax Act are amended on an annual basis by the Finance Act.

The Government or State Governments may, in the future, increase corporate income tax or other taxes or cesses that they currently impose. Any such future increases or amendments may affect the overall tax efficiency of companies operating in India and may result in significant additional taxes becoming payable. Additional tax exposure could have a material adverse effect on our business, financial condition and results of operations.

48. 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 although in the power generation and other infrastructure related sectors (other than real estate development) exchange controls are less prevalent. Such regulatory restrictions limit financing sources for the power projects under development and hence could constrain our ability to obtain financings on competitive terms and refinance existing indebtedness. In addition, it cannot be assured that the required approvals will be granted to us without onerous conditions, or at all. Limitations on foreign debt may have an adverse effect on business growth, financial condition and results of operations.

49. An outbreak of SARS, Avian flu, H1N1 and other infectious diseases may have an adverse effect on the economies of Asian countries and may adversely affect our Company.

In 2003, Hong Kong, Taiwan, China, Singapore, Malaysia and other places experienced an outbreak of Severe Acute Respiratory Syndrome ("SARS"), which adversely affected the Asian economies. In late 2003 and June 2004, outbreaks of avian influenza occurred in several countries in Asia. In 2005 and 2006, outbreaks were reported in other parts of the world including Europe, the Middle East and Africa. Several cases of bird-to-human transmission of avian influenza were reported. The World Health Organization ("WHO") and other agencies continue to issue warnings of a potential avian influenza pandemic if there are sustained human-to-human transmissions. In June 2007, the WHO reported new cases of human infection of avian influenza in China and Indonesia. In early 2009, outbreaks of H1N1 influenza (commonly referred to as "swine flu") occurred in Mexico. In April, the first cases were detected in Asia and, in June 2009, the WHO declared a global flu pandemic. The outbreak of an infectious disease such as avian influenza, SARS or H1N1 or the measures taken by the governments of affected countries against such outbreak could have a negative impact on India‘s economy and interrupt the operations of our projects and plants, which could have an adverse impact on our business, financial condition and results of operations. The perception that an outbreak of SARS, swine flu or another contagious disease may occur again may also have an adverse effect on the economic conditions of countries in Asia, including India.

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C. Risks in Relation to the GDRs and the underlying Shares

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

Capital gains arising from the sale of our Shares are generally taxable in India. Any gain realized on the sale of our Shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if the STT, has been paid on the transaction. The STT will be levied on and collected by an Indian stock exchange on which our Shares are sold. Any gain realized on the sale of our Shares held for more than 12 months to an Indian resident, which are sold other than on a recognized stock exchange and as a result of which no STT has been paid, will be subject to capital gains tax in India. Further, any gain realized on the sale of our Shares held for a period of 12 months or less will be subject to capital gains tax in India. Capital gains arising from the sale of our Shares will be exempt from taxation in India in cases where an exemption is provided under a treaty between India and the country of which the seller is a resident. Generally, Indian tax treaties do not limit India‘s ability to impose tax on capital gains. However, capital gains on the sale of our Shares purchased in the Issue by residents of certain countries may not be taxable in India by virtue of the provisions contained in the taxation treaties between India and such countries. As a result, residents of other countries may be liable for tax in India as well as in their own jurisdictions on gains arising from a sale of Shares.

51. There may be no active market for the GDRs, which may cause the price of the GDRs to fall.

No assurance can be given as to the liquidity or sustainability of the trading market for the GDRs, the ability of owners of the GDRs to sell their GDRs or the price at which owners of the GDRs will be able to sell their GDRs. If a market for the GDRs fails to be sustained, the trading price of the GDRs could fall. In addition, it is possible that the GDRs could trade at prices that may be lower than the initial offering price of the GDRs. The securities market worldwide has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the GDRs. There can be no assurance that the markets for the GDRs, if any, will not be subject to similar disruptions. Any disruptions in these markets may have an adverse effect on the market price of the GDRs.

52. Owners of the GDRs will bear the risk of fluctuations in the price of the Shares.

The market price of the GDRs is expected to be affected by various factors underlying the market price of the Shares. The market price of the Shares may experience significant fluctuations. It is impossible to predict whether the price of the Shares, and consequently of the GDRs will rise or fall. Trading prices of the Shares will be influenced by, amongst other things, our Company‘s financial condition, results of operations and political, economic, financial and other factors. Any decline in the price of the Shares may have an adverse effect on the liquidity and market price of the GDRs.

Future issues or sales of the Shares may significantly affect the trading price of the GDRs and the Shares, and the interests of the owners of the GDRs and Shares will be diluted to the extent of any future issues of Shares. The future issue of Shares or the disposal of Shares by any of our Company‘s major shareholders or the perception that such issues or sales may occur may significantly affect the trading price of the GDRs and the Shares. There is no restriction on our Company‘s ability to issue Shares or the shareholders‘ ability to dispose of their Shares, and there can be no assurance that our Company will not issue Shares.

53. Future issuances or sales of the Shares may significantly affect the trading price of the GDRs or the Shares

Any future issuance of our Shares or securities linked to our Shares by our Company, any disposal of Shares by any of our Company‘s significant shareholders, or the perception that such issues or sales may occur, could significantly affect the trading price of the GDRs or the Shares. Furthermore, any issuance of Shares may dilute our existing shareholders. We may issue additional Shares or securities linked to our Shares to finance the projects that we are developing. In addition, we may also issue additional Shares to eligible employees through our employee stock option plan. Our Company cannot make any prediction as to the timing of any sales of our Shares or the effect, if any, that future sales of

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Shares, or the availability of our Shares for future sale will have on the market price of the GDRs or the Shares prevailing from time to time.

54. Investors may have difficulty enforcing a foreign judgment against our Company or its management.

Our Company is a limited liability company incorporated under the laws of India. All of its directors and executive officers are residents of India and a substantial portion of its assets and the assets of such persons are located in India. As a result, it may not be possible for investors to effect service of process on our Company or to enforce judgments obtained against our Company in foreign courts predicated upon the liability provisions of foreign countries. Moreover, it is unlikely that a court in India would award damages on the same basis as a foreign court if an action were brought in India or that an Indian court would enforce foreign judgments if it viewed the amount of damages as excessive or inconsistent with Indian practice. See "Enforceability of Civil Liabilities"

55. The ability of owners of the GDRs to sell any Shares withdrawn from the GDR facility to a resident of India may be subject to delays if specific RBI approval is required.

Under the foreign exchange regulations currently in force in India, transfers of shares between non- residents and residents are freely permitted (subject to certain exceptions) if they comply with the pricing guidelines and reporting requirements specified by the RBI. RBI has pursuant to a recent circular allowed certain categories of transfer of shares, which are not in compliance with such pricing guidelines or reporting requirements, without requiring prior approval from the RBI. Any transfer of Shares which are not in compliance with the aforesaid requirements, would require prior approval of the RBI. Additionally, shareholders who seek to convert the Rupee proceeds from a sale of 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. There can be no assurance that any approval required from the RBI or any other government agency can be obtained on any particular terms or at all.

56. Owners of the GDRs are restricted in their ability to vote.

Owners of the GDRs will have no voting rights with respect to the Deposited Shares. The Depositary will not exercise any voting rights in respect of the Deposited Shares unless it is required to do so by law. If so permitted, the Depositary will, at the direction of our Board (subject to receipt of an opinion by the Depositary, provided at the expense of our Company and in form satisfactory to the Depositary, that to do so would not violate any applicable Indian law and that in so doing the Depositary will not incur any liability to any owner of the GDR for any action taken or not taken with respect to any vote), either vote as directed by our Board or give a proxy or power of attorney to vote the Deposited Shares in favour of a Director of our Company or other person or vote in same manner as those shareholders designated by our Board. A valid corporate decision of our Company will bind the Depositary and the owners of the GDRs notwithstanding these restrictions on voting rights. Shares which have been withdrawn from the depositary facility and transferred on our Company‘s register of members to a person other than the Depositary or its nominee may be voted by the holders thereof. However, Holders or owners of the GDRs may not receive sufficient advance notice of shareholder meetings to enable them to withdraw the Shares and vote at such meetings. See "Description of the Shares-Transfer of Shares". Owners of the GDRs may face uncertainties in their ability to withdraw shares from the GDR depositary facility and any such withdrawal may be subject to delays.

57. Fluctuations in the exchange rate between the rupee and U.S dollar may have a material adverse effect on the value of the GDRs or the Shares.

The price of the GDRs will be quoted in U.S dollars. The Shares are quoted in rupees on the BSE and the NSE. Dividends in respect of the Shares will be paid in rupees and subsequently converted into U.S dollars for distribution to the owners of the GDRs. The owners of the GDRs who seek to sell in India any Shares withdrawn on surrender of any GDR, and to convert the rupee proceeds of such sale into foreign currency and remittance in such foreign currency from India, will require the approval of the RBI for each such transaction (unless such Shares are sold on a stock exchange in India on which the

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Shares are listed). A delay in obtaining such approval might adversely affect the rate of exchange available for such conversion. In recent years, rates of exchange for certain currencies, including the U.S dollar have been volatile, and this volatility may be expected to continue in the future. Fluctuations in any particular exchange rate that have occurred in the past are not necessarily indicative of fluctuations in the rate that may occur in the future.

Fluctuations in the exchange rate between the rupee and U.S dollar will also affect the conversion by the Depositary of any cash dividends paid in rupees on the Shares represented by the GDRs. In addition, fluctuations in the exchange rate between the rupee and U.S dollar will affect the U.S dollar equivalent of the rupee price of the Shares on the Indian Stock Exchanges and, as a result, are likely to affect the prices of the GDRs. Such fluctuations will also affect the U.S dollar value of the proceeds a holder would receive upon the sale in India of any Shares withdrawn from the Depositary under the Deposit Agreement. There can be no assurance of the rate at which holders of GDRs will be able to convert rupee proceeds into U.S dollar or any other currency. This description of foreign currency risks does not describe all the risks of an investment in securities denominated in a currency other than the home currency. Investors should consult their own financial and legal advisers as to the risks involved in an investment in the GDRs.

58. Any adverse change of law may affect the trading price of the GDRs.

The terms of, and rights attaching to, the GDRs and the Shares are governed by the laws of England and Indian law, respectively. There can be no assurance as to the impact of any possible judicial decision or change to English law or administrative practice after the date of issue of the GDRs or any possible judicial decision or change to Indian law or English law or administrative practice after the date of issue of the Shares.

59. Economic developments and volatility in securities markets in other countries may cause the price of the GDRs to decline.

The securities markets are influenced by economic developments and volatility in securities markets in other countries and, in particular, in other emerging markets. Investors‘ reaction to developments in one country may have an adverse effect on the market price of securities of companies located in other countries. For instance, the economic downturn in the US and several European countries from 2001 to 2003 adversely affected market prices in the world‘s securities markets. Negative economic developments, such as rising fiscal or trade deficits, or a default on sovereign debt, in other emerging market countries may affect investor confidence and cause increased volatility in securities.

60. There is no guarantee that the Shares underlying the GDRs will be listed on the Indian Stock Exchanges.

Further, any trading closures at the Indian Stock Exchanges may adversely affect the trading price of our Company‘s Shares. In accordance with Indian law and practice, permission for listing of the Shares underlying the GDRs will not be granted until after those Shares and the GDRs representing them have been issued and allotted. Although an application for obtaining "in principle" approval for listing the Shares underlying the GDRs has been made to the Indian Stock Exchanges, the actual approval will not be given until all relevant documents authorizing issuing of Shares are submitted. There can be no assurance that such Shares will be admitted to listing on the Indian Stock Exchanges. There could also be a delay in the listing of the Shares on the Indian Stock Exchanges. The Shares evidenced by the GDRs may be withdrawn by the owners of the GDRs only after the listing of the underlying Shares on the Indian Stock Exchanges. Any failure or delay in obtaining the approval would restrict the ability of the owners of the GDRs to trade on the underlying Shares acquired upon conversion

61. Indian law imposes restrictions that limit a holder's ability to convert GDRs into Shares or to re- deposit shares into the GDR facility, which may cause our Company's GDRs to trade at a premium or discount to the market price of its Shares.

Under existing regulations in India, the Depositary will be allowed to accept deposits of outstanding Shares and issue GDRs representing such Shares only to the extent, and limited to the number, of

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GDRs evidencing such underlying Shares. If a Holder elects to surrender GDRs and receive Shares representing existing Shares, that Holder will be unable to deposit such Shares with the Depositary and receive GDRs because Indian regulations require that GDRs representing existing Shares can be issued only (i) against a deposit of Shares purchased from the Indian Stock Exchanges, subject to a ceiling of the maximum number of GDRs issued in this Offering, or (ii) if our Company facilitates a secondary sale of Shares on a pro rata basis for all its existing Shareholders. In addition, the Depositary will not deliver Shares to the owners of the GDRs presenting such GDRs for withdrawal unless it has received written confirmation from our Company that such Shares have been listed for trading on the applicable stock exchange in India. The market prices for GDRs and Shares may therefore move independently of each other and one may be significantly higher than the other.

62. You may be restricted in your ability to exercise preemptive rights under Indian law and thereby may suffer future dilution of your ownership position.

Under the Companies Act, as amended, a public limited company incorporated in India must offer holders of its equity shares preemptive rights to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages before the issuance of any new equity shares, unless the preemptive rights have been waived by adoption of a special resolution by holders of three-fourths of the equity shares that are present at the relevant meeting. If you are in a jurisdiction that requires registration or qualification of the new securities, you may be unable to exercise your preemptive rights for the GDRs and/or the underlying Shares unless such registration or qualification is effective with respect to the rights or an exemption from the registration or qualification requirements is available to you. Our Company may elect not to file a registration statement or otherwise qualify the preemptive rights available by Indian law to investors in your jurisdiction. To the extent that you are unable to exercise preemptive rights granted in respect of the GDRs and/or the underlying Shares, your proportional interests in our Company would be reduced.

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PRICE RANGE OF SHARES

Our Company‘s Shares are listed and traded on the BSE and the NSE since December 20, 2010. The prices for shares as quoted each of these stock exchanges are expressed in Indian rupees. As of March 31, 2013,263,010,249 Shares of our Company were outstanding.

The following table sets forth, for the period indicated, the high and low closing prices and the average trading volumes of the Shares on the BSE:

Period Price per Share Average Daily Share High (in `) Low (in `) Trading Volume (in terms of shares) Financial Year 2012 Second quarter Fiscal 2012 29 22.2 3,211,182 Calender Year 2012 January 2012 16.19 11.82 3,111,230 February 2012 16.00 13.25 1,701,951 March 2012 19.30 13.55 5,280,134 April 2012 20.35 14.42 3,687,406 May 2012 22.50 18.35 3,118,770 June 2012 26.00 20.30 6,133,540 July 2012 29.00 23.60 5,681,993 August 2012 29.00 22.20 2,767,620 September 2012 27.70 22.85 1,183,933 October 2012 30.50 23.00 10,945,948 November 2012 32.80 27.35 55,97,038 December 2012 32.25 25.50 56,71,965 Calendar Year 2013 January 2013 32.05 26.35 28,74,310 February 2013 28.15 23.35 12,76,603 March 2013 26.50 21.60 17,38,384

On May 22, 2013 the closing price of the Shares on the BSE was `[●].

The following table sets forth, for the period indicated, the high and low closing prices and the averagetrading volumes of the Shares on the NSE:

Period Price per Share Average Daily Share High (in `) Low (in `) Trading Volume (in terms of shares) Financial Year 2012 Second quarter Fiscal 2012 29.2 22.2 7,720,572 Calender Year 2012 January 2012 16.20 11.80 8,341,753 February 2012 15.70 13.35 2,554,679 March 2012 19.30 13.70 16,613,297 April 2012 20.45 14.45 13,538,791 May 2012 22.60 18.25 4,364,451 June 2012 26.10 20.30 13,198,481 July 2012 29.20 23.95 13,841,508 August 2012 28.70 22.20 6,647,353 September 2012 28.90 22.85 2,672,854 October 2012 29.90 25.60 15,768,576 November 2012 32.85 27.45 117,37,091 December 2012 32.30 28.60 11,375,728 Calender Year 2013

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Period Price per Share Average Daily Share High (in `) Low (in `) Trading Volume (in terms of shares) January 2013 31.50 26.05 4,718,811 February 2013 28.1 23.50 2,660,391 March 2013 26.65 21.30 32,76,196

On May 22, 2013 the closing price of the Shares on the NSE was `[●].

As of March 31, 2013, our Company had issued and allotted 263,010,249 Shares.

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EXCHANGE RATES

Fluctuations in the exchange rate between the rupee and the U.S. dollar will affect the U.S. dollar equivalent of the rupee price of our Company‘s Shares on the Indian Stock Exchanges and, as a result, are likely to affect the market price of the GDRs. These fluctuations will also affect the conversion into U.S. dollar by the Depositary of any cash dividends paid in rupees on the Shares represented by the GDRs.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between the rupee and the U.S. dollar (in rupees per U.S. dollar). On an average annual basis, the rupee consistently declined against the U.S. dollar from 1980 until 2002. In early July 1991, the Government adjusted the rupee downward by an aggregate of approximately 20% against the U.S. dollar as part of an economic package designed to overcome an external payment crisis. In 1994, the rupee was permitted to float freely for the first time.

No representation is made that the rupee amounts actually represent such U.S. dollar amounts or could have been or could be converted into U.S. dollars at the rates indicated, any other rate or at all.

(Indian Rupees per US$ 1.00) Year end March 31 Period End Average High Low Rate 2006 44.23 45.33 46.95 44.07 2007 39.41 41.29 44.61 39.27 2008 48.45 43.42 50.52 39.27

2009 First Quarter 50.95 49.76 52.06 48.37 Second Quarter 47.87 48.67 50.53 46.84 Third Quarter 48.04 48.42 49.40 47.54 Fourth Quarter 46.68 46.64 47.86 45.91

2010 First Quarter 45.14 45.92 46.81 44.94 Second Quarter 46.60 45.67 47.57 44.33 Third Quarter 44.92 46.50 47.33 44.92 Fourth Quarter 44.81 44.86 46.04 44.03

2010 First Quarter 44.65 45.26 45.95 44.65 Second Quarter 44.72 44.74 45.38 44.04 Third Quarter 48.93 45.76 49.67 43.95 Fourth Quarter 53.27 51.01 54.24 48.82

2012 First Quarter 51.16 50.31 53.30 48.68 Second Quarter 56.31 54.22 57.22 50.56 Third Quarter 54.77 54.13 55.70 51.61 Source: http:rbi.org.in

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USE OF PROCEEDS

The total proceeds of the Offering will be US$ $19,999,998.12. (approximately `1095.55 million) assuming that the entire Offering is subscribed in full. After deducting the underwriting commission and other fees of the Lead Manager and the estimated Offering expenses, the net proceeds will be approximately ` 1055 million (US$ 19.27 million).

Subject to compliance with, and as permitted under, applicable laws and regulations, including the RBI regulations, our Company intends to use the net proceeds of the Offering for meeting working capital requirements, content purchase and development, expansion of preschool centres and K-12 schools, loan repayment, and any other purpose as may be permitted under the guidelines and any other purposes as may be decided by our Company and as permitted by applicable laws and regulations from time to time.

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DESCRIPTION OF SHARE CAPITAL

The capital structure of our Company and related information as at March 31, 2013 on a non-consolidated basis is set forth below: (in` million) Aggregate Aggregate Value Nominal Value at Offering Price Authorised Share Capital 1,000,000,000 Shares of `1 each 1,000 - Our Company has no authorised preference share capital. Issued, Subscribed and Paid up capital 263,010,249 Shares of `1 each fully paid up 263.01 - Shares issued pursuant to the Offering 56,179,770 Shares of `1 each at a premium of `18.50 i.e. at a price of 56.17 1095.55 `19.50 Issued subscribed and paid up capital after the Offering 319,190,019 Shares of `1 each fully paid up 319.19 -

Changes in authorized share capital of our Company since incorporation

Our Company was incorporated with an authorized share capital of 50,000 equity shares of `10 each aggregating to `500,000. The following table sets forth the details of the changes in authorized share capital of Zee Learn Limited since incorporation:

Nature of meeting Date of resolution Authorised Share Capital Authorised Share Capital Before Change After Change Extra-ordinary January 22, 2010 50,000 equity shares of `10 150,000,000 Shares of `1 General Meeting each aggregating to each aggregating to `500,000 `150,000,000 Annual General June 29, 2011 150,000,000 equity shares 300,000,000 equity shares Meeting of `1 each aggregating to of `1 each aggregating to `150,000,000 `300,000,000 Pursuant to the effectiveness of the Scheme of Amalgamation for the merger of EEML with our Company, our Authorised Share Capital currently is 1000,000,000 equity shares of `1 each aggregating to `1,000 million

History of Share Capital

The following table sets forth the history of the equity shares allotted by Zee Learn Limited since incorporation:

Details Date of allotment No. of equity shares Cumulative equity share allotted capital Allotment of shares to January 20, 2010 50,000 equity shares of `10 500,000 initial subscribers of the each. Memorandum of Association of our Company1 Pursuant to resolution passed at the EGM on January 22, 2010, the issued shares were sub-divided into 500,000

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Details Date of allotment No. of equity shares Cumulative equity share allotted capital equity shares of `1 each.

Allotment of shares to October 14, 2010 122,238,599 equity shares 122,738,599 equity shareholders of Zee of `1 each. Entertainment Enterprises Limited, ("ZEEL"), pursuant to implementation of Composite Scheme of Amalgamation and Arrangement2

Allotment of shares to July 1, 2011 140,000,000 equity shares 262,738,599 equity shareholders of of `1 each. Essel Entertainment Media Limited, ("EEML"), pursuant to implementation of Scheme of Amalgamation3

Allotment of shares November 30, 2012 212,000 equity shares of 262,950,599 pursuant to the ESOP `1 each Scheme.

Allotment of shares March 13, 2013 59,650 equity shares of `1 263,010,249 pursuant to the ESOP each scheme

1. Allotment of 49,400 equity shares of `10 each to Mr. Punit Goenka, 100 equity shares of `10 each to Mr. Hitesh Vakil, 100 equity shares of `10 each to Mr. Anand Chalwade, 100 equity shares of `10 each to Mr. M. Lakshminarayanan, 100 equity shares of `10 each to Mr. Himanshu Mody, 100 equity shares of `10 each to Mr. M. Venkatraman, 100 equity shares of `10 each to Mr. Ravinder Dogra.

2. Allotment of 122,238,599 equity shares of `1 each to 1,12,944 equity shareholders of ZEEL in the ratio of one (1) fully paid up equity share of `1 each of our Company for every four (4) fully paid up equity share of `1 each held in ZEEL.

3. Allotment of equity shares to shareholders of EEML in the following manner: 77,000,000 equity shares of par value of `1 each to Jayneer Capital Private Limited, 62,999,880 equity shares of par value of `1 each to Asian Satellite Broadcast Private Limited, 20 equity shares of par value of `1 each to Asian Satellite Broadcast Private Limited Jt. Dhaval Ashar, 20 equity shares of par value of `1 each to Asian Satellite Broadcast Private Limited Jt. Naresh Dhoundiyal, 20 equity shares of par value of `1 each to Asian Satellite Broadcast Private Limited Jt.Ravinder Kumar Dogra, 20 equity shares of par value of `1 each to Asian Satellite Broadcast Private Limited Jt. Dinesh Kanodia, 20 equity shares of par value of `1 each to Asian Satellite Broadcast Private Limited Jt. Anand Chalwade and 20 equity shares of par value of `1 each to Asian Satellite Broadcast Private Limited Jt. Sudam Rajiwade. One (1) fully paid up equity share of `1 each of our Company was allotted for every five (5) fully paid up equity share of `1 each held in EEML.

ESOP Scheme

Pursuant to resolution dated October 12, 2010 passed by our Board and approved by our Shareholders at the EGM held on October 13, 2010, our Company implemented an employee stock option scheme ("ESOP Scheme") for the grant of options exercisable and convertible into equity shares for the benefit of employees of our Company and the Directors of our Company. The options granted pursuant to the ESOP Scheme will not exceed 5% of our Company‘s issued, subscribed and paid-up capital post the allotment of equity shares arising

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out of and in pursuance of the composite scheme of amalgamation and arrangement approved by the High Court of Bombay vide order dated July 16, 2010 i.e. a maximum of 6,136,930 equity shares of `1 each (5% of 122,738,599 equity shares).

As at March 31, 2012, 2,716,700 options, ("Stock Options"), have been granted to various employees, and/or Directors, of our Company ("Option Holders") giving them the right, but not the obligation, to purchase or subscribe the equity shares of our Company and securities (such as American Depositary Receipts, Global Depositary Receipts and other depository receipts) convertible to equity shares of our Company which on exercise will increase the issued, subscribed and paid up equity share capital of our Company.

The aforesaid grant includes 1,107,000 options at `26.05 per option and 1,609,700 options at `14.50 per option. Of this, 975,745 options have vested to eligible employees of which 271,650 options have been exercised and converted into 271,650 equity shares. As on date, an aggregate of 1,310,800 options have lapsed.

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CAPITALISATION

The following table sets forth our Company‘s audited indebtedness and capitalization as of March 31, 2012 and limited reviewed indebtedness and capitalisation as on September 30, 2012, which has been extracted from our Company‘s audited financial statements which were prepared on actual basis. Our Company‘s limited reviewed indebtedness and capitalisation have also been mentioned on adjusted basis giving effect to the Issue.

This capitalization table should be read together with the sections titled "Summary of Financial Information", "Management’s Discussion and Analysis of Financial Condition and Results of Operations", and the "Financial Statements" and related notes included elsewhere in this Prospectus. (` in millions) Particulars As on March 31, As on September 30, 2012 2012 Audited Limited reviewed Limited reviewed Pre issue Pre issue Post Issue BORROWINGS Secured Loans1 700.00 875.00 875.00 Unsecured Loans2 265.85 149.77 149.77 Total Indebtedness 965.85 1024.77 1024.77

SHAREHOLDERS’ FUNDS Share Capital Equity 262.74 262.74 318.91 Reserves and Surplus 1139.91 1018.27 2057.59 Total Shareholders’ Funds 1402.65 1280.75 2376.50

Total Capitalisation 2368.50 2305.52 3401.27

1. 12% Redeemable non-convertible debentures are redeemable at par in four equal installments of 25% each beginning at the end of 2nd year from the date of allotment, viz January 6, 2010. It was secured by first pari passu charge, inter alia, on free hold land, all fixed and current assets including fixed deposits, escrow account, reserve account, assignment of all benefits under agreement for operation of school and a further DSRA undertaking by Zee Entertainment Enterprises Limited.

Term loan from Bank carries interest of 12.25%. The loan is repayable in 8 half yearly installments beginning from September 30, 2013. The loan is secured by first pari passu charge on all the fixed and current assets (present & future) of the company and a reserve account and DSRA Undertaking by Zee Entertainment Enterprises Limited

2. Inter-Corporate Deposits availed by our Company based on the approval of our Board.

Pursuant to resolution dated October 12, 2010 passed by our Board and approved by the shareholders at the EGM held on October 13, 2010, our Company implemented an employee stock option scheme ("ESOP Scheme") for the grant of options exercisable and convertible into equity shares for the benefit of employees of our Company and the Directors of our Company. For further details in connection with the ESOP Scheme please see "Description of Share Capital".

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DIVIDEND POLICY

With our view to conserving resources for funding future business requirements and expansion plans, Our Company has not declared/paid any dividend to its shareholders till date. There is no guarantee that any future dividends will be declared or paid. Holders of GDRs will be entitled to receive dividends paid on Shares represented by such GDRs in accordance with the terms of the Deposit Agreement. Cash dividends on Shares represented by GDRs will be paid to the Depositary in rupees and, except as otherwise described under "Terms and Conditions of the Global Depositary Receipts" will be converted by the Depositary into US$ and distributed, net of Depositary fees, taxes, if any, and expenses, to the Holders of such GDRs. For information relating to taxes payable on dividends, see "Taxation".

Under the Companies Act, an Indian company pays dividends upon a recommendation by the board of directors and approval by a majority of the shareholders, who have the right to decrease but not to increase the amount of the dividend recommended by the board of directors. Under the Companies Act, dividends may be paid out of profits of a company in the year in which the dividend is declared or out of the undistributed profits or reserves of previous fiscal years.

Dividends are payable within 30 days of approval by shareholders at our Company‘s annual general meeting which is held not later than six months from the close of the financial year (or as extended for up to another three months by permission of Government authorities). The Articles of Association also give our Board the discretion to declare and pay interim dividends without shareholder approval at an Annual General Meeting. The dividend so declared and approved by the shareholders is required to be deposited in a separate bank account within five days of the date of declaration of the dividend, and the amount deposited may only be used for the payment of the dividend. The Shares represented by the GDRs will rank pari passu with other Shares in respect of dividends, and so will be entitled to a payment in respect of any dividend declared on the Shares in respect of the financial period in which the GDRs are issued and allotted.

When dividends are declared, all the shareholders who appear in the share register as on the 'record date' are entitled to the dividend declared by our Company. Any shareholder, who ceases to be a shareholder prior to the record date or becomes a shareholder after the record date, will not be entitled to the dividend declared by our Company. Our Company is only obliged to pay dividends to those shareholders who are on the register of members of our Company on the record date or book closure date. The Depositary will establish a record date in relation to any dividend payment to be paid to Holders of GDRs as of such record date.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together all financial information incorporated elsewhere in this Prospectus which have been prepared in accordance with the Companies Act and Indian GAAP and such other requirements laid down by the Listing Agreement entered into by our Company with the BSE and the NSE, including the schedules, annexures and notes thereto and the reports thereon, included in the section titled "Financial Statements" on page 173.

These financial statements have been prepared in accordance with Indian GAAP and the Companies Act. Indian GAAP differs in certain significant 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 Prospectus, nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS. Accordingly, the degree to which the Indian GAAP financial statements included in this Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with the Companies Act and Indian GAAP. You may also refer to the section titled "Summary of Significant Differences between Indian GAAP and IFRS" on page 169.

The significant accounting policies applied in the preparation of our Company's Indian GAAP consolidated financial statements are as set forth in notes to our Company's consolidated financial statements included in this Prospectus. Prospective investors should review the accounting policies applied in the preparation of its consolidated financial statements, and consult their own professional advisors for an understanding of the differences between Indian GAAP and IAS/IFRS and how they might affect the financial information contained in this Prospectus.

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 sections titled "Risk Factors" and "Forward-Looking Statements" on pages 24 and 8, respectively.

In this section, unless the context otherwise requires, a reference to the "Company" is a reference to Zee Learn Limited and unless the context otherwise requires, a reference to "we", "us" and "our" refers to Zee Learn Limited, on a stand-alone basis.

Overview

Introduction:

Our Company is one of the leading providers of educational services in India catering to various segments of the education business namely, (a) pre-schools, (b) K-12 schools, and (c) vocational training. We operate through a combination of partnerships, franchising arrangements, and our Company‘s self-managed institutes. We also offer school solutions and co-curricular learning modules aimed at improving the conceptual understanding of students. Our Company is a ISO 9001:2008 certified company.

We are a part of the "Essel" group of companies. The Essel group is a recognized business house with a diverse portfolio of assets in media, packaging, entertainment, technology-enabled services, infrastructure development and education. Some of the other major companies of the Essel group include Zee Entertainment Enterprises Limited, Zee News Limited, Essel Propack Limited, Dish TV India Limited, Siti Cable Network Limited and Essel Infraprojects Limited. We believe that the "Zee" brand name has propelled our Company and continues to add value immensely to our growth and recognition of our pre-schools, K-12 schools and other service offerings.

Our History:

Our Company‘s education related business activities were started in 1994 as a division of Zee Telefilms Limited (now known as Zee Entertainment Enterprises Limited), which education business was thereafter, in 1999, transferred to Zee Interactive Learning Systems Limited, a wholly owned subsidiary of Zee Telefilms Limited. Pursuant to a scheme of amalgamation of ETC Networks Limited with Zee Interactive Learning Systems Limited, as approved by the Bombay High Court vide an order dated January 11, 2008, the business of ETC

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Networks Limited was merged and transferred to Zee Interactive Learning Systems Limited and the resultant entity was engaged in the education as well as the media and entertainment business. Post merger the resultant entity was renamed as ETC Networks Limited, and was listed on the BSE and NSE.

Pursuant to a composite scheme of amalgamation and arrangement between ETC Networks Limited, Zee Entertainment Enterprises Limited, our Company and their respective shareholders (as approved by the Bombay High Court vide an order dated July 16, 2010), the education business of Zee Entertainment Enterprises Limited and ETC Networks Limited, was transferred to our Company. Accordingly, our Company commenced its operations in 2010 post the said transfer.

Further, DVPL became a subsidiary of our Company by virtue of a scheme of amalgamation between our Company and EEML dated June 17, 2011. Our Company issued and allotted to the shareholders of EEML 140,000,000 fully paid-up equity shares of `1 each of our Company. DVPL was formed with the main objective of owning and developing the infrastructure for educational business of our Company.

Brands and Products:

Our portfolio consists of various brands through which we offer a wide spectrum of educational services. We believe that our flagship pre-school brand, namely Kidzee is one of the most recognized brands in pre-schools in India. Kidzee is one of the largest playschools chain in India for the year 2009, For our Kidzee pre-schools we have developed our own proprietary pedagogy (namely teaching processes), under the name "iLLUME", which is an education program independently validated by M S University, Baroda, in January 2010. Kidzee has received the "Best Franchisor in Pre-school Education" award in 2004 and 2005. Kidzee has also won Franchise Plus" Franchisor of the Year" award in 2010.

Additionally, within the pre-school space, we have recently ventured into offering premium pre-school services aimed at the higher income bracket through our self-operated pre-schools at Mumbai under the Mount Litera World Preschool brand.

We also operate a chain of K-12 schools under our Company‘s Mount Litera Zee School brand. Our K-12 schools under the Mount Litera Zee School brand comprise of schools under three different models, namely (a) franchisee schools; and (b) schools where the day-to-day management and operations of the school are entrusted to our Company.

Our vocational education programs are operated through two brands, namely, (i) Zee Institute of Media Arts ("ZIMA"), and, (ii) Zee Institute of Creative Arts ("ZICA"). Our Company has, in collaboration with Gakken J Holdings Company Limited, Japan, formulated a science program titled Brain Café for K-12 schools which is aimed at improving the conceptual understanding of students by providing hands on experiment tools.

Factors Affecting Our Business, Results of Operations and Financial Condition

A number of general factors affected our financial performance during each of Fiscal 2012 and Fiscal 2011. These factors may affect our financial performance in the future, and include:

 Our ability to maintain and expand our student base directly and through our franchise network  Ability to manage costs, maintain and competitively increase the fee structure for our products and services  Regulation of the education sector in India  Ability to retain teachers and senior management personnel;  Competition  Ability to evolve new teaching methodology; and  Ability to protect Intellectual Property Rights

For further details, see the section titled "Risk Factors" and "Business" on pages 24 and 76 of this Prospectus.

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Presentation and comparability of Financial Information

In this Prospectus, we have included (i) our standalone audited financial statements for the period from January 4, 2010 to March 31, 2011 and for the period from April 1, 2011 to March 31, 2012; (i) our consolidated audited financial statements for the period from for the period from April 1, 2011 to March 31, 2012; and (ii) our standalone reviewed financial statements as of and for the six months ended September 30, 2012.

2010 Reorganisation

We were incorporated on January 4, 2010 and have only been operating independently since the Effective Date i.e. August 30, 2010 and the assets that we use in our business were acquired pursuant to the 2010 Reorganisation. Pursuant to the 2010 reorganisation, ETC merged and vested in ZEEL on March 31, 2010 and upon such merger the education business undertaking was demerged from ZEEL and vested in our Company at book value on 1 April, 2010. Notably, we had no meaningful assets or business operations for the period from January 4, 2010 to March 31, 2010

Consequently, the whole of the undertaking, assets, properties and liabilities of the education business undertaking of ZEEL was transferred to/and vested with our Company with effect from April 1, 2010 at book value. The difference between the book value of assets and the book value of liabilities was credited to general reserve account of our Company. The details are mentioned below.

Particulars (` In millions) Fixed Assets (including Capital WIP) 800.65 Investments 0.01 Current Assets, Loans and advances Inventories 29.09 Sundry Debtors (net) 12.10 Cash and Bank Balances 207.01 Loans and Advances (including Deferred Tax asset) 236.64 484.84

Total Assets 1285.50

Secured and Unsecured Loans 500.19 Current Liabilities and Provisions 154.01 654.20

Total Liabilities 654.20 Net Assets 631.29 Less: Shares issued and allotted on October 14, 2010 122.24 Surplus taken to general reserve 509.05

Further, our Company has issued and allotted 122,238,599 equity shares of `1 each to the shareholders of ZEEL on October 14, 2010, in the ratio of one equity share of our Company for every four equity shares held in the ZEEL. For details on our 2010 reorganisation, please refer "Summary of Restructuring of our Business" on Page 64 of the Prospectus and Financial Statements on page 173 of this Prospectus.

2011 Reorganisation

DVPL became a subsidiary of our Company by virtue of a scheme of amalgamation between our Company and EEML vide high court order dated June 17, 2011. As a part of the 2011 Reorganisation, our Company issued and allotted to the shareholders of EEML 140,000,000 fully paid-up equity shares of `1 each of our Company. The 2011 Re-organisation has been given effect in the financial statements for "pooling of interest" method as prescribed under accounting standard 14 of the Indian GAAP. Accordingly the assets and liabilities of EEML is vested and transferred to our Company at book value. The difference between transferred assets and liabilities and expenses incurred on amalgamation aggregating to an amount of `888.13 million was transferred to the general reserves of our Company of which the assets included Investments of `0.1 million; current assets, loans and advances of `1,060 million and cash and bank balances of `0.32 million.

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(`in million) Particulars Amount Investments 100.00 Current Assets, Loans and advances 1,060.00 Cash and Bank Balances 0.32 Total Assets 1,060. 421 Unsecured Loans 6.92 Current Liabilities and Provisions 0.38 Total Liabilities 7.30 Net Assets 1,053.11 Less: Shares issued and allotted to EEML 140.00 Less: Amalgamation expenses 24.99 Surplus taken to general reserve 888.13

Accordingly, we do not have any financial information for our performance as an independent operating company prior to January 4, 2010 and cannot meaningfully compare our results of operations for the period ended March 31, 2011 and March 31, 2012 as against the years ended March 31, 2010.

The aforesaid reorganisation occurred post March 31, 2011 and was not given effect in the audited financial statements for the period ended March 31, 2011.

Our reviewed results as of and for the six months ended September 30, 2012 are presented on a standalone basis in compliance with the requirements of the Listing Agreements entered into by us with the BSE and the NSE. The discussion and analysis of our results of operations for the six-months ended September 2012, should not be read as an estimate or projection of the full results for the year ended March 31, 2013

Significant Accounting Policies

Basis of Accounting

The Financial Statements have been prepared under the historical cost convention and on accrual basis in accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the period. Actual results could differ from these estimates. Any revision to estimates is recognized prospectively in current and future periods.

Tangible fixed assets

(i) Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost includes all expenses incurred to bring the assets to its present location and condition. (ii) Capital work in progress comprises cost of fixed assets and related expenses that are not yet ready for their intended use at the reporting date.

Intangible assets

(i) Intangible assets are recognised in the year it is put to use at cost. Intangible assets are carried at cost less accumulated amortization and accumulated impairment loss if any. (ii) Intangible assets under development comprises of purchase price, borrowing cost and directly attributable cost incurred on asset that are not ready for their intended use at the reporting date.

Borrowing Costs

Borrowing Costs directly attributable to the acquisition, construction or production of an asset that necessarily

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takes a substantial period of time to get ready for its intended use or sale are capitalized as a part of the cost of respective asset. All other borrowing costs are expenses in the period they occur.

Impairment of tangible and intangible assets

At each Balance Sheet date, our Company reviews the carrying amount of fixed assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

Depreciation of tangible assets (i) Depreciation on fixed assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 except Training equipments which is amortized on straight line basis over a period of three years based on management‘s estimate of useful life (ii) Leasehold improvements are amortized over the period of Lease.

Amortization on intangible assets

Intangible assets are amortized on straight line basis, based on management's estimate of useful life.

Investments

Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Long term investments are carried at cost. Provision for diminution in value of investment other than temporary is made wherever applicable.

Transactions in foreign currencies (i) Foreign currency transactions are accounted at the exchange rates prevailing on the date of such transactions. (ii) Foreign currency monetary items are retranslated using the exchange rates prevailing at the reporting date. Exchange differences are recognised as income or expense in the period in which they arise.

Revenue recognition (i) Services a) Course fees and Royalty income is recognized over the duration of the course. b) Franchise fees are recognized as per the agreed terms of the agreement. (ii) Sales- Educational goods and equipments is recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch. (iii) Interest income is recognised on a time proportion basis taking into account outstanding and the applicable interest rate.

Inventories

Educational goods and equipments are valued at lower of cost or estimated net realizable value. Cost is determined on the basis of weighted average cost. Cost of inventory includes cost of purchase, freight and other expense incurred in bringing the inventories to their present location and condition.

Retirement and other employee benefits

(i) Short-term employee benefits are expensed at the undiscounted amount in the statement of profit and loss in the year employee renders the service. (ii) Post employment and other long term employee benefits are recognised as an expense in the statement of profit and loss in the year the employee renders the service. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of Profit and Loss.

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Accounting for taxes on income

(i) Current Tax is determined as the amount of tax payable in respect of its taxable income as per the provisions of the Income Tax Act, 1961. (ii) Deferred tax is recognized, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and (iii) are capable of reversal in one or more subsequent periods and measured using tax rates and laws enacted.

Operating Lease

Earnings Per Share

Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive.

Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

Key Components of our Profit and Loss Statement

Income

Our income consists of (a) revenue from operations and (b) other income.

The components of our revenue from operations are from (a) Sale of educational goods and equipment; and (b) Education and other Services. Our revenue also includes interest income from banks and other, a net gain on exchange differences and liabilities/excess provision written back.

Expenditure

Our expenditure comprises (a) Cost of materials and operational expenses, (b) Employee Benefits Expense, (c) other expenses, (d) financial expenses, and (e) depreciation and amortisation expenses.

Cost of Material/ Operational Expenses:

Operational expenses include inventory costs for educational goods and equipments which are provided to our franchises, the education centre operation expenses and professional fees.

Personnel Costs

Personnel costs include expenses towards, salaries and allowances, contribution to provident and other funds, Training and recruitment costs and staff welfare expenses.

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Other Expenses

Other expenses include rent paid, repairs and maintenance, Insurance, rates and taxes, electricity and water charges, communication expenses, printing and stationary, Travelling and conveyance expenses, vehicle expenses, legal and professional charges, payment to auditor, bad debts and advances written off, provision for doubtful debts and advances, loss on sale of fixed assets, advertisement and publicity expenses, Advertisement and publicity expenses, bank charges, freight charges and other miscellaneous expenses.

Finance Cost

Finance Cost includes interest on loans, interest on others and other bank charges including processing Fees.

Results of Operations

The following table sets forth a summary of results of operations for the period March 31, 2012 and March 31, 2011: (`in million) Particulars For the Period For the Period Ended March 31, Ended March 31, 2012 2011 Income Revenue from operations 610.03 427.48 Other Income 9.10 9.51 Total 619.12 436.98 Expenditure Cost of material 142.03 89.49 Operational experience 31.08 24.64 Employee Benefits Expense 251.61 129.58 Other Expenses 403.07 159.05 Finance cost 35.23 1.28 Depreciation and amortisation expenses 30.21 7.53 Total 893.23 411.56 Profit before Tax (274.11) 25.42 Tax Expense Current Tax -- 7.78 Tax for earlier years 1.68 -- - Deferred Tax -- (0.88)

Net Profit after Tax for the period 275.79 18.52 Basic and Diluted Earnings per share of face value of `1 each (1.05) 0.19

Fiscal 2012 Compared to Fiscal 2011

Income

Our total income increased by 42 per cent to `619.12 million in Fiscal 2012 from `436.98 million in Fiscal 2011. In Fiscal 2012, out of `619.12 million of our total income, `610.03 million was attributable to revenue from operations, whilst `9.1 million was attributable to other income.In Fiscal 2011, out of `436.98 million of our total income, `427.48 million was attributable to revenue from operations, whilst `9.51 million was attributable to other income.

Revenue from Operations.

Our revenue from operations increased by 43 per cent to `610.03 million in Fiscal 2012 from `427.48 million in Fiscal 2011 primarily due on account of increase in the sale of educational goods and other equipment, sale of educational and other services, Course Fees, Royalty and Franchisee fees, due to addition of new franchisees. This increase in revenue from operations was primarily due primarily due to a 49 per cent increase in the sale of

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educational goods and equipment to 264.08 million in Fiscal 2012 from 176.81 million in Fiscal 2011; a 57 per cent increase in course fees to 177.33 million in Fiscal 2012 from 113.16 million in Fiscal 2011; and a 25 per cent increase in Franchisee Fees to 161.85 million in Fiscal 2012 from 129.74 million in Fiscal 2011.

Other Income.

Our other income declined by 4 per cent to ` 9.10 million in Fiscal 2012 from `9.51 million in Fiscal 2011.

Expenditure

Our total expenditure increased by 117 per cent to `893.23 million in Fiscal 2012 from `411.56 million in Fiscal 2011 primarily due to an increase in costs of materials sold and operational expenses, employee benefit expenses, other expenses and depreciation/amortization expenses.

Cost of Goods Sold and operational expenses

Cost of goods sold and operational expenses increased by 52 per cent to `173.11 million in Fiscal 2012 from `114.13 million in Fiscal 2011 mainly because of addition of new franchisees which included an increase in cost of material sold by 59 per cent to `142.03 million in Fiscal 2012 from `89.49 million in Fiscal 2011and increase in the operational expenditure pertaining to education centre by 26 per cent to `31.08 million in Fiscal 2012 from `24.64 million in Fiscal 2011.

Employee Benefits Expenses

Employee benefits expenses increased by 94 per cent to Rs 251.61 million in Fiscal 2012 from `129.58 million in Fiscal 2011 mainly due to increase in additional manpower employed for the operations of Braincafe, Mount Litera Zee Schools and Kidzee. Due to the additional manpower employed salaries and allowances increased by 109 per cent to `227.14 million in Fiscal 2012 from `108.86 million in Fiscal 2011;contribution to provident and other funds increased by 19 per cent to `4.24 million in Fiscal 2012 from `3.57 million in Fiscal 2011; training and recruitment costs increased by 93 per cent to `17.76 million in Fiscal 2012 from `9.18 million in Fiscal 2011.However, staff welfare expenses decreased by 69 per cent to `2.48 million in Fiscal 2012 from `7.97 million in Fiscal 2011.

Other Expenses

Other expenses increased by 153 per cent to `Rs 403.07 million in Fiscal 2012 from `159.01 million in Fiscal 2011 mainly due to increase in rent and repairs/maintenance due to shifting of the offices to a new location, increase in Communication expenses, travelling and conveyance charges and legal and professional charges. This increase in other expenses is primarily because rent increased by 135 per cent to `25.89 million in Fiscal 2012 from `11.02 million in Fiscal 2011;repairs and maintenance increased by 462 per cent to `12.97 million in Fiscal 2012 from `2.31 million in Fiscal 2011; Communication expenses increased by 72 per cent to `12.63 million in Fiscal 2012 from `7.35 million in Fiscal 2011; Travelling and conveyance expenses increased by 103 per cent to `49.39 million in Fiscal 2012 from `24.29 million in Fiscal 2011; Legal and professional expenses increased by 27 per cent to `10.46 million in Fiscal 2012 from `8.22 million in Fiscal 2011; Provisions for doubtful debts and advances increased by 1858 per cent to `23.95 million in Fiscal 2012 from `1.22 million in Fiscal 2011; Advertisement and publicity expenses increased by 204 per cent to `232.68 million in Fiscal 2012 from `76.61 million in Fiscal 2011and Travelling and freight charges increased by 106 per cent to `11.75 million in Fiscal 2012 from `5.771 million in Fiscal 2011.

Finance Costs

Finance costs increased by 2655 per cent to `35.23 million in Fiscal 2012 from `1.28 million in Fiscal 2011 on account of new loan undertaken by our Company. This increase in finance cost is because interest on loan increased to `8.60 million in Fiscal 2012 from NIL in Fiscal 2011; interest on others increased by 1582 per cent. to `21.51 million in Fiscal 2012 from `1.28 million in Fiscal 2011; and interest on others increased to `5.12 million in Fiscal 2012 from NIL in Fiscal 2011.

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Depreciation and amortisation expenses

Depreciation and amortisation expenses increased by 301 per cent to `30.21 million in Fiscal 2012 from `7.53 million in Fiscal 2011 due to amortisation of 'Gakken' Kits and similar educational content. Depreciation on tangible assets increased by 260 per cent to `18.01 million in Fiscal 2012 from `5.00 million in Fiscal 2011; and Amortisation of intangible assets increased by 383 per cent to `12.20 million in Fiscal 2012 from `2.53 million in Fiscal 2011.

Profit After Tax

Profit after tax decreased by 1589 per cent to `(275.79) million in Fiscal 2012 from `18.52 million in Fiscal 2011 largely on account of increase in operational expenditure and other expenses.

Financial Condition, Liquidity and Capital Resources

Liquidity

We broadly define liquidity as our ability to generate sufficient funds from both internal and external sources to meet our obligations and commitments. Our primary liquidity requirements have been to finance our working capital requirements for our operations and for capital expenditures and investments. We have financed our capital requirements primarily through funds generated from our operations and borrowings.

Cash Flows

The table below summarises our cash flow for the periods indicated: (``in million) March 31, 2012 March 31, 2011 Net cash generated from operating activities (197.56) (78.59) Net cash generated used in investing activities (185.54) (125.55) Net cash generated from financing activities 410.94 41.09 Net changes in cash and cash equivalent 27.85 (163.05)

Operating Activities

Net Loss before tax was ``197.56 million in Fiscal 2012 and `Rs.78.59 million in Fiscal 2011 and consisted of Net Profit/Loss before tax; adjustments for depreciation, interest income, net gain on exchange difference, interest expense, provisions for doubtful debt, loss on sale/discard of fixed assets; operating profit before working capital changes; Cash generated from operations and taxes paid.

Investing Activities

Net negative cash flow from investing activities was `Rs.185.54 million in Fiscal 2012, which primarily includes ``182.26 million for the purchase of fixed assets, ``0.04 million from the sale of fixed assets, ``3.76 million for interest received, ``7.07 million from investments in Bank deposits with an original maturity of more than 12 months.

Net negative cash flow from investing activities was ``125.55 million in Fiscal 2011, which primarily includes ``116.19 million for the purchase of fixed assets, ``0.01 million from the sale of fixed assets, ``6.35 million for interest received, ``15.72 million from investments in Bank deposits with an original maturity of more than 12 months.

Financing Activities

Net cash generated from financing activities was ``410.94 million in Fiscal 2012 which primarily includes ``372.92 million as proceeds from inter-corporate deposits, `.155.00 million as repayment of intercorporate deposits, ``325.00 million as proceeds from borrowing, `.125.00 million as repayment of

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borrowings and,``6.98 million as interest paid.

Net cash generated from financing activities was ``41.09 million in Fiscal 2011 which primarily includes ``0.50 million as proceeds from issue of share capital, ``41.00 million as proceeds from inter-corporate deposits, `.0.19 million as repayment of inter-corporate deposits, ``0.22 million as interest paid.

Off-Balance Sheet Arrangements and Financial Instruments

We do not have any off-balance sheet arrangements, derivative instruments or other relationships with unconsolidated entities that would have been established for the purpose of facilitating off-balance sheet arrangements.

Indebtedness (in `million) Particulars As at March 31, 2012 Secured Loans 12% Secured Redeemable Non Convertible debentures of `1 million each 375.00 Term loan from Bank 275.79325.00 Unsecured Loans 265.85 Total 965.85

Contingent Liabilities

The following table sets forth our contingent liabilities not provided for, as at the dates indicated. (in `million) Particulars March 31, 2012 March 31, 2011 Claims against Company not acknowledged as debts 6.99 5.44 Disputed Indirect tax demands 19.81 19.81 Corporate guarantee for subsidiaries to the extent of loans 11.14 -- availed /outstanding Total 37.94 25.25

Related Party Transactions

We have entered into, and from time to time will enter into, transactions with our joint ventures, associates, subsidiary companies and other related parties as described on page 231 of this Prospectus. These transactions are entered into on an arm‘s length basis. For details in relation to related party transactions, see section titled "Financial Statements - Related Party Disclosure" on page 231 of this Prospectus.

Results of operation for the nine months period ended December 31, 2012

Following are the details of the financials for the nine month period ended December 31, 2012.

Revenue from Operations

Our income from operations for the nine months period ended December 31, 2012 was ` 636.46 million. Our revenues from operations for the said period comprised `229.61 million from the sale of educational goods and equipments; `406.39 million as income from education and other services; and `0.47 million as income from other operating income.

Other Income

Our other income for the nine months period ended December 31, 2012 were `11.84 million which was primarily due to interest on bank deposit and Inter-corporate deposits.

Expenditure

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Our total expenditure for the nine months period ended December 31, 2012 was `745.96 million. This included Cost of materials education goods and equipments of `176.74 million; operational expenses of `28.36 million; employee benefit expense of `242.80 million; depreciation and amortisation expense of `46.23 million and other expenses of `277.32 million.

Finance Costs

Our finance costs for the nine months period ended December 31, 2012 was `41.07 million which included interest paid on our borrowings and bank charges.

Profit/Loss before and after Tax

As a consequence of the above financial results, we incurred losses before tax and losses after tax of `138.72 million.

Liquidity and Capital Resources

Our Company‘s primary liquidity needs have been to finance the growth of our business and in related expenditures. Our Company has historically financed the majority of our working capital, capital expenditure and other requirements through our funds generated through our operations, inter-corporate deposits and fresh borrowings as needed. Our primary capital requirements have been towards development of infrastructure for our pre-schools and K-12 schools. We may also from time to time seek other sources of funding, which may include debt or equity financings, including rupee-denominated loans from Indian banks, depending on our financing needs and market conditions.

To our knowledge and belief, no circumstances other than those disclosed in this Prospectus, have arisen since the date of the last financial statements contained in this Prospectus which materially affect or are likely to affect, the trading and profitability of our Company, or the value of our assets or our ability to pay material liabilities within the next 12 months.

On November 5, 2012, Zee Entertainment Limited launched a channel in the education domain in the name and style of 'ZeeQ'. Recognising our Company‘s expertise in the education sector and our capability and expertise in the education domain, it proposes to enter into an agreement with our company to manage and to distribute and market the channel. The services provided shall include content acquisition, content production, editing and quality control, channel programming, distribution management, marketing and promotion. It is expected to be a fun learning destination imparting knowledge and life skills. It would also help in child development while inculcating values and helping children choose the right career and lifestyle. It would be one of the first edutainment and multi-platform television channel. ZeeQ will also have a presence on television, internet and mobiles. To introduce subscriptions our Company shall provide higher order subject content with focus on science, general knowledge, scientific innovation and English which may be integrated in school curriculums of institutions of our Company. ZeeQ shall also host participative content by inclusion of participative show formats like quizzes and interstitials featuring real children.

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SUMMARY OF RESTRUCTURING OF OUR BUSINESS

1. Scheme of Amalgamation of ETC Networks Limited, ("ETC") with Zee Interactive Learning Systems, ("ZILS"), ("ZEE Interactive Scheme")

The board of directors of ETC approved the ZEE Interactive Scheme on August 6, 2007. The appointed date under the ZEE Interactive Scheme was April 1, 2007. On January 11, 2008 the High Court of Bombay sanctioned the ZEE Interactive Scheme and on January 24, 2008 ("Zee Interactive Effective Date") certified copies of the orders of the High Court of Bombay sanctioning the scheme were filed with the RoC The record date for the purpose of re-organisation and issue of shares was, February 11, 2008, ("Zee Interactive Record Date").

ETC was amalgamated into ZILS on the effective date and upon the High Court of Bombay passing an order for the dissolution without winding up of ZEEL under section 394 of the Companies Act.

Share Capital

As at March 31, 2007

 The authorized share capital of ETC was `500,000,000 of which `140,057,000 was issued, subscribed and paid up. Subsequent to March 31, 2007, ETC, pursuant to its buy-back program, bought back 116,781 equity shares of `10 each and accordingly, the issued, subscribed and paid up capital was`138,889,110 comprising 13,888,911 equity shares of `10 each; and  The authorized share capital of ZILS was `20,000,000 of which `7,325,000 was issued, subscribed and paid up.

Transfer and Vesting of Undertakings

With effect from the Zee Interactive Scheme Appointed Date:

 the entire business and the whole of the undertakings of ETC, including all of its properties and assets of whatsoever nature, but subject to any charges affecting the same as on the Zee Interactive Scheme Effective Date, were transferred to and vested in our Company and became the properties and assets of ZILS.  all of the debts, liabilities, contingent liabilities, duties and obligations of ETC of any nature whatsoever, including those accruing after the Appointed Date but relating to the period on or up to the Zee Interactive Scheme Effective Date, were transferred, vested in and assumed by ZILS and became the debts, liabilities, contingent liabilities, duties and obligations of ZILS on the same terms and conditions as were applicable to ETC.

Reorganization of capital and issue of shares

On January 24, 2008, ZILS issued and allotted to the shareholders of ETC whose names were recorded in its register of members on the Record Date ("ETC Shareholders") 6,944,456 equity shares of `10 each in the ratio of 1 equity share of face value `10 each of ZILS, ("Consideration Shares") for every 2 equity shares of `10 each held in ETC. This was in consideration for the ETC Shareholders agreeing to the extinguishment of their shares following the amalgamation and the dissolution without winding up of ETC.

Accounting treatment

On the Effective Date, ZILS took the following measures for accounting treatment pursuant to the Zee Interactive Scheme: (i) All of ETC‘s assets, liabilities and reserves were recorded in ZILS‘s books of account as they were recorded in the books of account of ETC;

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(ii) The face value of the Consideration Shares was recorded as ‗share capital suspense on amalgamation‘ in our Company‘s books of account; (iii) All inter-company balances were cancelled; (iv) The differences, being excess or shortfall in the net asset value between assets, liabilities and reserves of ETC (after the cancellation of any inter-company balances) and the Consideration Shares and was credited to the Restructuring Account of ZILS; and (v) The income and expenditure of ETC for the year was accounted as the income and expenditure of ZILS.

Legal proceedings

On the Zee Interactive Scheme Effective Date, all suits and proceedings by or against ETC pending or arising at the Appointed Date, as and from the Effective Date, could be enforced against ZILS as could have been continued, prosecuted and enforced by or against ETC had the Zee Interactive Scheme not been made.

ZILS has undertaken to have all legal or other proceedings initiated by or against ETC transferred to its name and to have the same continued, prosecuted and enforced by or against itself.

Contracts, deeds and other instruments

From the Zee Interactive Effective Date, all contracts and other instruments, (including tenancies and licenses, deeds, bonds, agreements and other assurances in favour of ETC or powers or authorities granted by or to it) of any nature to which ETC was a party or to the benefit of which ETC was entitled, and which were subsisting or had effect immediately before the Zee Interactive Scheme Effective Date, without any further act, instrument or deed, came into full force and effect against or in favour of ZILS, as the case may be, and may now be enforced as if ETC had been a party thereto.

Winding up of ETC

On the Zee Interactive Effective Date, ETC was dissolved without being wound up. Its board of directors and committees thereof were also dissolved without any further act, instrument or deed.

Change of name

With effect from the Effective Date, the name of ZILS was changed to "ETC Networks Limited".

2. Composite scheme of Amalgamation and Arrangement between ETC Networks Limited, ("ETC") and Zee Entertainment Enterprises Limited, ("ZEEL") and our Company and their respective shareholders and creditors

The High Court of Bombay, vide its order dated July 16, 2010 sanctioned the Composite Scheme of Amalgamation and Arrangement which became effective on August 30, 2010 upon the filing of the certified copy of the order of the High Court of Bombay with the RoC.

The appointed date for the merger was March 31, 2010, ("Merger Appointed Date"), and record date for the merger was April 19, 2010, ("Merger Record Date"). The appointed date for the demerger of the education business undertaking was April 1, 2010, ("Demerger Appointed Date") and the book closure period was from October 9, 2010 to October 12, 2010 for the purpose of determining the shareholders who would be entitled for issuance of shares by ZLL.

Upon the scheme coming into effect and in consideration of the amalgamation, ZEEL issued and allotted 4,413,488 equity shares of `1 each of ZEEL to the shareholders of ETC whose name appeared in the register of members of ETC on the Merger Record Date in the ratio of 10 fully paid up equity shares of `1 each of ZEEL for every 11 equity shares of `10 each held in ETC. Upon the scheme coming into effect and in consideration for the transfer and vesting of the education business undertaking in our Company, our Company issued and allotted 122,238,599 equity shares of `1 each of our Company to shareholders of ZEEL whose name appeared in the register of members of ZEEL on

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the Demerger Record Date in the ratio of 1 fully paid up equity share of `1 each of our Company for every 4 fully paid up equity shares of `1 each held in ZEEL.

Demerger

Our Board approved the composite scheme on January 20, 2010 providing for the demerger and vesting of the education businesses transferred to ZEEL by ETC, including the businesses of Zee Learn, Kidzee, Zee School, ZICA and ZIMA with our Company.

3. Scheme of Amalgamation of Essel Entertainment Media Limited, ("EEML") with Zee Learn Limited, ("ZLL"), (EEML Scheme)

Our Board approved the EEML Scheme on January 27, 2011. However, the appointed date under the EEML Scheme was March 31, 2011 ("EEML Appointed Date"). On June 17, 2011 the High Court of Bombay sanctioned the EEML Scheme and on June 30, 2011 ("EEML Effective Date"), a certified copy of the order of the High Court of Bombay sanctioning the EEML Scheme was filed with the RoC. The record date for the purposes of re-organisation and issue of shares was June 30, 2011, ("Record Date").

EEML was amalgamated into our Company on the EEML Effective Date and upon the High Court of Bombay passing an order for the dissolution and winding up of EEML under section 394 of the Companies Act.

Share Capital

As at January 25, 2011: (i) The authorized share capital of the EEML was `700,000,000 all of which was issued, subscribed for and paid up; and (ii) The authorized share capital of our Company was `150,000,000 of which 122,738,599 was issued, subscribed for and paid up

Transfer and vesting of undertakings

With effect from the EEML Appointed Date (i) The entire business and the whole of the undertakings of EEML including all of its properties and assets of whatsoever nature, including equity investment in DVPL but subject to any charges affecting the same as on EEML Effective Date, were transferred to and vested in our Company and became properties and assets of our Company; and (ii) All of the debts, liabilities, contingent liabilities, duties and obligations of EEML of any nature whatsoever, including those accruing after the EEML Appointed Date were transferred and vested in and assumed by our Company and became debts, liabilities, contingent liabilities, duties and obligations of our Company on the same terms and conditions as were applicable to EEML.

Reorganization of capital and issue of shares

On the EEML Effective Date, our Company issued and allotted to the shareholders of EEML whose names were recorded in its register of members on the Record Date (the "EEML Shareholders") 140,000,000 fully paid-up equity shares of `1 each of our Company (the "Consideration Shares"). 1 fully paid up equity of `1 each of our Company was issued for every 5 equity shares of `1 each held by EEML Shareholders. This was in consideration for the EEML Shareholders agreeing to the extinguishment of their shares following the amalgamation and the dissolution without winding up.

Accounting treatment

On the EEML Effective Date, our Company took the following measures for accounting treatment pursuant to the EEML Scheme: (i) All of EEML‘s assets, liabilities and reserves were recorded in our Company‘s books of

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account in the same form as they were recorded in the books of account of EEML, after making adjustments for differences (if any) between the accounting policies of EEML our Company; (ii) The face value of the Consideration Shares was recorded as ‗share capital suspense on amalgamation‘ in our Company‘s books of account (iii) All inter-company balances were cancelled; (iv) The difference, being the excess or shortfall in the net asset value between the assets, liabilities and reserves of EEML (after the cancellation of any inter-company balances) and the Consideration Shares was adjusted against or transferred to the ‗general reserve‘ account of our Company; (v) For the purpose of application of uniform accounting methods and policies between EEML and our Company, our Company may make suitable adjustments and reflect the effect thereof in the general reserves.

Legal Proceedings

On the EEML Effective Date, all suits and proceedings by or against EEML pending could be continued and enforced by or against our Company as such could have been continued, prosecuted and enforced by or against EEML if the EEML Scheme had not been made.

Our Company has undertaken to have all legal or other proceedings initiated by or against EEML transferred to its name and to have the same continued, prosecuted and enforced by or against itself.

Contracts, deeds and other instruments

From the EEML Effective Date, all contracts and other instruments, (including tenancies, leases, licenses and other assurances in favour of EEML, or powers or authorities granted by or to it) of any nature, to which EEML was a party or to the benefit to which EEML may be eligible, and which were subsisting or had effect immediately before the EEML Effective Date, without any further act, instrument or deed, came into full force and effect against or in favour of our Company, as the case may be, and may now be enforced as if our Company had been a party thereto.

Winding up of EEML

On the EEML Effective Date, EEML was dissolved without being wound up. Its board of directors and committees thereof were also dissolved without any further act, instrument or deed.

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INDUSTRY OVERVIEW

The following information includes extracts from publicly available information, data and statistics derived from official sources and other sources we believe to be reliable, but which has not been independently verified by us or the Lead Manager. The information in this Chapter is derived from various government/Industry Association publications, Reports issued by KPMG on Indian Education in April 2012 and by Anand Rathi on Indian Education in December 2011, Religare Research Report on Treehouse- June 2012 and other web sources. Neither we, nor the Lead Manager or any other person connected with the issue have verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and accordingly, investment decisions should not be based on such information

Growth of the Indian Economy

Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, which began in the early 1990s, has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit.

India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. (Source:https://www.cia.gov/library/publications/the-world-factbook/geos/in.html). The Indian economy is expected to continue growing steadily at 7.2% in 2013 and 7.5% in 2014 (Source: IMF World Economic Outlook Update, October 2012). India's long term challenges include widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, insufficient access to quality basic and higher education, and accommodating rural-to-urban migration (Source: CIA World Factbook).

The Indian Education sector

India needs a strong education system due to its young population. The education system is growing but is characterized by divergence in the level of literacy rates with states like Kerala having higher levels of literacy relative to states such as Bihar. Further Government spends on education (albeit growing) as a percentage of GDP remains low relative to many of the developed countries.

The Indian education sector is on the concurrent list of the Constitution, and hence, is regulated both by the Centre and the State. The education system in India comprises of formal, vocational and informal education. While all levels of formal education are highly regulated and fall under the purview of Ministry of Human Resource Development, Government of India (MHRD), non-formal education is mostly unregulated. The table below explains the structure of the education sector in India:

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At USD100 billion a year at market prices; India‘s education sector is among the top 10 in the world in value terms. In addition, the cost of educational services in India is one of the lowest in the world – less than one-sixth of the global average. (Source: Anand Rathi’s report on Indian EducationUS$45billion private education opportunity: Everyone wants a slice; December 29, 2011)

Government spending on education as percentage of GDP

India’s overall education spends to GDP rose from less than 1% in early 1950s to over 5% currently.

(Source: Anand Rathi’s report on Indian EducationUS$45billion private education opportunity: Everyone wants a slice; December 29, 2011)

The Indian education sector requires continuous and growing investments in the education sector to meet the growing needs of the population. Improvement in elementary education has been the priority of the Government relative to secondary and higher education as evidenced by the Government allocation of expenditure in the 5 year plans. The Planning commission has recommended that there should be an increase in the spending on higher education sector from the present 18% of total government spending on education to 25% of the total government spending on education (Source: Faster sustainable and more inclusive growth: An approach to the Twelfth Five Year Plan, Planning Commission, October 2011).

Over the years the Government has been making dedicated efforts to promote literacy and elementary education. Over the last decade, with rising focus on literacy and primary education in the country, the Central government's outlay on education has been increasing at a CAGR of close to 19 per cent. also, the addressable market for private investments is currently about US$ 30 billion and is growing at a annual rate of 17% and is likely to accelerate to 19% until 2015 (Source: Anand Rathi’s report on Indian EducationUS$45billion private education opportunity: Everyone wants a slice; December 29, 2011)

Central Government spending on education

In the Eleventh 5-year Plan, the Central government has earmarked `2,700 billion for the education segment as compared to `742 billion in the tenth 5 year plan. Out of the total spend on education the majority of funds have been allocated towards elementary education segment. In the Tenth Plan, around 62 per cent of the funds were allocated to elementary education. Even in the Eleventh Plan, 50 per cent of total funds have been allocated for various schemes to promote elementary education.

An agreement between Government of India and the World Bank for loan of US$ 500 million (equivalent) from World Bank for the Rashtriya Madhyamik Shiksha Abhiyan (RMSA) has been signed in October 2012. The Objective of the project is to help India to achieve increased and more equitable access to good quality secondary education through support of the Government‘s ongoing program for secondary education as

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delineated in the (RMSA) Framework. (Sources: http://pib.nic.in/newsite/erelease.aspx?relid=88209)

In addition to the Central government, states also incur expenditure on education, which is financed by their own revenues and through deficit financing. Over the last few years, state governments' spend on education has also been increasing. The table below provides a breakdown of State Government spending in the education sector.

State governments taken together are currently spending around 14 per cent of the total expenditure on education at all levels, a decrease from the level a decade ago but an increase compared with the middle years of the previous decade. But the Central government's declared desire to increase education spending is barely reflected in the budgetary figures with the amount spent remaining a shockingly low proportion of the total public spending.

The table below depicts the spending on education as a percentage of total government spending:

(Report issued by KPMG on Education Sector in India on April 20, 2011)

Investments of USD 100 billion are expected to flow into the education services industry by 2014. These investments would flow into the formal education space - kindergarten to standard twelfth (K-12) and higher education - and support infrastructure services. (Source: Report issued by KPMG on Education Sector in India)

The presence of private players in this sector has been increasing due to the need for quality education and better infrastructure, which are found lacking in several government-owned institutions. Moreover, the low ‗gross enrolment to institution‘ ratio within the formal education segment, especially higher education, indicates the need for more quality institutions in this space.

Formal Education: K-12 Education

Overview and Structure of the Industry

K-12 education symbolizes education from kindergarten to Std. XII. The minimum age of entry into pre-primary schools is 5-6 years, including junior college and is completed at 17-18 years of age. These schools form the largest chunk of the educational services industry in India and can be categorized as follows.

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There are different types of schools based on the curricula. The School Boards develop the curriculum and conduct exams for these schools. Government schools follow either the Central or state curriculum while private schools are free to choose their own curriculum though aided private schools have to follow the state curriculum.. Indian K-12 schools are primarily affiliated to CBSE, ICSE, state Government education boards, IB or ICGSE curriculum. Most schools are owned either by the Central Government (MHRD), State Government or are private schools. The table below provides the ownership structure of the schools.

Government Schools:

Government schools can be classified into schools running under MHRD and state Government schools. MHRD schools include the Kendriya Vidyalayas (run by Kendriya Vidyalaya Sangathan), Navoda Vidyalayas (run by Navoda Vidyalayas Samiti) and the Sainik Schools.

In addition, Governments of every state operate schools in cities, towns and villages in their respective states to facilitate access to education to those people who cannot afford to enroll their children in private schools. The chart below gives a description of the ownership structure of the Government schools:

Private schools: Private schools are set up by private trusts, societies or companies established under Section 25 of Companies Act and cater to middle and upper middle class population. These schools are affiliated to, either State Boards, CBSE or ICSE. Increasingly, private schools have started offering international qualifications like IB and IGCSE in addition to ICSE / CBSE. The table below gives ownership structure of the private schools.

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The Indian private school segment is highly fragmented with very few organised players. As the proportion of students pursuing private education rises, there is a corresponding increase in private investment entering the sector.

Government initiatives for promotion of K-12 education

Sarva Shiksha Abhiyan (SSA)

SSA has been operational since 2000-2001 to provide for a variety of interventions for universal access and retention, bridging of gender and social category gaps in elementary education and improving the quality of learning. SSA interventions include inter alia, opening of new schools and alternate schooling facilities, construction of schools and additional classrooms, toilets and drinking water, provisioning for teachers, periodic teacher training and academic resource support, textbooks and support for learning achievement.

National Program of Nutritional Support to Primary Education (NPEGEL)

With a view to enhancing enrolment, retention and attendance and simultaneously improving nutritional levels among children, the National Programme of Nutritional Support to Primary Education (NP-NSPE) was launched as a Centrally Sponsored Scheme on August 15, 1995.

In 2001 MDMS became a cooked Mid Day Meal Scheme under which every child in every Government and Government aided primary school was to be served a prepared Mid Day Meal with a minimum content of 300 calories of energy and 8-12 gram protein per day for a minimum of 200 days. The Scheme was further extended in 2002 to cover not only children studying in Government, Government aided and local body schools, but also children studying in Education Guarantee Scheme (EGS) and Alternative & Innovative Education (AIE) centres.

Over a period of time the Scheme was revised to provide for central government assistance for Cooking cost per child per school day to cover cost of pulses, vegetables cooking oil, condiments, fuel and wages and remuneration payable to personnel or amount payable to agency responsible for cooking and transport subsidy. Central government assistance was provided for the first time for management, monitoring and evaluation of the scheme as a percentage of the cost of food grains, transport subsidy and cooking assistance. A provision for serving mid day meal during summer vacation in drought affected areas was also made.

In October 2007, the Scheme was extended to cover children of upper primary classes (i.e. class VI to VIII) studying in 3,479 Educationally Backwards Blocks (EBBs) and the name of the Scheme was changed from ‗National Programme of Nutritional Support to Primary Education‘ to ‗National Programme of Mid Day Meal in Schools‘. The Scheme was further revised in April 2008 to extend the scheme to recognized as well as unrecognized Madarsas / Maqtabs supported under SSA.

Right to Education Act

The Right to Education Bill was introduced as part of the 86th Amendment in the Indian Constitution. Some of the salient features of the RTE Act are as follows: • It is the duty of the government to provide free and compulsory education to all students from the ages of 6-14 • Reservation of up to 25 per cent. for economically weaker section students in the neighborhood (as per the Indian census definition) in private unaided schools • Minimum 25 per cent. (or higher depending upon the extent of government aid) reservation for EWS students in private aided schools (Source:www.mhrd.gov.in)

Informal Education: Pre-school Education

Overview:

Pre-schools or playschools traditionally cater to children in the age group of two to four years. Pre-schools as a concept is relatively new in India and largely remains an urban phenomenon but the trend is spreading fast

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across the country. Company estimates the players to increasingly foray into semi-urban areas over the next few years. Increasing awareness among parents (about the benefits of quality pre-school education) and rising disposable income have been boosting penetration levels in this segment.

The Planning Commission report for 2012-17 suggests several measures to enhance provision and improve quality of elementary education including:  Integration of pre-school education into schooling especially in the Government schools so as to provide entitlements at the pre-school level.  Funding for pre-school children under Early Childhood Care and Education (ECCE), especially in special focus districts.  Making physical education, games and sports an integral part of curriculum in schools for holistic development of children and making provision of infrastructure for the same.

The current addressable preschool market in India is worth US$ 770 million, growing at a 6% CAGR. While the segment was dominated by unorganized and unbranded players in the past, organised players have entered the market in recent times and have begun to make an impact. (Source: Religare Research Report June 2012)

As per Census 2011, India has about 159 million students in the 0–6 age bracket. Within this, 74% are students in rural India, a market not addressable both from economic and scalability standpoints. Based on socio- economic indicators, we believe that of the remaining 26% (urban population), only about 12% would be willing to pay for such services and hence are likely to be the target segment for preschools. Thus, the total addressable preschool market works out to only 1.6 million students, which is about 0.6% of India‘s total school-going population. (Source: Religare Research Report June 2012)

The chart below depicts the addressable segment in preschool:

(Source: Religare Research Report June 2012)

The pre-school market is highly fragmented and unorganised in nature owing to the low entry barriers and low investment levels required in the sector. Unlike schools, colleges and higher educational institutions (which are restricted by law from functioning as 'for-profit' ventures), pre-schools are not prohibited to make profits.

Structure and business models

Companies operating pre-schools either adopt a franchisee model or self-operated model for pre-schools.

Franchisee model: A company expands its operations and extends its brand name through franchise, in lieu of which, it is paid a franchise fee and a royalty fee. The royalty fees is based on the total fee generated by the school in a year while franchisee fee refers to the one-time fee paid for use of the brand name over the tenure of the contract.

The franchisor typically provides the curriculum, takes care of teacher training and initial marketing for the franchise Majority of large pre-school chains have adopted the franchise route for rapid growth.

Company-owned model: Under this model, the company owns most of the pre-schools with very few schools on franchisee. This model facilitates the company to maintain quality, hygiene, and safety control across its pre- schools.

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The Indian private school segment is highly fragmented with very few organised players.

Outlook

The industry is expected to grow due to (a) the increasing willingness of the parents to spend on quality education, (b) growing proportion of working women, (c) lower entry barriers and (d) no regulation.

FY11 FY12 India Population (million) 1,210 1,304 0-6 year population (million) 159 157 Rural 118 114 Urban 41 43 1.5-3.5 year age group 14 13 Target Population % 12% 16% Target Segment population (million) 1.6 2.0 ASP 21,200 23,400 Addressable Market (` million) 34,707 47,182 Addressable Market ($ million) 771 1,049 (Source: Religare Research Report issued on June 2012)

Factor affecting the growth of Education Sector in India

The education sector is likely to be driven by the following factors over the next decade:  Favourable Demographics: India is a country where a major portion of the population is young and close to half the population projected to be below the age of 30 as of 2011. (Source: http://mospi.nic.in/Mospi_New/site/India_Statistics.aspx). With the literacy rates at about 74% as per the 2011 census and a relatively favourable demographics, continuous investment in education is require to continue economic growth in India. (Source: http://planningcommission.nic.in/data/datatable/1705/final_132.pdf).

 Changes in the economy: Higher economic growth and growing urbanisation is expected to translate to higher disposable income. This is likely to result into higher affordability, especially for the middle class, which in turn, is expected to increase spending and investment in education. This, in turn should translate into higher growth in education services.

 Government policies: As indicated above, the Government is looking to invest and upgrade elementary education significantly over the last few years and into the foreseeable future- as evidenced by increasing allocations for investments in the 5 year plans. For examples, the Government has envisaged an investment of `2,700 billion in the Eleventh five year plan. The Government has promulgated the Right to Education Act and has various ongoing programmes such as the SSA, the Mid-day Meal Scheme to encourage and foster education services in India. Continued investment by the Government is likely to spur the growth of education sector in India.

 Increased private sector investment: The number of private players has been increasing particularly on account of the need for quality education and better infrastructure which are lacking in Government institutions. An investment of US$ 100 billion into the formal education services industry by 2014. (Source: Report issued by KPMG on Education Sector in India on 20th April, 2011)

 Increasing penetration level in pre-school industry: The pre-school industry is likely to grow to `45- 50 billion by 2015-16 from `30-35 billion in 2010-11. (Source: Religare Research). Greater thrust on education and increasing awareness about the necessity of quality pre-school education, are likely to be key drivers resulting in growth of the pre-school industry.

Challenges of the Education sector

Following are the key challenges of the education sector in India

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 Quality of education delivery: Many state-funded schools, especially those in the rural areas, lack even basic infrastructure facilities. Moreover the quality of education remains quite dismal. Additionally the Indian pupil-teacher ratio remains substantially high relative to the world average and the developing countries average. An improvement in the aforesaid areas is a pre-requisite for nation building.

 Government spending on education: As explained earlier, the Government of education (despite significant efforts in recent times), remains lower than that of developed countries. Sustained increase in spending in education remains a key focus area.

 Access: While the Government has been looking to expand the elementary school programme the physical availability of institutions, other barriers to access – e.g. socio-economic, linguistic – academic, physical barriers for the disabled continue to remain.

 Relevance: Education in India needs to be more skill-oriented – both in terms of life-skills as well as livelihood skills. In sheer numerical terms, India has the manpower to substantially meet the needs of a world hungry for skilled workers, provided its education system can convert those numbers into a skilled work-force with the needed diversity of skills.

 Management: Management of Indian education needs to build in greater decentralization, accountability, and professionalism, so that it is able to deliver good quality education to all, and ensure optimal utilization of available resources.

Regulatory bodies

Regulation of educational institutions is carried out by various agencies created by the Central Government, the State Governments or through special legislation by the Central or State Government. K-12 regulation is regulated almost entirely at the state level and varies across states. Schools which are established or funded by the state governments are regulated through the state level boards for secondary and higher secondary education while self financed schools are relatively lesser regulated.

The State Government regulates education through the Board for Secondary and Higher Secondary Education owned by the state or affiliated to the State Board. Central Government schools affiliated to CBSE are regulated by the CBSE Board while schools affiliated to ICSE are affiliated to the ICSE Board.

In addition (apart from MHRD), some of the main bodies regulating higher education are as follows: • University Grants Commission: To promote, monitor and coordinate university education and related activities including disbursement of grants • All India Council for Technical Education: Co-ordinates the development of technical education at all levels • Medical Council of India: Empowered to prescribe minimum standards for medical education • Dental Council of India: Regulating Dental education and profession of dentistry • Pharmacy Council of India • Indian Nursing Council • Bar Council of India • Central Council for Homeopathy • Central Council for Indian medicine etc. • Council of Architecture • Distance Education Council • Rehabilitation Council

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BUSINESS

Unless stated otherwise, the financial data in this section is as per our unconsolidated financial information set forth elsewhere in this Prospectus. The following information should be read together with the more detailed financial and other information included in this Prospectus, including the information contained in the section titled "Risk Factors" beginning on page 24 of this Prospectus.

OVERVIEW

Introduction:

Our Company is one of the leading providers of educational services in India and is focusing on child development through various segments of the education business namely, (a) pre-schools, (b) K-12 schools, and (c) vocational training. Our Company is positioned to cater to the large unmet needs in the child development and education domain enabled by strong brands and increasing penetration through multiple channels of distribution. We operate through a combination of partnerships, franchising arrangements, and our Company‘s self-managed institutes. We also offer school solutions and co-curricular learning modules aimed at improving the conceptual understanding of students in various subjects including but not limited to Science and Grammar. Our Company is a ISO 9001:2008 certified company for design and development of various educational content upto 8th standard and deployment through multiple delivery mechanisms. We also provide (a) School Solutions; and (b) Vocational studies.

We are a part of the "Essel" group of companies. The Essel group is a recognized business house with a diverse set of businesses in media, packaging, entertainment, technology-enabled services, infrastructure development and education. Some of the other major companies of the Essel group include Essel Infra projects Limited, Essel Propack Limited, Dish TV India Limited, Siti Cable Network Limited, Zee Entertainment Enterprises Limited and Zee News Limited. We believe that the "Zee" brand name has propelled our Company and continues to provide immense value to our growth and recognition of our pre-schools, K-12 schools and other service offerings.

Our History:

A brief history of our Company‘s education related business activities is as summarized in the following table, and, as better detailed hereinafter.

No Date Particulars 1 1994 Our Company‘s education related business activities were started as a division of Zee Telefilms Limited, (subsequently renamed as Zee Entertainment Enterprises Limited)

2 1999 Zee Telefilms Limited education related business activities were transferred to Zee Interactive Learning Systems Limited, a wholly owned subsidiary of Zee Telefilms Limited.

3 2008 Merger and amalgamation of ETC Networks Limited with Zee Interactive Learning Systems Limited, and consequently:  the business of ETC Networks Limited was merged and transferred to Zee Interactive Learning Systems Limited,  the resultant entity was engaged in the education as well as the media and entertainment business,  the resultant entity was renamed as ETC Networks Limited, and was listed on the BSE and NSE.  4 2010 Our Company was incorporated as a public limited company on January 4, 2010, with the name Zee Learn Limited. A composite scheme of amalgamation provided for Merger of ETC Networks Ltd with Zee Entertainment Enterprises Limited with effect from March 31, 2010 and upon the aforesaid merger, demerger of education business undertaking of Zee Entertainment Enterprises Limited and the transfer / vesting of the business undertaking to Zee Learn Limited on and from April 1, 2010 (Appointed Date).

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Pursuant to a composite scheme of amalgamation and arrangement between ETC Networks Limited, Zee Entertainment Enterprises Limited, our Company, (as approved by the Bombay High Court vide an order dated July 16, 2010) and their respective shareholder, the education business of Zee Entertainment Enterprises Limited and ETC Networks Limited, was transferred to our Company. Accordingly, our Company commenced its operations in 2010 pursuant to the scheme effected on August 30, 2010.

Pursuant to a scheme of amalgamation between Essel Entertainment Media Limited ("EEML") with our Company (as approved by the Bombay High Court vide an order dated June 17, 2011), the entire business (including equity investments in DVPL), properties (including intellectual property rights) and liabilities of EEML were transferred to our Company.

Brands and Products:

Our Company provides the following educational services in India catering to various segments of the education business namely:

Pre-schools

Our portfolio consists of various brands through which we offer a wide spectrum of educational services. We believe that our flagship pre-school brand, namely Kidzee is a recognized brand in pre-schools in India spread across 340 cities and is considered to be one of the largest pre-schools. Kidzee is also recognised as one of the largest playschools chains in India and has 1211 such centres. For our Kidzee pre-schools we have developed our own proprietary pedagogy (namely teaching processes), under the name "iLLUME", which is an education program independently validated by M S University, Baroda, in January 2010Kidzee has been awarded with the "Best Franchisor in Pre-school education" award in 2004 and 2005. For the Fiscal 2010, Kidzee was awarded by Franchise Plus as the "Franchisor of the Year" in the general franchisee segment.

K-12 schools

We also have a chain of K-12 schools across India under the Mount Litera Zee School brand. Our K-12 schools under the brand Mount Litera Zee School brand that comprise of schools under two models, namely (a) franchisee schools; and (b) management schools. As on December 31, 2012 we had 54 operational franchisee schools and 2 schools under management.

We also manage K-12 Schools and have such schools at Bhatinda and Nagothane and propose to have similar schools at places including Patiala, Marmugao, and Mumbai.

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Vocational Training

Our vocational education programs are operated through two brands, namely, (i) Zee Institute of Media Arts ("ZIMA"), and, (ii) Zee Institute of Creative Arts ("ZICA") for various courses in media and classical and digital animation training academies through affiliation with recognised universities. We have 32 centres for ZICA spread over 16 cities while we have 1 centre for ZIMA. For some of the current courses being offered under the ZICA and ZIMA brands, we have been affiliated with HimgiriZee University and Annamalai University. Under the ZICA program, we offer courses varying between 6-36 months, which include bachelors‘ degrees in science and fine arts; certificate courses in 3D motion graphics, 3D character design and sculpting; diploma courses in 3D Graphics; and advanced courses in Maya character animation. Under ZIMA, we offer programs in direction, cinematography, editing, sound, film animation, visual effects and the training in specialized software such as Autodesk, Smoke and Flame. The courses offered at ZIMA range between 2 to 24 months and include diploma courses in film making, direction, advertising film making, cinematography, executive producers for film and television, editing, acting, voicing and television presentation, sound and writing.

The details pertaining to segmentation of various verticals is provided in the table below:

Age of students Certifications from courses (in years) Pre School 2-4 -- K-12 4-18 Certificate for secondary or senior secondary education Vocational 18-24 Diploma and Graduation Certificates in various disciplines courses

On November 5, 2012, Zee Entertainment Limited launched a channel in the education domain in the name and style of 'ZeeQ'. Recognising our Company‘s expertise in the education sector and our capability and expertise in the education domain, it proposes to enter into an agreement with our company to manage and to distribute and market the channel. The services to be provided include content acquisition, content production, editing and quality control, channel programming, distribution management, marketing and promotion. It is expected to be a fun learning destination imparting knowledge and life skills. It would also help in child development while inculcating values and helping children choose the right career and lifestyle. It would be one of the first edutainment and multi-platform television channel. ZeeQ will also have a presence on television, internet and mobiles.

Revenue Details:

For the Fiscal Years 2012 and 2011, our total income was `619.12 million and `436.98 million, and our net profit/(loss) for the period was `(275.79) million and `18.52 million, respectively. Details of our revenues, profit before tax and profit after tax are as follows: (`in million) Particulars Period ended Period ended Half Year Ended March 31,2012 March 31,2011 September 30,2012 Revenues Sale of Education al Goods and Equipments 264.08 176.82 186.28 Education and Other Services 345.94 250.66 235.49 Profit Before Tax (274.10) 25.42 (58.64) Profit After Tax (275.79 18.52 (58.64)

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OUR STRENGTHS

We believe that the following are our key competitive strengths:

Established brand name in pre-schools and large network in pre-schools and K-12 Schools

We believe that we have established ourselves as one of the leading players in the pre-school education space in India under the Kidzee brand. We believe that our award winning Kidzee brand is one of the most prominent brands in pre-schools in India. As on December 31, 2012 we have 1211 Kidzee locations catering to around 65,000 students in 340 cities. Our Company‘s Kidzee schools are spread over 26 states and 5 union territories.

Within the K-12 education space, we believe that we have a strong presence through our schools operating under the Mount Litera Zee School brand. We believe that our Mount Litera Zee School brand is well recognised K-12 schools segment. As at December 31, 2012, in the K-12 segment, we have 54 operational franchisees spread across various cities catering to over 10,000 students.

We believe that the brand image and brand recall of both Kidzee and Mount Litera Zee School coupled with our pan-India presence has helped us in establishing our Company as a recognized player in the pre-schools and K- 12 schools segment which in turn has helped to grow our franchise network. Being a well-recognized national brand has been instrumental in establishing a larger student base than several of our competitors. It has also enabled us in recruiting qualified professionals including teachers for our institutions.

Brand recognition by virtue of being part of the Essel group and geographical reach

We are a part of the "Essel" group of companies which enables us to use the "Zee" brand name in our business. We believe that recognition of the brand name "Zee" has helped us enhance and will continue to enhance the visibility of our Company‘s pre-schools, K-12 schools and other service offerings in an industry sector which is otherwise very fragmented.

As at December 31, 2012, in the K-12 segment we had 54 operational franchisees spread over various cities across India catering to around 10,000 students. Currently, we manage K-12 Schools at Bhatinda and Nagothane. Our 1,211 Kidzee centres are spread across 26 states and 5 union territories. We also have 32 centres for ZICA spread over 16 cities and 1 centre for ZIMA.

Our wide reach combined with the brand recognition of "Zee" helps us in attracting students.

Innovative educational modules and teaching techniques with a focus on delivering quality education

Innovative education modules

We believe that our key strength lies in designing and developing educational modules which are suited to the requirements of students and match up to their preferred learning patterns and aptitude. We believe this ability differentiates our Company from other competitors and strengthens our ability to attract and retain students. We have internally developed our own proprietary pedagogies, "iLLUME" (for our Kidzee pre-schools) and "Litera Octave" (for our K-12 schools).Our iLLUME methodology has been independently validated by the Faculty of Family and Community Sciences, M S University, Baroda on January 30, 2010. Our proprietary K-12 education model, "Litera Octave" is an integrated educational model that has been refined through to extensive research and development integrating various components such as content, infrastructure, classroom design, assessment and systems that impact the child during his/her learning and development in school.

Further, we have developed multimedia content for our educational modules. Such multimedia content is divided into audio visuals, teacher plan and learning resources, and are interlinked with each other. The audio visual content is mapped to the curriculum designed by the National curriculum framework in the Fiscal 2011. The content utilizes a documentary style approach and learning experiences are woven through a story.The multimedia content can be utilized on a range of devices and platforms and has been customized to suit the Indian accent.

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Innovative teaching techniques

Zee Learn Gakken Science Academy, a venture of our Company in collaboration with Gakken J Holdings Company Limited, Japan, ("Gakken"), has promoted the Brain Café science module which is a four level concept builder program for students of class III to VIII. Pursuant to our arrangement with Gakken, Gakken has licensed our Company to disseminate the Gakken‘s science experiment classrooms within India. Our Company has in collaboration with Gakken further developed and continues to evolve and modify Gakken‘s products to suit the requirements of students in India. The program supplements the regular curriculum and aims at bringing about a better understanding and appreciation of science. Currently, a total of 649 schools have signed-up for implementing the Braincafé module catering to 100,000 students. Out of the 649 schools, 240 schools have already implemented this module.

Advanced training facilities for teachers

We focus on a strong continual training and development program for our teachers, which enable us to offer a better teaching experience to our students. It also strengthens our ability to attract and retain our teachers. We have designed various training modules and programs to provide teachers, principals and school administrators with new and enhanced skills and content. Our focus is on changing the way teachers interact with children, inside and outside classrooms. We provide over 60 teacher training hours per teacher every year. We train them in classroom management techniques, instructional strategies, and other such skills that help develop the required skill-sets in teachers.

Our Company‘s training facilities for teachers has helped us in maintaining and enhancing the quality of education and teaching techniques in our pre-schools and K-12 schools. We also require that the teachers hired by our franchisees have to attend training sessions conducted by our Company.

Large addressable market and scalable business model driven by our existing network and ability to deliver homogeneous service offerings

We believe that there exists a large addressable market, both, within the pre-school and K-12 education space. Government spending on education as a percentage of GDP in India remains lower than similar Government spending in many developed countries.

We believe that we have a substantial presence in the pre-school and K-12 education space. This, in addition our growth plans, positions us favourably to take advantage of this market. We have developed a highly scalable operating platform on the basis of our innovative offerings which have enabled us to efficiently replicate our service model as we expand and deepen our nationwide network. We believe that our franchising model and our standardized operations are integral aspects of the scalability of our business model. In particular, we believe that the franchisee model has facilitated the fast growth of our pre-school and K-12 school networks.

The uniformity adopted by us in running our schools aids in making our business scalable. Further, as a part of our strategy of maintaining the quality of education across our franchise and ensuring uniformity in the delivery of our offerings, we follow a standard design and architecture across our pre-schools and K-12 schools so as to ensure a homogenous learning environment and infrastructure. We follow a central procurement process for furniture and learning equipment. We also have a centralized process for procuring and supplying all material for our pre-schools and K-12 schools. Similarly, at both our Kidzee and Mount Litera Zee School outlets, we have flexible transfer policies which are popular with parents who get transferred to different locations and who would prefer for their children to learn in a uniform atmosphere even when their parents are transferred to different locations. By adopting standardized procedures throughout our operations, we have been able to apply our accumulated expertise to our geographic expansion in such areas as student and teaching staff training; recruitment and retention; best practices for opening and ramping up new locations and general business management practices.

OUR STRATEGIES

Our goal is to further strengthen our leadership position in India's pre-school, K-12 and vocational training education sectors, and to expand our market share in the highly fragmented educational service market in India. We intend to leverage our established leading market position and strong brand in pursuing the following

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strategies.

Maintain our competitive position in pre-schools and expand our network and brand for K-12 schools

We believe that Our Company‘s Kidzee playschool network is one of the largest pre-school chains in India. We propose to sustain our leadership position in pre-schools by continuing to identify new centres for our Kidzee playschools and thereby expanding our existing franchise networks at such centres.

Within the pre-school segment, our Company has recently has started premium pre-schools at Mumbai in the year 2011and 2012 under the Mount Litera World Preschool brand. We propose to develop a chain of such premium pre-schools aimed at catering to the higher income bracket customers under the Mount Litera World Preschool brand in the near future.

Further, we propose to expand our existing network of K-12 schools and further develop the Mount Litera Zee Schools brand. As on December 31, 2012, we had executed 124 franchisee agreements in connection with our K-12 schools. We propose to continue to expand our K-12 schools network both through franchise arrangements, as well as through our self-managed K-12 schools.

With a view to sustaining our competitive position in pre-schools and to expanding our network and brand recognition for K-12 schools we intend to continue our focus on brand building by a consolidated nationwide marketing campaign through the television and print media. We intend to implement targeted initiatives throughout the year to increase student enrolment to ensure optimum utilisation of our infrastructure capabilities. We intend to try and ensure that we have K-12 schools strategically located near our pre-schools to enable us to cross- sell our different offering more effectively to our existing pre-school students.

Within each segment of our business, we seek to constantly innovate and add value-added products and services to fulfill a wide range of educational needs of our students and to give us an advantage over our competitors. We also intend to continue to focus on continuing to develop and evolve a dynamic curriculum and pedagogy through continuous research and timely upgrades of content and student kits.

Set-up larger network of Company managed K-12 Schools

With a view of diversifying our revenue streams further, and capitalizing on our experience and expertise in the education business we propose to expand our portfolio by managing and operating a much larger number of K- 12 schools. We also manage K-12 Schools and have such schools at Bhatinda and Nagothane.

In addition to providing educational infrastructure and management services to various schools, we intend to provide physical infrastructure to such schools through our wholly owned subsidiary, DVPL. DVPL would provide the infrastructure and assets (school building, furniture and fixtures, vehicles etc.) to various schools. Our Company would provide educational infrastructure in the form of the curriculum, teacher training, student aids and programs, etc. and manage the day to day affairs of such schools.

Pursuant to a development agreement dated October 28, 2010 between TALEEM Research Foundation ("TALEEM")and DVPL, DVPL had agreed to develop the land at GN Block Bandra Kurla Complex which has been given to TALEEM on lease by the Mumbai Metropolitan Region Development Authority for a period of 80 years from December 16, 2009.

Seek to become an established player in school solutions

In an effort to capitalize on the growing demand for specialized educational offerings, curriculum modules and school solutions, we seek to continuously expand, innovate and develop our offerings within the school solutions space. Our Brain Café science module developed by Zee Learn Gakken Science Academy, a venture between our Company and Gakken J Holdings Company Limited, Japan, is intended to supplement the regular curriculum of the school while aiming at bringing about a better understanding and appreciation of science. As of December 31, 2012, 649 schools have signed up for implementing the Braincafé module catering to 100,000 students and 240 of such schools have already implemented the said module. With the success of the BrainCafé in the secondary school section our Company is proposing to introduce a module for the pre-primary section of

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the K-12 Schools. We propose to continuously develop similar new/improved education solutions in the K-12 segment which could, in turn, help us in strengthening our presence in this segment.

Develop Vocational Education Business

We propose to expand our vocational studies business by entering into franchise arrangements both under the ZICA and ZIMA brands. We propose to introduce more courses through affiliation with recognized universities. For some of the current courses being offered under the ZICA and ZIMA brands, we have been affiliated with Himgiri Zee University and Annamalai University. We also propose to increase enrolments in our vocational education business through delivery of quality education and by focusing on development of a dynamic curriculum through continuous research and timely upgrades of content.

Good student experience

We believe that our key strength lies in designing and developing educational modules and providing innovating teaching techniques which are suited to the requirements of students and match up to their preferred learning patterns and aptitude. This would provide a good student experience. Additionally digital content, activity based learning program that provides multiple pathways to learn for children. We also provide an integrated parenting curriculum that empowers parents to facilitate child development in the right manner.

Multiple channels of distribution

We have developed a large network of educational institutions complemented by an online platform. We have 1211 Kidzee centres, 124 Mount Litera Zee Schools and 649 Braincafe schools. These educational institutions have a very strong student and faculty engagement solutions thereby increasing the focus of all teaching methods and also effectively manage the growth of each individual student. With the launch of ZeeQ channel by Zee Entertainment Limited, our Company would now reach children using the DTH (television) platform.

Wide Product Portfolio

Our Company is one of the leading providers of educational services in India catering to various segments of the education business including (a) pre-schools, (b) K-12 schools, and (c) vocational training. We have also made a foray specifically into premium pre-schools and a premium K-12 school. All our product offerings are complementary to each other thereby allowing us to leverage existing relationships all our business partners resulting in higher revenue per centre/school. Strategic Partnerships for creating or sourcing differentiated Best In Class products from across the world strongly aligned with Indian Curriculum

Our Operations

Our operations can be summarized as follows:

A. Pre-Schools

Our pre-schools business was initiated in 2003 while our business was operated as a part of Zee

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Interactive Learning Systems Limited. Over the years we have expanded our foot print of pre-schools under the Kidzee brand to 340 cities spread over 26states and 5 union territories catering to over 65,000 students as of December 31, 2012.

We believe that we offer curriculums with a unique learning style at our pre-schools which have been developed in-house on the basis of an extensive research initiative. Our own proprietary pedagogy, "iLLUME", is aimed at recognizing the preferred learning patterns of each child and accordingly deploying teaching techniques and activities around such preferred learning pattern for the child. iLLUME: "iLLUME" is an approach which we believe helps parents and teachers spot the unique potential in each child and help them realize such potential. "iLLUME is different from the one size fits all approach followed in most pre-schools. Under this methodology, we observe a child based on various pre-defined parameters. Pursuant to our observation, a note is made of the preferred learning style of each child. Once this is concluded, activities are built around his/her preferred learning style. This approach seeks to ensure that there is no pressure on the child thereby learning and growing at their own pace.

"iLLUME" was independently validated by the Faculty of Family and Community Sciences, M S University, Baroda in January 30, 2010. Based on a case study and parent feed-back in connection with this program, the university found the content, methodology and assessment techniques of the program to be developmentally appropriate and child centered. Moreover, the infrastructure at Kidzeecentres was found to be safe, welcoming, stimulating, interesting and child friendly.

Teaching Methodology: Our core belief is that "every child is unique"and has infinite potential. Through "iLLUME", Kidzee pre-schools help children discover their learning style and inculcate the love for learning in their early years. "iLLUME" is an enabler for a child to learn at his/her own pace and makes learning a joyful experience. "iLLUME" places a child at the centre and all the eight pillars of "iLLUME" are designed around a child for her overall development. While most of our competitors follow the 'Learning while Playing' approach, we follow the eight pronged "iLLUME" approach as described below.

Franchisee Model

Most of our current Kidzee pre-schools are operated on a franchisee model where the pre-schools are owned and run by the franchisee. Our Company provides the curriculum to franchisee operated pre- schools on an annual basis along with regular updates on the curriculum. Further, we provide necessary training to teachers of the franchisee operated pre-schools, for which our Company has a dedicated department. We regularly monitor the pre-schools operated by the franchisee through periodic audits to ensure that they maintain the pre-schools in accordance with our standardized methods, systems and processes.

Our Company licenses our Kidzee program which includes our proprietary student kits, operations manual, teachers manuals and school management systems kit to the franchisee to implement

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standardized procedures and teaching methods. Such license typically grants the franchisee the right to use the trademark and logo of our Company on any articles or materials proposed to be used for the purposes of the franchise in order to attract a wider array of students by increasing the credibility of the school.

The franchisee is required to pay our Company (a) a non refundable franchisee license fee/ franchise fee inclusive of the fees for use of the intellectual property, (b) fees for providing centre kits, (c)fees for providing student kits on a per student basis, and (d) a royalty on a per student basis collected at each Kidzee centre, as consideration for the license in respect of the Kidzee program.

Mount Litera World Preschool

In the wake of the rising awareness of global standards of education amongst parents, we believe that there is a growing demand for international standard pre-schools in India. within the pre-school space, we have commenced operations of two premium pre-school schools aimed at the higher income bracket through self-operated pre-schools at Mumbai under the Mount Litera World Preschool brand. We propose to add similar premium world pre-schools in the near future.

B. K-12 Schools

Our K-12 schools under the Mount Litera Zee School brand comprise of schools under two different models, namely (a) franchisee schools, and (b) Management Schools. As on December 31, 2012 of the 124 K-12 schools we had 54 operational franchisee schools and 2 schools under our management. We manage K-12 Schools and have such schools at Bhatinda and Nagothane.

At Mount Litera Zee School we provide end to end education management and advisory services ranging from architectural plans, branding, marketing, content, teacher training, assessment to school audits and parenting programs. Our proprietary K-12 education model "Litera Octave" is an integrated educational model developed pursuant to extensive research and development initiatives. The program integrates various pillars of tutoring such as content, infrastructure, classroom design, assessment and systems that impact the child during his/her learning and development in school.

These schools follow an integrated educational model that has been honed over years of research and development integrating various pillars such as content, infrastructure, classroom design (including unique hexagonal learning spaces), assessment and systems that impact the child during his/her learning and development in school. Our Company provides 3Ddesigns of the infrastructure, in-house developed blended learning designs integrated with digital content, Teacher Training, Marketing and Centre Audits, Parenting Programs and Seminars as services.

Franchisee K-12 Schools

We enter into franchisee agreements with the charitable trusts, societies and/or organizations which are responsible for the management of the schools. The franchisee agreement is made with a typical operating period of 12 years and can be renewed for a further period of 12 years. The Franchisee is generally required to establish, manage and conduct our school program by constitution of a school management committee, wherein our Company reserves a right to have equal representations in the composition of the committee.

The franchisee must ensure that at the time of admission each student shall pay an annual fee. In addition, a student is also required to pay monthly tuition fees to the franchisee. The franchisee is required to pay our Company (a) a non refundable franchisee license fee/ franchise fee inclusive of the fees for use of the intellectual property, (b) fees for providing student kits on a per student basis, and (c) a specified royalty per student from the franchisee either at the time of enrollment of the student or on an annual basis, as consideration for the license in respect of the "Litera Octave" program.

We conduct periodic audits of our franchisee pre-schools to ensure quality of delivery of education and compliance with our standards. These audits are conducted by the academic team of our Company once in a year.

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C. School Solutions:

Our Company has entered into an agreement dated October 20, 2010 with Gakken J Holdings Company Limited, Japan, whereby Gakken J Holdings Company Limited has granted our Company a license to open and operate the Gakken Science experiment classrooms within India, in lieu of a know- how fee based on number of student kits supplied by our Company on a coach model or a non coach model. Currently our Company is the only licensee of Gakken J Holdings Company Limited in India. Pursuant to the aforesaid agreement our Company through the Zee Learn Gakken Science Academy has promoted the Brain Café science module which is an integrated four level concept builder program for students of class Ito VIII. This program supplements the regular curriculum and provides a better understanding and appreciation of science. As at December 31, 2012, a total of 649 schools have signed-up for implementing the Braincafé module, catering to close to 100,000 students, of which 240 schools have already implemented the said module. Our Company provides services such as establishment of science laboratories in the school, teachers training, preparation of lesson plan and operations manuals. Our company also provides "QuarC" a unique pedagogy aimed at facilitating development of thinking skills among children. Additionally we organize, Brain Cafe Budding Scientist Contest - an Interschool National Contest which provide platform to school children to showcase their innovations.

D. ZICA: Under the ZICA brand we have, through franchisee arrangements as well as through a self- managed institute, full-fledged classical and digital animation training academies that impart vocational training in classical two dimensional and modern three dimensional animations. As at December 31, 2012, ZICA operates at 32 centres in more than 16 major cities across India including Mumbai, Delhi, Bangalore, Hyderabad, Pune, Lucknow, Chandigarh, Bhubaneswar and Ahmedabad. We operate one ZICA centres while 31 centres are run by franchisees. Under this program, we offer courses varying between 6-36 months, which include bachelors‘ degrees in science and fine arts; certificate courses in 3D motion graphics, 3D character design and sculpting; diploma courses in 3D Graphics; and advanced courses in Maya character animation. Various films from ZICA centres have won accolades at various film festivals. For example ZICA Bhubaneswar was the winner of best animation movie at Bangalore Short Film Festival in July 2012 and the winner of best animation movie At Kolkata International Short Film Festival in August 2012

E. ZIMA: Under our ZIMA brand we offer numerous courses in direction, cinematography, editing, sound, film animation, visual effects and the training in specialized software such as Autodesk, Smoke and Flame. ZIMA offers the platform and infrastructure required for such media education. The curriculum has been carefully engineered and implemented to provide quality education aimed at matching global standards. As at December 31, 2012, our Company operates the only ZIMA institute at Mumbai. The courses offered at ZIMA range between 2 to 24 months and include diploma courses in film making, direction, advertising film making, cinematography, executive producers for film and television, editing, acting, voicing and television presentation, sound and writing. Students from our academy have won various accolades including Best Director, Best Cinematographer and Best Actor for a short film titled "IF", First Prize for Short film titled "Girl"etc.

F. Other Operations and Initiatives

Some of the other operating business ventures of our Company, such as the following:

 Our Company has collaborated with Maharashtra Knowledge Corporation Limited ("MKCL") to be Authorised Learning centre of MKCL and to promote and conduct MS-CIT course under the overall co-ordination of MKCL, whereby we receive a share of course fees from MKCL.  The BSE Limited has collaborated with our Company whereby our Company to provide a web enabled test engine for BSE‘s online certification examinations, wherein we receive remuneration from BSE on a per student basis from the examination fees received by BSE.

The details pertaining to the business verticals of our Company are provided below:

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Number of centres/schools Presence Pre School Kid Zee 1211 More than 340 cities Mount Litera World Pre school 2 1city K-12 Schools Mount Litera Zee Schools 124 More than 100 Brain Café 649 More than 184 cities Vocational training ZIMA 1 1 city ZICA 32 16 cities

Businesses through our Wholly-owned Subsidiary

DVPL, our wholly-owned subsidiary, provides infrastructure and assets to various schools.

TEACHER TRAINING

We lay emphasis on continual training and development of our teachers. We have designed various teacher training modules to provide teachers with new skills and content and leadership program for principals and school administrators. Our focus is on changing the way teachers interact with children, inside and outside classrooms. We provide over 60 teacher training hours per teacher every year. We train them in classroom management techniques, instructional strategies, and other such skills that help develop the required skill-sets in teachers.

We also focus on principals so as to enable them to lead their respective organizations. To help principals and acquire the knowledge and skills to become more effective, efficient and professional leaders, our Company organizes the leadership training workshop for all the Principal and Vice Principals of MLZS in Mumbai. The aim of the workshop is to transfer training skills and empower the leaders of schools as custodians of our Company‘s education philosophy

RESEARCH AND DEVELOPMENT

We have a dedicated team of 60 members for reach and development of content pertaining to our various offerings. The content team augments the delivery of educational services through creating e-Content, lecture notes, learning resources, lesson plans, activity plans, learning manipulative, and assessments for the schools, pre-schools, and skill development programs. We ensure that the learning experience created in the various classrooms are based on well-researched content and teaching-learning strategies. We also research on creating new educational products and services based on market requirements and trends. The team has policymakers, instructional designers, classroom teachers, subject matter experts, content developers, product/program designers, and copy editors.

INTELLECTUAL PROPERTY

Our Company‘s intellectual property rights are critical to our business especially with respect to our proprietary education material and modules. Our Company relies on a combination of copyright laws, trademark laws, confidentiality procedures and contractual provisions to protect its intellectual property rights. Our Company has applied for registration of trademarks for all its principal products in India. Pursuant to the commencement of their relationships with us, our Company requires franchisees to maintain confidentiality and inform us in respect of any infringement of our intellectual property rights.

Our Company has around 96 registered trademarks and 85 trademarks which are pending hearing and registration. We have also registered one copyright registered under the Indian Copyrights Act, 1947.

INSURANCE

Our Company has taken out insurance policies, as deemed necessary, covering property, plant and equipment, furniture fixtures, leasehold improvements for loss due to, including but not limited to, earthquake, fire and

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shock, terrorism, flood, material damage to electronic equipment, employee fidelity coverage and all risk coverage for portable equipment.Our Company also has personal accident insurance policies and medi-claim insurance for our employees. Our Company has also taken out insurance policies covering the liability of directors and officers against third party litigation. The policy provides for certain defense costs and pay certain settlements or judgments entered against officers and directors of our Company.

Our Company believes that its insurance coverage is adequate and consistent with industry standards. As at the date of this Prospectus, there have been no material claims made against our Company or any of our associate entities under the insurance policies. These insurance policies are generally valid for one year and are renewed annually.

EMPLOYEES

As on March 31, 2011 we had an aggregate 302 employees, of which 215 employees were engaged in our pre schools, K-12 schools operations, Braincafe division and in our vocational education programs and the remaining 87 were support staff.

As on March 31, 2012 we had an aggregate 504 employees, of which 370 employees were engaged in our pre schools, K-12 schools operations, Braincafe division and in our vocational education programs and the remaining 134 were support staff.

As on date, we had about 415 employees, of which 341employees were engaged in our pre schools, K-12 schools operations, the youth segment and in our Zee Learn School Innovations division and the remaining 79 were support staff.

COMPETITION

Our Company operates in a highly competitive environment that is subject to innovations, changes and varying levels of resources available to each entity in each segment of business. Competition is generally based on the location, the type of courses offered and the quality of the curriculum and course material, the quality of instruction, reputation and course fees. We believe that we are able to compete effectively on each of these. We also have a competitive advantage in the markets with our presence because of the quality of instruction, the strength of our brand equity and our reputation.

The pre-school market is highly fragmented and unorganised in nature owing to the low entry barriers and low investment levels required in the sector, which gives us the opportunity to capitalize on our brand image and network of schools to further scale up our operations. In recent years the education business has seen the entry of host of new entrants, some of whom are big and organized corporate entities. In our pre-schools segment our competition includes Euro Kids, Kangaroo Kids, Mother‘s Pride, Tree House, Apple Kids, Little Millennium, Bachpan, Shemrock, DRS Kids. In our K-12 schools segment we face competition from traditional school chains such as Delhi Public School, DAV schools; newer entrants such as Millenium School and Ryans International; and various Jesuit schools. In the market for providing school solutions we face competition from players like Educomp Solutions Limited, CL Educate Limited and Everonn Education Limited.

PROPERTIES

Our Company through our Subsidiary has one freehold property of 5.09 acres in Goa located at Bella Addo, Survey number 236/2 of Sancoale village, Mormugao, South Goa, Goa. Our Company and DVPL collectively have leasehold rights over various properties for its use as offices, warehouses for storage and distribution of products like books or furniture‘s. Some of these lands, acquired on a long term lease shall be used for the construction of schools. Our Company has a corporate office, 5 zonal offices, 3 warehouses, 1 guest house, 5 Kidzee (COCO) centres, 2 Mount Litera World Pre-schools (COCO); 1 ZICA (COCO) Centre and 1 ZIMA (COCO) Centres.

Following are the details of the properties owned or leased (with a term of over five years) by our Subsidiary

No. Locations Area Land Ownership 1 *Bandra Kurla Complex (BKC) , Mumbai 1.45 acres Leased for 80 years

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No. Locations Area Land Ownership 2 Marmagao 5.09 acres Owned 3 Karnal 5.48 acres Leased for 36 years 4 Patiala 5.717 acres Leased for 35 years 5 Nagpur 7.8 acres Leased for 40 years 6 Bhatinda 8 acres Leased for 33 years *Our Company has entered into a Management Agreement with Taleem on November 27, 2012, to jointly manage, run and operate Mount Litera International School at this property.

Around 100,000 square feet each is being constructed at these schools The schools shall also have facilities like swimming pool, basket ball court, lawn tennis court, volleyball court, badminton court, golf drive range, gymnastic room, wall climbing, These schools are expected to be operational in Fiscal 2013.

AWARDS AND RECOGNITION a) iLLUME Validation

"iLLUME" is the proprietary pedagogy of Kidzee. iLLUME was independently validated by M S University, Baroda in January 2010. b) Collaboration with OMEP

We have been ranked first in unique company initiatives for "India‘s Best Companies to work for in 2012". We have also been awarded the Bloomberg UTV CXO awards 2011 for "Best Implementation of Student and Faculty Engagement Solutions" for our web-based information systems.

Information technology

Our information technology systems are a critical part of our business and help us manage processes, records and inventory. Any technical failures associated with our information technology systems, including those caused by power failures and computer viruses and other unauthorized tampering, may cause interruptions in our ability to provide services to our clients. Our Company received an award from UTV Bloomberg for "Best Implementation of Student and Faculty Engagement Solutions" for our web-based information systems that have been developed in-house by our information technology department. The information systems such as eKidzee, eMountLitera and Braincafe MIScaters to its business and education needs. The system provides a platform to engage with our students, teachers, academic experts and sales team members thereby forming a strong tool to enhance the quality of education.

CORPORATE SOCIAL RESPONSIBILITY, ("CSR")

As a part of our CSR initiatives, our Company through Zee Learn Education Society pursuant to a MoU dated June 15, 2010 has been providing school management services under a public private partnership model to the schools managed by Gujarat State Tribal Development Residential Educational and Institutional Society under the Eklavya Model Residential School project of Government of Gujarat. Additionally, our Company regularly organizes various education awareness events/programs for the various sections of the society from time to time.

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OVERVIEW OF LAW REGULATING EDUCATION SECTOR IN INDIA

The following description is a summary of certain sector specific laws and regulations in India, which are applicable to our Company. The information detailed in this chapter has been obtained from publications available in the public domain. The regulations set out below may not be exhaustive, and are only intended to provide general information to the investors and are neither designed nor intended to substitute for professional legal advice.

The role of Education for strengthening the social fabric of democracy through provision of equal opportunities to all has been accepted since the inception of our Republic. Focus on education of the masses has been an important part of Indian democracy.

The government, with a view to increase the education levels of the public, has introduced various projects including: (1) Sarva Shiksha Abhiyan ("SSA"); (2) Mid Day Meal Scheme; (3) The Mahila Samakhya Programme.

Apart from the schemes undertaken to enhance education levels prevalent in the country, the entire education segment is governed by the following rules and regulations.

CENTRAL LAWS

1. Constitution of India

The Constitution (Eighty-sixth Amendment) Act, 2002 inserted Article 21-A in the Constitution of India to provide free and compulsory education of all children in the age group of six to fourteen years as a Fundamental Right in such a manner as the State may, by law, determine.

2. Right of Children to Free and Compulsory Education Act, 2009, ("RTE Act"):

The RTE Act, deals with provisions related to the modalities of the provision of free and compulsory education for children between 6 and 14 in India under Article 21A of the Indian Constitution. The RTE Act includes provisions in connection with schools, teachers, curriculum, evaluation, access and specific division of duties and responsibilities of different stakeholders. Key features of the Act include:  Every child from 6 to 14 years of age has a right to free and compulsory education in a neighborhood school till completion of elementary education.  Private schools must take in a quarter of their class strength from the weaker sections and disadvantaged groups', sponsored by the government.  All schools except private unaided schools are to be managed by School Management Committees with 75 per cent. parents and guardians as members.  All schools except government schools are required to be recognized by meeting specified norms and standards within 3 years to avoid closure.

On the basis of the RTE Act, the Government has framed subordinate legislation in the form of rules and guidelines to various state governments in connection with the implementation of the RTE Act. A summary of the key notifications issued by the Government in this regard are as follows:

S. No. Title Date of Summary Notification 1. Guidelines Regarding November 23, Guidelines in relation to s. 13(1) of the Act Procedure for School 2010 provide that: Admission Under RTE  Admission procedure in any pre-primary Act, class in unaided and specified category schools shall be random selection out of applications received from students belonging to disadvantaged groups. The seats allotted to such students shall not

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S. No. Title Date of Summary Notification be less than 25%

 For the remaining 75%, the admission procedure shall consist of rational, reasonable procedure of categorization of students.

2. Guidelines Regarding November 23, Only those minority schools that are covered applicability of RTE Act 2010 u/s 2(n) of the RTE Act will be governed by on Minority Institutions. its provisions.

3. Minutes of the Meeting August 14, 2010 Ministry of HRD clarified the position on the on the Right of Children applicability of the RTE Act on Minority to Free and Compulsory Institutions and recognition of schools Education Act, 2009 running before the commencement of the act.

4. Notification of July 08, 2010 The NAC shall advise the Central Constitution of National Government on the implementation of the Advisory Council (NAC) provisions of the RTE in a smooth manner. u/s 33(1) of the RTE Act.

5. Guidelines under Section June 22, 2010 Directs states to (i) rationalize the 35(1) of the RTE Act deployment of existing teachers to address regarding the problems of urban-rural imbalances in implementation of teacher placements and (ii) initiate the Section 25( 1 ) process of recruitment of new teachers as per the PTR stipulated in the schedule.

6. Development of May 31, 2010 NCF, 2005 shall be the National Curriculum framework of national Framework till the Central Government curriculum u/s 7 of the develops a new one. RTE Act.

7. The Right of Children to April 09, 2010 The Rules prescribes the composition and Free and Compulsory functions of the School Management Education Rules, 2010. Committee, duties and responsibilities of the Central Government, Appropriate Government and Local Authorities, responsibilities of schools and teachers, curriculum, rights of children.

8. Notification for April 05, 2010 Authorizes NCERT to lay down the appointment of NCTE as curriculum and evaluation procedure for academic authority u/s elementary education and to develop a 23 of the RTE Act and of framework of national curriculum. NCERT as the academic Authorizes NCTE to lay down minimum authority u/s 29 of the qualification to be eligible for appointment RTE Act. as teacher.

9. Notification of NCTE November 08, In order for the Central Government to laying down the 2010 provide relaxation u/s 23(2) to a state, it is minimum qualification necessary for the state to provide the for a person to be following information along with its eligible for appointment application:

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S. No. Title Date of Summary Notification as a School teacher u/s  Quantitative information in the 23 (1) of the RTE Act. prescribed format.

 Nature and the time period for which relaxation sought.

The manner in which the state government will provide for teachers not possessing the required qualifications to acquire such qualifications.

3. The Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010

The Government has introduced the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010 (the "Bill") for regulation and entry of foreign educational institutions in India. In terms of the Bill, any foreign university intending to impart foreign education in India, shall submit an application, for being recognised as such to the Registrar. In terms of the Bill, those foreign educational institutions which have been offering educational services for at least 20 years in the country of incorporation/establishment will be accredited. Further, such foreign educational institutions should offer educational services in India through conventional methods of teaching, and not through the distant learning mode. Further, the Bill grants recognition to not only standalone foreign educational institutions but also to those foreign educational institutions, which maybe established in collaboration or partnership with any Indian educational institution.

The foreign educational institutions will be required to comply with the following regulations under the Bill:  Foreign educational institutions should apply for grant of recognition to the concerned Registrar;  The foreign educational institutions should respond to all the inquiries made by the Registrar;  They should be notified by the Central Government as foreign educational institutions;  The foreign educational institutions should ensure that they maintain a corpus of not less than five hundred million rupees or such sum as maybe notified from time to time by the Central Government.

The foreign educational institutions will also need to comply with the norms laid down by the University Grants Commission and to submit a report of its activities from time to time to the University Grants Commission. If the foreign educational institution is in violation of the norms laid down by the University Grants Commission or any other laws for the time being in force in India, then, the University Grants Commission after giving a reasonable opportunity of being heard to the foreign educational institution, may, recommend to the Central Government for withdrawal or recognition and rescission of such foreign educational institution.

STATE LAWS

The laws relating to the establishment of pre-schools and K-12 schools:

The Maharashtra Educational Institutions (Prevention of Capitation Fee) Act, 1987 (the "Act")

The Act is a state legislation brought into force to prevent commercialization of education by prohibition of capitation fee at the time of admission of a student to an institution as well as promotion to a higher class. The Act is applicable to all schools (including kindergarten, pre-primary, balwadi or nursery school), a college or any other institution whether managed by Government, local authority, a university or a private management and includes educational institution established and administered by any minority, and imparting education and training exclusively or as one of the various activities, whether technical, professional vocational or otherwise.

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The term capitation fee has been ascribed to mean any amount, by whatever name called, whether in case or kind paid or collected directly or indirectly, in excess of the prescribed or, as the case may be approved rates of fees regulated by the Government under the Act. The Act prohibits the management of an educational institution from collecting any capitation fee. Further, the State Government has been authorized to regulate the tuition fee or any other fee that may be received by any educational institution and to direct an enquiry into affairs of the management of the institution in case of any violation. The management is permitted to collect or accept donations in good faith for opening of new educational institutions, or for developmental purposes, or for creation of endowment fund scholarships, prizes etc., without reserving any seats in consideration thereof. If in accepting such donation, any seat is reserved for a student, it is deemed to collection of capitation fees and hence constitutes a contravention under the provisions of the Act.

The violation of the Act attracts a punishment of imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which may extend to `5,000. Where an offence under the Act is committed by a company, every person, who at the time when the offence was committed, was in charge of, and was responsible to our Company for the conduct of the offence shall be liable to be proceeded against and punished accordingly.

BYE-LAWS FOR GETTING SCHOOLS AFFILIATED WITH THE CENTRAL SCHOOL BOARDS

The Council for the CBSE and the CISCE has laid down guidelines that need to be complied with by schools for affiliation purposes. A synopsis of these guidelines laid down by both the boards is as follows:

1. Central Board of Secondary Education Affiliation

The CBSE requirements for affiliation are prescribed under the CBSE Affiliation Bye-laws ("CBSE Bye-laws"). Applications for affiliation under the bye-laws can be considered if approval is required for any of the following categories of cases: (i) approval of middle class syllabus; (ii) provisional affiliation of a secondary school; (iii) upgradation/provisional affiliation of a senior secondary school; (iv) regular affiliation for schools run by the Government, Government aided Kendriya Vidyalaya Sangathan, Navodaya Vidyalaya Samiti , Central Tibetan Schools Organization (CTSO); and (v) permanent affiliation.

The CBSE bye-laws mandate that the following conditions need to be complied with if affiliation is required for schools with the CBSE Board:  school must have prior affiliation or formal recognition from the State or Union Territory Government;  a no objection certificate should be obtained from the State Government for affiliation of the school with the CBSE Board;  school must have atleast 2 acres of land (out of which atleast one acre should be through ownership or through a lease in favour of the school for thirty years) and a building constructed on a part of land and proper playgrounds on the remaining land;  in metropolitan cities with a population exceeding 2.5 million, the land should not be less than one acre with adequate building and arrangement for imparting physical and health education facilities for conducting games to the satisfaction of the CBSE Board;  the trust or the society or the section 25 company registered the Companies Act should be on a non-proprietary character and should run the school on a not for profit basis; and  schools managed directly by Public Sector Undertaking ("PSU") or by reputed societies under financial control of these PSUs may apply for permanent affiliation and all other schools get a provisional affiliation.

If a school wishes to get permanently affiliated with the CBSE Board, then, after the expiry of the provisional affiliated period of three years, it may ask the Board to grant it permanent affiliation on the basis of the fulfillment of certain condition which may be laid down by the CBSE Board.

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2. Council for the Indian School Certificate Examinations

The Council for the Indian School Certificate Examinations ("ISC Council") requirements for affiliation are prescribed under the ISC Guidelines for Affiliation ("ISC Guidelines"). Applications for affiliation under the ISC Guidelines can be considered and will be granted if the following conditions are met:  the school has to obtain a no objection certificate from the state in which the school is to be set-up;  if the school is started as an affiliating entity from class VI, then, the school must leave sufficient time for the purpose of preparing candidates and presenting them, in the first instance for the Indian School Certificate of Secondary Education;  the school has to be run either as a registered society under the Societies Registration Act, 1860 or a trust or a section 25 company under the Companies Act and it must not be run for profit;  the school must have a properly constituted governing body or managing committee which is responsible to and under the control of the society or trust or company;  the medium of instruction in the school has to be English and special emphasis has to be placed on oral English, as a really high standard is required to be maintained;  the school should have two acres of land with suitable buildings constructed on the land along with proper playgrounds with adequate facilities;  in metropolitan cities with a population exceeding 2.5 million, the land should not be less than one acre with adequate building and arrangement for imparting physical and health education facilities for conducting games to the satisfaction of the ISC Council;  schools will initially be granted provisional affiliation and after the end of a period of three years, they can apply to the ISC Council for permanent affiliation which will be decided by the ISC Council on the basis of the performance of the school; and  the ISC Council may have the power to withdraw the affiliation of a school or temporarily suspend affiliation, if the ISC Council is satisfied that the school concerned is not fit to continue as an affiliated school.

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DIRECTORS AND MANAGEMENT

Under the terms of the Articles of Association, our Company shall not have less than four directors and not more than fifteen directors, if any subject to Section 252 and 259 of the Companies Act, 1956. As of the date of this Prospectus, our Company has three Directors on our Board, all of whom are non-executive Directors out of which two are independent directors. Pursuant to the resignation of Mr. Sumeet Mehta effective from July 24, 2012, we do not have a Managing Director, Whole-Time Director or a Manager.

Name, Designation, Address, Occupation Nationality Age Other Directorships and Date of Appointment As at March 30, 2013 Mr. Himanshu Mody Indian 35 years 1. Asian Satellite Broadcast Private Non-Executive Chairman Limited; Address: 2. Mediavest India Private Limited; 1201/B, Gardenia Building, Vasant Valley, 3. Taj Television India Private Film City Road, Malad East, Mumbai, Limited; Maharashtra, India - 400097 4. ICL Lions Private Limited; DIN:00686830 5. Royal Bengal Sports Private Term: Liable to retire by rotation Limited; 6. ICL Heroes Sports Private Limited; 7. Vasant Sagar Properties Private Limited; 8. Essel Airport Infrastructure Private Limited; 9. Zee Sports Limited; 10. Diligent Media Corporation Limited; 11. Taj TV Limited, Mauritius; 12. Essel Sagar Damoh Toll Roads Limited; 13. Tatva Global Environment (Deonar) Limited; 14. Essel KIPL Infrastructure Private Limited; 15. Essel Damoh Jabalpur Toll Roads Limited; and 16. Adhikar Foundation. 17. Capstar Pvt Ltd. 18. Direct Media Distribution Ventures Pvt Ltd.

Dr. Manish Agarwal Indian 46 years 1. Value Media Limited; and Independent Non-Executive Director 2. Valuable Technologies Limited. Address: Ullas, 1st Floor, 17 Laburnum Road (next to Mani Bhavan), Gamdevi, Mumbai, Maharashtra, India – 400007 DIN:02069969 Term: Liable to retire by rotation.

Mr. Surjit Banga Indian 71 years 1. Quantum Trustee Company Independent Non-Executive Director Private Limited; Address: A/1101 Serenity Heights, Mindspace, 2. Zee News Limited and Malad (West), Mumbai, Maharashtra, India 3. Jetking Infotrain Limited – 400064 DIN:00001637

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Name, Designation, Address, Occupation Nationality Age Other Directorships and Date of Appointment As at March 30, 2013 Term: Liable to retire by rotation

Brief Biography of the Directors

Mr. Himanshu Mody

Mr. Himanshu Mody, aged 35 years, has been on our Board since January 4, 2010. Mr. Himanshu Mody holds a M.Sc. degree in finance from the University of Strathclyde, Glasgow. In the past, he has worked with Barclays Bank, London and currently heads the group finance and strategy division for the Essel Group. Mr. Himanshu Mody has worked directly with Mr. Subhash Chandra, Chairman, Essel Group. Pior to heading Essel Group‘s finance and strategy he was the business head for Essel Group‘s sports business since its inception. He was instrumental in the launch of Zee Sports, a sports channel and buyout of Ten Sports (a leading sports channel in south asia). During this period he also launched the Indian Cricket League (ICL) for the Essel Group. He has had 15 years of experience in the field of corporate strategy and finance.

Dr. Manish Agarwal

Dr. Manish Agarwal, aged 46 years,has been an independent director on our Board since January 4, 2010. Dr. Manish Agarwal holds a MBBS degree from the University of Mumbai, MS (ortho) from the university of Mumbai; D.N.B. (Ortho), from College of Physicians and Surgeons and a diploma in tissue banking from National University of Health, Singapore. Dr. Manish Agarwal is an orthopaedic oncologist involved in clinical, teaching and research work. He is the recipient of various awards including Shree Jairamdas Berry Gold Medal and the Gold Medal for Orthopaedic Surgery.

Mr. Surjit Banga

Mr. Surjit Banga, aged 71years, has been an independent director on our Board since September 1, 2010. Mr. Surjit Banga is a graduate in Sociology and a fellow of the All India Management Association. Mr. Surjit Banga, is a certified associate of the Indian Institute of Bankers. He was, earlier, the Managing Director at SBI Factors and Commercial Services Limited and was previously associated with the State Bank of India in various capacities. He has had about 40 years of experience in the banking sector.

Remuneration Policy

Executive Director

The executive director of our Company is paid a monthly remuneration and other perquisites and allowances The remuneration payable to the Whole-time Director generally includes House rent allowance, Personal allowance; Medical reimbursements, meal allowances, club fees, personal accident & medical insurance, use of chauffer driven company car, telecommunication facilities at residence and such other perquisites and allowances in accordance with the rules of our Company; Company‘s contribution to the providant fund, gratuity and leave encashment as per the rules of our Company; and an Annual performance bonus/incentive and Stock Options, if any, based on the performance and other criteria as laid down by or approved by our Board or remuneration committee, from time to time. However, our Company currently does not have a Executive director.

Remuneration paid to Whole-time director

Details of the remuneration paid to Mr. Sumeet Mehta, the Whole-time director, during the period from April 1, 2011 till March 31, 2012 is set forth below:

Particulars Amount (`) Salary, allowance and perquisites 10,244,945 Employer‘s contribution to provident fund 519,120

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Particulars Amount (`) Total 10,764,065

Additionally, Mr. Sumeet Mehta was granted 175,000 options under the first grant of the ESOP Scheme.

In respect of remuneration payable to the our whole time director, Mr. Sumeet Mehta was being paid in excess of the limits prescribed under section 198 read with Schedule XIII, our Company had applied for approval from the Central Government which is still pending. However, Mr. Sumeet Mehta has resigned from our Company with effect from July 24, 2012.

Non- executive Directors

The Non-Executive Directors are paid remuneration by way of sitting fees. No commission is paid to any Director and hence, the computation of profits under section 198/349 of the Companies Act is not required.

Details of remuneration paid to Non-Executive Directors during fiscal year 2012

Pursuant to the resolution passed at our Board meeting held on September 28, 2010, and with effect from October 1, 2010, the Non-Executive Directors are entitled to sitting fees of `10,000 per meeting for attending the meetings of our Board and the committees thereof.

Particulars of sitting fees paid to Non-Executive Directors of our Company for the period ended March 31, 2012are as under:

No. Name of Director Sitting Fees Paid (Gross) (in `) 1. Mr. Surjit Banga 170,000 2. Dr. Manish Agarwal 150,000 3. Mr. Himanshu Mody NIL TOTAL 320,000

In addition to the sitting fees, the non-executive independent directors were granted Stock Options (each convertible into equivalent number of equity shares of `1 each of our Company) as per the following details at an exercise price equivalent to Market Price, as per the SEBI ESOP Guidelines.

No. Name of Director Stock Options First Grant Second Grant 1. Mr. Surjit Banga 30,000 30,000 2. Dr. Manish Agarwal 30,000 30,000 3. Mr. Himanshu Mody NIL NIL

Corporate Governance

To comply with the requirements of Clause 49 of the Listing Agreements, our Company has appointed independent directors on our Board and has also constituted the Audit Committee and Shareholders/Investors Grievances Committee.

Committees of the Board

Our Board acts through several committees, who are empowered to act under the supervision and on behalf of our Board on various critical aspects of our Company‘s operations. The duly constituted committees of our Board are as follows: A. Audit Committee B. Remuneration Committee C. Shareholders‘/Investors‘ Grievance Committee D. Executive Committee of our Board

A. Audit Committee:

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The Audit Committee is composed of Mr. Surjit Banga (chairman of the Audit Committee), Dr. Manish Agarwal and Mr. Himanshu Mody, of whom Mr. Surjit Banga and Dr. Manish Agarwal are non-executive and independent directors.

The terms of reference, role and scope are in line with those prescribed by Clause 49 of the Listing Agreement. Our Company also complies with the provisions of Section 292A of the Companies Act, 1956 pertaining to Audit Committee and its functioning.

The following are the objectives of the Audit committee: a. Overseeing the company‘s financial reporting process and the disclosure of the financial information to ensure that the financial statement is correct, sufficient and credible. b. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the Statutory Auditor and the fixation of audit fees. c. Approval of appointment / re-appointment / replacement / removal of and remuneration payable to the Internal Auditors. d. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: (i) Changes, if any, in accounting policies and practices and reasons for the same. (ii) Major accounting entries involving estimates based on the exercise of judgment by management. (iii) Major accounting entries involving estimates based on the exercise of judgment by management (iv) Significant adjustments made in the financial statements arising out of audit findings. (v) Compliance with listing and other legal requirements relating to financial statements. (vi) Disclosure of any related party transactions. (vii) Qualifications in the draft audit report. e. Reviewing, with the management, the quarterly financial statements before submission to the board for approval f. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems. g. 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. h. Discussion with internal auditors any significant findings and follow up there on. i. Reviewing the findings of any internal investigations 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. j. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. k. To look 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. l. To review the functioning of the Whistle Blower mechanism. m. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

At its meeting held on September 1, 2010, our Board delegated the following powers to the Audit Committee: 1. To investigate any activity within its terms of reference; 2. To seek information from any employee; 3. To obtain outside legal or other professional advice; and 4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

The Audit Committee invites such of the executives, as it considers appropriate (and particularly the head of the finance function), to be present at its meetings. The Statutory Auditor, Internal Auditor and the Chief Financial Officer are all invitees to the meetings. Mr Samir Raval, our Company Secretary, acts as the secretary of the Audit Committee.

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B. Remuneration Committee:

The Remuneration Committee is composed of Dr. Manish Agarwal (Chairman of the Remuneration Committee), Mr. Himanshu Mody and Mr Surjit Banga, all of whom are non-executive and the chairman is an independent Director. The terms of reference of the Remuneration Committee, inter- alia, consist of reviewing the overall compensation policy, service agreements and other employment conditions of the Executive Director(s) and administering the Employee Stock Option Scheme. The remuneration of the Executive Director is decided by our Board on the recommendation of the Remuneration Committee as per the remuneration policy of our Company within the overall ceiling approved by the shareholders.

C. Shareholders’/Investors’ Grievance Committee:

The Shareholders‘ and Investors‘ Grievance Committee comprises of Mr. Surjit Bangaas Chairman and Mr Himanshu Mody as member.

The terms of reference of the Shareholders‘ and Investors‘ Grievance Committee are to supervise and ensure efficient transfer of shares and proper and timely attendance to investors‘ grievances. The committee has delegated the power of approving requests for transfer, transmission, rematerialisation, dematerialisation etc. of the shareholders to the officials of the secretarial department.

Date of expiry of the current term of the Directors

Name of Director Tenure of Appointment Mr. Himanshu Mody Liable to retire by rotation Dr. Manish Agarwal Liable to retire by rotation Mr. Surjit Banga Liable to retire by rotation

Shareholding of Directors

None of our Directors hold any Shares in our Company.

Key Managerial Personnel

Our Key Managerial Personnel comprise the following:

Mr. Navneet Anhal, aged 36, is the Chief Executive Officer of our Company, based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. He has a Bachelors Degree in Chemistry (Honours) from Delhi University and a Masters in marketing from Institute of Management Studies, Indore. He has been instrumental in setting up BrainCafe Science Centres and expansion of Mount Litera Zee Schools. Prior to joining Zee Learn, Navneet has had experience in the healthcare sector for which he worked with Wockhardt, Goldshield Group PLC (UK), and Nicholas Piramal. He has an experience of around 12 years.

Mr. Umesh Pradhan, aged 44, is the Chief Financial Officer of our Company and Manager (as per Company Act, 1956), based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. He is a Commerce Graduate and a qualified Cost Accountant and has done part time, Executive Diploma in Advance Television Media Management from Mudra Institute of Communications. He brings along 22 years of experience in the areas of Accounts, MIS Development and Reporting, Strategic Planning & Budgeting, Compliances, Designing internal Control mechanism, Consolidations, Mergers/De- mergers, Treasury and working Capital Management, Taxation, Handling Statutory & Internal Audits, Sox Compliances, Commercial etc. Before joining, Zee Learn Ltd, he was working with Tuner General Entertainment Networks Pvt Limited (a Time Warner Group Company) for 3 years as Director Finance. He has also worked with Zee Entertainment Enterprises Limited for 13 years from 1994 to 2007.

Mr. Pradeep Pillai, aged 38, is the Chief Operating Officer of our Company, based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. He has a masters degree in

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Business administration specialising in Marketing from Institute of Management Studies, Indore. He leads the K-12 schools business where in specifically focuses on sales and Operations in our Company. He has, in the past worked with Aptech and with Max New York Life and Reliance life playing the sales role and has won various star performer awards and accolades. He has an experience of around 12 years.

Mr. Aman Pal Singh, aged 44, is the Business Head – BrainCafé and Head - Human Resources of our Company, based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. He is a MBA from Gujarat University from B K School of Business Management, Ahmedabad. Under his leadership, BrainCafé schools have grown from a mere 55 to 450 in a span of just 12 months. He brings with him a diverse experience of working in different industries like, financial services, telecom and life insurance. He has worked with both established companies like Vodafone and start-ups like Aegon, Religare & Sistema Shyam Teleservices Ltd in different roles ranging from Sales Head to managing overall operations of a region. He has an experience of around 20 years.

Mr. Subhadarshi Tripathy, aged 38, is the Business Head – Academic Design and Head- Information Technology of our Company, based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. He has a Bachelor's degree in Mathematics from Utkal University and a Post Graduate Diploma in Animation Film Making from ZICA, Hyderabad. Prior to joining the Zee Group, with his expertise in both politics and lifestyle, he served as the Director ITVI – India TV and spearheaded unique initiatives undertaken for enhancing the channel‘s new media business. Mr Tripathy was associated with the Dreamz Eye Entertainment, as Group COO for their Mumbai/Hyderabad/Singapore/LA and Manila based preproduction, motion capture and gaming group of studios. His short films were selected in the Hiroshima and Mumbai International Film Festival. His work includes various films and audio-visual projects for the Ministry of External Affairs and Customs & Service tax. He has also been a visiting faculty for various institutes such as IIT Kanpur in Media Technology and Visual Effects.

Ms. Sindu Aven, aged 42, is the Head – Content Hub of our Company, based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. She has a Bachelors and Masters Degree in Arts from Mahatma Gandhi University, Kerala and a Masters degree in Education from Mumbai University. She is currently a Ph.D Scholar at SNDT University. She currently works on supervising and producing end-to-end designs for the preschool division (Kidzee) and the K-12 segment (Mount Litera Zee Schools) covering core academics, assessments, enrichment and life skill programs, teacher training and online content. She is also responsible for product development initiatives including textbook publishing, supplementary learning material, summer programs, interactive white board lessons and online platforms. Prior to joining our Company she has worked with Bombay Cambridge Group of Schools, S.K Somaiya Junior College, Nirmala Niketan College of Home Science and St. Xavier‘s Institute of Education. She was involved with SNDT University, Department of Educational Technology for designing their Masters Program in Instructional Design and the Narsee Monjee Institute of Management Studies for their Masters in Business Administration.

Mr. Amit Bhatnagar, aged 37, is the Business Head of Company Owned Company Operated Schools and Pre- schools and heading Marketing for Kidzee and MLZS, based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. He has a Bachelor Degree in Pharmacy and a post graduate diploma in business management with a specialisation in marketing from Sri Sringeri Sharada Institute of Management, Delhi and Executive Masters in International Business from IIFT, Delhi. Prior to joining our Company, he worked with Educomp Solutions Limited, Times of India and DS Group. He has an experience of over 13 years.

Mr. Samir Raval, aged 47 years, is the Company Secretary and Compliance Officer of our Company, based at our corporate office at 6th Level, Fun Republic, Off New Link Road, Andheri (West), Mumbai 400 053. He has a bachelor‘s degree in commerce from Gujarat University and a bachelor‘s degree in law from Mumbai University, he is also a qualified company secretary. He is responsible for secretarial and compliance functions of our Company. Mr. Raval has an experience of around 19 years in secretarial functions of various corporate entities engaged in various sectors including engineering, power, paper, refinery, communication and petrochemical. Prior to joining Essel Group in August, 2008, he was working as a Senior Manager-Secretarial at Reliance Industries Limited, Mumbai.

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Our Company pays an aggregate remuneration of about `35,000,000 per annum to its Key Managerial Personnel. In addition to the remuneration paid, our Key Managerial Personnel were granted Stock Options (each convertible into equivalent number of equity shares of `1 each of our Company) as per the following details. Other than the Stock Options granted, as detailed herein below, our Key Managerial Personnel do not hold any Shares of our Company.

No. Name of Employees Stock Options First Grant Second Grant 1. Mr. Navneet Anhal 21,900 32,000 2. Mr. Pradeep Pillai 26,300 38,000 3. Mr. Aman Pal Singh NIL 32,000 4. Mr. Subhadarshi Tripathy 17,500 45,000 5. Ms. Sindu Aven NIL 25,000 6. Mr. Amit Bhatnagar NIL NIL 7. Mr. Samir Raval 17,500 17,500

Promoter Group

The Promoter Group of our Company and their shareholding as on March 31, 2013 are listed below:

No. Name of Shareholder No of Percentage Shares Pledged or otherwise shares of encumbered held shareholding Shares Sharehol Grand (%) ding % Total 1. Jayneer Capital Private Limited 68,891,275 26.19 27,775,000 40.32 10.56 2. Asian Satellite Broadcast Private 63,052,512 23.97 8,500,000 13.48 3.23 Limited 3. Jayneer Enterprises LLP 15,000,000 5.70 0 0 0 4. Essel Media Ventures Private Limited 12,861,036 4.89 0 0 0 5. Essel Holdings Limited 5,797,315 2.20 0 0 0 6. Churu Trading Company Private 5,990,102 2.28 5,990,000 100.00 2.28 Limited 7. Ganjam Trading Company Private Ltd 4,949,506 1.88 0 0 0 8. Prajatma Trading Co. Pvt Ltd 4,735,992 1.80 0 0 0 9. Veena Investment Pvt Ltd 3,449,013 1.31 0 0 0 10. Essel Infraprojects Limited 1,752,286 0.67 0 0 0 11. Ambience Business Services Pvt Ltd 622,883 0.24 0 0 0 12. Ashok Mathai Kurien 559,089 0.21 0 0 0 13. Prajatma Trading Company Pvt Ltd 377,670 0.14 0 0 0 14. Sushila Goel 170,000 0.06 0 0 0 15. Jayneer Capital Pvt Ltd 3,500,000 1.33 0 0 0 16. Premier Finance And Trading Co. Ltd. 100 0 0 0 0 Total 191,708,779 72.89 42,265,000 22.05 16.07

Shareholding Pattern as on March 31, 2013

Category of Shareholder Number of Total No of Shares Total Shareholding Shares pledged or otherwise Shareholders Number of held on as percentage of encumbered Shares Dematerialised total number of form shares

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As % As % of No of As % of of (A+B+C) Shares Shareholding (A+B) Shareholding of Promoter & Promoter Group

Indian

Individuals / HUF 2 729,089 729,089 0.28 0.28 0 0.00

Bodies Corporate 13 185,182,375 185,182,375 70.41 70.41 42,265,000 22.82

Sub-total (A)(1) 15 185,911,464 185,911,464 70.69 70.69 42,265,000 22.73 Foreign

Bodies Corporate (OCB) 1 5,797,315 5,797,315 2.20 2.20 0 0.00

Sub-total(A)(2) 1 5,797,315 5,797,315 2.20% 2.20 0 0.00

Total Shareholding of 16 191,708,779 191,708,779 72.89% 72.89 42,265,000 22.05 Promoter and Promoter Group (A) =(A)(1)+(A)(2)

Institutions

Mutual Funds and UTI 3 6,447,177 6,446,903 2.45% 2.45 0 0.00

Financial Institutions/Banks 13 92,723 92,723 0.04% 0.04 0 0.00

Insurance Companies 5 1,386,796 1,386,796 0.53% 0.53 0 0.00

Foreign Institutional 42 30,113,245 30,110,232 11.45% 11.45 0 0.00 Investors Sub-total (B)(1) 63 38,039,941 38,036,654 14.46 14.46 0 0.00

Non-Institutions

Bodies Corporate 1505 18,802,921 18,801,098 7.15 7.15 0 0.00

Individuals holding shares 97277 11,700,212 11,577,980 4.45 4.45 0 0.00 upto Rs. 1 Lac in nominal value Individuals holding shares in 11 2,275,736 2,275,736 0.87 0.87 0 0.00 excess of Rs. 1 Lac in nominal value Any other

Overseas Corporate Body 2 4,148 4,148 0.00 0.00 0 0.00

Foreign National 3 12,801 12,527 0.00 0.00 0 0.00

NRI 1418 464,280 347,357 0.18 0.18 0 0.00

Trust 7 1,431 1,431 0.00 0.00 0 0.00

Sub-total (B)(2) 100,223 33,261,529 33,020,277 12.65 12.65 0 0.00

Total Public Shareholding 100,286 71,301,470 71,056,931 27.11 27.11 0 0.00 (B)= (B)(1)+(B)(2)

TOTAL (A)+(B) 100,302 263,010,249 262,765,710 100.00 100.00 0 0.00

Share held by Custodians & 0 0 0 0.00 0 0 0.00 against which Depository Receipts have been Issued

GRAND TOTAL (A+B+C) 100,302 263,010,249 262,765,710 100.00 100.00 42,265,000 16.07

ORGANIZATIONAL CHART

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Board of Directors

Navneet Anhal, CEO

Business Academic Service Functions Functions Functions Amit Sindu Aven Umesh Bhatnagar Head CDE Pradhan Business Aman Pal SamirCFO Raval SinghHead Pradeep Company Business Pillai Secretary SubhdarshiHead and Academic HeadTripathi, HR Design Channel Head

School & Pre-

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ZEE LEARN LIMITED’S SUBSIDIARY

Set forth below is a brief description of our subsidiary, which we believe issignificant to our business.

Digital Ventures Private Limited

Digital Ventures Private Limited ("DVPL"), became a wholly owned subsidiary of our Company by virtue of a scheme of amalgamation between our Company and EEML dated June 17, 2011. It was formed with the main objective of owning and developing the infrastructure for educational business of our Company. This may result in higher capital efficiency and enable acess to funds apart from deriving value from such properties held by DVPL.

DVPL has its registered office at 135, Continental Building, Dr. Annie Besant Road, Worli, Mumbai, Maharashtra, India – 400018.

As at September 30, 2012, DVPL has an authorised share capital `50.10 million divided into 5.01 million equity shares of `10 each and an issued and subscribed capital of `50.10 million comprising of 5.01 million equity shares of `10 each.

The financial information pertaining to DVPL for Fiscal 2012 is provided below: (` in millions) Balance Sheet March 31, 2012 Shareholders' Funds 49.72 Loan Funds Secured Loans 625.00 Unsecured Loans 221.60 Deferred Tax Liabilities (Net) Total 896.32 Application Of Funds Net Fixed Assets 64.23 Capital Work-In-Progress 1740.43 Net Current Assets (908.34) Deferred Revenue Expenditure Total 896.32

(` in millions) Profit and Loss Account March 31, 2012 Total Income - Expenditure 0.38 EBITDA (0.38) Interest & Depreciation - Profit Before Tax (0.38) Profit After Tax (0.38)

The following are the names of the directors of DVPL:

No. Name of Director Position 1 Mr. Anilkumar Jain Director 2 Mr. Dinesh Kanodia Director 3 Mr. Navneet Anhal Director

The following table contains certain additional information pertaining to DVPL for Fiscal 2012:

As on March 31, 2012 Share Capital `100,000 Share Application Money `50,000,000

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As on March 31, 2012 Reserve and Surplus `379,570 Un-paid Amounts on Shares NIL Dividend Declared NIL Value of Investment, as shown in the Company‘s accounts `100,000 Loans and Advances(advance towards Share Application given to subsidiary) as `50,000,000 shown in the Company‘s accounts Loans and Advances (Loans, Advances and Deposits to related parties) as shown `108,125,000 in the Company‘s accounts

The following table contains brief details about Zee Learn Limited‘s subsidiary: (`in million) No. Name of our Company Issued and paid up Percentage of voting capital as on rights owned by our September 30, 2012 Company 1. Digital Ventures Private Limited 50.10 100.00

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LEGAL PROCEEDINGS

Except as disclosed in the following paragraphs, our Company is not subject to, any pending legal proceedings which our Company considers to be potentially material to its respective business. This section on Legal proceedings includes disclosures of (i) all criminal proceedings to which our Company is currently a party; and (ii) civil proceedings in which the amount exceeds `1 Million. Aggregate disputed amounts have been disclosed in respect of tax related cases filed against our Company.

Our Company is involved in legal proceedings and claims in India that are incidental to its business. These legal proceedings are pending at different levels of adjudication before various courts and other competent authorities and include Civil proceedings, Criminal proceedings under Negotiable Instruments Act and revenue proceedings. While no assurance can be given, we believe that, none of the litigation or legal proceedings in which we are currently involved, except as stated below could reasonably be expected to have a material adverse effect on our business, financial condition or results of operations.

Cases filed against our Company

(a) Civil proceedings:

 Icon Innovative Training Centre Limited ("Icon") has filed a civil suit (C.S. No. 642 of 2001) before the High Court of Madras for recovery of a sum of `1.10 million along with the interest @ 24% from the date of the plaint till the date of the decree and realisation of the money and for a permanent injection restraining our company from interfering with the running of the computer training centre. Icon had entered into a franchise agreement with our Company, and Icon alleged that our Company did not fulfill its obligations including publicity requirements, which resulted in Icon incurring losses.The last hearing was on April 5, 2012 for examination of the chief witness by way of affidavit of evidence and submission of original documents before the Court. We are currently awaiting the next date of hearing.

 Mr. Sunny Garg approached Zee Learn to become a business partner in a project. Mr. Sunny Garg made an initial deposit of `1,159,000 and further spent `550,000 on infrastructure. Subsequently, Mr. Sunny Garg was unable to complete the project accepted by him and asked for a refund. Mr. Sunny Garg filed a complaint (31 of 2004) in the District Consumer Redressal Forum, Chandigarh for the recovery of the amount. The complaint was dismissed by the District Consumer Redressal Forum, Chandigarh vide order dated June 1, 2004. Mr. Sunny Garg appealed against the said order, which was allowed by the State Commission vide its order dated December 12, 2004. Subsequently, vide its order dated September 24, 2007, the Forum directed our Company to pay around `2,000,000 (Rupees two million) to Mr. Sunny Garg. We filed an appeal (243 of 2008) against the order dated September 24, 2007 in the National Commission which was dismissed by its order on April 30, 2008 dismissed the said appeal. Our Company filed a revision petition (2250 of 2008) against the order dated April 30, 2008 in National Commission. The National Commission by its order dated May 30, 2008 stayed the order of the District and State Forums, subject to our Company depositing `1,000,000 with the National Commission. The Company has subsequently deposited the said amount.

(b) Revenue Cases

 Our Company is involved in sales tax disputes aggregating to `19.81 millionunder the Central Sales Tax Act, 1956, the Maharashtra Value Added Tax Act, 1944 and the Bombay Sales Tax Act, 1959, interalia, pertaining to assessment of dues penalties thereon and interest. Such disputes are pending before the Deputy Commissioner of sales tax (appeals) for Fiscal 2003 to Fiscal 2006.

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Cases Filed by our Company

(a) Civil cases  Our Company had granted a franchise license to Mr. Pawan Loughani for running a Kidzee centre by executing a franchise agreement. Mr. Pawan Loughani defaulted in paying the royalty fee in terms of the franchise agreement, pursuant to which Zee Learn terminated the franchise agreement. However, Mr. Loughani continued to use the term KIDZEE which is a registered trademark of Zee Learn. Hence, Zee Learn has filed a civil suit (O.S. No.1442 of 2006) in May, 2006 before the High Court at Mumbai, for injunction against use of the term "Kidzee " and to recover royalty payments aggregating to `164,762 (Rupees one hundred and sixty four thousand seven hundred and sixty two), along with damages amounting to `1,500,000 from Mr. Pawan Loughani.The matter is currently pending before the high court for arguments on March 2, 2013.

(b) Criminal Cases

 Our Company entered into a franchise agreement with Axis Computer Education Centre, Ms. Inderjit Rathore and Mr. Balwinder Singh (the "Accused Persons"). Thereafter, in settlement of certain outstanding dues, the Accused Persons issued a cheque No. 497248 dated October 22, 2005 for an amount of `29,250 in favour of our Company which was dishonoured and returned by the Bank due to insufficiency of funds. Hence, our Company filed a criminal complaint (No. 30 of 2006) in January, 2006 before the Court of the Chief Metropolitan Magistrate, Patiala House Courts, New Delhi under Section 138 of the Negotiable Instrument Act, 1881 for dishonour of the said cheque.The Court vide its order dated May 22, 2007 framed charges against the Accused Persons under Section 138 read with section 141 of the Negotiable Instrument Act, 1881.Thereafter, the Accused Persons filed a Revision Petition against the order dated May 22, 2007 in the court of the Addl. District and Sessions Judge, Patiala House Courts, New Delhi on June 7, 2007.The next date of the hearing is April 1, 2013.

 Our Company filed a complaint on August 4, 2011 against Mr. Prashant Jaiswal for (i) infringement of our intellectual property rights; (ii) manufacturing duplicate materials, child kits and children‘s materials; (iii) misuse of our Company‘s reputation and (iv)cheating innocent customers. This complaint was followed by a charge sheet on August 5, 2012. Pursuant thereto, Mr. Prashant Jaiswal filed an anticipatory bail petition (Ant. B.P. No. 4254 of 2011) with the Court of Sessions Judge, Patna, which was disposed on October 12, 2011. Currently, we await the filing of charge sheet by the police.

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THE INDIAN SECURITIES MARKET

The information in this section has been extracted from publicly available documents from various sources, including officially prepared materials from the SEBI, the BSE and the NSE, and has not been prepared or independently verified by the Issuer or the Underwriter or any of their respective affiliates or advisors.

The Indian Securities Market

India has a long history of organised securities trading. In 1875, the first stock exchange was established in Mumbai.

Stock Exchange Regulations

Indian stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the Ministry of Finance, Capital Markets Division, under the SCRA, and, the SCRR, which, along with the rules, bye-laws and regulations of the respective stock exchanges, regulate the recognition of stock exchanges, the qualifications for membership thereof and the manner in which contracts are entered into and enforced between members of the stock exchanges.

The SEBI Act, granted powers to SEBI to regulate the Indian securities markets, including stock exchanges and other intermediaries in capital markets, to promote and monitor self-regulatory organisations, to prohibit fraudulent and unfair trade practices and insider trading and to regulate substantial acquisitions of shares and takeovers of companies. SEBI has also issued guidelines and regulations concerning minimum disclosure requirements by public companies, rules and regulations concerning investor protection, insider trading, substantial acquisitions of shares and takeovers of companies, buy-backs of securities, delisting of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds, FIIs, credit rating agencies and other capital markets participants. The SEBI has the powers to amend the Listing Agreements and bye-laws of stock exchanges in India. Any amendment of the bye-laws of the stock exchanges in India requires the prior approval of SEBI.

The Companies (Amendment) Act, 2000, amended the Companies Act and incorporated significant provisions relating to securities, options in securities and equity shares with differential rights. Further, the Companies Act, as amended, has empowered SEBI to administer certain provisions of the Companies Act in so far as they relate to the issue and transfer of securities and non payment of dividends by listed public companies as well as companies intending to list their securities on any recognized stock exchange in India, and to conduct inspection of a company‘s records in respect of matters relating to the issue and transfer of securities. The power to prosecute defaulting companies in compliance with the said matter has also been vested with SEBI.

Listing

The listing of securities on recognised Stock Exchanges is regulated by the Companies Act, the SCRA, the SCRR, the SEBI Act and the Listing Agreement. Further, under the SCRR, the governing body of each stock exchange is empowered to suspend trading of or dealing in a listed security for breach of our Company‘s obligations under such agreement, subject to our Company receiving prior notice of the intent of the stock exchange. In the event that a suspension of a company‘s securities continues for a period in excess of three months, the company may appeal to set aside the suspension, to the Securities Appellate Tribunal, established under the SEBI Act. SEBI has the power to veto stock exchange decisions in this regard. SEBI also has the power to amend such Listing Agreements and the bye-laws of the stock exchanges in India.

Clause 49 of the Listing Agreement introduced by SEBI encompasses the framework of Corporate Governance for all listed companies. Every company that wants to list its shares on the stock exchanges in India must enter into a Listing Agreement. Clause 49 inter-alia provides that:

 Our Board shall have an optimum combination of executive and non-executive directors with not less than fifty percent.of the board of directors comprising of non-executive directors.

 Where the Chairman of the board is a non-executive director, at least one-third of the board should

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comprise of independent directors and in case he is an executive director, at least half of the Board should comprise of independent directors. However where the non-executive Chairman is a promoter of the company or is related to any promoter or person occupying management positions at the Board level or at one level below the Board, at least one-half of the Board of the company shall consist of independent directors.

Any non-compliance with the terms and conditions of the Listing Agreements with the Stock Exchanges may entail the delisting of the Issuer‘s Shares from such stock exchanges, which will affect future trading of those equity shares.

Minimum Level of Public Shareholding

The minimum public shareholding norms have been amended twice by the Securities Contracts (Regulation) (Amendment) Rules, 2010 (the "2010 Rules") and Securities Contracts (Regulation) (Second Amendment) Rules, 2010. The said rules inter alia provide as follows:

 At least 25 per cent. of each class of equity shares or debentures convertible into equity shares issued by a company should have been offered and allotted to the public.

 Existing listed companies having less than 25 per cent. public holding have to reach the prescribed minimum level within a period of three years from the date of the commencement of the 2010 Rules.

 Companies which have a post issue capital (when calculated at the offer price) of more than `40,000 million are required to offer at least 10 per cent. of each class or kind of equity shares or debenture convertible into equity shares to the public. Such companies are required to increase their public shareholding to at least 25 per cent. within a period of three years from the date of listing of the securities.

 If the public shareholding in a listed company falls below 25 per cent. at any time, such company shall bring the public shareholding to 25 per cent. within a maximum period of 12 months from the date of such reduction.

 Every listed public sector company shall maintain public shareholding of at least 10 per cent.

 Existing listed public sector companies having less than 10 per cent. public shareholding have to reach the prescribed minimum level within a period of three years from the date of the commencement of Securities Contracts (Regulation) (Second Amendment) Rules, 2010.

 If the public shareholding in a listed public sector company falls below 10 per cent. at any time, such company shall bring the public shareholding to 10 per cent. within a maximum period of 12 months from the date of such reduction.

If the public shareholding in a listed public sector company falls below 10 per cent.at any time, such company shall bring the public shareholding to 10 per cent. within a maximum period of 12 months from the date of such reduction.

Clause 40A of the Listing Agreement prescribes methods to raise the public shareholding as envisaged in 2010 Rules. Earlier, only four methods were prescribed to achieving minimum public shareholding i.e. issuance of shares to public through prospectus; or offer for sale of shares held by promoters to public through prospectus; or sale of shares held by promoters through the secondary market; or Institutional Placement Programme in terms of Chapter VIIIA of SEBI ICDR Regulations. SEBI vide its recent circular CIR/CFD/DIL/11/2012 dated August 29, 2012 has allowed additional methods for achieving minimum public shareholding. These methods are: (i) Rights Issues to public shareholders, with promoters/promoter group shareholders forgoing their rights entitlement; and (ii) Bonus issues to public shareholders, with promoters/promoter group shareholders forgoing their bonus entitlement. Further, SEBI has also given the option of using any other method to achieve the minimum public shareholding requirements, as approved by SEBI on case to case basis. Such requests would be considered by SEBI based on merit.

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Delisting

The equity shares of a listed company can be delisted under the provisions of the Delisting Regulations, which govern voluntary and compulsory delisting of equity shares of Indian companies from the stock exchanges where they are listed. No company can apply for permission to de-list: (i) pursuant to a buyback of equity shares or preferential allotment made by a company or (ii) unless a period of three (3) years has elapsed since the listing of that class of equity shares on any recognized stock exchange or (iii), if any instruments issued by the company which are convertible into the same class of equity shares that are sought to be delisted are outstanding.

A company may be delisted through a voluntary delisting sought by the shareholders of the said company or a compulsory delisting by the stock exchange. However, a company is not permitted to delist its equity shares if any instruments issued by the company which are convertible into the same class of equity shares as are also sought to be delisted are outstanding. A company may voluntarily delist its equity shares from the stock exchanges where its equity shares are listed provided that an exit opportunity has been given to the investors at an exit price to be determined in accordance with a book-built method prescribed under the Delisting Regulations, subject to a minimum price to be determined in accordance with a specified formula specified in the Delisting Regulations. The procedure for compulsory delisting requires appointment of an independent valuer by the stock exchange to determine the fair value of the equity shares proposed to be delisted.

For a voluntary delisting, prior approval of the shareholders of the company is required to be obtained by a special resolution passed through postal ballot, where the votes cast by public shareholders in favour of the resolution should be at least two times the number of votes cast by the public shareholders against the resolution. A voluntary delisting offer would be successful if post the offer, the shareholding of the promoter (along with persons acting in concert with the promoter) taken together with the shares accepted in the offer reaches the higher of: (a) 90 per cent. of the total issued shares of that class, excluding the shares which are held by a custodian and against which depository receipts have been issued overseas; or (b) the aggregate percentage of the pre-offer promoter shareholding (along with persons acting in concert with him) and 50 per cent. of the offer size.

A delisting proposal also requires (i) a public notice to be given in accordance with the Delisting Regulations; (ii) application for in-principle approval to the stock exchanges; and (iii) final application to the stock exchange to be made within one year of the special resolution approving the delisting.

A company is not permitted to list the equity shares that have been voluntarily delisted for a period of five years from delisting. In respect of equity shares that have been compulsorily delisted, a company is not permitted to list the equity shares for a period of ten years from the delisting. To restrict abnormal price volatility, SEBI has instructed the stock exchanges in India to apply the following price bands calculated at the previous day‘s closing price (there are no restrictions on price movements of index stocks):

Market Wide Circuit Breakers

In order to restrict abnormal price volatility in any particular stock, SEBI has instructed the stock exchanges to apply daily circuit breakers, which do not allow transactions beyond certain price volatility. An index based market-wide (equity and equity derivatives) circuit breaker system has been implemented and the circuit breakers are applied to the market for movement by 10 per cent., 15 per cent. and 20 per cent. for two prescribed market indices: the BSE Sensex for BSE and the Nifty for the NSE (the "NSE Nifty"), whichever is earlier. These circuit breakers, when triggered, bring about a coordinated trading halt in all equity and equity derivative markets nationwide.

Price Bands

Price bands are circuit filters of 20 per cent. movements either up or down, and are applied to most securities traded in the markets, excluding securities included in the BSE Sensex and the NSE Nifty and derivatives products. The stock exchanges can also exercise the power to suspend trading during periods of market volatility. At the discretion of the stock exchanges and under instructions from SEBI, the stock exchanges can also impose ad hoc margins on the stockbrokers, for specific stocks in the event of extreme volatility in price

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movements.

Disclosures under the Companies Act and Securities Regulations

Under the Companies Act, a public issue of equity securities in India must be made by means of a prospectus, which must contain information specified in the Companies Act, and the SEBI ICDR Regulations. The prospectus must be filed with the Registrar of Companies having jurisdiction over the place where a company‘s registered office is situated, which in the case of our Company is the Registrar of Companies located at Mumbai, Maharashtra. A company‘s directors are subject to civil and criminal liability for misstatements/misrepresentations in a prospectus. The Companies Act also sets forth procedures for the acceptance of subscriptions and the allotment of securities among subscribers and regulates and imposes restrictions in connection with the payment of commissions in relation to the subscription of and/or the sale of shares or debentures of an Indian company. The SEBI has issued detailed guidelines through the SEBI Regulations concerning disclosures by public companies and investor protection.

All companies, including public limited companies are required under the Companies Act to prepare, file with the registrar of companies and circulate to their shareholders audited annual accounts, which comply with the disclosure requirements specified in the Companies Act. In addition, a listed company is subject to continuing disclosure requirements pursuant to the terms of its Listing Agreements and SEBI regulatory requirements. The companies are also required to publish unaudited reviewed financial statements (subject to a limited review by our Auditors), on a quarterly basis and are required to inform stock exchanges immediately regarding any price sensitive information, which includes but is not restricted to: a) issue of any class of securities; b) acquisition, merger, de-merger, amalgamation, restructuring, scheme of arrangement, spin off or selling divisions of the company; c) change in market lot of the company‘ shares, sub-division of equity shares of the company; d) voluntary delisting by the company from the stock exchanges; e) forfeiture of shares; f) any action which will result in alteration in, the terms regarding redemption/cancellation/ retirement in whole or in part of any securities issued by the company; g) information regarding opening, closing of status of ADR/GDR or any other class of securities to be issued abroad; and h) cancellation of dividend/rights/bonus etc.

The above information is required to be made public.

The ICAI and the SEBI have implemented changes which require Indian companies to account for deferred taxation, consolidate their accounts with subsidiaries, categorise reporting and to increase their disclosure of related party transactions from April 1, 2001 and accounting for investments in associated companies and joint ventures in consolidated accounts and interim financial reporting from April 1, 2002. As of April 1, 2003, accounting of intangible assets is also regulated by accounting standards set by the ICAI and as of April 1, 2004, accounting standards regulate accounting for impairment of assets. On November 4, 2010, the Ministry of Corporate Affairs, Government has released a roadmap for phase wise implementation of Indian Accounting Standards converged with International Financial Reporting Standards (IFRS). The Ministry of Corporate Affairs, Government is yet to notify the roadmap for the phase wise implementation.

Additionally, a listed company is subject to continuing disclosure requirements pursuant to the terms of the Listing Agreement. Accordingly, listed companies are required to publish unaudited financial statements, (subject to a limited review by our Auditors), on a quarterly basis, and, are also required to intimate the relevant stock exchange/s immediately of any stock price-sensitive information which is not in the public domain.

Rights Issues by companies which have outstanding fully or partly convertible debt instruments

In relation to listed companies proposing to make rights issues, the relevant regulations issued by SEBI require that no company may make a rights issue of equity shares if it has outstanding fully or partly convertible debt instruments at the time of making rights issue, unless it has made reservation of equity shares of the same class in favour of the holders of such outstanding convertible debt instruments in proportion to the convertible part thereof. The equity shares reserved for the holders of fully or partially convertible debt instruments are required

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to be issued at the time of conversion of such convertible debt instruments on the same terms on which the equity shares offered in the rights issue were issued.

Indian Stock Exchanges

As on July 2012, SEBI has provided a list of 20 active stock exchanges in India. Most of the stock exchanges have their governing board for self-regulation. The BSE and the NSE hold prominent positions among the stock exchanges in terms of number of listed companies, market capitalisation and trading activity.

BSE

The BSE, established in 1875, is the oldest stock exchange in India. It is the first stock exchange in India to have obtained permanent recognition in 1956 from the Government under the SCRA. It has evolved over the years into its present status as one of the leading stock exchanges of India. Pursuant to the BSE (Corporatisation and Demutualization) Scheme 2005 of SEBI, with effect from August 20, 2005, the BSE has been corporatised and demutualised and is now a company under the Companies Act. Recently, pursuant to a press release dated July 11, 2011, BSE announced a change in its name from the Bombay Stock Exchange Limited to BSE Limited.

The BSE switched over from an open outcry trading system to an online trading network in May 1995 and has today expanded this network to over 349 cities in India. Only a member of the BSE has the right to trade in the stocks listed on the BSE.

Derivatives trading commenced on the BSE in 2000. The BSE also has wholesale and retail debt trading segments. The retail trading in Government securities commenced in June 2003.

As of June 30, 2012, the BSE had 1,388 members comprising 206 individual members, 1,154 Indian companies and 28 FIIs. As of 30 June 2012, there were 5,141 companies listed on the BSE and the approximate market capitalisation of stocks trading (in all segments) on the BSE was `61556.47 billion. The average daily turnover on the BSE as of June 30, 2012 was `21.10 billion.

NSE

The NSE was established by financial institutions and banks to serve as a national exchange and provide nationwide on-line satellite-linked screen-based trading facilities with electronic clearing and settlement for securities including government securities, debentures, public sector bonds and units. It has evolved over the years into its present status as one of the premier stock exchange of India. The NSE was recognised as a stock exchange in April 1993 and commenced operations in the wholesale debt market segment in June 1994.

The NSE launched the NSE 50 index, now known as S&P CNX NIFTY, on April 22, 1996 and the Mid-cap Index on January 1, 1996. NSE has a wide network in major metropolitan cities, screen based trading and a central monitoring system. The NSE introduced, for the first time in India, fully automated screen-based trading. It uses a modern, fully computerised trading system designed to offer investors across the length and breadth of the country a safe and easy way to invest. The NSE trading system called National Exchange for Automated Trading ("NEAT") is a fully automated screen-based trading system, which adopts the principle of an order driven market.

As of June 30, 2012, there were 1,611 companies listed on the NSE and the estimated market capitalisation of stocks trading on the NSE was `60,267.66 billion. The average daily turnover on the NSE as of June 30, 2012 was `96.24 billion on the cash segment.

Trading Hours

Trading on both the BSE and the NSE occurs from Monday through Friday, from 9.15 a.m. to 3.30 p.m. IST (excluding the 15 minutes pre-open session from 9.00 a.m. to 9.15 a.m. introduced recently). The BSE and the NSE are closed on public holidays. The recognised stock exchanges have been permitted to set their own trading hours (in cash and derivatives segments) subject to the condition that (i) the trading hours are between 9 a.m. and 5 p.m.; and (ii) the stock exchange has in place risk management system and infrastructure commensurate to the trading hours.

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Stock Market Indices

S&P CNX Nifty is a diversified 50 stock index accounting for 21 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. S&P CNX Nifty is owned and managed by India Index Services and Products Limited, which is a joint venture between the NSE and CRISIL Limited.

The two indices which are generally used in tracking the aggregate price movements on the BSE are SENSEX and BSE 100 Index. The BSE Sensitive Index, or the Sensex, consists of listed shares of 30 large market capitalisation companies. The companies are selected on the basis of market capitalisation, liquidity and industry representation. Sensex was first compiled in 1986 with the fiscal year ended March 31, 1979. The BSE 100 Index (formerly the BSE National Index) contains listed shares of 100 companies including the 30 in Sensex with 1983-1984 as the base year.

Trading Procedure

In order to facilitate smooth transactions, in 1995, BSE replaced its open outcry system with BSE On-line Trading, ("BOLT"), facility in 1995. BOLT is an automated screen based trading system for trading in securities, which was put into practice nation-wide. This has enhanced transparency in dealings and has assisted considerably in smoothening settlement cycles and improving efficiency in back-office work.

Internet-Based Securities Trading and Services

SEBI approved internet trading in January 2000. Internet trading takes place through order routing systems, which route client orders to exchange trading systems for execution. This permits clients to trade using brokers‘ Internet trading systems. Stock brokers interested in providing this service are required to apply for permission to the relevant stock exchange and also have to comply with certain minimum conditions stipulated by SEBI.

Takeover Code

Vide a notification dated September 23, 2011, SEBI notified the new SEBI Takeover Code which has replaced the existing Takeover (SAST) Regulations, 1997. The new SEBI Takeover Code came into force on the 30th day from the date of their publication in the Official Gazette i.e. with effect from October 22, 2011, any acquisition or sale of shares of listed company shall be governed by provisions of SEBI Takeover Code.

Salient features of the new Takeover Code are as follows:

1. A person who (along with persons acting in concert with him), holds more than 25 per cent. of the shares or voting rights in any company is required to make an annual disclosure of his holdings to that company and every stock exchange where the equity shares of the company are listed within seven working days from the end of the financial year on 31st March. Further, a person who together with persons acting in concert with him, aggregating to 5 per cent. or more of the shares of such target company, shall disclose such aggregate shareholding and voting rights in such company, is required to disclose any purchase or sale representing 2 per cent. or more of the equity shares or voting rights of that company (together with the aggregate shareholding after such acquisition or sale) to that company and the stock exchanges on which the company‘s equity shares are listed within two days of the purchase or sale.

2. Promoters or persons in control of a company are also required to make annual disclosure of their holding in a specified manner as on 31st March of the respective year to each of the stock exchanges on which its equity shares are listed and the company at its registered office. The Takeover Code requires the promoters and promoter group of listed companies to disclose the details of any invocation or release of encumbrance on the equity shares held by such persons within seven days of the creation, or invocation, or release of the encumbrance.

3. An acquirer cannot acquire equity shares or voting rights (taken together with the existing equity shares or voting rights, if any, held by him or by persons acting in concert with him) which would entitle such

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acquirer to exercise 25 per cent. or more of the voting rights in a company, unless such acquirer makes a public announcement offering to acquire a further minimum of 26 per cent. of the equity shares of the company at a price not lower than the price determined in accordance with the Takeover Code. Such offer has to be made to all public shareholders of the company. A copy of the public announcement is required to be delivered, within one working day of the date of the public announcement the stock exchanges on which the company‘s equity shares are listed. Pursuant to the public announcement, a detailed public statement shall be published by the acquirer through the manager to the Open Offer, within five working days of the public announcement.

4. An acquirer shall not be entitled to acquire or enter into any agreement to acquire shares or voting rights exceeding such number of shares as would take the aggregate shareholding pursuant to the acquisition above the maximum permissible non-public shareholding.

5. An acquirer (taken together persons acting in concert with him) holding with the existing equity shares or voting rights, if any, held by him or by) which would entitle such acquirer to exercise 25 per cent. or more of the voting rights in a company, shares or voting rights, but less than the maximum permissible non-public shareholding, may voluntarily make a public announcement of an Open Offer to a maximum of 10 per cent. However, an acquirer may acquire, together with persons acting in concert with him additional shares or voting rights entitling him to up to 5 per cent. voting rights in a company without making an Open Offer.

6. An increase in the shares or voting rights pursuant to a buy-back of shares by the target company would be exempt from the applicability of the provisions of the Takeover Code if such shareholder has not voted in favour of the resolution authorising the buy-back of securities under section 77A of the Companies Act, in the case of a shareholder resolution, voting is by way of postal ballot and the increase in voting rights does not result in an acquisition of control by such shareholder over the company.

7. Regardless of whether there has been any acquisition of equity shares or voting rights in a company, an acquirer cannot directly or indirectly acquire control over a company (for example, by way of acquiring the right to appoint a majority of the directors or to control the management or the policy decisions of the company) unless such acquirer makes a public announcement offering to acquire a minimum of 26 per cent. of the voting equity shares of the company.

8. The Takeover Code sets out the contents of the required public announcements as well as the minimum offer price. The minimum offer price depends on whether the shares of the company are direct or indirect acquisitions under the Takeover Code.

9. In case of indirect acquisitions as provided in Regulation 5(2) where a) the proportionate net asset value of the target company as a percentage of the consolidated net asset value of the entity or business being acquired; b) the proportionate sales turnover of the target company as a percentage of the consolidated sales turnover of the entity or business being acquired; or c) the proportionate market capitalisation of the target company as a percentage of the enterprise value for the entity or business being acquired;

is in excess of 80 per cent., on the basis of the most recent audited annual financial statements, such indirect acquisition shall be regarded as a direct acquisition of the target company for all purposes of these regulations including without limitation, the obligations relating to timing, pricing and other compliance requirements for the Open Offer are met.

10. In case of direct acquisitions of shares or voting rights in, or control over the target company, and indirect acquisition of shares or voting rights in, or control over the target company where the parameters referred to in sub-regulation (2) of regulation 5 are met, the offer price shall be the highest of: a) the highest negotiated price per share of the company for any acquisition under an agreement attracting the obligation to make a public announcement of an Open Offer; b) the volume-weighted average price paid or payable for acquisitions, whether by the acquirer

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or by any person acting in concert with him, during the fifty-two weeks immediately preceding the date of the public announcement; c) the highest price paid or payable for any acquisition, whether by the acquirer or by any person acting in concert with him, during the twenty six weeks immediately preceding the date of the public announcement; d) the volume-weighted average market price of such shares for a period of sixty trading days immediately preceding the date of the public announcement as traded on the stock exchange where the maximum volume of trading in the shares of the target company are recorded during such period, provided such shares are frequently traded; e) where the shares are not frequently traded, the price determined by the acquirer and the manager to the Open Offer taking into account valuation parameters including, book value, comparable trading multiples, and such other parameters as are customary for valuation of shares of such companies; and f) the per share value computed as calculated under Regulation 5(2) of the Takeover Code, if applicable.

11. In the case of an indirect acquisition of shares or voting rights in, or control over the target company, where the parameters referred to in sub-regulation (2) of regulation 5 are not met, the offer price shall be the highest of: a) the highest negotiated price per share, if any, of the target company for any acquisition under the agreement attracting the obligation to make a public announcement of an Open Offer; b) the volume-weighted average price paid or payable for any acquisition, whether by the acquirer or by any person acting in concert with him, during the fifty-two weeks immediately preceding the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain; c) the highest price paid or payable for any acquisition, whether by the acquirer or by any person acting in concert with him, during the twenty-six weeks immediately preceding the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain; d) the highest price paid or payable for any acquisition, whether by the acquirer or by any person acting in concert with him, between the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain, and the date of the public announcement of the Open Offer for shares of the target company made under the Takeover Code; e) the volume-weighted average market price of the shares for a period of sixty trading days immediately preceding the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain, as traded on the stock exchange where the maximum volume of trading in the shares of the target company are recorded during such period, provided such shares are frequently traded; and f) the per share value computed under Regulation 5(2) of the Takeover Code.

12. The Takeover Code permits conditional offers that may be made conditional upon a minimumlevel of acceptance of the Open Offer. The agreement pursuant to which the Open Offer is beingmade shall contain a condition to the effect that in the event this desired level of acceptance isnot received, the acquirer shall not acquire any shares under the Open Offer and the agreementattracting the obligation to make the Open Offer shall stand rescinded.

13. Acquirers making a public offer are also required to deposit in an escrow account, towardssecurity for performance of obligations under the Takeover Code, and deposit in escrow account such aggregate amount as specified, which amount may be forfeited, either in part or in full, in the event that the acquirer does not fulfill his obligations.

14. The general requirements to make such a public announcement do not, however, apply to certaincases including the following: a) inter se transfer of shares amongst qualifying persons (as defined under the Takeover Code) b) acquisition pursuant to the provisions of the Securitisation and Reconstruction of Financial

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Assets and Enforcement of Security Interest Act, 2002; c) acquisition pursuant to the provisions of the Delisting Regulations; d) acquisition by way of transmission, succession or inheritance; e) acquisition of voting rights or preference shares carrying voting; f) acquisition in the ordinary course of business by an underwriter, a stock broker, a merchant banker, any person acquiring shares pursuant to a scheme of safety net in terms of Regulation 44 of SEBI (Issue of Capital and Disclosure Requirement) Regulations 2009, a registered market-maker of a stock exchange and a scheduled commercial bank, acting as an escrow agent; g) acquisitions at subsequent stages, by an acquirer who has made a public announcement of an Open Offer for acquiring shares pursuant to an agreement of disinvestment; h) acquisition pursuant to a scheme (i) under section 18 of the SICA; (ii) of arrangement involving the target company as a transferor company or as a transferee company, or reconstruction of the target company, including amalgamation, merger or demerger, pursuant to an order of a competent authority; (iii) of arrangement not directly involving the target company as a transferor company or as a transferee company, or reconstruction not involving the target company‘s undertaking, including amalgamation, merger or demerger, pursuant to an order of a competent authority subject to certain conditions provided under the Takeover Code.

15. The public offer provisions of the Takeover Code (subject to certain specified conditions), do not apply, inter alia, to certain specified acquisitions, including the acquisition of shares: a) by allotment in a rights issue, up to his entitlement and in excess of his entitlement subject to the fulfillment of certain conditions; b) pursuant to buy-back of shares; c) in a company by any person in exchange for shares of another company tendered pursuant to an Open Offer for acquiring shares; d) in a target company from state-level financial institutions or their subsidiaries by promoters of the target company pursuant to an agreement between such transferors and such promoter; e) in a target company from a venture capital fund or a foreign venture capital investor, by their respective promoters pursuant to an agreement between such venture capital fund or foreign venture capital investor and such promoters.

Insider Trading Regulations

The Insider Trading Regulations, have been notified by SEBI to prohibit and penalise insider trading in India. The Insider Trading Regulations prohibit an ‗insider‘ from dealings in the securities of a listed company on the basis of 'unpublished price sensitive information' communication of such information or the counsel or procurement of any other person to deal in securities on the basis of such information. The term ‗insider‘ was defined as any person who is or was connected with the company or is deemed to have been connected with the company and who is reasonably expected to have access to unpublished price sensitive information in respect of securities of a company. Pursuant to amendments to the Insider Trading Regulations issued on November 19, 2008, the definition of the term ‗insider‘ has been broadened to include any person who has received or has had access to unpublished price sensitive information of the company.

The insider is also prohibited from communicating, counselling or procuring, directly or indirectly, any unpublished price-sensitive information to any other person who while in possession of such unpublished price sensitive information is prohibited from dealing in securities. The prohibition under the Insider Trading Regulations extends to all persons, including a company dealing in the securities of another company listed on any stock exchange or associate of that other company, while in the possession of unpublished price-sensitive information. Pursuant to amendments to the Insider Trading Regulations, the definition of the term insider has been broadened to include any person who has received or has had access to unpublished price sensitive information of the company.

The Insider Trading Regulations require any person who holds more than 5 per cent. shares or voting rights in any listed company to disclose to the company, the number of shares or voting rights held by such person and any change in the shareholding or voting rights, on becoming such holder, within two working days of (1) the receipt of intimation of allotment of shares; or (2) the acquisition or the sale of the shares or voting rights, as the

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case may be.

In terms of amendment made in Insider Trading Regulations vide August 16, 2012 by SEBI, any person who is a promoter or part of promoter group of a listed company shall disclose to the company, the number of shares or voting rights held by such person, within two working days of becoming such promoter or person belonging to promoter group. Further, any person who is a promoter or part of promoter group of a listed company, shall disclose to the company and the stock exchange, where the securities are listed, the total number of shares or voting rights held and change in shareholding or voting rights, if there has been a change in such holdings of such person from the last disclosure made under Listing Agreement or under the relevant regulation of Insider Trading Regulations, and the change exceeds `500,000 in value or 25,000 shares or 1 per cent. of total shareholding or voting rights, whichever is lower.

On a continuing basis, any person who holds more than 5 per cent. shares or voting rights in any listed company is required to disclose to the company, the number of shares or voting rights held by him and change in shareholding or voting rights, even if such change results in shareholding falling below 5 per cent., if there has been change in such holdings from the last disclosure made, provided such change exceeds 2 per cent. of total shareholding or voting rights in the company. Such disclosure is required to be made within two working days of (i) the receipt of intimation of allotment of shares; or (ii) the acquisition or sale of shares or voting rights, as the case may be.

The Insider Trading Regulations make it compulsory for listed companies and certain other entities associated with the securities market to establish an internal code of conduct to prevent insider trading deals and also to regulate disclosure of unpublished price-sensitive information within such entities so as to minimise misuse thereof. The Insider Trading Regulations specify a model code of corporate disclosure practices to prevent insider trading, which is to be implemented by all listed companies and other such entities. Pursuant to amendments to the Insider Trading Regulations issued on November 19, 2008, listed companies are required to establish an internal code of conduct without diluting in any manner the model code specified in the Insider Trading Regulations.

The recent amendments also amend certain provisions of the model code of conduct contained in the Insider Trading Regulations to prohibit all directors/officers/designated employees who buy or sell any number of shares of the company from entering into an opposite transaction i.e. sell or buy any number of shares during the next six months following the prior transaction. All directors/officers/designated employees have also been prohibited from taking positions in derivative transactions in shares of the company at any time. In relation to subscription in the primary market (initial public offers) the aforesaid persons are required to hold their investments for a minimum period of 30 days. The holding period would commence when the securities are actually allotted. Further, certain provisions of the model code have been also extended to dependants of directors/officers/designated employees of the company.

Derivatives (Futures and Options)

Trading in derivatives in India is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended by the Securities Laws (Amendment) Act, 1999, with effect from February 22, 2000 and derivative contracts were included within the term 'securities' as defined in the SCRA. Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on separate segments of an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions as a self-regulatory organisation under the supervision of the SEBI. Derivatives products were introduced in four phases in India, starting with futures contracts in June 2000 and index options, stock options and stock futures in June 2000, July 2001 and November 2001, respectively.

Depositories

In August 1996, the Indian Parliament enacted the Depositories Act, 1996 which provides a legal framework for the establishment of depositaries to record ownership details and effect transfers in electronic book-entry form. SEBI framed the SEBI (Depositories and Participants) Rules and Regulations, 1996 which provide for the formation of such depositaries and the registration of participants as well as the formation of the rights and obligations of the depositaries, participants, beneficial owners and issuers. The depositary system has significantly improved the operation of the Indian securities markets.

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The Depositories Act requires that every person subscribing to securities offered by an issuer has the option either to receive the security certificate or hold the securities with a depository. The NSDL and the CDSL are two depositories that provide electronic depository facilities for the trading of equity and debt securities in India.

Trading of securities in book-entry form commenced in December 1996. In order to encourage 'dematerialisation' of securities, SEBI has set up a working group on dematerialisation of securities comprising FIIs, custodians, stock exchanges, mutual funds and the NSDL to review the progress of securities and trading in dematerialised form and to recommend scrips for compulsory, dematerialised trading in a phased manner. In January 1998, SEBI notified of various companies for compulsory dematerialised trading by certain categories of investors such as FIIs and other institutional investors and also notified compulsory dematerialised trading in specified scrips for all retail investors. Subsequently, SEBI has significantly increased the number of scrips in which dematerialised trading is compulsory for all investors. Under the Depositories Act and guidelines issued by SEBI, our Company shall give the option to subscribers/shareholders to receive the security certificates and hold securities in dematerialised form with a depositary.

However, even in the case of scrips notified for compulsory dematerialised trading, investors, other than institutional investors, are permitted to trade in physical shares on transactions outside the stock exchange where there are no requirements of reporting such transactions to the stock exchange and on transactions on the stock exchange involving lots of less than 500 securities.

Transfers of shares in book-entry form require both the seller and the purchaser of the equity shares to establish accounts with depositary participants registered with the depositaries established under the Depositories Act, 1996. Charges for opening an account with a depository participant, transaction charges for each trade and custodian charges for securities held in each account vary depending upon the practice of each depository participant and have to be borne by the accountholder. Upon delivery, the shares shall be registered in the name of the relevant depositary on the company‘s books and this depositary shall enter the name of the investor in its records as the beneficial owner, thus effecting the transfer of beneficial ownership. The beneficial owner shall be entitled to all rights and benefits and be subject to all liabilities in respect of his/her securities held by a depositary. Every person holding equity share capital of the company and whose name is entered as a beneficial owner in the records of the depository is deemed to be a member of the concerned company. The Companies Act requires that Indian companies making any initial public issue of securities for or in excess of `100 million should issue such securities in dematerialised form.

Derivatives

Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in February 2000 and derivative contracts were included within the term 'securities' as defined by the SCRA. Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a separate segment of an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions as a self regulatory organisation under the supervision of SEBI. Derivatives products have been introduced in a phased manner in India starting with future contracts in June 2000 and index options, stock options and stock futures in June 2000, July 2001 and November 2001, respectively.

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DESCRIPTION OF THE SHARES

Description of shares

Set out below is information relating to the share capital, including a brief summary of some of the provisions of our Company‘s Memorandum, Articles of Association, the Companies Act, SCRA and other related Indian legislation.

The following description of capital is subject to and qualified in its entirety by our Company‘s Memorandum and Articles of Association and by the provisions of the Companies Act, which governs its affairs, and other applicable provisions of Indian law.

General

Our Company‘s authorised share capital comprises 1000,000,000 equity shares of `1 each. Our Company has no preference share capital. As at the date of this Prospectus the issued share capital of our Company is 263,010,249 equity shares of `1 each.

For the purposes of this Prospectus, 'Shareholder' means a Shareholder who is registered as a member in the register of members of our Company. The shares are in registered physical form as well as in non-physical (dematerialised) form.

Division of Shares

The Companies Act provides that a company may sub-divide its share capital if so authorised by its Articles of Association, by an ordinary resolution passed in its general meeting.

The Articles of Association allow our Company in its general meeting to alter the conditions of its Memorandum of Association and sub-divide its shares or any of them into shares of smaller amounts than originally fixed by the Memorandum of Association subject to the provisions of the Companies Act and the Articles of Association of Company. Pursuant to the resolution passed on January 22, 2010 our Company sub- divided the face value of its equity shares from `10 to `1.

Dividends

Under the Companies Act, the board of directors first recommends the payment of a dividend which is then declared by Shareholders in a general meeting. However, the board of directors is not obligated to recommend a dividend. Under the Articles of Association of our Company and the Companies Act, the Shareholders may, at the AGM, declare a dividend for an amount less than that recommended by the board of directors, but they cannot increase the amount of the dividend.

In India, listed companies are required to declare their dividends on per share basis only. The dividend recommended by the directors, if any, and subject to the limitations described above, is required to be distributed and paid to Shareholders, as on the record date that such dividend is payable, within 30 days of the approval by the Shareholders at our Company‘s AGM. Any dividend so declared is required to be deposited in a separate bank account within a period of 5 days from the date of declaration of such dividend. The amount deposited shall be used for payment of dividends only. Pursuant to the Articles of Association of our Company, the directors have discretion to declare and pay interim dividends without Shareholder approval. Under the Companies Act, dividends can only be paid in cash to the registered Shareholder on a record date fixed on or prior to the AGM. The dividend may be paid through cheque or warrant sent through the post to the registered address of the Shareholder, or to his order or his bankers, or in case of joint Shareholders, to that one of them first named in the register of members. No Shareholder is entitled to a dividend while any lien in respect of unpaid calls on any of such Shareholder‘s shares is outstanding.

The shares represented by the GDRs rank pari passu with the existing shares of our Company in all respects including entitlements to any dividends declared. The Companies Act provides that any dividends that remain unpaid or unclaimed after the 30 day period referred to above must be transferred to a special bank account

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within seven days. Our Company is required to transfer any dividends that remain unclaimed for seven years from the date of transfer to the special bank account to a fund created by the Government. The proceeds of this fund are utilised to promote investor awareness and protection of investors‘ interests. Following such transfer, such unclaimed dividends cannot be claimed. No claim shall lie against such fund or our Company in respect of the amounts transferred to such fund.

Under the Companies Act, dividends may be paid out of the profits of a company in the year in which the dividend is declared or out of the undistributed profits of previous fiscal years. Before declaring a dividend greater than 10% of the paid up capital, our Company is required under the Companies Act to transfer to its reserves a minimum percentage of its profits for that year, ranging from 2.5% to 10% depending upon the dividend percentage to be declared in such year. The Companies Act further provides that, in the event of an inadequacy or absence of profits in any year, a dividend may be declared for such year out of our Company‘s accumulated profits or reserves, subject to the following conditions:  the rate of dividend to be declared may not exceed 10% of our Company‘s paid up capital or the average of the rate at which dividends were declared by our Company in the immediately preceding five years, whichever is less;  the total amount to be drawn from the accumulated profits earned in the previous years and transferred to the reserves may not exceed an amount equivalent to 10%. of its paid up capital and free reserves, and the amount so drawn is required to be used first to set off the losses incurred in the fiscal year before any dividends in respect of preference or equity shares are declared; and  the balance of reserves after withdrawals shall not fall below 15% of its paid up capital.

Bonus shares

In addition to permitting dividends to be paid out of current or retained earnings as described above, the Companies Act permits our Company to distribute an amount transferred in the general reserve or surplus in its profit and loss account to its Shareholders in the form of bonus shares, which are similar to a stock dividend. The Companies Act also permits the issue of fully paid up bonus shares from a share premium account. Bonus shares are distributed to Shareholders in the proportion of the number of shares owned by them as recommended by the board of directors. The Shareholders on record on a fixed record date are entitled to receive such bonus shares. Any issue of bonus shares is subject to guidelines issued by the SEBI.

The SEBI Guidelines prescribe that no company shall, pending conversion of convertible securities, issue any shares by way of bonus unless a similar benefit is extended to the holders of such convertible securities, through reservation of shares in proportion to such conversion. The bonus issue shall be made out of free reserves built out of the genuine profits of share premium collected in cash only. The bonus issue cannot be made unless partly paid-up shares, if any, are made fully paid-up. Further, for the issuance of such bonus shares a company should not have defaulted in the payment of interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption of such debentures. The declaration of bonus shares in lieu of a dividend cannot be made. Further, a company should have sufficient reason to believe that it has not defaulted in respect of the payment of statutory dues of the employees such as contribution to a provident fund, gratuity, bonus etc.

As per the Articles of Association, our Company in any general meeting may resolve that the undivided profits or reserves of our Company may be capitalized for making bonus issues. In accordance with the SEBI Guidelines, such bonus issue is required to be implemented within two months from the date of the meeting of our Board wherein the decision to announce bonus was taken subject to shareholders‘ approval.

Upon issuance of bonus shares by our Company, our Company shall deposit such bonus shares with the Custodian against which the Depositary would issue corresponding GDRs to the holders.

Consolidation and Subdivision of shares

The Companies Act and the Articles of Association of our Company permit our Company to split or combine/consolidate the par value of our Company‘s shares, provided such split or combination/consolidate is not made in fractions. Shareholders on record on a fixed record date are entitled to receive a split or combination.

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Pre-emptive Rights and Issue of Additional shares

The Companies Act and the Articles of our Company gives Shareholders the pre-emptive right to subscribe for new shares in proportion to their respective existing shareholdings unless the Shareholders elect otherwise by a special resolution. A special resolution is a resolution which is approved by three-fourths of the Shareholders of our Company. If the special resolution is not approved, the new shares must first be offered to the existing Shareholders as of a fixed record date.

The offer must include: (a) the right, exercisable by the Shareholders of record, to renounce the shares offered in favour of any person; and (b) the number of shares offered and the period of the offer, which may not be less than 15 days from the date of offer. If the offer is not accepted it is deemed to have been declined.

Our Board is authorised to distribute any new shares not purchased by the pre-emptive rights holders in the manner that it deems most beneficial to our Company.

The Shareholders have waived their pre-emptive rights on the Shares offered through this issue of GDRs by a special resolution dated October19, 2011.

General Meetings of Shareholders

There are two types of general meetings of Shareholders: (i) AGMs, and (ii) EGMs. Our Company is required to convene an AGM within six months after the end of each financial year, and with an intervening period of no more than fifteen months between two AGMs. Our Company may also, in accordance with its Articles of Association, convene an EGM of Shareholders when necessary or at the request of a Shareholder or Shareholders holding on the date of the request at least 10% of the paid up capital of our Company carrying voting rights. Written notice setting out the agenda of the meeting must be given, at least 21 clear days (excluding the days of mailing and receipt, and such service shall be deemed to have been effected on the expiry of 48 hours after the same is posted) prior to the date of the general meeting to the Shareholders of record. A general meeting may be called after providing a shorter notice if consent is received from all Shareholders entitled to vote, in the case of an AGM, and in case of any other meeting, from Shareholders holding not less than 95% of such part of the paid up capital of our Company as gives a right to vote in the meeting. Shareholders who are registered as such on the date of the general meeting are entitled to attend and vote at such meeting.

The AGM of the Shareholders is held at the registered office of our Company or at such other place within the city or town where the registered office of our Company is situated. Meetings other than AGM may be held at any other place if so determined by our Board. Our Company‘s registered office is located at Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai, Maharashtra, India - 400018.

Quorum

The Articles of Association of our Company provide that a quorum of a general meeting is at least five Shareholders entitled to vote and present in person.

Voting Rights

At any general meeting, voting is by show of hands unless a poll is demanded by a Shareholder or Shareholders present in person or by proxy holding at least 10% of the total shares entitled to vote on the resolution or on which an aggregate sum of not less than `50,000 is paid up. Upon a show of hands, each Shareholder entitled to vote and present in person has one vote and, on a poll, every Shareholder entitled to vote and present in person or by proxy has voting rights in proportion to the paid up capital held by such Shareholder.

Ordinary resolutions are adopted at general meetings of Shareholders by a simple majority of the Shareholders having voting rights present in person or by proxy. However certain resolutions, such as commencement of a new line of business, waiver of pre-emptive rights, issue of further shares to persons other than existing Shareholders and reduction of share capital, require that votes cast in favour of the resolution, whether by show of hands or poll, are not less than three times the number of votes, if any, cast against the resolution by members

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so entitled and voting. Under the provisions of Section 42 of the Companies Act, subsidiaries are not permitted to be members of the holding company. Even if any subsidiary holds shares in its holding company prior to it becoming a subsidiary, the shares held by the subsidiary will not have any voting rights.

Any Shareholder may appoint a proxy. A Shareholder may, by a single power of attorney, grant a general power of representation regarding several general meetings of Shareholders. The instrument appointing a proxy must be delivered to our Company at its registered office at least 48 hours prior to the meeting. A proxy may not vote except on a poll and does not have the right to speak at meetings. A corporate Shareholder is also entitled to appoint an authorised representative to attend and vote (both upon a show of hands and upon a poll) on its behalf at general meetings.

Shares with Differential Voting Rights

The Companies Act permits a company to issue shares with differential rights as to dividend, voting or otherwise subject to certain conditions. For a company to issue shares with differential voting rights it should have distributable profits (as specified under the Companies Act) for a period of three financial years preceding the year in which it was decided to issue shares; it should not have defaulted in filing annual accounts and annual returns for the three financial years immediately preceding the financial year in which it was decided to issue such shares; it should have not failed to repay its deposits or interest thereon on due date or redeem its debentures on due date or pay dividend; the company should not have been convicted of any offence arising under the SEBI Act, the SCRA and/or the FEMA; it should not defaulted in meeting investors‘ grievances; it should have obtained the approval of share holders; and the articles of association of the company should authorize the issue of shares with differential voting rights.

The Articles of Association of our Company do not authorise our Company to issue any shares (not being preference shares) which carry voting rights or rights in our Company as to dividend, capital or otherwise which are disproportionate to the rights attached to the holders of other shares (not being preference shares). However, in the event it is permitted by law to issue shares without voting rights attached to them, the directors may issue such shares upon such terms and conditions and with such rights and privileges annexed thereto as thought fit and as may be permitted by law.

Our Company maintains a register of Shareholders and all transfers of shares should be notified to our Company. The register and index of beneficial owners maintained by a depository under the Depositories Act, 1996 (the "Depositary Act") is deemed to be an index of members and register and index of debenture holders. Our Company recognises as Shareholders only those persons who appear on register of Shareholders of our Company and does not recognise any person holding any share or part of it upon any trust, express, implied or constructive, except as permitted by law. In the case of shares held in physical form, our Company registers transfer of shares on the register of Shareholders upon lodging of the share transfer form, duly complete in all respects, accompanied by a share certificate or, if there is no certificate, the letter of allotment in respect of shares to be transferred together with duly stamped transfer forms. In respect of electronic transfers, the depository transfers shares by entering the name of the purchaser in its books as the beneficial owner of the shares. Our Company then enters the name of the depository in its records as the registered owner of the shares. The beneficial owner is entitled to all the rights and benefits as well as the liabilities with respect to the shares that are held by the depository.

For the purpose of determining the Shareholders entitled to annual dividends, the register is closed for a specified period prior to the AGM. The date on which this period begins is the record date.

To determine which Shareholders are entitled to specified Shareholder rights, our Company may close the register of Shareholders. The Companies Act requires our Company to give at least seven working days‘ prior notice to the public and to the stock exchange(s) where the securities of our Company are listed before such closure. Our Company may not close the register of Shareholders for more than 30 consecutive days and in no event for more than 45 days in a year. Under the listing agreements of the Indian Stock Exchanges, our Company may, upon at least 7 days‘ advance notice to the Indian Stock Exchanges set a record date and/or close the register of Shareholders in order to ascertain the identity of Shareholders. Trading of our Company‘s shares on the Indian Stock Exchanges, however, may continue while the register of Shareholders is closed.

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Postal Ballot

Under the provisions of the Companies Act, certain resolutions such as those listed below are to be voted on only by a postal ballot:  amendments of the memorandum of association to alter the objects of the company;  the issuance of shares with deferential rights;  the sale of the whole or substantially the whole of an undertaking of the company;  providing loans, extending guarantees, providing security in excess of the limits;  varying the rights of the holders of any class of shares or debentures; and  the buy-back of shares.

It is provided that a listed public company may obtain any resolution passed by means of a postal ballot, instead of transacting the business in general meeting of the company. The resolution passed by means of postal ballot shall be deemed to have been duly passed at a general meeting physically convened. The Central Government has framed rules with respect to the voting by postal ballot of listed companies.

Convertible Securities/Warrants

Our Company may issue from time to time debt instruments that are partly and fully convertible into shares and/or warrants to purchase shares subject to the provisions of the SEBI ICDR Regulations. The SEBI ICDR Regulations also regulate the conversion pricing of such convertible instrument issued on a preferential basis and also the tenure of such convertible instruments.

ETC had issued 500, 12% Secured Redeemable Non-Convertible Debentures of `1 million each fully paid up aggregating `500 million which vested with our Company as part of the Composite Scheme of Amalgamation and Arrangement. These debentures are redeemable at par in four equal installments with the first installment redeemed on January 6, 2012 and last redemption due on January 6, 2015.

Audit and Annual Report

The annual report must be laid before the AGM of the shareholders of a company. This includes financial information about the company such as the audited financial statements as of the date of closing of the financial year, directors‘ report, management‘s discussion and analysis and a corporate governance section, and is sent to the shareholders of the company. Under the Companies Act, a company must file the annual report with the Registrar of Companies within 30 days from the date of the AGM. As required under the listing agreements with the stock exchanges, copies are required to be simultaneously sent to the stock exchanges. Our Company must also publish its financial results in at least one English language daily newspaper circulating in the whole or substantially the whole of India and also in a newspaper published in the language of the region where the registered office of our Company is situate. Our Company files certain information on-line, including its Annual Report, financial statements and the shareholding pattern statement, in accordance with the requirements of the listing agreements and as may be specified by SEBI from time to time.

Transfer of shares

Shares held through depositories are transferred in electronic form in accordance with regulations specified by SEBI. These regulations provide the regime for the functioning of the depositories and the participants and set forth the manner in which the records are to be kept and maintained and the safeguards to be following in this system. Transfers of beneficial ownerships of shares held through a depository are exempt from stamp duty. Our Company has entered into an agreement for such depository services with NSDL and CDSL.

The Companies Act provides that the shares or debentures of a publicly listed company (such as our Company) are freely transferable.

Under Section 111A(3) of the Companies Act, if a transfer of shares contravenes any of the provisions of the SEBI Act or the regulations issued thereunder or the SICA or any other Indian law, the NCLT may, on an application made by our Company, a depositary incorporated in India, an investor, or SEBI or other parties

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within two months from the date of transfer, after such inquiry as it thinks fit, direct the rectification of the register of members. If a company without sufficient cause refused to register a transfer of shares within two months from the date of which the instrument of transfer is delivered to the company, the transferee may appeal to the Tribunal seeking to register the transfer of shares. The Tribunal may also, in its discretion, issue an interim order suspending the voting rights attached to the relevant shares before making or completing its investigation into the alleged contravention. Pending resolution of an application with the Tribunal, the rights of a Shareholder to transfer the shares are not suspended unless there is an order of the Tribunal to that effect.

Under the terms of the listing agreements with the Indian Stock Exchanges, in the event our Company has not effected the transfer of shares within one month or where our Company has failed to communicate to the transferee any valid objection to the transfer within the stipulated time period of one month, our Company is required to compensate the aggrieved party for the opportunity losses caused during the period of delay.

Acquisition by our Company of our own shares

A company is prohibited from acquiring its own shares unless the consequent reduction of capital is effected by an approval of at least 75% of its Shareholders, voting on it in accordance with the Companies Act and sanctioned by the High Court of competent jurisdiction. Subject to certain conditions, a company is prohibited from giving, whether directly or indirectly and whether by means of loan, guarantee, provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person for any shares in the company or its holding company. However, pursuant to certain amendments to the Companies Act, a company has been empowered to purchase its own shares or other specified securities out of its free reserves, the securities premium account, the proceeds of any shares or other specified securities (other than the kind of shares or other specified securities proposed to be bought back) subject to certain conditions, including:  the buy-back should be authorised by the Articles of Association of the company;  a special resolution has been passed by shareholders authorising the buy-back;  the buy-back is limited to 25% of the total paid-up capital and free reserves. Further, the buy-back of equity shares in any financial year shall not exceed 25% of the total paid-up equity capital in the financial year;  all the shares or other specified securities for buy-back are fully paid-up;  the debt owed by the company is not more than twice the capital and free reserves after such buy-back; and  the buy-back is in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations 1998.

The second condition mentioned above would not be applicable if the buy-back is for less than 10% of the total paid-up equity capital and free reserves of the company and provided that such buy-back has been authorised by the company‘s board. A company buying back its securities is required to extinguish and physically destroy the securities so bought back within seven days of the last date of completion of the buy-back. Further, a company buying back its securities is not permitted to buy back any securities for a period of one year from the buy-back or to issue securities for six months.

A company is also prohibited from purchasing its own shares or specified securities through any subsidiary company including its own subsidiary companies or through any investment company. Further a company is prohibited from purchasing its own shares or specified securities, if the company is in default in the repayment of deposit or interest, redemption of debentures or preference shares, in payment of dividend to a Shareholder, in repayment of any term loan or interest payable thereon to any financial institution or bank or in the event of non-compliance with certain other provisions of the Companies Act.

Liquidation Rights

Subject to the rights of creditors, employees and the holders of any shares entitled by their terms to preferential repayment over the shares, if any, in the event of our Company winding-up, Shareholders are entitled to be repaid the amounts of capital paid up or credited as paid up on those shares.

In case assets available are insufficient to repay the whole of the paid up capital, the assets shall be so

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distributed such that as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up, on the shares held by them respectively. And if in a winding up the assets available for distribution among the members shall be more than sufficient to repay the whole of the capital paid up at the commencement of winding up, the excess shall be distributed amongst the members in proportion to the capital at the commencement of the winding up paid up or which ought to have been paid up on the shares held by them respectively.

The division of assets on winding up, if thought expedient, may subject to the provisions of the Companies Act, be otherwise than in accordance with the legal rights of the contributories (except when unalterably fixed by the Memorandum) and in particular, any class may be given preferential or special rights which may be excluded altogether or in part but in case any division otherwise than in accordance with the legal rights of the contributories shall be determined on, any contributory who would be prejudiced thereby shall have the same right to dissent and ancillary rights as if such determination were a special resolution under section 494 of the Companies Act.

Disclosure of Ownership Interest

Section 187C of the Companies Act requires beneficial owners of shares of Indian companies who are not holders on record to declare to that company the nature of his interest, details of the holder of record, and such other particulars as may be prescribed, within 30 days after his becoming such beneficial owner. Further, the holder of record is required to declare details of the beneficial owner. Any charge, promissory note or other collateral agreement created, executed or entered into in relation to any share, by the registered owner thereof, or any hypothecation by the registered owner of any share, in respect of which a declaration is required to be made, but not so declared, shall not be enforceable by the beneficial owner or any person claiming through the beneficial owner. Failure by a person to comply with Section 187C will not affect our Company‘s obligation to register a transfer of shares or to pay any dividends to the registered holder of any shares in respect of which the declaration has not been made. While it is unclear under Indian law whether Section 187C applies to holders of GDRs, in the absence of any specific exemption from the Department of Company Affairs, the reporting requirements under this Section could be enforced against holders of GDRs. However, the investors who exchange GDRs for the underlying shares may be subject to the requirements of Section 187C. Additionally, holders may be required to comply with the notification and disclosure obligations, if any, pursuant to the provisions of a Deposit agreement to be entered.

In addition to the above, holders of GDRs may be required to comply with the notification and disclosure obligations pursuant to the provisions of the Deposit Agreement.

Redemption of equity shares

Under the Companies Act, equity shares are not redeemable.

Alteration of Shareholder Rights

Whenever the share capital, by reason of the issue of preference shares or otherwise is divided into different classes of shares, all or any of the rights, privileges attached to each class may subject to the provisions of the Companies Act be varied, modified, commuted, abrogated or dealt with, with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class and all the provisions contained in the Articles as the general meetings (including the provisions relating to quorum at such meetings) shall mutatis mutandis apply to every such meeting.

However, if the rights attached to any class of shares are at any time varied, the holders of not less in the aggregate than 10% of the issued shares of that class, being persons who did not consent to or vote in favour of the resolution for the variation, may apply to the Tribunal to have the variation cancelled, and where any such application is made, the variation shall not have effect unless and until it is confirmed by the Tribunal.

Limitation on the Rights to Own Securities

The limitation on the rights to own securities of Indian companies, including the rights of non-resident or

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foreign Shareholders to hold securities, are discussed in the section titled "Foreign Investment and Exchange Controls".

Provisions on Changes in Capital

The authorised capital of our Company can be altered by a special resolution of the Shareholders in a general meeting. The additional issue of equity shares is subject to the pre-emptive rights of the Shareholders. In addition, a company may increase its share capital, consolidate its share capital into shares of larger face value than its existing shares or sub-divided its shares by reducing their par value, subject to provisions of the Companies Act and the Articles of Association.

Discriminatory Provisions in the Articles

There are no provisions in the Articles of Association of our Company discriminating against any existing or prospective Shareholder as a result of such Shareholder owning a substantial number of shares.

Board of Directors

Election

The Articles of Association provide that the number of directors of our Company shall be not less than four and not more than fifteen. Our Company in the general meeting may, subject to provisions of its Articles of Association and Section 259 of the Companies Act by ordinary resolution, increase or reduce the number of its directors.

Notice and Quorum

Under the Articles, subject to Section 287 of the Companies Act, the quorum for a meeting of the board of directors of our Company shall be one third of its total strength 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 in number, the remaining directors, that is to say, the number of directors, who are not interested, present at the meeting being not less than two, shall be the quorum during such meeting. Notice of every meeting of the board or committee thereof shall be given in writing to every director for the time being in India and at his usual address in India and to every other director.

Interested Directors

An Interested director is not allowed to take part in the discussion of, or vote on, any contract or arrangement entered into, or to be entered into, by or on behalf of our Company, if he is in any way, directly or indirectly, concerned or interested in the contract or arrangement; nor shall his presence count for the purpose of forming a quorum at the time of any such discussions or vote. In addition, the director is required to disclose the nature of his interest under Section 299 of the Companies Act.

Under Section 297 of the Companies Act, the consent of the board of directors is required where a director of our Company or his relative, firm in which such a director or relative is a partner, any other partner in such a firm, or a private company of which such director is a member or such director proposes to enter into certain contracts with our Company.

Qualifying shares

A director of our Company shall not be required to hold qualification shares.

Borrowing Powers

The directors may raise, borrow or secure the payment of any sums of money for our Company‘s purposes as they deem appropriate, provided that, in accordance with Section 293 of the Companies Act, without the consent of a majority of the Shareholders in a general meeting, the aggregate principal amount outstanding in respect of monies raised, borrowed or secured by our Company may not exceed the aggregate of its paid up share capital

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plus free reserves. Pursuant to resolution passed on June 29, 2011, the shareholders of our Company authorized the Board to borrow and raise sums of money up to `5,000,000,000.

Director Compensation

The Articles of the Association of our Company require that the minimum remuneration of a director for his services for attending each meeting of our Board or the committee of directors shall be such as may be prescribed by the Companies Act or the Central Government. However, the board of directors may fix the actual remuneration within this limit.

Rotation

The Articles of Association of our Company require that not less than two-thirds of the total number of directors of our Company shall be persons whose period of office is liable to determination by retirement by rotation and save as otherwise expressly provided in the Companies Act and the Articles of Association, be appointed by our Company in general meeting. Further, at AGM in each year, one-thirds of the directors for the time being as are liable to retire by rotation, shall retire from office.

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TERMS AND CONDITIONS OF THE GLOBAL DEPOSITARY RECIEPTS

The global depositary receipts represented by this certificate (the "GDRs") are each issued in respect of 10 equity shares of par value Re.1 each in ZEE Learn Limited (the "Company") (the "Shares") pursuant to and subject to an agreement dated May 22, 2013 between the Company and Deutsche Bank Trust Company Americas as depositary (such agreement, as amended from time to time, being hereinafter referred to as the "Deposit Agreement").

Pursuant to the provisions of the Deposit Agreement, the Depositary has appointed Deutsche Bank AG, Mumbai Branch as Custodian (as defined below) to receive and hold on its behalf the Share certificates in respect of certain Shares (the "Deposited Shares") and all rights, securities, property and cash deposited with the Custodian which are attributable to the Deposited Shares (together with the Deposited Shares, the "Deposited Property"). The Depositary shall hold Deposited Shares for the benefit of the Holders (as defined below) in proportion to the number of Shares in respect of which the GDRs held by them are issued.

In these terms and conditions (the "Conditions"), references to the "Depositary" are to Deutsche Bank Trust Company Americas and/or any other depositary which may from time to time be appointed under the Deposit Agreement, references to the "Custodian" are to Deutsche Bank AG, Mumbai Branch or any other custodian from time to time appointed under the Deposit Agreement and references to the "Custodian’s Office" mean, in relation to the Custodian, its office at Deutsche Bank AG, Mumbai Branch, 222, Kodak House, Dr. D.N.Road, Fort, Mumbai-400 001, India (or such other office as from time to time may be designated by the Custodian with the approval of the Depositary).

GDRs may take the form of GDRs evidenced by one or more Master GDRs (each a “Master GDR”) registered in the name of a common nominee for, and held by the Common Depositary for, the Clearing Systems, and held for the account of accountholders in the relevant Clearing System(s), exchangeable, at the option of the Holder (as defined below) of such Master GDR and at the expense of any person shown in the records of the relevant Clearing System(s) as the Owner of a GDR (as defined below) and upon delivery to the Depositary of either (i) a certificate substantially in the form of Schedule 3 Part A of the Deposit Agreement or (ii) an electronic certification through the relevant Clearing System(s) in lieu of such certification set forth in Schedule 3 Part A of the Deposit Agreement, for a certificate in definitive registered form in respect of GDRs evidencing all or part of the interest of such person in such Master GDR.

If at any time when Deposited Shares are evidenced by a Master GDR, the Holder of such Master GDR is unwilling or unable to continue as a Common Depositary and a successor Common Depositary is not appointed within 90 calendar days or the Depositary has determined that, on the occasion of the next payment in respect of the GDRs, the Company, the Depositary or its Agent would be required to make any deduction or withholding (in respect of any tax or governmental charges) from any payment in respect of the GDRs which would not be required were the GDRs represented by certificates in definitive registered form, the Depositary will make available certificates in definitive form in respect of GDRs.

If at any time when Deposited Shares are evidenced by a Master GDR, either of the Clearing Systems is closed for business for a period of 14 calendar days (other than by reason of holiday, statutory or otherwise) or announces an intention to cease business or does in fact do so, the Company will consult with the Depositary regarding other arrangements for book-entry settlement of interests in such Master GDR. If no alternative clearing system satisfactory to the Depositary is available, the Company will instruct the Depositary to make available certificates in definitive registered form in respect of GDRs.

Under the terms of the GDRs, each purchaser of GDRs is deemed to have represented and agreed, among other things, that (a) the GDRs have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may be offered, sold, pledged or otherwise transferred only in a transaction exempt from the registration requirements of the Securities Act and (b) the GDRs may not be offered, sold, pledged or otherwise transferred to any person located in India, residents of India, or to, or for the account or benefit of, such persons. Each GDR will contain a legend to the foregoing effect. For a description of the restrictions on the transfer of GDRs see “Transfer Restrictions” and “Subscription and Sale” of the Offering Circular.

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These Conditions include summaries of, and are subject to, the detailed provisions of the Deposit Agreement, which includes the forms of the certificate in respect of the GDRs. Copies of the Deposit Agreement are available for inspection at the specified office of the Depositary and each Agent (as defined in Condition 17 and at the Custodian‘s Office. Holders are deemed to have notice of and be bound by all of the provisions of the Deposit Agreement.

Terms used in these Conditions and not defined herein but which are defined in the Deposit Agreement have the meanings given to such terms in the Deposit Agreement.

1. DEPOSIT OF SHARES AND OTHER SECURITIES

(A) After the initial deposit of Shares by the Company in respect of each GDR, unless otherwise agreed by the Depositary and the Company and permitted by applicable law, only the following may be deposited under the Deposit Agreement in respect of such GDR:

(i) Shares issued as a dividend or free distribution on Deposited Shares pursuant to Condition 5; (ii) Shares subscribed or acquired by Holders from the Company through the exercise of rights distributed by the Company to such persons in respect of Deposited Shares pursuant to Condition 0; (iii) securities issued by the Company to the Holders in respect of Deposited Shares as a result of any change in the par value, sub-division, consolidation or other reclassification of Deposited Shares or otherwise pursuant to Condition 10. References in these Conditions to ―Deposited Shares‖ or ―Shares‖ shall include any such securities, where the context permits; and (iv) (to the extent permitted by applicable law and regulation) any other Shares in issue;

(B) The Depositary will issue GDRs in respect of Shares accepted for deposit under this Condition. Under the Deposit Agreement, the Company must inform the Depositary if any Shares issued by it which may be deposited under this Condition do not, by reason of the date of issue or otherwise, rank pari passu in all respects with the other Deposited Shares. Subject to the provisions of Conditions 5, 7 and 10, if the Depositary accepts such Shares for deposit it will arrange for the issue of temporary GDRs in respect of such Shares which will form a different class of GDRs from the other GDRs until such time as the Shares which they represent become fully fungible with the other Deposited Shares.

Shares may not be deposited by persons located in India, residents of India or for, or on the account of, such persons (except by the Company and the Custodian) and such other persons who are not authorised to do so in accordance with Indian regulations.

Subject to the terms and conditions of the Deposit Agreement and applicable law, upon physical delivery to the Custodian of Shares, delivery to the Depositary of either (i) a certificate substantially in the form of Schedule 3 Part C of the Deposit Agreement and available from the Depositary or the Custodian or (ii) an electronic certification through the relevant Clearing System, in lieu of such certification set forth in Schedule 3 Part C of the Deposit Agreement, and payment of necessary taxes, governmental charges (including transfer taxes) and other charges as set forth in the Deposit Agreement, the Depositary will adjust its records for the number of GDRs issued in respect of the Shares so deposited and will notify the Common Depositary, as the case may be, as to the increase in the number of GDRs evidenced by a Master GDR. Each person receiving a GDR or interest therein will be deemed to make the representations, covenants and acknowledgements set forth under “Transfer Restrictions” of the Offering Circular.

(C) The Depositary will refuse to accept Shares for deposit whenever it is notified in writing that the Company has restricted the transfer of such Shares to comply with ownership restrictions under applicable Indian law or that such deposit would result in any violation of any applicable Indian laws or governmental or stock exchange regulations. The Depositary may also refuse to accept Shares for deposit in certain other circumstances as set out in the Deposit Agreement.

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(D) The number of Shares or other Deposited Property not deposited but represented by GDRs outstanding at any time as a result of Pre-Releases will not normally exceed thirty per cent (30%) of the Shares or other Deposited Property deposited hereunder; provided, however, that the Depositary reserves the right to disregard such limit from time to time as it deems reasonably appropriate, and may, with prior written consent of the Company, change such limit for purposes of general application. Nothing in Condition 1(D) shall obligate the Company to issue any new Shares in respect of any Pre-Release by the Depositary.

(E) Subject to the limitations set forth in the Deposit Agreement, the Depositary may (but is not required to) issue GDRs prior to the delivery to it of Shares in respect of which such GDRs are to be issued.

2. WITHDRAWAL OF DEPOSITED PROPERTY

(A) Deposited Property may not be withdrawn until the Depositary has received a written confirmation from the Company that the Deposited Shares are (i) listed on the Share Exchange and (ii) in dematerialised form. The Depositary shall notify the Holders of such listings in accordance with Condition 23 as soon as is practically possible after receiving such written confirmation. Subject as set out above, any Holder may request withdrawal of, and the Depositary shall thereupon relinquish, the Deposited Property attributable to any GDR upon production of such evidence that such person is the Holder of, and entitled to, the relative GDR as the Depositary may reasonably require at the specified office of the Depositary or any Agent accompanied by: (i) a duly executed order (in a form approved by the Depositary) requesting the Depositary to cause the Deposited Property being withdrawn to be delivered at the Custodian‘s Office, or (at the request, risk and expense of the Holder) at the specified office from time to time of the Depositary or any Agent (located in India or such other place as permitted under applicable law from time to time) to, or to the order in writing of, the person or persons designated in such order and either (a) a certificate substantially in the form of Schedule 3 Part B of the Deposit Agreement and available from the Depositary or the Custodian or (b) an electronic certification through the relevant Clearing System, in lieu of such certification set forth in Schedule 3 Part B of the Deposit Agreement; (ii) the payment of such fees, duties, charges and expenses as may be required under these Conditions or the Deposit Agreement; and (iii) the surrender (if appropriate) of GDR certificates in definitive registered form to which the Deposited Property being withdrawn is attributable.

(B) Certificates for withdrawn Deposited Shares will contain such legends, including the legends described under ―Transfer Restrictions‖ of the Offering Circular, and withdrawals of Deposited Shares may be subject to such transfer restrictions or certifications, as the Company or the Depositary may from time to time determine to be necessary for compliance with applicable laws.

The Board of Directors may in certain circumstances refuse to register the transfer of Deposited Shares from the name of the Depositary or its nominee.

A stamp duty of 0.25 per cent. of the market value of Shares is currently charged in respect of any transfer of Shares in physical form. This duty is payable by the relevant Holder. Currently, in accordance with Indian regulations, the delivery of Shares underlying the GDRs shall only be in the dematerialised form and stock exchanges may not accept delivery of underlying Shares of GDRs in physical form. In addition, it may be necessary to obtain the approval of (i) the Reserve Bank of India for Shares, such as withdrawn Deposited Shares, to be registered in the name of a person who is a resident of India and (ii) the Foreign Investment Promotion Board for Shares such as withdrawn Deposited Shares, to be registered in the name of certain categories of persons who are not residents of India. Holders are advised to seek independent legal advice in relation to transfer and requirement of approval issues.

(C) Upon production of such documentation and the making of such payment as aforesaid in accordance with Condition 2(A), the Depositary will direct the Custodian, within a reasonable time

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after receiving such direction from such Holder, to deliver at the Custodian‘s Office to, or to the order in writing of, the person or persons designated in the accompanying order: (i) a certificate for, or other appropriate instrument of title to, the relevant Deposited Shares, registered in the name of the Depositary or its nominee and accompanied by such instruments of transfer in blank or to the person or persons specified in the order for withdrawal and such other documents, if any, as are required by law for the transfer thereof; and (ii) all other property forming part of the Deposited Property attributable to such GDR, accompanied, if required by law, by one or more duly executed endorsements or instruments of transfer in respect thereof as aforesaid,

provided that the Depositary (at the request, risk and expense of any Holder so surrendering a GDR):

(a) will direct the Custodian to deliver the certificates for, or other instruments of title to, the relevant Deposited Shares and any document relative thereto and any other documents referred to in Condition 2(C)(i) (together with any other property forming part of the Deposited Property which may be held by the Custodian or its Agent and is attributable to such Deposited Shares); and/or (b) will deliver any other property forming part of the Deposited Property which may be held by the Depositary and is attributable to such GDR (accompanied by such instruments of transfer in blank or to the person or persons specified in such order and such other documents, if any, as are required by law for the transfer thereto),

in each case to the Specified Office from time to time of the Depositary or, if any, to the specified office from time to time of any Agent (located in India or such other place as is permitted under applicable law from time to time) as designated by the surrendering Holder in such accompanying order as aforesaid.

(D) Delivery by the Depositary, any Agent and the Custodian of all certificates, instruments, dividends or other property forming part of the Deposited Property as specified in this Condition will be made subject to any laws or regulations applicable thereto.

(E) The Depositary may suspend the withdrawal of all or any category of Deposited Property during any period when the register of shareholders or other relevant holders of other securities of the Company is closed, generally or in one or more localities, or in order to comply with any applicable Indian law or governmental or stock exchange regulations. The Depositary shall restrict the withdrawal of Deposited Shares whenever it is notified in writing that such withdrawal would result in a breach of ownership restrictions under applicable Indian law.

3. TRANSFER AND OWNERSHIP

GDRs are in registered form each issued in respect of 10 (ten) Shares. Title to the GDRs passes by registration in the records of the Depositary. The Depositary will refuse to accept for transfer any GDRs if it reasonably believes that such transfer would result in a violation of applicable laws. The Holder of any GDR will (except as otherwise required by law) be treated as its absolute owner for all purposes (whether or not any payment or other distribution in respect of such GDR is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, or the theft or loss of, any certificate issued in respect of it) and no person will be liable for so treating the Holder.

The Deposit Agreement defines (i) the “Owner of GDRs” as, in respect of any GDRs represented by a Master GDR, such person whose name appears in the records of the Clearing Systems as the owner of a particular amount of GDRs and, in respect of any other GDR, the Holder thereof; and (ii) “beneficial owner of GDRs” as a person holding beneficial title to such GDRs or interests therein.

4. CASH DISTRIBUTIONS

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Whenever the Depositary shall receive from the Company any cash dividend or other cash distribution on or in respect of the Deposited Shares (including any amounts received in the liquidation of the Company) or otherwise in connection with the Deposited Property, the Depositary, its Agent or Custodian shall as soon as practicable convert the same into United States dollars in accordance with Condition 8. The Depositary shall, if practicable in the opinion of the Depositary, give notice to the Holders of its receipt of such payment in accordance with Condition 23, specifying the amount per Deposited Share payable in respect of such dividend or distribution and the date, determined by the Depositary, for such payment and shall as soon as practicable distribute any such amounts to the Holders in proportion to the number of Deposited Shares represented by the GDRs so held by them respectively, subject to and in accordance with the provisions of Conditions 9 and 11, provided that: (a) in the event that any Deposited Shares shall not be entitled, by reason of the date of issue or transfer or otherwise, to such full proportionate amount, the amount so distributed to the relative Holders shall be adjusted accordingly; and (b) the Depositary will distribute only such amounts of cash dividends and other distributions as may be distributed without attributing to any GDR a fraction of the lowest integral unit of currency in which the distribution is made by the Depositary and any balance remaining shall be retained by the Depositary beneficially as an additional fee under Condition 16(A)(iv).

5. DISTRIBUTIONS OF SHARES

Whenever the Depositary shall receive from the Company any distribution in respect of Deposited Shares which consists of a dividend in, or free distribution or bonus issue of, Shares, the Depositary shall cause to be distributed to the Holders entitled thereto, in proportion to the number of Deposited Shares represented by the GDRs held by them respectively, additional GDRs representing an aggregate number of Shares received pursuant to such dividend or distribution by an increase in the number of GDRs evidenced by the Master GDR or an issue of certificates in definitive registered form in respect of GDRs, according to the manner in which the Holders hold their GDRs; provided that, if and in so far as the Depositary deems any such distribution to all or any Holders not to be reasonably practicable (including, without limitation, owing to the fractions which would otherwise result or to any requirement that the Company, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the Depositary shall sell such Shares so received (either by public or private sale and otherwise at its discretion, subject to Indian laws and regulations) and distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto.

6. DISTRIBUTIONS OTHER THAN IN CASH OR SHARES

Whenever the Depositary shall receive from the Company any dividend or distribution in securities (other than Shares) or in other property (other than cash) on or in respect of the Deposited Property, the Depositary shall distribute or cause to be distributed such securities or other property to the Holders entitled thereto, in proportion to the number of Deposited Shares represented by the GDRs held by them respectively, in any manner that the Depositary may deem equitable and practicable for effecting such distribution; provided that, if and in so far as the Depositary deems any such distribution to all or any Holders not to be reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Company, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the Depositary shall sell the securities or property so received, or any part thereof, (either by public or private sale and otherwise at its discretion, subject to Indian laws and regulations) and distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto.

7. RIGHTS ISSUES

(A) If and whenever the Company announces its intention to make any offer or invitation to the holders of Shares to subscribe for or to acquire Shares, securities or other assets by way of rights, the Depositary shall as soon as practicable give notice to the Holders in accordance with Condition 28

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of such offer or invitation specifying, if applicable, the earliest date established for acceptance thereof, the last date established for acceptance thereof and the manner by which and time during which Holders may request the Depositary to exercise such rights as provided below or, if such be the case, give details of how the Depositary proposes to distribute the rights or the proceeds of sale. The Depositary will deal with such rights in the manner described below: (i) if, at its discretion, the Depositary shall be satisfied that it is lawful and reasonably practicable and, to the extent that it is so satisfied, the Depositary shall make arrangements whereby the Holders may, upon payment of the subscription price in Rupees or other currency (where appropriate) together with such fees, taxes, duties, charges, costs and expenses as may be required under the Deposit Agreement and completion of such undertakings, declarations, certifications and other documents as the Depositary may reasonably require, request the Depositary to exercise such rights on their behalf with respect to the Deposited Shares and in the case of Shares so subscribed or acquired to distribute them to the Holders entitled thereto by an increase in the numbers of GDRs evidenced by the Master GDR or an issue of certificates in definitive form in respect of GDRs, according to the manner in which the Holders hold their GDRs; (ii) if, at its discretion, the Depositary shall be satisfied that it is lawful and reasonably practicable and to the extent that it is so satisfied, the Depositary shall distribute such securities or other assets by way of rights or the rights themselves to the Holders entitled thereto in proportion to the number of Deposited Shares represented by the GDRs held by them respectively in such manner as the Depositary may at its discretion determine; or (iii) if, and in so far as the Depositary is not satisfied that, any such arrangement and distribution to all or any Holders is lawful and reasonably practicable (including, without limitation, owing to the fractions which would otherwise result or to any requirement that the Company, the Custodian or the Depositary withhold an amount on account of taxes or other governmental charges) or is so satisfied that it is unlawful, the Depositary will, provided that Holders have not taken up rights through the Depositary as provided in (i) above, sell such rights (either by public or private sale and otherwise at its discretion subject to Indian laws and regulations) and distribute the net proceeds of such sale as a cash distribution pursuant to Condition 4 to the Holders entitled thereto except to the extent prohibited by applicable law.

(B) If at the time of the offering of any rights, at its discretion, the Depositary shall be satisfied that it is not lawful or practicable (for reasons outside its control) to dispose of the rights in any manner provided in Condition 7(A) the Depositary shall permit the rights to lapse. In the absence of its own wilful default, gross negligence or bad faith the Depositary will not be responsible for any failure to determine that it may be lawful or practicable to make rights available to Holders in general or to any Holder in particular.

(C) The Company has agreed in the Deposit Agreement that it will, unless prohibited by applicable law, give its consent to, and, if requested, use all reasonable endeavours (subject to the next paragraph) to facilitate any such distribution, sale or subscription by the Depositary or the Holders, as the case may be, pursuant to Condition 4, 5, 6, 7 or 10.

(D) If the Company notifies the Depositary that registration is required in any jurisdiction under any applicable law of the rights, securities or other property to be distributed under Condition 4, 5, 6, 7 or 10 or the securities to which such rights relate, in order for the Depositary to offer such rights or distribute such securities or other property to the Holders or Owners of GDRs and to sell the securities represented by such rights, the Depositary will not offer such rights or distribute such securities or other property to Holders of GDRs unless and until the Company procures at the Company‘s expense, the receipt by the Depositary of an opinion from counsel satisfactory to the Depositary that the necessary registration has been effected or that the offer and sale of such rights, securities or property to Holders of GDRs are exempt of registration. Neither the Company nor the Depositary shall be liable to register such rights, securities or other property or the securities to which such rights relate and they shall not be liable for any losses, damages or expenses resulting from any failure to do so.

8. CONVERSION OF FOREIGN CURRENCY

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Whenever the Depositary shall receive any currency other than United States dollars by way of dividend or other distribution or as the net proceeds from the sale of securities, other property or rights, and if at the time of the receipt thereof the currency so received can in the judgement of the Depositary be converted on a reasonable basis into United States dollars and distributed to the Holders entitled thereto, the Depositary shall as soon as practicable itself convert or cause to be converted by another bank, by sale or in any other manner that it may determine, the currency so received into United States dollars. If such conversion or distribution can be effected only with the approval or licence of any government or agency thereof, the Depositary, with the assistance of the Company, shall make reasonable efforts to apply, or procure that an application be made, for such approval or licence, if any, as it may consider necessary. If at any time the Depositary shall determine that in its judgment any currency other than United States dollars is not convertible on a reasonable basis into United States dollars and distributable to the Holders entitled thereto, or if any approval or licence of any government or agency thereof which is required for such conversion is denied or, in the opinion of the Depositary, is not obtainable, or if any such approval or licence is not obtained within a reasonable period as determined by the Depositary, the Depositary may distribute such other currency received by it (or an appropriate document evidencing the right to receive such other currency) to the Holders entitled thereto to the extent permitted under applicable law, or the Depositary may in its discretion hold such other currency for the benefit of the Holders entitled thereto. If any conversion of any such currency can be effected in whole or in part for distribution to some (but not all) Holders entitled thereto, the Depositary may in its discretion make such conversion and distribution in United States dollars to the extent possible to the Holders entitled thereto and may distribute the balance of such other currency received by the Depositary to, or hold such balance on non-interest bearing accounts for the account of, the Holders entitled thereto and notify the Holders accordingly.

9. DISTRIBUTION OF ANY PAYMENTS

(A) Any distribution of cash under Condition 4, 5, 6, 7 or 10 will be made by the Depositary to those Holders who are Holders of record on the record date established by the Depositary (which shall be the same date as the Record Date or, if different from the Record Date, shall be set after consultation with the Company and shall be as near as practicable to the Record Date) for that purpose and, if practicable in the opinion of the Depositary, notice shall be given promptly to Holders in accordance with Condition 23, in each case subject to any laws or regulations applicable thereto and (subject to the provisions of Condition 8) distributions will be made in United States dollars by cheque drawn upon a bank in New York City or, in the case of the Master GDR, according to usual practice between the Depositary and the relevant Clearing System(s). The Depositary or the Agent, as the case may be, may deduct and retain from all moneys due in respect of such GDR in accordance with the Deposit Agreement all fees, taxes, duties, charges, costs and expenses which may become or have become payable under the Deposit Agreement or under applicable law in respect of such GDR or the relative Deposited Property.

(B) Delivery of any securities or other property or rights other than cash shall be made as soon as practicable to the entitled Holder, subject to any laws or regulations applicable thereto. If any distribution made by the Company with respect to the Deposited Property and received by the Depositary shall remain unclaimed at the end of 12 years from the first date upon which such distribution is made available to Holders in accordance with the Deposit Agreement, all rights of the Holders to such distribution or the proceeds of the sale thereof shall be extinguished and the Depositary shall (except for any distribution upon the liquidation of the Company, which remains unclaimed for such period as aforesaid, when the Depositary shall retain the same) return the same to the Company for its own use and benefit.

10. CAPITAL REORGANISATION

Upon any change in the par value, sub-division, consolidation or other reclassification of Deposited Shares or any other part of the Deposited Property or upon any reduction of capital or upon any reorganisation, merger or consolidation of the Company or to which it is a party (except where the Company is the continuing corporation), the Depositary shall as soon as practicable give notice of

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such event to the Holders in accordance with Condition 23 and, at its discretion, may treat such event as a distribution and comply with the relevant provisions of Conditions 4, 5, 6 and 9 with respect thereto or may execute and deliver additional GDRs in respect of Shares or may require the exchange of existing GDRs for new GDRs which reflect the effect of such change.

11. TAXATION AND APPLICABLE LAWS

(A) Payments to Holders of dividends or other distributions made to Holders on or in respect of the Deposited Shares will be subject to deduction of Indian and other withholding taxes, if any, at the applicable rates.

(B) If any governmental or administrative authorisation, consent, registration or permit or any report to any governmental or administrative authority is required under any applicable law in India in order for the Depositary to receive from the Company Shares to be deposited under the Conditions or in order for Shares, other securities or other property to be distributed under Condition 4, 5, 6, 7 or 10 to be subscribed under Condition 7, the Depositary shall request that the Company apply for such authorisation, consent, registration or permit or file such report on behalf of the Holders within the time required under such law. In this connection, the Company has undertaken in the Deposit Agreement, to the extent reasonably practicable and that it does not involve unreasonable expense on behalf of the Company, to take such action as may be required in obtaining or filing the same. The Depositary shall not distribute GDRs, Shares, other securities or other property with respect to which such authorisation, consent or permit or such report has not been obtained or filed, as the case may be, and shall have no duties to obtain any such authorisation, consent or permit or to file any such report except in circumstances where the same may only be obtained or filed by the Depositary without, in the opinion of the Depositary, unreasonable burden or expense.

12. VOTING RIGHTS

Holders of GDRs will have no voting rights with respect to the Deposited Shares. The Depositary will not exercise any voting rights in respect of the Deposited Shares unless it is required to do so by law. If so required, the Depositary will, at the direction of the Board of Directors of the Company (subject to the advice of legal counsel taken by the Depositary and the Company at the expense of the Company), either vote as directed by the Board of Directors of the Company or give a proxy or power of attorney to vote the Deposited Shares in favour of a Director of the Company or other person or vote in same manner as those shareholders designated by the Board of Directors of the Company. A valid corporate decision of the Company will bind the Depositary and the Holders notwithstanding these restrictions on voting rights.

Shares which have been withdrawn from the depositary facility and transferred on the Company’s register of members to a person other than the Depositary or its nominee may be voted by the holders thereof. However, Holders or Owners of GDRs may not receive sufficient advance notice of shareholder meetings to enable them to withdraw the Shares and vote at such meetings.

13. DOCUMENTS TO BE FURNISHED, RECOVERY OF TAXES, DUTIES AND OTHER CHARGES

The Depositary shall not be liable for any taxes, duties, charges, costs or expenses which may become payable in respect of the Deposited Shares or other Deposited Property or the GDRs, whether under any present or future fiscal or other laws or regulations, and such part thereof as is proportionate or referable to a GDR shall be payable by the Holder thereof to the Depositary at any time on request or may be deducted from any amount due or becoming due on such GDR in respect of any dividend or other distribution. In default thereof, the Depositary may, for the account of the Holder, discharge the same out of the proceeds of sale and subject to Indian law and regulations, of an appropriate number of Deposited Shares (being an integral multiple of the number of Shares in respect of which a single GDR is issued) or other Deposited Property and subsequently pay any surplus to the Holder. Any such request shall be made by giving notice pursuant to Condition 23.

14. LIABILITY

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(A) None of the Depositary, the Custodian, the Company, or any of their agents, officers or directors or employees or any Agent shall incur any liability to any other of them or to any Holder or Owner of a GDR if, by reason of any provision of any present or future law or regulation of India or any other country or of any relevant governmental authority, or by reason of the interpretation or application of any such present or future law or regulation or any change therein, or by reason of any other circumstances beyond their control or, in the case of the Depositary, the Custodian, or any of their agents, officers, directors or employees or any Agent by reason of any provision, present or future, of the Constitutive Documents, any of them shall be prevented, delayed or forbidden from doing or performing any act or thing which the terms of these Conditions or the Deposit Agreement provide shall or may be done or performed; nor (save in the case of wilful default, gross negligence or bad faith) shall any of them incur any liability to any Holder or Owner of a GDR or a person with an interest in a GDR by reason of any non-performance or delay, caused as aforesaid, in performance of any act or thing which the terms of these Conditions or the Deposit Agreement provide shall or may be done or performed, or by reason of any exercise of, or failure to exercise, caused as aforesaid, any voting rights attached to the Deposited Shares or any of them or any other discretion or power provided for in these Conditions or the Deposit Agreement. Any such party may rely on, and shall be protected in acting upon, any written notice, request, direction or other document believed by it to be genuine and to have been duly signed or presented (including a translation which is made by a translator believed by it to be competent or which appears to be authentic).

(B) None of the Depositary, the Custodian or any Agent shall be liable (except by reason of its own wilful default, gross negligence or bad faith or that of its agents, officers, directors or employees) to the Company or any Holder or Owner of a GDR, by reason of having accepted as valid, or not having rejected, any document relating to Shares or GDRs or any signature on any transfer or instruction purporting to be such and subsequently found to be forged or not authentic (except as aforementioned) for its failure to perform any obligations under these Conditions or the Deposit Agreement.

(C) The Depositary and each of its Agents (and any holding, subsidiary or associated company of the Depositary) may engage or be interested in any financial or other business transactions with the Company or any of its subsidiaries or affiliates or in relation to the Deposited Property (including, without prejudice to the generality of the foregoing, the conversion of any part of the Deposited Property from one currency to another), may at any time hold GDRs for its own account, and shall be entitled to charge and be paid all usual fees, commissions and other charges for business transacted and acts done by it as a bank or in any other capacity, and not in the capacity of Depositary, in relation to matters arising under the Deposit Agreement (including, without prejudice to the generality of the foregoing, charges on the conversion of any part of the Deposited Property from one currency to another and on any sales of property) without accounting to Holders or Owners of GDRs or a person with an interest in a GDR or any other person for any profit arising therefrom.

(D) The Depositary shall endeavour to effect any such sale as is referred to or contemplated in Conditions 5, 6, 7, 10, 13 or 21 or any such conversion as is referred to in Condition 8 in accordance with the Depositary‘s normal practices and procedures, but shall have no liability (in the absence of its own wilful default, gross negligence or bad faith or that of its agents, officers, directors or employees) with respect to the terms of such sale or conversion or if such sale or conversion shall not be possible. In the absence of its own wilful default, gross negligence or bad faith the Depositary will not be responsible for any failure to determine that it may be lawful or practicable to make rights available to Holders in general or to any Holder in particular pursuant to Condition 7.

(E) The Company, the Depositary and any of their respective agents shall not be liable to Holders of GDRs for any indirect, special, punitive or consequential damages.

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(F) The Depositary shall not be required or obliged to monitor, supervise or enforce the observance and performance by the Company of, its obligations under or in connection with, these Conditions or the Deposit Agreement.

(G) Neither the Company nor the Depositary shall, subject to all applicable laws, have any responsibility whatsoever to the other party hereto, any Holder or any Owner of GDRs or a person with an interest in a GDR as regards any deficiency which might arise because the Depositary is subject to any tax in respect of the Deposited Property or any part thereof or any income therefrom or any proceeds thereof.

(H) In connection with any proposed modification, waiver, authorisation or determination permitted by the terms of these Conditions or the Deposit Agreement, the Depositary shall not, except as otherwise expressly provided in Condition 22, be obliged to have regard to the consequence thereof for the Holders or Owners of GDRs or a person with an interest in a GDR or any other person.

(I) Notwithstanding anything else contained in these Conditions or the Deposit Agreement, the Depositary may refrain from doing anything which could or might, in its reasonable opinion, be contrary to any law of any jurisdiction or any directive or regulation of any agency or state or which would or might otherwise render it liable to any person and the Depositary may do anything which is, in its reasonable opinion, necessary to comply with any such law, directive or regulation.

(J) Applicable laws and regulations in India, as amended from time to time, and the Constitutive Documents of the Company, may require holders and beneficial owners of Shares and/or GDRs to satisfy reporting requirements, comply with ownership restrictions or obtain regulatory approvals in certain circumstances. The Depositary shall be under no obligation to check, monitor or enforce compliance with any such reporting requirements, ownership restrictions, regulatory approvals or Constitutive Documents in respect of GDRs or Shares. Holders and beneficial owners of GDRs are solely responsible for complying with such reporting requirements, ownership restrictions and Constitutive Documents and obtaining such approvals. None of the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall have any liability in respect of such reporting requirements, ownership restrictions, approvals or Constitutive Documents and shall not be required to take any actions whatsoever on behalf of Holders or beneficial owners of GDRs to satisfy or comply with such reporting requirements, ownership restrictions or Constitutive Documents or obtain such regulatory approvals under applicable laws and regulations.

(K) Notwithstanding the generality of Condition 3, the Depositary shall refuse to register any transfer of GDRs or any deposit of Shares against issue of GDRs if notified by the Company, or if the Depositary becomes aware of the fact, that such transfer or issue would be in violation of the limitations set forth above or any other applicable laws.

(L) The Depositary may, in relation to these Conditions or the Deposit Agreement, act or take no action on the advice or opinion of, or any certificate or information obtained from, any lawyer, valuer, accountant, banker, broker, securities company or other expert whether obtained by the Company, the Depositary or otherwise and shall not be responsible or liable for any loss or liability occasioned by so acting or refraining from acting or relying on information from persons presenting Shares for deposit or GDRs for surrender or requesting transfer thereof. Any such advice, opinion, certificate or information may be sent or obtained by letter, telex or facsimile transmission, and the Depositary shall not be liable for acting on any advice, opinion, certificate or information purported to be conveyed by any such letter, telex or facsimile transmission.

(M) The Depositary may call for and shall be at liberty to accept as sufficient evidence of any fact or matter or the expediency of any transaction or thing, a certificate, letter or other written communication signed or otherwise communicated on behalf of the Company by the Board of Directors or by a person duly authorised by the Board of Directors or such other certificate

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from persons specified in Condition 14(L) above which the Depositary considers appropriate and the Depositary shall not be bound in any such case to call for further evidence or be responsible for any loss or liability that may be occasioned by the Depositary acting on such certificate.

(N) Notwithstanding anything to the contrary contained in these Conditions or the Deposit Agreement, the Depositary shall not be liable in respect of any loss or damage which arises out of or in connection with the performance or non-performance of or the exercise or attempted exercise of, or the failure to exercise any of, its powers or discretions under the Deposit Agreement, except to the extent that such loss or damage arises from its own wilful default, gross negligence or bad faith or that of its agents, officers, directors or employees.

(O) No provision of these Conditions or the Deposit Agreement shall require the Depositary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity and security against such risk of liability is not assured.

(P) The Depositary may, in the performance of its obligations hereunder, instead of acting personally, employ and pay an agent, whether a lawyer or other person, including obtaining an opinion of legal advisers in form and substance reasonably satisfactory to it, to transact or concur in transacting any business and do or concur in doing all acts required to be done by such party, including the receipt and payment of money. Save for (i) the failure on the part of the Depositary to exercise reasonable care in the selection or retention of any such agent or (ii) any misconduct or omission by an agent which is an affiliate of the Depositary, the Depositary will not be liable to anyone for any misconduct or omission by any such agent so employed by it or be bound to supervise the proceedings or acts of any such agent.

(Q) The Depositary may having given prior notification to the Company, delegate by power of attorney or otherwise to any person or persons or fluctuating body of persons, whether being a joint Depositary of the Deposit Agreement or not and not being a person to whom the Company may reasonably object, all or any of the powers, authorities and discretions vested in the Depositary by the Deposit Agreement and such delegation may be made upon such terms and subject to such conditions, including power to sub-delegate and subject to such regulations as the Depositary may in the interest of the Holders think fit provided that no objection from the Company to any such delegation as aforesaid may be made to an Affiliate. Any delegation by the Depositary shall be on the basis that the Depositary is acting on behalf of the Holders and the Company in making such delegation. The Company shall not in any circumstances and the Depositary shall not (provided that it shall have exercised reasonable care in the selection of such delegate) be bound to supervise the proceedings or be in any way responsible for any loss, liability, cost, claim, action, demand or expense incurred by reason of any misconduct or default on the part of any such delegate or sub-delegate, except that the Depositary shall be responsible for any loss, liability, cost, claim, action, demand or expense incurred by reason of any misconduct or default on the part of any such delegate or sub- delegate which is an Affiliate. However, the Depositary shall, if practicable, and if so requested by the Company, pursue (at the Company's expense and subject to receipt by the Depositary of such indemnity and security for costs as the Depositary may reasonably require) any legal action it may have against such delegate or sub-delegate, arising out of any such loss caused by reason of any such misconduct or default. The Depositary shall, within a reasonable time of any such delegation or any renewal, extension or termination thereof, give notice thereof to the Company. Any delegation under this Condition which includes the power to sub-delegate shall provide that the delegate shall, within a specified time of any sub- delegation or amendment, extension or termination thereof, give notice to the Company and the Depositary.

(R) The Depositary shall be at liberty to hold or to deposit the Deposit Agreement and any deed or document relating thereto in any part of the world at the cost of the Depositary with any banking company or companies (including itself) whose business includes undertaking the

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safe custody of deeds or documents or with any lawyer or firm of lawyers of good repute and may pay all sums due in respect thereof and the Depositary shall not (in the case of deposit with itself, in the absence of wilful default, gross negligence or bad faith or that of its agents, officers, directors or employees) be responsible for any losses or liability incurred in connection with any such deposit.

(S) In acting hereunder the Depositary shall have only those duties, obligations and responsibilities expressly specified in these Conditions or the Deposit Agreement and, other than holding the Deposited Property for the benefit of Holders as bare trustee, does not assume any relationship of trust for or with the Holders or the Owners of GDRs except that any funds received by the Depositary for the payment of any amount due, in accordance with the Conditions, on the GDRs shall, subject to Condition 9(B) be held by it in trust for the relevant Holder until duly paid thereto.

15. ISSUE AND DELIVERY OF REPLACEMENT GDRS AND EXCHANGE OF GDRS

Subject to the payment of the relevant fees, taxes, duties, charges, costs and expenses and such terms as to evidence and indemnity as the Depositary may require, replacement GDRs will be issued by the Depositary and will be delivered in exchange for or in replacement of outstanding lost, stolen, mutilated, defaced or destroyed GDRs upon surrender thereof (except in the case of destruction, loss or theft) at the specified office of the Depositary or (at the request, risk and expense of the holder) at the specified office of any Agent.

16. DEPOSITARY’S FEES, COSTS AND EXPENSES

(A) The Depositary shall be entitled to charge the following remuneration and receive the following remuneration and reimbursement (such remuneration and reimbursement being payable on demand) from the Holders in respect of its services under the Deposit Agreement: (i) for the issue of GDRs (other than upon the issue of GDRs on the date hereof) or the cancellation of GDRs upon the withdrawal of Deposited Property: USD0.05 or less per GDR issued or cancelled; (ii) for issuing GDR certificates in definitive registered form in replacement for mutilated, defaced, lost, stolen or destroyed GDR certificates: a sum per GDR certificate which is determined by the Depositary to be a reasonable charge to reflect the work, costs and expenses involved; (iii) for issuing GDR certificates in definitive registered form (other than pursuant to (ii) above): a sum per GDR certificate which is determined by the Depositary to be a reasonable charge to reflect the work, costs (including, but not limited to, printing costs) and expenses involved; (iv) for receiving and paying any cash dividend or other cash distribution on or in respect of the Deposited Shares: a fee of USD0.02 or less per GDR for each such dividend or distribution; (v) in respect of any issue of rights or distribution of Shares (whether or not evidenced by GDRs) or other securities or other property (other than cash) upon exercise of any rights, any free distribution, stock dividend or other distribution (except where converted to cash): USD0.05 or less per outstanding GDR for each such issue of rights, dividend or distribution; (vi) for the operation and maintenance costs associated with the administration of the GDRs: an annual fee of USD0.02 or less per GDR; (such fee to be assessed against Holders of record as at the date or dates set by the Depositary as it sees fit and collected at the sole discretion of the Depositary by billing such Holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions); and (vii) for the issue of GDRs pursuant to a change for any reason in the number of Shares represented by each GDR, regardless of whether or not there has been a deposit of Shares to the Custodian or the Depositary for such issuance: a fee of USD0.05 or less per GDR (or portion thereof),

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together with all expenses, transfer and registration fees, taxes, duties and charges payable by the Depositary, any Agent or the Custodian in connection with any of the above including, but not limited to charges imposed by a central depositary and such customary expenses as are incurred by the Depositary in the conversion of currencies other than U.S. dollars into U.S. dollars and fees imposed by any relevant regulatory authority.

(B) The Depositary is entitled to receive from the Company such fees, taxes, duties, charges, costs, expenses and other payments as agreed between them in any agreement concerning such fees, taxes, duties, charges, costs, expenses and other payments.

17. AGENTS

(A) The Depositary shall be entitled to appoint one or more Agents for the purpose, inter alia, of making distributions to the Holders.

(B) Notice of appointment or removal of any Agent or of any change in the specified office of the Depositary or any Agent will be duly given by the Depositary to the Holders.

18. LISTING

The Company has undertaken in the Deposit Agreement to use its best endeavours to obtain and thereafter maintain, so long as any GDR is outstanding, a listing of the GDRs on the GDR Exchange, an admission to trading on the Euro MTF market of the GDR Exchange and a listing of the Shares on the Share Exchanges. For that purpose the Company will pay all fees and sign and deliver all undertakings required by the GDR Exchange and the Share Exchanges in connection therewith. In the event that such GDR listing is not obtained and maintained, the Company has undertaken in the Deposit Agreement to use its best endeavours to obtain and maintain a listing of the GDRs on another internationally recognised investment exchange designated as a ―recognised stock exchange‖ for the purposes of section 1005 of the Income Tax Act 2007 and a listing of the Shares on one or more stock exchanges in India.

19. THE CUSTODIAN

The Depositary has, pursuant to the Deposit Agreement, agreed with the Custodian that the Custodian will receive and hold (or appoint agents approved by the Depositary to receive and hold) all Deposited Property for the account and to the order of the Depositary in accordance with the applicable terms of the Deposit Agreement, which include a requirement to segregate the Deposited Property from the other property of, or held by, the Custodian. The Custodian shall be responsible solely to the Depositary; provided that, if at any time the Depositary and the Custodian are the same legal entity, references to them separately in these Conditions and the Deposit Agreement are for convenience only and that legal entity shall be responsible for discharging both functions directly to the Holders and the Company. Upon receiving notice of the resignation of the Custodian, the Depositary shall promptly appoint a successor custodian, which shall, upon acceptance of such appointment, become the Custodian under the Deposit Agreement. Whenever the Depositary in its discretion determines that it is in the best interest of the Holders to do so, it may terminate the appointment of the Custodian and, in the event of the termination of the appointment of the Custodian, the Depositary shall promptly appoint a successor Custodian, which shall, upon acceptance of such appointment, become the Custodian under the Deposit Agreement on the effective date of such termination. The Depositary shall notify Holders of such change as soon as is practically possible following such change taking effect in accordance with Condition 23. Notwithstanding the foregoing, the Depositary may temporarily deposit the Deposited Property in a manner or a place other than as herein specified. In case of transportation of the Deposited Property under this Condition, the Depositary shall obtain appropriate insurance at the expense of the Company if, and to the extent that, the obtaining of such insurance is reasonably practicable and the premiums payable are, in the opinion of the Depositary, of a reasonable amount.

20. RESIGNATION AND TERMINATION OF APPOINTMENT OF THE DEPOSITARY

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(A) Unless otherwise agreed to in writing between the Company and Depositary from time to time, the Company may terminate the appointment of the Depositary under the Deposit Agreement by giving at least 90 calendar days‘ notice in writing to the Depositary and the Custodian, and the Depositary may resign as Depositary by giving at least 90 calendar days‘ notice in writing to the Company and the Custodian. Within 30 calendar days after the giving of such notice, notice thereof shall be duly given by the Depositary to the Holders in accordance with Condition 23. Such resignation by the Depositary shall be subject to the terms and conditions of any other agreement executed between the Depositary and the Company.

The termination of the appointment or the resignation of the Depositary shall take effect on the date specified in the relevant notice provided that no such termination of appointment or resignation shall take effect until the appointment by the Company of a successor depositary, the grant of such approvals as may be necessary to comply with applicable laws and with the Constitutive Documents for the transfer of the Deposited Property to such successor depositary, the acceptance of such appointment to act in accordance with the terms thereof by the successor depositary and the payment to the Depositary of all fees, taxes, duties, charges, costs, expenses and other payments as agreed by the Depositary and the Company in any agreement concerning such fees, taxes, duties, charges, costs, expenses and other payments. The Company has undertaken in the Deposit Agreement to use its best endeavours to procure the appointment of a successor depositary with effect from the date of termination specified in such notice as soon as reasonably possible following notice of such termination or resignation. Upon any such appointment and acceptance, notice thereof shall be duly given by the successor depositary to the Holders in accordance with Condition 23.

(B) Upon the termination of appointment or resignation of the Depositary, the Depositary shall deliver to its successor depositary sufficient information and records to enable such successor efficiently to perform its obligations under the Deposit Agreement and shall deliver and pay to such successor depositary all Deposited Property held by it under the Deposit Agreement. Upon the date when such termination of appointment or resignation takes effect, the Deposit Agreement provides that the Custodian shall be deemed to be the Custodian thereunder for such successor depositary and shall hold the Deposited Property for such successor depositary and the Depositary shall thereafter have no obligation thereunder.

21. TERMINATION OF DEPOSIT AGREEMENT

(C) Subject as set out below, either the Company or the Depositary but, in the case of the Depositary, only if the Company has failed to appoint a replacement Depositary within 90 calendar days of the date on which the Depositary has given notice pursuant to Condition 20 that it wishes to resign, may terminate the Deposit Agreement by giving 90 calendar days‘ notice to the other and to the Custodian. Within 30 calendar days after the giving of such notice, notice of such termination shall be duly given by the Depositary to Holders of all GDRs then outstanding in accordance with Condition 23. If the Company terminates the Deposit Agreement, it will (unless the termination is due to the wilful default, gross negligence or bad faith of the Depositary) be obligated, prior to such termination, to reimburse to the Depositary all amounts owed to the Depositary as set out in the Deposit Agreement and in any agreement between the Depositary and the Company.

(D) During the period beginning on the date of the giving of such notice by the Depositary to the Holders and ending on the date on which such termination takes effect, each Holder shall be entitled to obtain delivery of the Deposited Property relative to each GDR held by it, subject to the provisions of Condition 2(D) and upon compliance with Condition 2, and further upon payment by the Holder of any sums payable by the Depositary to the Custodian in connection therewith for such delivery and surrender but otherwise in accordance with the Deposit Agreement.

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(E) If any GDRs remain outstanding after the date of termination, the Depositary shall as soon as reasonably practicable sell the Deposited Property then held by it under the Deposit Agreement and shall not register transfers, shall not pass on dividends or distributions or take any other action except that it will deliver the net proceeds of any such sale, together with any other cash then held by it under the Deposit Agreement, pro rata to Holders of GDRs which have not previously been so surrendered by reference to that proportion of the Deposited Property which is represented by the GDRs of which they are Holders. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement and these Conditions, except its obligations to account to Holders for such net proceeds of sale and other cash comprising the Deposited Property without interest.

(F) The Company has agreed not to appoint any other depositary in respect of GDRs issued or to be issued under the depositary facility established pursuant to the Deposit Agreement, so long as Deutsche Bank Trust Company Americas is acting as Depositary under the Deposit Agreement.

22. AMENDMENT OF DEPOSIT AGREEMENT AND CONDITIONS

All and any of the provisions of the Deposit Agreement and these Conditions (other than this Condition 22 and Clause 12 of the Deposit Agreement) may at any time and from time to time be amended by written agreement between the Company and the Depositary and, if required, the SEBI in any respect which they may deem necessary or desirable. Notice of any amendment of these Conditions (except to correct a manifest error) shall be duly given to the Holders by the Depositary and any amendment (except as aforesaid) which shall increase or impose fees or charges payable by Holders or which shall otherwise, in the opinion of the Depositary, be materially prejudicial to the interests of the Holders (as a class) shall not become effective so as to impose any obligation on the Holders of the outstanding GDRs until the expiry of three months after such notice shall have been given. During such period of three months, each Holder shall be entitled to obtain, subject to and upon compliance with Condition 2, delivery of the Deposited Property relative to each GDR held by it upon surrender thereof, free of the charge specified in Condition 16(A)(i) for such delivery and surrender but otherwise in accordance with the Deposit Agreement. Each Holder at the time when any such amendment so becomes effective shall be deemed, by continuing to hold a GDR, to approve such amendment and to be bound by the terms thereof in so far as they affect the rights of the Holders. In no event shall any amendment impair the right of any Holder to receive, subject to and upon compliance with Condition 2, the Deposited Property attributable to the relevant GDR.

For the purposes of this Condition 22 and Clause 12 of the Deposit Agreement, an amendment shall not be regarded as being materially prejudicial to the interests of Holders if its principal effect is to permit the creation of GDRs in respect of additional Shares to be held by the Depositary which are or will become fully consolidated as a single series with the other Deposited Shares provided that temporary GDRs will represent such Shares until they are so consolidated.

23. NOTICES

All notices to Holders shall be validly given if mailed to them at their respective addresses in the register of Holders maintained by the Depositary or furnished to them by electronic transmission as agreed between the Company and the Depositary and, so long as the GDRs are listed on the Luxembourg Stock Exchange, published on the website of the Luxembourg Stock Exchange (www.bourse.lu). Any such notice shall be deemed to have been given on the later of such publication and the seventh day after being so mailed.

All notices required to be given by the Company to the holders of any Shares or other Deposited Property pursuant to any applicable laws, regulations or other agreements shall be given by the Company to the Depositary and upon receipt of any such notices, the Depositary shall forward such notices to the Holders. The Depositary shall not be liable for any notices required to be given by the Company which the Depositary has not received from the Company, nor shall the Depositary be liable to monitor the obligations of the Company to provide such notices to the holders of any Shares or other Deposited Property.

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24. REPORTS AND INFORMATION ON THE COMPANY

(A) The Company has undertaken in the Deposit Agreement (so long as any GDR is outstanding) to furnish the Depositary with six copies in the English language by mail, facsimile or electronic transmission as agreed between the Company and the Depositary (and to make available to the Depositary, the Custodian and each Agent as many further copies as they may reasonably require to satisfy requests from Holders) of: (i) in respect of the financial year ending on 31 March 2012 and in respect of each financial year thereafter, the non-consolidated (or, if published for holders of Shares, consolidated) balance sheets as at the end of such financial year and the non- consolidated (or, if published for holders of Shares, consolidated) statements of income for such financial year in respect of the Company, prepared in conformity with either generally accepted accounting principles in India or, at the option of the Company, in accordance with IFRS and reported upon by independent public accountants selected by the Company, as soon as practicable (and in any event within nine months) after the end of such year; and (ii) quarterly and semi-annual non-consolidated (and, if published for holders of Shares, consolidated) financial statements as soon as practicable after the same are published and, in any event, not later than four months after the date to which they relate.

(B) The Depositary shall, upon receipt thereof, give due notice to the Holders that such copies are available upon request at its specified office and the specified office of any Agent.

25. COPIES OF COMPANY NOTICES

On or before the day when the Company first gives notice, by mail, publication or otherwise, to holders of any Shares or other Deposited Property, whether in relation to the taking of any action in respect thereof or in respect of any dividend or other distribution thereon or of any meeting or adjourned meeting of such holders or otherwise, the Company has undertaken in the Deposit Agreement to transmit to the Custodian and the Depositary such number of copies of such notice and any other material (which in the opinion of the Company contains information having a material bearing on the interests of the Holders) furnished to such holders by the Company in connection therewith as the Depositary may reasonably request. If such notice is not furnished to the Depositary in English, either by the Company or the Custodian, the Depositary shall, at the Company‘s expense, arrange for an English translation thereof (which may be in such summarised form as the Depositary may deem adequate to provide sufficient information) to be prepared. The Depositary shall, as soon as practicable after receiving notice of such transmission or (where appropriate) upon completion of translation thereof, give due notice to the Holders which notice may be given together with a notice pursuant to Condition 9(A), and shall make the same available to Holders in such manner as it may determine.

26. MONEYS HELD BY THE DEPOSITARY

The Depositary shall be entitled to deal with moneys paid to it by the Company for the purposes of the Deposit Agreement in the same manner as other moneys paid to it as a banker by its customers and shall not be liable to account to the Company or any holder or any other person for any interest thereon, except as otherwise agreed.

27. DISCLOSURE OF BENEFICIAL OWNERSHIP AND OTHER INFORMATION

The Depositary may from time to time request Holders or former Holders or any clearing system in which the GDRs are from time to time cleared to provide information as to the capacity in which they hold or held GDRs and regarding the identity of any other persons then or previously interested in such GDRs and the nature of such interest and various other matters. Each such Holder agrees to provide any such information reasonably requested by the Depositary pursuant to the Deposit Agreement whether or not still a Holder at the time of such request.

28. SEVERABILITY

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If any one or more of the provisions contained in the Deposit Agreement or in these Conditions shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained therein or herein shall in no way be affected, prejudiced or otherwise disturbed thereby.

29. GOVERNING LAW

(A) The GDRs and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law. The rights and obligations attaching to the Deposited Property only will be governed by Indian Law. (B) The courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with the GDRs (including a Dispute) and accordingly any Proceedings may be brought in the English courts. This submission to the jurisdiction of such courts is for the benefit of each of the Holders and nothing in this Condition 29 shall limit the right of any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

(C) The Depositary irrevocably appoints the Managing Director for the time being of Deutsche Trustee Company Limited, currently situated at Winchester House, 1 Great Winchester Street, London EC2N 2DB as its authorised agent for service of process in England. If for any reason the Depositary does not have such an agent in England, it will promptly appoint a substitute process agent and notify the Company of such appointment. Nothing herein shall affect the right to serve process in any other manner permitted by law.

30. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No person shall have any right to enforce these terms and conditions under the Contracts (Rights of Third Parties) Act 1999 except and to the extent (if any) that these terms and conditions expressly provide for such Act to apply.

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SUMMARY OF PROVISIONS RELATING TO THE GDRs WHILE IN MASTER FORM

The GDRs will be issued in global form. The Master GDR, in registered form, which will be registered in the name of BT Globenet Nominees Limited, as common depositary for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream"). Interests in the Master GDRs will be exchangeable for GDRs in definitive form in accordance with the provisions set out in "Terms and Conditions of the Global Depositary Receipts" and "Transfer Restrictions" The GDRs will be issued pursuant to a deposit agreement (the "Deposit Agreement"), dated the Closing Date, by and among our Company and Deutsche Bank Trust Company Americas as depositary (the "Depositary"). Payment for the GDRs will be required on the Closing Date.

1. Exchange

The Master GDR will only be exchanged for certificates in definitive registered form representing GDRs in the circumstances described in (A), (B) and (C) below, in whole but not in part and, until exchanged in full, is subject to the Conditions and the Deposit Agreement. Subject to the Conditions, the Depositary has irrevocably undertaken to deliver certificates in definitive registered form representing GDRs in exchange for the Master GDR to Holders, in the event that: A. the Holder of the Master GDR is unwilling or unable to continue as common depositary or depositary (or as nominee thereof), as the case may be, and a successor common depositary or successor depositary (or successor nominee thereof), as the case may be, is not appointed within 90 calendar days; B. either of the Clearing Systems is closed for business for a continuous period of 14 calendar days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does, in fact, do so and no alternative clearing system satisfactory to the Depositary is available within 45 calendar days; or C. the Depositary has determined that, on the occasion of the next payment in respect of the GDRs, the Company, the Depositary or its Agent would be required to make any deduction or withholding from any payment in respect of the GDRs which would not be required were the GDRs in definitive form,

In relation to (C) above any person appearing in the records maintained by the Clearing Systems as entitled to any interest in this Master GDR shall be entitled to require the Holder to procure the exchange of an appropriate part of this Master GDR for a definitive GDR for an interest held by such person in this Master GDR in the above circumstances upon notice to the Holder. Any such exchange shall be at the expense (including printing costs) of the Holder in the case of such appropriate part or at the expense of the Holders in case of exchange of the whole of the Master GDR for the definitive GDRs.

A GDR evidenced by an individual definitive certificate will not be eligible for clearing and settlement through the Clearing Systems.

Upon any exchange of a part of this Master GDR for a certificate evidencing a GDR or GDRs in definitive form or any distribution of GDRs pursuant to Conditions 4, 5, 6, 7 or 10, or any reduction in the number of GDRs evidenced hereby following any withdrawal of any Deposited Property pursuant to Condition 2, or any increase in the number of GDRs following the deposit of Shares pursuant to Condition 1, the relevant details shall be entered on the Register of the Depositary, whereupon the number of GDRs represented by this Master GDR shall be reduced or increased (as the case may be) for all purposes by the amount so exchanged and entered on the Register, provided always that if the number of GDRs evidenced by this Master GDR is reduced to zero this Master GDR shall continue in existence until the obligations of the Company under the Deposit Agreement and the obligations of the Depositary pursuant to the Deposit Agreement and the Conditions have terminated.

2. Payments, Distributions and Voting Rights

Payments of cash dividends and other amounts (including cash distributions) in respect of the GDRs evidenced by the Master GDR will be made by the Depositary through the Clearing Systems on behalf of persons entitled thereto upon receipt of funds thereof from the Company. A free distribution or

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rights issue of Shares to the Depositary on behalf of Holders may result in the Master GDR being marked up to reflect the enlarged number of GDRs it thereby evidences.

As specified in Condition 12, Holders of GDRs will have no voting rights in respect of the Deposited Shares.

3. Surrender of GDRs

Any requirement in the Conditions relating to the surrender of a GDR to the Depositary shall be satisfied by the production by the Common Depositary on behalf of a Holder of such evidence of entitlement of such Holder as the Depositary may reasonably require, which is expected to be a certificate or other documents issued by the Clearing Systems or, if relevant, an alternative clearing system. The delivery or production of any such evidence shall be sufficient evidence, in favour of the Depositary, any Agent and the Custodian of the title of such person to receive (or to issue instructions for the receipt of) all moneys or other property payable or distributable, in respect of the Deposited Property represented by such GDRs.

4. Notices

For so long as the Master GDR is registered in the name of a common depositary on behalf of the Clearing Systems, notices may be given by the Depositary by delivery of the relevant notice to the Common Depositary for communication to persons entitled thereto in substitution for publication required by Condition 23.

The Master GDR shall be governed by and construed in accordance with English law.

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INFORMATION RELATING TO DEPOSITARY

The Depositary is Deutsche Bank Trust Company Americas. Deutsche Bank Trust Company Americas was incorporated in 1903 as a bank with limited liability in the State of New York and is an indirect wholly owned subsidiary of Deutsche Bank AG. Deutsche Bank Trust Company Americas is subject to regulation and supervision by the New York State Banking Department, the Federal Reserve Board and the Federal Deposit Insurance Corporation. The registered office of the Depositary is located at 60 Wall Street, New York, NY 10005. A copy of the Depositary‘s Bylaws, as amended, together with copies of the most recent financial statements of the Depositary and annual report of Deutsche Bank AG will be available for inspection at the principal administrative establishment of the Depositary located at 60 Wall Street, DR. Department, 27th Floor, New York, NY 10005 and at the office of the Depositary located at Winchester House, 1 Great Winchester Street, London EC2N 2DB.

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PLACEMENT AND SALE

Our Company and the Lead Manager have agreed that pursuant to an agreement dated May 22, 2013] (the "Placing Agreement") the Lead Manager agrees to act as agent for our Company to use its reasonable endeavors on a best efforts basis to procure Investors for the GDRs at the offer price of USD 3.56 per GDR (being ` 19.50 per Share) (the "Offer Price").

The Placing Agreement provides that the obligations of the Manager acting as agent for our Company are subject to satisfaction of certain conditions precedent. Our Company has agreed to indemnify the Manager against certain liabilities.

The GDRs will be issued pursuant to a Deposit Agreement dated May 22, 2013 between the Depositary and our Company on May 22, 2013. The GDRs will be issued in global form and evidenced by a Master GDR.

If the Shares are delisted or our Company desires to delist its Shares from the BSE and/or the NSE, then our Company will follow the procedure for delisting as set out in the SEBI Delisting Guidelines and reimburse its shareholders in compliance with the SEBI Delisting Guidelines thereof. Our Company will give notices of delisting of its Shares to the Depositary by delivery of the relevant notice to Euroclear and Clearstream, Luxembourg for communication to persons entitled thereto.

Our Company will publish copies of the following in the English language:

(i) the annual financial statements in respect of the financial year ending on March 31, 2012 and in respect of each financial year thereafter, in respect of our Company, prepared in conformity with generally accepted accounting principles in India and reported upon by independent public accountants selected by our Company, as soon as practicable (and in any event within 180 days) after the end of such year; and

(ii) the quarterly financial statements of our Company and any semi-annual financial statements of our Company that our Company publishes for holders of Shares, as soon as practicable after the same are published and in any event no later than one month after the end of the period to which they relate.

Our Company will also concurrently publish all information and documents that are announced on the Indian Stock Exchanges.

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SELLING RESTRICTIONS

1. General

No action has been or will be taken in any jurisdiction that would permit a public offering of the GDRs or the shares represented by the GDRs or the possession, circulation or distribution of this Prospectus or any other material relating to our Company or the GDRs or the shares represented by the GDRs in any jurisdiction where action for such purpose is required. Accordingly, the GDRs or the shares represented by the GDRs may not be offered or sold directly or indirectly, and neither this Prospectus nor any other material or advertisements in connection with the GDRs or the shares represented by the GDRs may be distributed or published, in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

The issue and distribution of this Prospectus and the offering of the GDRs and the Shares represented by the GDRs may be subject to statutory restrictions in other jurisdictions. Our Company and the Manager request persons into whose possession this Prospectus may come to inform themselves of and to observe all such restrictions. Neither our Company nor the Manager accept any legal liability for any violation of any such restriction by any person, whether or not a prospective purchaser of the GDRs.

2. United States of America

The GDRs and the Shares represented by the GDRs have not been, and will not be, registered under the Securities Act and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

The GDRs and the Shares represented by the GDRs are being offered and sold only outside the United States in "offshore transactions", in accordance with Regulation S under the Securities Act. Terms used in this section have the meaning given to them by Regulation S under the Securities Act.

3. United Kingdom

This Prospectus is for distribution only to persons who: (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"); (ii) are persons falling within Article 49(2)(a) to (d) ("high-net-worth companies, unincorporated associations etc") of the Financial Promotion Order; (iii) are outside the United Kingdom; or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This Prospectus is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this Prospectus relates is available only to relevant persons and will be engaged in only with relevant persons.

4. Hong Kong

No GDRs or the Shares represented by the GDRs of our Company may be offered or sold in Hong Kong or offered or directed from outside Hong Kong to any person in Hong Kong, by means of any document, other than (a) to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that ordinance; or (b) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance.

No advertisement, invitation or document relating to the GDRs and the Shares represented by the GDRs of our Company, which is directed at, or the contents of which are likely to be accessed or read by the public of Hong Kong, has been or will be issued other than with respect to such GDRs and the Shares represented by the GDRs which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the Securities and Futures Ordinance and

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any rules made under that Ordinance.

5. Singapore

This Prospectus has not been and will not be registered as a prospectus with the Monetary Authority of Singapore ("MAS") under the Securities and Futures Act (Chapter 289) of Singapore ("SFA"). Accordingly, the GDRs and Shares represented by the GDRs may not be offered or sold, or made the subject of an invitation for subscription or purchase nor may the Prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase of the GDRs or the Shares represented by the GDRs be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than to an "institutional investor" within the meaning of Section 274 of the SFA and in accordance with the conditions of an exemption invoked under Section 274.

Any transfer or on-selling of the GDRs or the Shares represented by the GDRs is subject to applicable on-selling restrictions and must meet the requirements set out in the SFA.

6. European Economic Area (including Germany)

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), an offer to the public of any GDRs or the Shares represented by the GDRs may not be made in that Relevant Member State, except that such GDRs or the Shares represented by the GDRs may be offered to the public in that Relevant Member State: a) to any legal entity which is a qualified investor as defined in the Prospectus Directive, as implemented in the Relevant Member State; b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) as permitted under the Prospectus Directive; or c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of the GDRs or the Shares represented by the GDRs shall result in a requirement for the publication by our Company or any Manager of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression "an offer to the public" in relation to the GDRs and the Shares represented by the GDRs in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Offering and any Offering Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Offering Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State. The expression "2010 PD Amending Directive" means Directive 2010/73/EU.

7. People’s Republic of China ("PRC")

This Prospectus has not been and will not be circulated or distributed in the PRC and the GDRs and the Shares represented by the GDRs may not be offered or sold to any person for re-offering or resale, directly or indirectly, to any resident of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph only, the PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

8. United Arab Emirates

The GDRs and the Shares represented by the GDRs to be issued under the Prospectus have not been and will not be offered, sold or publicly promoted or advertised by it in the United Arab Emirates other than in compliance with any laws applicable in the United Arab Emirates governing the issue, offering and sale of securities.

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The information contained in this Prospectus does not constitute a public offer of securities in the United Arab Emirates in accordance with the Commercial Companies Law (Federal Law 8 of 1984 (as amended)) or otherwise and is not intended to be a public offer and the information contained in this Prospectus is not intended to lead to the conclusion of any contract of whatsoever nature within the territory of the United Arab Emirates.

9. Dubai, International Financial Center ("DIFC")

The GDRs and the Shares represented by the GDRs have not been offered and will not be offered to any person in the DIFC unless such offer is: (a) an "Exempt Offer" in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (the "DFSA"); and (b) made only to persons who meet the Professional Client criteria set out in Rule 2.3.2 of the DFSA Conduct of Business Module.

10. Japan

The GDRs and the Shares represented by the GDRs have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Law No.25 of 1948, as amended; the "FIEA") and the Manager has represented and agreed, and any further Manager appointed under the Offering will be required to represent and agree, that it will not offer or sell any GDRs and the Shares represented by the GDRs, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (as defined under Item 5, Paragraph 1, Article 6 of the Foreign Exchange and Foreign Trade Control Law (Law No. 228 of 1949, as amended)), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan.

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TRANSFER RESTRICTIONS

The Offering is being made in reliance on Regulation S. The GDRs may not be offered, sold, pledged or otherwise transferred, directly or indirectly, to any person in India, residents of India, or to, or for the account or benefit of, such persons, except domestic mutual funds, subject to rules, regulations and guidelines issued by the RBI and SEBI. The GDRs and the underlying 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 or any other jurisdiction, and may only be offered, sold or delivered outside the United States in offshore transactions in reliance on Regulation S, and in accordance with any other applicable law.

Each owner of the GDRs will be deemed to have represented, agreed and acknowledged that (terms used herein are defined in Regulation S): (i) It understands that the GDRs and the underlying 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 or any other jurisdiction of the United States and are subject to restrictions on transfer; (ii) It is, or if the GDRs are being purchased prior to the distribution compliance period, at the time the GDRs are purchased will be, the beneficial owner of such GDRs and (a) is located outside the United States; and (b) is not an affiliate of our Company or a person acting on behalf of such an affiliate; (iii) Each owner purchasing the GDRs prior to the expiration of the distribution compliance period is purchasing the GDRs in an offshore transaction meeting the requirements of Rule 903 or Rule 904 of Regulation S; (iv) Such owner, prior to the expiration of the distribution compliance period, will not offer, sell, pledge or otherwise transfer any interest in the GDRs or the underlying Shares except as permitted by the applicable legend set out below. (v) It understands that the GDRs will be evidenced by a Master GDR, which will, unless otherwise agreed between our Company and the Depositary, bear a legend substantially to the following effect:

"THE GLOBAL DEPOSITARY RECEIPTS ("GDRs") EVIDENCED HEREBY AND THE SHARES OF ZEE LEARN LIMITED REPRESENTED THEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "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 IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION OF THE UNITED STATES.

THE HOLDERS HEREOF, BY PURCHASING THE GDRs EVIDENCED BY THIS CERTIFICATE, AGREE, FOR THE BENEFIT OF ZEE LEARN LIMITED AND THE DEPOSITARY NAMED BELOW THAT THE GDRs EVIDENCED BY THIS CERTIFICATE MAY NOT AT ANY TIME BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY PERSON LOCATED IN INDIA, RESIDENTS OF INDIA, OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, SUCH PERSONS.

EACH HOLDER BY ITS ACCEPTANCE OF THE GDRs EVIDENCED HEREBY AND THE BENEFICIAL INTEREST IN THE SHARES REPRESENTED THEREBY REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS"

(i) Our Company, the Depositary, the purchasers and their respective affiliates and others, will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

(ii) Any resale or other transfer, or attempted resale or other transfer, made other than in compliance with the above-stated restriction shall not be recognised by our Company or the Depositary in respect of the GDRs or the underlying Shares. Because of the restrictions, purchasers are advised to consult their own legal counsel prior to making any resale, pledge or transfer of GDRs.

(iii) It understands that the any definitive GDR certificates that are issued will, unless otherwise agreed between our Company and the Depositary, bear a legend substantially to the following effect:

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THE GLOBAL DEPOSITARY RECEIPTS ("GDRs") EVIDENCED HEREBY AND THE SHARES OF ZEE LEARN LIMITED REPRESENTED THEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "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 IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION OF THE UNITED STATES.

EACH HOLDER BY ITS ACCEPTANCE OF THE GDRs EVIDENCED HEREBY AND THE BENEFICIAL INTEREST IN THE SHARES REPRESENTED THEREBY REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.

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FOREIGN INVESTMENT AND EXCHANGE CONTROLS

General

Prior to June 1, 2000, foreign investment in Indian securities, including the acquisition, sale and transfer of securities of Indian companies, was regulated by the Foreign Exchange (Regulation) Act, 1973, as amended ("FERA"), and the notifications issued by the RBI thereunder.

With effect from June 1, 2000, FERA was replaced by the FEMA, and thereafter foreign investment in Indian securities was regulated by FEMA and the rules, regulations and notifications issued by the RBI under FEMA and the Department of Industrial Policy and Promotion.

A person resident outside India can transfer any security of an Indian company or any other security to an Indian resident only in accordance with the terms and conditions specified in FEMA and the rules and regulations made thereunder or as permitted by the RBI.

The FEM Transfer Regulations regulate the issue of Indian securities, including global depositary receipts, to persons resident outside India and the transfer of Indian securities by or to persons resident outside India.The FEM Transfer Regulations provide that an Indian entity may issue securities to a person resident outside India or record in its books any transfer of security from or to such person only in the manner set forth in FEMA and the rules and regulations made thereunder or as permitted by the RBI.

Foreign Direct Investment

The Government, pursuant to its liberalisation policy, set up the FIPB under the Ministry of Finance, Government of India to regulate all investments by way of subscription and/or purchase and/or gift of securities of an Indian company by a person resident outside India or FDI into India. The following investments also require the prior permission of the FIPB for investments in excess of specified sectoral caps or in sectors in which FDI is not permitted or in sectors which specifically require prior approval of the FIPB or in proposals for investments in real estate business, atomic energy, railway transport, manufacture of items reserved for production in micro and small enterprises.

The Government has indicated that in all cases where FDI is allowed on an automatic basis without FIPB approval, the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. The prescribed applicable norms with respect to determining the price at which shares may be issued by an Indian company to a non resident investor and the price at which shares may be sold by a resident to a non-resident or by a non-resident to a resident would need to be complied with and a declaration in the prescribed form, is required to be filed with the RBI once the issuance/transfer of shares of the Indian company is complete.

The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India has recently released updated consolidated FDI policy dated April 10, 2012 which inter alia set out detailed guidelines for calculation of total foreign investment (direct and indirect) in Indian companies. The Government has set up the Foreign Investment Implementation Authority (the "FIIA") in the Department of Industrial Policy and Promotion. The FIIA has been mandated to (i) translate FDI approvals into implementation, (ii) provide a pro-active one stop after care service to foreign investors by helping them obtain necessary approvals, (iii) deal with operational problems, and (iv) meet with various Government agencies to find solutions to foreign investment problems, and maximize opportunities through a partnership approach.

Investment by Foreign Institutional Investors

In terms of the Foreign Institutional Investor Regulations, the following may register with the SEBI as FIIs: (i) pension funds, mutual funds, investment trusts, insurance companies or reinsurance companies, established or incorporated outside India, (ii) international or multilateral organisations or agencies thereof, foreign governmental agencies, sovereign wealth funds, foreign central banks, (iii) endowments, university funds, foundations or charitable trusts or charitable societies, (iv) asset management companies, investment managers or advisors, banks, institutional portfolio managers, established or incorporated outside India and proposing to invest in India, on behalf of "broad based" funds and proprietary funds if any; and (v) trustees of trusts

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established outside India and proposing to invest in India, on behalf of "broad based" funds and proprietary funds if any(subject to certain conditions specified in the FII Regulations).

Investments made by FIIs are governed by the Portfolio Investment Scheme under the Security Regulations. As per the Portfolio Investment Scheme, FIIs registered with the SEBI may buy or sell shares or convertible debentures of Indian companies on stock exchanges in India through registered stock brokers. FIIs are also permitted to purchase shares and convertible debentures of an Indian company, subject to the percentage limits specified either through (a) a public offer, where the price of the shares to be issued is not less than the price at which the shares are issued to Indian residents; or (b)a private placement, where the issue price should be determined as per the relevant provisions of the FDI Scheme.

Foreign investors are not necessarily required to register with SEBI as FIIs and may invest in securities of Indian companies pursuant to the FDI route under the Security Regulations (as discussed above). Foreign investors wishing to generally invest and trade in Indian securities in India as a Foreign Institutional Investor are required to register with SEBI and obtain a general permission from the RBI.

FIIs who are registered with SEBI are required to comply with the provisions of the FII Regulations. A registered Foreign Institutional Investor may, subject to the pricing, ownership and other restrictions discussed below, freely buy and sell securities issued by any Indian company, realise capital gains on investments made through the initial amount invested in India, appoint a domestic custodian for custody of investments made and repatriate the capital, capital gains and dividends that they may receive or make.

Subject to the terms and conditions set out in the FII Regulations, and subject to any sectoral restrictions that may be applicable to FIIs under the foreign investment regime in India, a registered Foreign Institutional Investor or a sub-account of a FII may buy or sell equity shares or debentures of Indian companies through stock exchanges in India at the ruling market price and also buy or sell shares or debentures of listed or unlisted companies other than on a stock exchange in compliance with the applicable SEBI/RBI pricing norms. A Foreign Institutional Investor is not permitted to hold more than 10 per cent. Of the total issued capital of an Indian company and a corporate or individual sub-account of the Foreign Institutional Investor is not permitted to hold more than 5 per cent. of the total issued capital of an Indian company. The total holding of all FIIs in an Indian company is subject to a cap of24 per cent. of the total issued capital of the company which may be increased up to the percentage of sectoral cap on FDI in respect of the said company with the passing of a board of directors‘ resolution followed by the passing of a special resolution by the shareholders of the company in a general meeting, to that effect.

Furthermore, requisite compliance with the provisions of the recent circular of the RBI dated March 19,2012is to be ensured. FIIs are permitted to issue or otherwise deal in off-shore derivative instruments against underlying securities, listed or proposed to be listed on any stock exchange in India subject to the satisfaction of the following conditions:  the off-shore derivative instruments are issued only to persons who are regulated by an appropriate foreign regulatory authority; and  the off-shore derivative instruments are issued after compliance with "know your client" norms.

In terms of the FII Regulations, on and from May 22, 2008, no sub account of an FII is permitted to, directly or indirectly, issue off-shore derivative instruments.

Portfolio Investment by Non-Resident Indians

A variety of methods for investing in shares of Indian companies is available to Non-Resident Indians. These methods allow Non-Resident Indians to make portfolio investments in shares and/or convertible debentures of Indian companies on a basis not generally available to other foreign investors. In addition to portfolio investments in Indian companies, the Non-Resident Indians may also make investments in Indian companies pursuant to the FDI route discussed above. The FEM Transfer Regulations enable NRIs to make portfolio investments in shares/ convertible debentures of an Indian company through a registered broker on a recognised stock exchange in India. Under the portfolio investment scheme, each NRI can purchase up to 5% of the paid-up share capital of an Indian company (both on a re-patriation and non re-patriation basis), subject to the condition that the aggregate paid-up share capital of an Indian company purchased by all NRIs through portfolio investments cannot exceed 10% (both on a re-patriation and non re-patriation basis). The 10% limit may be

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raised to 24% of the paid-up share capital (both on a re-patriation and non re-patriation basis) if a special resolution is adopted by the shareholders of the company. OCBs, at least 60% of which are owned by the Non- Resident Indians, OCBs, were allowed to invest by way of portfolio investments until 2001, when the RBI prohibited such investments. Further, pursuant to circulars dated September 16, 2003, and, December 18, 2003, the RBI no longer recognises OCBs as a separate category of investor. In this connection, the RBI has issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies) Regulations, 2003, notified vide Notification No. FEMA 101/2003-RB dated October 3, 2003, pursuant to which, with effect from September 16, 2003, the facilities for OCBs under various FEMA notifications and the rules issued by the RBI thereunder were withdrawn.

Transfer of shares and convertible debentures of an Indian company by a person resident outside India

Subject to what is stated below, a person resident outside India may transfer the shares held by him in an Indian company in accordance with the Security Regulations. A person resident outside India (other than NRI and OCB), is generally permitted to transfer by way of sale or gift the shares held by him to any other person resident outside India (including NRIs but excluding OCBs) without the prior approval of the RBI.

NRIs and erstwhile OCBs are generally permitted to transfer by way of sale or gift the shares held by them to other NRIs without the prior approval of the RBI.

A person resident outside India is generally permitted to transfer any security held by him in an Indian company to a person resident in India by way of a gift. A person resident outside India is also generally permitted to sell the shares of an Indian company held by him on a recognised stock exchange in India through a registered broker. Further, RBI‘s master circular dated July 2, 2012 on Foreign Investment in India, provides for general permission for the transfer of shares by a person resident outside India to a person resident in India, subject to compliance with certain terms, conditions and reporting requirements.

Furthermore, a person resident in India can transfer by way of sale, shares / convertible debentures (including transfer of subscriber‘s shares), of an Indian company under private arrangement to a person resident outside India, subject to the following conditions along with certain other conditions pertaining to pricing, reporting etc.: (a) where the transfer of shares requires the prior approval of the FIPB as per extant FDI policy provided that the requisite FIPB approval has been obtained and the transfer of share adheres with the pricing guidelines and documentation requirements as specified by the RBI from time to time (b) where SEBI Takeover Code are attracted, subject to adherence with the pricing guidelines and documentation requirements as specified by the RBI from time to time. (c) where the pricing guidelines under FEMA are not met provided that the resultant FDI is incompliance with the extant FDI policy and FEMA regulations in terms of sectoral caps, conditionalities (such as minimum capitalization etc.),reporting requirements, documentation, etc., the pricing for the transaction is compliant with specific/explicit, extant and relevant SEBI regulations (such as initial public offering, book building, block deals, delisting, open/ exit offer, substantial acquisition/ SEBI Takeover Code, and chartered accountant certificate to the effect that compliance with relevant SEBI regulations as indicated above is attached to the Form FC-TRS to be filed with the authorised dealer bank. (d) where the investee company is in the financial services sector provided that no objection certificates (NOCs) are obtained from the respective regulators/regulators of the investee company as well as the transferor and transferee entities and such NOCs are filed along with Form FC-TRS with the authorised dealer bank and guidelines pertaining to sectoral caps, conditionalities (such as minimum capitalization, etc.), reporting requirements, documentation etc., are complied with.

It may also be noted that the above general permission also covers transfer of shares / convertible debentures of an Indian company by a resident to a non-resident, engaged in an activity earlier covered under the Government route but now falling under automatic route of RBI, as well as transfer of shares by anon-resident to an Indian company under buyback and / or capital reduction scheme of the company. However, this general permission would not be available for the above transactions if they are not meeting the pricing guidelines or in case of transfer of shares / debentures by way of gift from a resident to anon-resident / non-resident Indian.

Any transfer of shares of companies engaged in sector falling under the Government approval route, from

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residents to non-residents by way of sale or otherwise, requires prior Government approval. Furthermore, in case any transfer of shares result in foreign investments in the Indian company breaching the stipulated sectoral caps, the same would also require prior Government approval. Furthermore, prior approval of RBI would also be required: (a) in case of transfer of shares or convertible debentures from residents to non-residents by way of sale where the non-resident acquirer proposes deferment of payment of the amount of consideration; (b) transfers which do not conform to the pricing guidelines of RBI; and (c) in case of transfer of shares from non- resident Indian to non- resident.

A person resident outside India is not permitted to purchase shares of an Indian company on a stock exchange without the prior approval of the RBI, unless such person is registered as an FII. The RBI and the SEBI by their circulars dated January 13, 2012 have allowed non-resident investors (other than the SEBI registered FIIs and the SEBI registered foreign venture capital investors) who meet the ‗know your customer‘ requirements of SEBI, called Qualified Foreign Investors ("QFIs") to purchase shares of an Indian company on the stock exchange, in the manner specified by the RBI and the SEBI. A QFI is not permitted to hold more than 5% of the paid-up capital of the Indian company, and the aggregate investment by all QFIs must not exceed 10% of the paid-up capital of the company. The limits specified above are over and above the FII and NRI investment ceilings prescribed under the portfolio investment scheme for foreign investment in India. Further, whenever there are composite sectoral caps, under the extant FDI policy, these aforesaid limits for QFI investments in equity shares shall also be within such overall FDI sectoral caps.

Any person resident outside India, seeking to sell Shares issued to them pursuant to conversion of the Bonds or otherwise, transfer such Shares, whether or not through a stock exchange, should seek advice of their Indian legal advisers as to the applicable requirements.

Issue of GDRs

An Indian company is permitted to issue fresh shares to the depositary abroad for the purpose of raising resources through the GDR mechanism:

1. Provided the Indian company issuing such shares: (a) has an approval from the Ministry of Finance, Government of India, to issue such GDRs or is eligible to issue GDRs in terms of the relevant scheme in force or notification issued by the Ministry of Finance: (b) it is not otherwise ineligible to issue shares to persons resident outside India in terms of the regulations; and (c) the aggregate of the foreign investment made either directly or indirectly through GDRs must not exceed 51% of the issued and subscribed capital of the issuing company. However, the investment made through offshore funds or by FIIs will not form part of the aforesaid limit. Notably, the RBI Master Circular on Foreign Investments in India (July 2, 2012) clarifies that there is no monetary limit up to which an Indian company can raise ADRs / GDRs. (d) the GDRs are issued in accordance with the Scheme for Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993 (the "1993 Scheme") and Guidelines issued by the Central Government there under from time to time.

2. The Indian company issuing shares under the above paragraph, shall furnish to the RBI, full details of such issue in a specified form within 30 days from the date of closing of the issue.

3. The Indian company issuing shares against GDRs shall furnish a quarterly return in the specified form to the RBI within 15 days of the close of the calendar quarter.

4. Overseas Corporate Bodies who are not eligible to invest in India through the portfolio route and entities that are prohibited from buying, selling or dealing in securities by the SEBI are not eligible to subscribe to the GDRs.

5. GDRs may be issued on the basis of the ratio worked out by the Indian company in consultation with the lead Manager of the issue.

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As per the amendment dated November 27, 2008 to the 1993 Scheme, the pricing of GDRs in case of listed companies should not be less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the relevant date. The "relevant date" means date of the meeting in which the Board of the company or the Committee of Directors duly authorized by the Board of the company decides to open the proposed issue.

As per the guideline dated January 19, 2000, the issue related expenses (covering both fixed expenses like underwriting commissions, lead manager's charges, legal expenses and other reimbursable expenses) shall be subject to a ceiling of 4% in the case of GDRs. Issue expenses beyond the ceiling would need the approval of the RBI. GDRs are treated as FDI under the 1993 Scheme, and are subject to policies applicable to FDI. The issuance of GDRs pursuant to this scheme also affords to Holders of GDRs the benefits of Sections 115AC of the Income Tax Act, 1961 for purposes of the application of Indian tax law.

Use of Proceeds—Retention of Proceeds abroad

Pending repatriation or utilisation of the foreign exchange resources raised, the Indian company may invest the foreign currency funds in deposits with or in Certificate Deposits or other instruments of banks who have been rated by Standard and Poors, Fitch, IBCA or Moody's etc; with such rating not being less than the rating stipulated by the RBI from time to time for short term obligations or in deposits with branches outside India of an Authorised Dealer in India and in treasury bills and other monetary instruments with a maturity of one year of less.

While no detailed end uses are specified for GDRs. the existing bar on investments in stock markets and real estate would continue to be operative.

Transfer of GDRs

A non resident holder of GDRs may transfer those GDRs or may ask the overseas depositary bank to redeem the GDRs. In the case of redemption, the overseas depositary bank shall request the domestic custodian bank to procure the release of the corresponding underlying shares in favour of the non resident investor for sale directly on behalf of the non resident or transfer in the books of account of the issuing company in the name of the non resident.

The GDRs redeemed and underlying shares sold in terms of the above paragraph may be reissued to the extent of such redemption and sale made in the domestic markets.

Fungibility of GDRs and Sponsored GDRs

In March 2001, the RBI amended the FEM Transfer Regulations and established two alternative methods to allow equity shares to be converted into and sold as GDRs.

First, a registered broker in India can purchase shares of an Indian company that has issued GDRs on behalf of a person resident outside India, for the purposes of converting the shares into GDRs. However, such conversion of equity shares into GDRs is possible only if the following conditions are satisfied:  the shares are purchased on a recognised stock exchange;  the Indian company has issued GDRs;  the shares are purchased with the permission of the custodian to the GDR offering of the Indian company and are deposited with the custodian;  the shares purchased for conversion into GDRs do not exceed the number of shares that have been released by the custodian pursuant to conversions of GDRs into equity shares under the Deposit Agreement; and  the non-resident investor, broker, the custodian and the overseas depository comply with the provisions of the 1993 Scheme and any related guidelines issued thereunder from time to time.

Further, the RBI requires the domestic custodian to ensure compliance with the guidelines issued by the RBI and to file reports wish the RBI from time to time and to perform the following functions:  monitor the reissuance of shares underlying the GDRs and provide a certificate to the RBI and the

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SEBI stating that the sectoral caps for foreign investment in the relevant company have not been breached;  monitor the total number of GDRs that have been converted into underlying shares by non-resident investors;  liaise with the company to ensure that the sectoral cap on foreign investment in the relevant company, if any, if not being breached; and  file a monthly report about the GDR transactions under the two-way fungibility arrangement with the RBI and the SEBI.

Additionally, the Indian company issuing GDRs is required to furnish to the RBI full details of such issue in the prescribed form, within 30 days from the date of closing of the issue. The company is also required to furnish a quarterly return to the RBI within 15 days of the close of the calendar quarter till the entire amount raised through GDR mechanism is either repatriated to India or utilized abroad as per RBI guidelines.

By notification dated November 23, 2002. the RBI has permitted Indian companies whose shares are being offered for divestment in the overseas market to sponsor GDR issues against the block of existing shares of the Indian company offered by the shareholders, subject So the following conditions:

(i) Divestment by shareholders of their holdings of Indian companies, in the overseas markets would be allowed through the mechanism of sponsored GDR issue in respect of: (a) Divestment by shareholders of their holdings of Indian companies listed in India; (b) Divestment by shareholders of their holdings of Indian companies not listed in India but which are listed overseas;

(ii) The process of divestment would be initiated by such Indian companies whose shares are being offered for divestment in the overseas market by sponsoring GDR issues against the block of existing shares offered by the shareholders under the provisions of the 1993 Guidelines:

(iii) Such a facility would be available pari-passu to all categories of shareholders, of the company whose shares are being sold in the GDR markets overseas. This would ensure that no class of shareholders gets a special dispensation;

(iv) The sponsoring company, whose shareholders propose to divest existing shares in the overseas market through issue of GDRs will give an option lo all its shareholders indicating the number of shares to be divested and the mechanism how the price will be determined under the GDR norms. If the shares offered for divestment are more than the pre-specified number to be divested, shares would be accepted for divestment in proportion to existing holdings. Pursuant to the amendment dated August 22, 2008 to the FEM Transfer Regulations, the pricing of GDRs shall be determined under the provisions of the 1993 Scheme and guidelines issued by the Government from time to time;

(v) The proposal for divestment of the existing shares in the GDR market would have to be approved by a special resolution of the company whose shares are being divested;

(vi) The proceeds of the GDR issue raised abroad shall be repatriated into India within a period of one month of the closure of the issue;

(vii) Such GDR issues against existing shares arising out of the divestment would also come within the purview of the existing SEBI Takeover Code if the GDRs are cancelled and the underlying shares are to be registered with the company as shareholders;

(viii) Divestment of existing shares of Indian companies in the overseas markets for issue of GDRs would be reckoned as FDI. Such proposals would require FIPB approval as also other approvals, if any under the FDI policy:

(ix) Such divestment inducting foreign equity would also need to conform to the FDI sectoral policy and the prescribed sectoral cap as applicable. Accordingly the facility would not be available where the company whose shares are to be divested is engaged in an activity where FDI is not permitted:

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(x) Each case would require the approval of FIPB for foreign equity induction through offer of existing shares under the GDR route;

(xi) Other mandatory approvals such as those under the Companies Act. etc. as applicable would have to be obtained by the company prior to the GDR issue;

(xii) The issue related expenses (covering both fixed expenses like underwriting commissions, lead manager's charges, legal expenses and reimbursable expenses) for public issue shall be subject to a ceiling of 4% in the case of GDRs and 2% in case of private placements of GDRs. Issue expenses beyond the ceiling would need the approval of RBI. The issue expenses shall be passed onto the shareholders participating in the sponsored issue on a prorate basis;

(xiii) The shares earmarked for the sponsored GDR issue may be kept in an escrow account created for this purpose and in any case, the retention of shares in such escrow account shall not exceed 3 months;

(xiv) If the issues of GDR are made in more than one tranche, each tranche would have to be treated as a separate transaction;

(xv) After completing the transactions, the companies would need to furnish full particulars thereof including amount raised through GDRs, number of GDRs issued and the underlying shares offered, percentage of foreign equity level in the Indian company on account of issue of GDRs, details of issue parameters, details of repatriation, and other details to the Exchange Control Department of the Reserve Bank of India, within 30 days of completion of such transactions; and

(xvi) The tax provision under Section 115 AC of the Income Tax Act 1961, which is applicable to non- resident investors for GDR offering against issue of fresh underlying shares would extend to non- resident investors investing in foreign exchange in GDRs issued against disinvested existing shares, in terms of the relevant provisions of the Income Tax Act, 1961.

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INDIAN REGULATORY APPROVALS AND FILINGS

Reporting Requirements

Our Company is required to provide the RBI, within thirty days of the dale of closing of this Offering, details of its capital structure before and after the Offering.

Our Company is required so furnish a statement, in the prescribed form, to the Chief General Manager, Exchange Control Department. Foreign Investment Division, RBI, within thirty days from the date of closing of this Offering, providing full particulars of the Offering such as the number of GDRs issued, the number of underlying fresh Shares issued, listing arrangements, total proceeds of the Offering, any proceeds of the Offering retained abroad and other relevant details relating to the launching and initial trading of the GDRs.

Our Company is required to inform the RBI of any repatriation of issue proceeds held abroad, immediately upon such repatriation.

Our Company is required to furnish to the RBI a quarterly return within 15 days of the close of each calendar quarter.

Approvals Received by our Company

Our Company has received in-principle approvals for the listing of the Shares underlying the GDRs from the following Stock Exchanges:

BSE, pursuant to letter dated March 22, 2013. NSE, pursuant to letter dated March 22, 2013.

Our Company is also required to obtain the final approval for listing of the Shares underlying the GDRs on the completion of the allotment of the Shares.

Other Approvals

Our Board and Shareholders have approved the Offering by resolutions dated September 16, 2011 and October 19, 2011, respectively, and no other approval is required under the Companies Act nor are the provisions of the Companies Act relating to the issue of a prospectus applicable to the Offering.

Filing

A copy of the Prospectus will be filed with the RBI, the Register of Companies, Maharashtra, the BSE, NSE and SEBI for record purposes.

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TAXATION

The following is a summary of the principal Indian tax consequences for non-resident investors of the GDRs and the Shares underlying the GDRs. The summary is based on the taxation law and practice in force at the time of this Offering Circular and is subject to change. Further, it only addresses the tax consequences for persons who are "non-resident" as defined in the Indian Income Tax Act who acquire GDRs or Shares underlying the GDRs or Shares pursuant to this Offering Circular and who hold such GDRs, or Shares underlying the GDRs as capital assets, and does not address the tax consequences which may be relevant to other classes of non- resident investors, including dealers. The summary proceeds on the basis that the person continues to remain a nonresident when the income by way of dividends and capital gains are earned.

Each prospective investor is advised to consult its tax advisers about the particular tax consequences to it on account of an investment in the GDRs, and the shares underlying the GDRs

The summary is based on the special tax regime contained in laws and practices of the Indian Income Tax Act including Section 115AC and other significant applicable provisions of the Indian Income Tax Act, without reference to any double taxation avoidance agreements, and the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through the Depositary Receipt Mechanism) Scheme 1993, as amended from time to time, promulgated by the Central Government (together, the "Section 115AC Regime"). The offering is in accordance with the Section 115AC Regime, and non-resident investors of the GDRs will therefore have the benefit of tax concessions available under the Section 115AC Regime subject to the fulfillment of conditions of that section. Such tax concessions include taxation at a reduced income tax rate of 10% which is then subject to the applicable rate of surcharge and 3% cess on income tax including surcharge (surcharge is calculated on income tax and applicable surcharge on dividend (other than dividends referred to in section 115-O) on the GDR and Capital Gain on transfer of GDR.

This summary is not intended to constitute a complete analysis of the tax consequences or a legal opinion under Indian law of the acquisition, ownership and sale of the GDRs or Shares underlying the GDRs by non-resident investors. Potential investors should, therefore, consult their own tax advisors on the consequences of such acquisition, ownership and sale including specifically, tax consequences under Indian law, the laws of the jurisdiction of their residence and any tax treaty between India and their country of residence or the country of residence of the Overseas Depositary Bank as applicable and, in particular, the application of the provisions of the Indian Income Tax Act and Section 115AC Regime. The Income Tax Act is amended every year by the Finance Act of the relevant year. Some or all of the tax consequences of the Section 115AC Regime may be modified or amended by future amendments to the Income Tax Act.

The Income Tax Act is the law relating to taxes on income in India. It provides for taxation of persons resident in India on their global income and persons not resident in India on income received, accruing or arising in India or deemed to have been received, accrued or arisen in India. Sections 4, 5, 6 and 9 of the Income Tax Act together, inter alia set forth the circumstances under which persons not resident in India are subject to income tax in India.

1. Residence for the purpose of the Income Tax Act

For the purpose of the Income Tax Act, an individual is said to be resident in India if in any year ending on March 31, the individual: a. is in India for 182 days or more; or b. having been in India for 365 days or more during the last four years preceding the year under consideration, and is in India for 60 days or more in the year under consideration.

However, in the case of an Indian citizen or a person of Indian origin who is not resident in India and visits India during the year under consideration or, an Indian citizen or a person who leaves India as a member of a crew of an Indian ship or for the purpose of employment outside India during the year

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under consideration, the 60 day period in (ii) above is extended to 182 days.

A company is resident in India in any year ending on March 31, if it is registered or incorporated in India or if during that year the control and management of its affairs is situated wholly in India.

A firm or other association of persons, and every other person is regarded as resident in India except where, during the year ending on March 31, the control and the management of its affairs are situated wholly outside India. An individual, company or a firm, which does not satisfy the above respective definition of resident, is nonresident in India for tax purposes.

2. Taxation of distributions

In addition to the corporate tax, the Company is liable to pay a "Dividend Distribution Tax" at the rate of 15 per cent (plus a surcharge 10 per cent and Education and Secondary and Higher Education Cess on the aggregate of dividend distribution tax at the rate of 3 per cent) on the total amount distributed as dividend. Dividends are not taxable in India in the hands of the recipient and hence dividends to holders of the GDRs will not be liable to tax in India.

The issue of right shares or bonus shares to the holders of GDR or shareholders will not give rise to a taxable event for Indian income tax purposes. The shareholders or the GDR holders will be subject to capital gains tax liability as per the provisions of the Indian Income Tax Act on the transfer of right shares or bonus shares.

3. Taxation of transfer of shares

Sale of the Shares by any holder thereof may occasion certain incidence of tax in India, as is discussed below. Under applicable law, a transaction of sale of Shares may be chargeable to a transaction tax and/or tax on income by way of capital gains. Capital gains accruing to a non-resident investor on the sale of the Shares, whether to an Indian resident or to a person resident outside India and whether in India or outside India, may be subject to Indian capital gains tax in certain instances as described below.

4. Transfer of GDRs from non-resident to non-resident

Under the Income Tax Act, capital gains arising from the transfer of GDRs from a non-resident to non- resident outside India are not subject to tax in India and such transactions are specifically exempted from the definition of transfer under section 47(viia) of the Income tax Act, 1961.

5. Transfer of GDRs in India

In the event that the GDR holder becomes resident in India and thereafter transfers the GDRs, then its taxability would cease to be governed by the concessional provisions of the Section 115AC Regime and it would be taxed under the Income Tax Act. Depending on whether the GDR is a long term capital asset or a short term capital asset, the gains would be taxable at the rate of 20 per cent (plus applicable surcharge and education cess on tax plus surcharge) or at the normal tax rate applicable to the investor.

6. Taxation on conversion / redemption of GDRs in exchange for shares

Currently the conversion / redemption of GDRs in exchange for shares do not give rise to any taxable event in India and not regarded as transfer for the purposes of Income Tax Act hence not subject to tax in India.

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7. Long term / Short term capital asset

In case of equity shares (including shares issuable on the conversion of GDRs) held by the investor for a period of more than 12 months are treated as long term capital assets. Equity shares (including shares issuable on the conversion of GDRs) held for a period of 12 months or less are treated as short term capital assets. In respect of the equity shares received upon conversion of GDRs the period of holding commences from the date of the advice of the conversion of such GDRs as given by the relevant depository to its custodian and not from the date of acquisition of the GDRs.

8. Transfer of equity shares from non-resident to non-resident / non-resident to resident

Under the provisions of the Income Tax Act and Section 115AC Regime, capital gains arising to the non-resident investor on the sale or transfer of the equity shares which are received upon conversion of the GDRs, to a non-resident or a resident will be subject to tax in India as follows:

a. Capital gains realized on the sale of equity shares being long term capital asset will not be subject to tax if the Securities Transaction Tax ("STT") has been paid on such transaction.

b. Capital gains realized on the sale of equity shares being long term capital asset where STT is not paid on such transaction, would be subject to tax at the rate of 20 per cent (plus applicable surcharge and cess). However, in case these shares are sold to a non-resident then the transaction would be subject to tax at the rate of 10 per cent (plus applicable surcharge and cess) under the Section 115AC Regime.

c. Capital gains realized on the sale of equity shares being short term capital asset, where STT is paid on such transaction would be subject to tax at the rate of 15 per cent (plus applicable surcharge and cess).

d. Capital gains realized on the sale of equity shares being short term capital asset, where STT is not paid on such transaction, would be subject to tax at variable rates applicable to non-residents under the provisions of the Income Tax Act. Under the Income Tax Act, the normal tax rates applicable would be as follows:

 Individual: - 10 per cent if the total taxable income is between INR 200,000 and 500,000 - 20 per cent if the total taxable income is between INR 500,001 and 1,000,000 - 30 per cent if the total taxable income is above INR 1,000,000.

 Non-resident Company — 40 per cent

 Firm— 30 per cent

For the purpose of computing capital gains tax on the sale of shares under the Section 115AC Regime, the cost of acquisition of Shares received in exchange for GDRs will be determined on the basis of the price of the Shares prevailing on the BSE or the NSE on the date on which the relevant Depository gives notice to its Custodian for the delivery of such Shares upon redemption of the GDRs, while the cost of acquisition of shares directly converted into GDRs will be determined on the basis of the price prevailing on the BSE or the NSE on the date of exchange of GDRs into Shares. A non-resident Holder‘s holding period (for the purpose of determining the applicable Indian capital gains tax rate) in respect of Shares received in exchange for GDRs commences on the date of the advice of withdrawal of such ordinary shares by the relevant Depository to its Custodian.

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9. Applicable Rate of Surcharge under Income Tax Act

Currently surcharge is applicable @ of 5% for Domestic Company and 2% for foreign Company in case total income is more than Rs 1 crore but less than Rs 10 crore and 10% for Domestic Company and 5% for foreign Company having total income of more than Rs 10 crores.

10. Taxation on buyback

If the Shares held by the non-resident investor are purchased by the issuing company from the non- resident investor, the non-resident investor will be liable to income tax in respect of the capital gains arising on such buyback as per the provisions of the Indian Income tax Act and capital gains tax arising there from shall be withheld at source before repatriation of sale proceeds from India (See "Taxation on Transfer of Shares" above).

11. Capital Losses

Neither Section 115AC nor the Depositary Receipt Scheme deals with capital losses arising on a transfer of shares in India. In general terms, losses arising from a transfer of a capital asset in India can only be set off against capital gains in India. A short term capital loss can be set off against any capital gain, whether short term or long term. Whereas, a long term capital loss can be set off only against long term capital gain. To the extent that the losses are not absorbed in the year of transfer, they may be carried forward for a period of eight assessment years immediately succeeding the assessment year for which the loss was first determined by the assessing authority and may be set off against the capital gains assessable for such subsequent assessment years. In order to set off capital losses as above, the non-resident investor would be required to file appropriate and timely tax returns in India and undergo the usual assessment procedures. If the transaction resulting in capital loss has been subject to STT, the loss arising from transfer of such long term capital asset would not be available for setoff against any capital gains.

12. Taxation on Payment on Liquidation or Reduction of Capital

If any distribution is made by the Company to its shareholders or GDR holders on its liquidation or on the reduction of its capital, to the extent to which such distribution is attributable to accumulated profits of the Company, same will be treated as deemed dividend income in the hands of the shareholders or GDR holders. Any gains accruing to the shareholders or GDR holders on liquidation or reduction of capital in excess of such accumulated profits will be liable to income tax as capital gains in the hands of the shareholders or GDR holders as per the provisions of the Income Tax Act.

13. Securities Transaction Tax

All transactions entered on a recognized stock exchange in India will be subject to Securities Transaction Tax ("STT") levied on the transaction value.

a. Delivery based transactions

In case of sale of listed equity shares, which is settled by way of actual delivery, or transfer of the equity share, STT will be levied at the rate of 0.001% on the seller of the equity share.

b. Non-delivery based transactions

In case of sale of equity shares settled otherwise than by way of actual delivery or transfer of the equity share, STT will be levied at the rate of 0.025% on the seller of the equity share.

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c. Taxability of STT

In case of income being treated as trading income, STT paid can be claimed as deductible expenditure in computing taxable income from business.

As per Finance Bill 2013 STT is payable only by the seller on the total price at which the shares are transacted when the shares are sold on a recognized stock exchange in India.

14. Tax Deduction at Source

Any taxable gains realized by a non-resident on the sale of GDRs or equity shares, if they are taxable in India, are subject to withholding tax in accordance with the provisions of the Income Tax Act.

15. Tax Treaties

The provisions of the Tax Treaty entered into by the Government of India with the government of the country of residence of the depositary or the non-resident investor (as the case may be) will be applicable to the extent they are more beneficial to the non-resident investor. Currently, dividend income is not subject to tax in India in the hands of the holder of the Shares. During the period of fiduciary ownership of shares in the hands of the depositary, the provisions of the Tax Treaty entered into by the Government of India with the government of the country of residence of the depositary will be applicable in the matter of taxation of dividend income, if taxable in India. During the period, if any, when the redeemed underlying shares are held by the non-resident investor on transfer of fiduciary ownership of shares from the depositary, before they are sold to resident purchasers, the provisions of the Tax Treaty entered into by the Government of India with the government of the country of residence of the non-resident investor will be applicable in the matter of taxation of capital gains and dividend income, if taxable in India.

16. Stamp Duty

Under the Indian Law, transfers of GDRs will be exempt from liability to Indian stamp duty. Purchasers of Shares who seek to register such Shares on our share register are required to pay Indian stamp duty at the rate of Rs.0.25 for every Rs.100 or part thereof of the market value of such Shares. An acquisition of equity shares from the depositary in exchange for GDRs representing such equity shares will not render an investor liable to Indian stamp duty, but we will be required to pay stamp duty at the applicable rate on the share certificate. However, the Shares are compulsorily deliverable in dematerialized form and no stamp duty is payable on the subsequent transfers of such shares in dematerialized form.

17. Other Taxes

Currently, there is no wealth, gift or inheritance taxes which may apply to the GDRs or the underlying equity shares. Non-resident holders are however advised to consult their own legal and tax advisers regarding this issue.

18. Service Tax

Brokerage or commissions paid to stockbrokers in connection with the sale or purchase of shares listed on a recognized stock exchange in India are subject to a service tax of 12 per cent (plus education cess at the rate of 3 per cent.) ad valorem. The stockbroker is responsible for collecting the service tax and paying it to the relevant authority.

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GENERAL INFORMATION

1. Our Company was incorporated under the Companies Act in India and is registered with the Registrarof Companies, Mumbai, Maharashtra. Our Company‘s CorporateIdentity Number is L80301MH2010PLC198405. Our Company‘s registered office is situated at Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai, Maharasthra, India.

2. Our Company operates its business in conformity with its constitutional documents. The main objects of our Company as provided in clauseIII(A)(1) and III(A)(2) of its Memoradum of Association are as follows:

(i) "To provide, equip and deliver systems/technology led education interactive or otherwise to individuals, corporates, non-corporate entities and homes across the globe, set up learning network centres and education institutions, build, create and provide content / software and design education delivery methods of such content / programs through Print, Television, Computer, Multimedia, Internet, VSAT, DTH, IPTV, Mobile and other emerging technologies and exploit or deal with such educational / informative content / software in audio-video and/or computer generated data signal or fi lms, serials, dramas, music or in any other manner including but not limited to wired/wireless/cable TV system, internet service including ISP, Local Area Network (LAN), Wide Area Network (WAN), satellite television channels, in all languages, informative channels, educational channels, Microwave Multi Channel Distribution System (MMDS), MDS, Fibre optic system, laser beam system, SMATV, telephony, Personal Cellular System (PCS), Data Transfer/ Transmission/Reception, Dissembles and to source and distribute service relevant to audiences address by the education network.

(ii) To carry on the business establishing, constructing, leasing, providing, maintaining and conducting, schools, college, sports complexes, stadiums and other institutions for imparting training, education, and instructions in the fi elds of education and creative arts and fi elds incidental and ancillary to the promotion of creative arts through various media forms"

3. This Prospectus and the entry by our Company into the Deposit Agreement were authorised and approved by our Board on May 13, 2013.

4. The issue of GDRs was pursuant to approval by way of special resolution passed by the shareholders of our Company by an AGM dated October 19, 2011. All of the Shares pursuant to the Offering will be issued in the form of GDRs and will be issued by our Company to the Depositary on the Closing Date.

5. The Company does not own any of its shares nor does the Company own any of its shares through another company in which it has direct or indirect holding of more than 50%.

6. Application has been made for the GDRs to be listed on the Luxembourg Stock Exchange and for trading on the Euro MTF Market of the Luxembourg Stock Exchange. Deutsche Bank Luxembourg S.A. (the "Listing Agent") will serve as the intermediary between Luxembourg Stock Exchange and the persons connected with the issue and listing of the GDRs and copies of our Company‘s most recent annual reports , annual audited accounts published on a consolidated and a non-consolidated basis, quarterly unaudited accounts and semi-annual audited accounts published on a non-consolidated basis and this Prospectus may be obtained free of charge at the offices of the Listing Agent located at 2, Boulevard Konrad Adenauer L-1115 Luxembourg. Copies of the Articles of Association and Deposit Agreement will also be available for inspection free of charge at the offices of the Listing Agent.

7. The Shares underlying the GDRs are intended to be listed on the BSE and the NSE. Although an application for obtaining "in principle" approval for listing the Shares underlying the GDRs has been made to the BSE and the NSE, the actual approval will not be given until all other relevant documents authorising the issuing of Shares are submitted. There is no guarantee that such Shares will be admitted

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to listing on the Indian Stock Exchanges. There could also be a delay in the listing of the Shares on the Indian Stock Exchanges. Our Company has undertaken to use its best endeavours to obtain such approval from any other stock exchanges on which Shares are listed from time to time.

8. There has been no material adverse change in the financial or trading position of our Company since March 31, 2012, the date of its last published financial statements, and no material adverse change in the financial position or prospects of our Company since March 31, 2012.

9. The GDRs have been accepted for clearance through Euroclear and Clearstream with a code of 089975557. The International Securities Identification Number for the GDRs is US9892181028.

10. With the exception of the Deposit Agreement, our Company has not, within the two years immediately preceding the date of this Prospectus, entered into any contract which is or may be material (not being a contract entered into in the ordinary course of business) and which directly concerns the issue of the GDRs.

11. Our Company has obtained all consents, approvals and authorisations required in connection with the issue of the GDRs.

12. Except as stated under th chapter titled‗Legal Proceeding‘ on page 105 of this Prospectus, our Company is not involved in any material litigation or arbitration proceedings that may have, or have had during the 12 months preceding the date of this Prospectus, a material adverse effect on our Company‘s financial position, nor, so far as our Company is aware, are there any such proceedings pending or threatened.

13. The Ministry of Finance, Department of Economic Affairs and the Exchange Control Department of the RBI will be furnished with full particulars of the Listing, including the percentage of foreign shareholding in our Company, within 30 days after the issue of the GDRs.

14. The statutory auditors of our Company are M/s MGB & Co., Chartered Accountants, a member of the Institute of Chartered Accountants of India. M/s MGB & Co., Chartered Accountants audited and rendered an audit report on the Issuer‘s financial statements for the period ended March 31, 2011 and the period ended March 31, 2012 and has given and not withdrawn its consent to the issue of this document with the inclusion in it, where relevant, of references to it and its reports and the review report in the form and context in which they are included.

15. The Depositary is subject to regulation and supervision principally by the United States Federal Reserve Board and the New York State Banking Department.

16. The Depositary will maintain the register of Holders at its principal office located at 60 Wall Street, New York, New York 10005 or at the specified office of its agent.

17. Our Company has not paid any remuneration or benefits in kind granted during the last completed fiscal year that have been charged to overheads or the profit appropriation account, to members of the administrative, management and supervisory bodies other than as provided in this Prospectus.

18. During the preceding and current fiscal year, no interests of members of the administrative, management and supervisory bodies of our Company, in transactions effected by our Company, have been unusual in their nature or conditions.

19. There are no outstanding loans that have been granted by our Company to members of its administrative, management or supervisory bodies, nor any guarantees provided by our Company for their benefit.

20. There have been no public takeover or exchange offers by third parties in respect of our Company‘s shares, nor any public exchange offers made by our Company in respect of other companies‘ shares during the last and the current fiscal year.

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21. Subject to the provisions of the Civil Code, submission by the Company to the jurisdiction of the English courts, and the appointment of an agent for service of process, are valid and binding under Indian law. The choice of English law as the governing law, under the laws of India, is a valid choice of law and should be honoured by the courts of India, subject to proof thereof and considerations of public policy.

22. The GDRs being offered in terms of this Prospectus, are being issued in accordance with automatic route of the RBI set forth in the RBI Notification Number FEMA 20/2000-RB, dated May 3, 2000, as amended from time to time and as per the applicable limit as prescribed under the said notification.

23. The Shares underlying the GDRs are fungible with the same class of Shares being traded on the Indian Stock Exchange and in accordance with the provisions of RBI Notification Number FEMA 20/2000- RB, dated May 3, 2000, as amended from time to time, limited two way fungibility is available by way of re-issuance of GDRs to the extent of GDRs which have been redeemed into underlying shares and sold in the domestic market..

24. As per the current applicable Indian laws, our Company will have to obtain necessary approvals fromthe statutory authorities and/or the Shareholders for effecting any secondary or follow-on GDR issue,share capital reorganization, issue of scrip dividend or bonus and issue of rights or options orwarrants. The holders of the GDR shall not be entitled to any cash back on share capital reorganistionby our Company.

25. As per the current applicable Indian laws, our Company does not have the right to force redemption ofthe GDRs and/or shares underlying the GDRs and to effect a cash payout. Similarly, the holders ofthe GDRs cannot force our Company to effect a mandatory redemption.

26. The holders of the GDR are not entitled to participate in an Open Offer made under Indian TakeoverCode.Further, the holders of the GDR do not have any right to force redemption of the GDRs and/orshares underlying the GDRs pursuant to an Open Offer made under Indian Takeover Code.

27. For so long as any of the GDRs are outstanding and listed on the LuxSE, our Company will maintainthe listing of Shares underlying GDRs on the BSE and the NSE. Our Company shall also provide toLuxSE with the English version of any price sensitive information, other documents or informationand annual report or financial information as submitted to the Indian Stock Exchanges in compliancewith the Listing Agreement.

28. For so long as any of the GDRs are outstanding and listed on the LuxSE, any change of the Depositary shall be notified to the LuxSE in accordance with the listing rules of the LuxSE. Deutsche Bank Luxembourg S. A., will, for so long as the GDRs are listed on the LuxembourgStock Exchange, serve as an intermediary between the Luxembourg Stock Exchange and personsconnected with the issue and listing of the GDRs.

29. Our Company will publish all notices to holders of the GDRs on the website of the LuxSE.

30. The address of our Company‘s website is www.zeelearn.com. Information contained on this website does not constitute part of this Prospectus.

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SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IFRS

The unconsolidated financial statements and the consolidated financial statements (collectively referred to as the "Financial Statements") included in this document have been prepared in accordance with the accounting principles generally accepted in India and the requirements of India’s Companies Act (collectively "Indian GAAP"), which differ in certain material respects from IAS/ IFRS.

The following is a summary of the significant differences between "Indian GAAP" and "IAS/IFRS" in so far as they are relevant to the financial statements of our Company.

Summary of Certain Differences

Subject Indian GAAP IAS/IFRS Preparation & Financial statements are presented on a Financial statements are presented on Presentation single entity parent company (standalone) a consolidated basis. In limited basis. Pursuant to the listing agreement circumstances or on voluntary basis, with stock exchanges, public limited an entity may present single entity companies are required to present parent company (standalone) financial consolidated financial statements. It is not statements along with its consolidated mandatory to prepare consolidated financial statements. financial statements but must use the consolidation standard if prepared.

Contents of Financial Balance sheet, statement of profit and Balance sheet, income statement, Statements loss, cash flow, accounting policies statement of recognized gains and and notes to accounts for two years. losses, cash flow statements and statement of changes in equity, accounting policies and notes for two years.

Financials format Accounting standards do not prescribe Balance sheet: Does not prescribe a a particular format, except preparation particular format, however certain of certain items on the face of the minimum items must be presented Balance Sheet. The Companies Act has on the face of the balance sheet or specified some formats. in notes to accounts. All assets and liabilities are presently broadly in Balance sheet: Specified format and order of liquidity. disclosure norm has been specified. Income Statement: Does not Income Statement: Does not prescribe prescribe a particular format, a particular format, however prescribes however expenditure must be certain disclosure norms for income presented in one of the two formats and expenditures. (function or nature). Certain items must be presented on the face of the income statement. Extraordinary items The nature and amount of each Disclosure as extraordinary item extraordinary item is separately either on the face of income disclosed in the income statement. statement or in notes is prohibited.

Cash Flow statement It can be prepared using either direct It can be prepared using either method or indirect method but listed direct method or indirect method. companies are required to adopt IAS 7 also requires some additional indirect method only. disclosures.

Definition of Based on controlling interest through Based on voting control or power to subsidiary voting power or control of board of exercise dominant influence. directors.

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Subject Indian GAAP IAS/IFRS IFRS specifically requires potential Currently exercisable potential voting voting rights to be assessed. rights are not considered to determine whether control exists.

Parent only financial Under AS 13, in a parent‘s separate In IAS 27, in a parent‘s separate statements financial statement, investments in financial statements investment in subsidiaries are carried at cost less any subsidiaries may be accounted for impairment loss recognized. either at cost less any impairment, or by the equity method or by available for sale investments.

Consolidation and AS 21 does not require consolidation, As per IAS 27, consolidated investment in but sets out the standards to be financial statements must be Subsidiaries followed in the event that consolidated prepared whenever there is a financial statements are presented or parent-subsidiary relationship. required by law or regulation. The Intermediate parent companies SEBI requires listed companies and which are wholly owned or those seeking a listing to publish virtually wholly owned subsidiaries consolidated financial statements in are exempted from preparing accordance with AS 21 in addition to consolidated financial statements the separate financial statements of the irrespective of their location, provided parent. the parent publishes consolidated financial statements that comply Unlisted companies will continue to with IAS. have the option of not presenting consolidated financial statements.

Goodwill on Goodwill is the excess of the cost of Goodwill is the excess of the cost consolidation the parent‘s Investment over its share of the parent‘s investment over its of the equity (book value) of the share of the fair values of the acquired company at the time of identifiable net assets of the acquisition. acquired company at the time of acquisition. Goodwill arising on consolidation is not amortized. Goodwill arising on consolidation needs to be amortized over useful life, normally not longer than 20 years.

Presentation of There is no requirement to apply the If an enterprise presents separate associate result equity method of accounting in the financial statements, its investments standalone financial statements of the in associates are either accounted parent. Investments in associates are for using the equity method, carried accounted for in the same manner as at cost or accounted for as other investments in the stand-alone available-for-sale financial assets, financial statements of a parent. as described in IAS 39.

AS 23 requires the equity method of In the consolidated financial accounting for investments in statements, associates are generally associates in consolidated financial required to be accounted for under statements. the equity method.

Disclosures about AS 23 requires the following Disclosures similar to Indian significant associates additional disclosures: GAAP, except that there are  Names of associates including additional disclosures under Indian

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Subject Indian GAAP IAS/IFRS proportion of ownership and GAAP. voting power if different, and their reporting dates if different from those of the investor.  Any differences where differing accounting policies are used and it is impracticable to adjust the associate‘s financial statement.  In the case of exceptions, the justification for not applying the equity method.  Goodwill or capital reserve arising on the acquisition of an associate.

Accounting for foreign Exchange difference on Foreign All exchange differences are currency transactions currency transaction are recognized in included in determining net income the profit and loss with the option that for the period which differences the long term foreign currency arise. monetary items related to acquisition of depreciable fixed assets can be adjusted to the carrying value of the fixed assets and for other than capital purposes can be amortized over the balance period of long term monetary asset / liability.

Depreciation Only Written Down Value and Straight Variety of methods is available to Line methods are allowed. allocate the depreciable amount of Periodic review of depreciation asset on systematic basis. methods, residual values and useful Depreciation method, useful life and lives are not specifically required at residual value reviewed each balance sheet. periodically at each balance sheet date.

Events after the balance Dividend proposed or declared after Dividend proposed or declared after the sheet date the balance sheet date but before balance sheet date but before approval of approval of the financial statements the financial statements are not adjusting are treated as an adjusting event and event. Only appropriate disclosure is recorded as liability (subject to required. approval of the members).

Interim financial  Not Mandatory to prepare interim Not mandatory to prepare interim reporting financial statements, however if statements but must use standard if they an entity is required or elects to are prepared. Basis should be consistent prepare interim financial with full year statements and include statements it needs to comply comparatives. with AS – 25.

 Quarterly interim financial reporting is mandatory for listed entities, minimum disclosure requirement and format has been specified by the SEBI.

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Subject Indian GAAP IAS/IFRS Investment and Only unrealized depreciation on AFS Both appreciation and depreciation (if Marketable Securities. (Available for sale) securities is unrealized) in AFS is recognized as recognized in the income statement. gains/losses in either income statement or equity. However, the selection is a one time option.

Issuance and Debt issuance costs and redemption Debt issuance costs and redemption redemption costs for premiums payable on the redemption premiums payable on the borrowings of debt may be amortized, charged as redemption of debt are treated as a an expense or charged to the Securities deferred charge and amortized Premium Account. using the effective interest rate method over the life of the debt.

Employee retirement Required to be mandatorily provided To be provided for and funded benefits based on the either actuarial valuation based on the actuarial valuation. or contribution to a defined plan. Significant disclosure requirement Follows AS 15, Actuarial gain/losses exist. Actuarial gains/losses are are recognized immediately. amortized.

Prior Period items Entity is required to disclose prior Entity is required to restate period items separately in the current financial statement of the respective statement of Profit and Loss together year to which such expenses with the nature and amount that their pertains. impact on current profit and loss can be perceived.

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FINANCIAL STATEMENTS

Particulars Page No. Auditors Report for the year ended March 31, 2011- Standalone 173 Balance Sheet as at March 31, 2011 – Standalone 177 Profit and Loss Accounts as at March 31, 2011 – Standalone 178 Cash Flow Statements as at March 31, 2011 –Standalone 192 Auditors Report for the year ended March 31, 2012– Consolidated 193 Auditors Report for the year ended March 31, 2012– Standalone 195 Balance Sheet as at March 31, 2012– Consolidated 200 Profit and Loss Accounts as at March 31, 2012– Consolidated 201 Cash Flow Statements as at March 31, 2012 – Consolidated 216 Comparative Standalone Balance Sheet as at March 31, 2012and March 31, 2011 217 Comparative Standalone Profit and Loss Accounts as at March 31, 2012and March 31, 2011 218 Comparative Standalone Cash Flow Statements as at March 31, 2012 and March 31, 2011 234 Unaudited Financial Results for the nine month period ended December 31, 2012 236

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STANDALONE AUDITORS’ REPORT FOR THE PERIOD ENDED MARCH 31, 2011

To The Members, Zee Learn Limited

1. We have audited the attached Balance Sheet of Zee Learn Limited (the "Company") as at 31 March 2011, and also the Profit and Loss account and the Cash Flow statement for the period from the date of incorporation i.e. 4 January 2010 to 31 March 2011, annexed thereto. These financial statements are the responsibility of the Company‘s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors‘ Report) Order, 2003 (the ‗Order‘) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 ("the Act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Without qualifying out opinion, attention is drawn to

(a) Note B 2 in Schedule 17 regarding demerger of education business undertaking to the Company as at 1 April 2010 as per the Composite Scheme of Amalgamation and Arrangement u/s 391 to 394 approved by the Honorable High Court at Mumbai and effect thereof is given in these financial statements and the difference between the assets and liabilities taken over of `509.05 million is taken to general reserve.

(b) Note B 11 in Schedule 17 regarding Managerial Remuneration for the period is subject to approval of Central Government

5. Further to our comments in the annexure referred to in paragraph (3) above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(c) The Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Profit and Loss account and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Act;

(e) On the basis of written representations received from the directors and taken on record by our Board, we report that none of the Directors is disqualified as at March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together the significant accounting policies and notes to accounts as per Schedule 17, give the information required by the Act, in the manner so required and give

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a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2011;

ii) In the case of the Profit and Loss account, of the Profit for the period from the date of incorporation i.e. 4 January, 2010 to 31 March 2011; and

iii) In the case of the Cash Flow statement, of the cash flows for the period from the date of incorporation i.e. 4 January, 2010 to 31 March 2011.

For MGB & Co Chartered Accountants Registration No- 101169W

Sanjay Kothari Partner Membership No. 48215

Mumbai, 20 May, 2011

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Annexure referred to in Paragraph (3) of Auditors’ Report to the members of Zee Learn Limited on the accounts for the period ended 31 March 2011

1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation, of its fixed assets. (b) The company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years except assets lying with third parties. In our opinion, this periodicity of the physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification. (c) During the period, there was no disposal of substantial part of fixed assets.

2) (a) The inventory has been physically verified by the management at reasonable intervals during the period. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) In our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

3) (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. (b) The Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal controls system of the Company.

5) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register in pursuance of Section 301 of the Act.

6) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the period.

7) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8) We are informed that the Central Government has not prescribed the maintenance of cost accounting records under Section 209 (1) (d) of the Act in respect of the Company‘s activities.

9) According to the records of the Company examined by us and information and explanations given to us:

a) Undisputed Statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and others as applicable have generally been regularly deposited with appropriate authorities except delay in few cases andnon deposit of dues (since paid) of Employees State Insurance Scheme due to pending registration with requisite authorities. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at 31 March 2011 for a period of more than six months from the date became payable. b) According to the records of the Company, the dues outstanding of Sales Tax and VAT on account of dispute are as follows:

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Name of the Nature ofAmount (`in million) Period to which the Forum where dispute is Statute the Dues amount relate* pending Maharashtra Sales Tax 7.46 FY 2005-2006 Deputy Commissioner of Value Added 4.66 Sales tax (Appeals) Tax Act 2002 Central Sales tax Sales tax 0.16 FY 2003-2004 Deputy Commissioner of Act 0.43 FY 2004-2005 Sales tax (Appeals) 5.00 FY 2005-2006 Bombay Sales Sales Tax 0.31 FY 2002-2003 Deputy Commissioner of Tax Act 0.37 FY 2003-2004 Sales tax (Appeals) 0.67 FY 2004-2005 * Pursuant to the Composite Scheme of Arrangement as referred in Note 2 of Schedule 17B

10) The company has been registered for a period of not more than five years. Hence, the requirement of clause (x) of paragraph 4 of the said order is not applicable.

11) The Company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

12) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not chit fund or a nidhi/mutual benefit fund / society.

14) The Company is not dealing in or trading in shares, securities, debentures and other investments.

15) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from bank or financial institution.

16) The Company has not raised any term loan during the period.

17) On the basis of review of utilization of funds which is based on an overall examination of the Balance Sheet of the Company and related information as made available to us, we report that short term funds to the extent of `86.49 million have been used for long term investments.

18) The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the period.

19) The Company has not issued any secured debentures during the period. However pursuant to the Composite Scheme of Arrangement, the Company has been vested liability of secured debentures issued by erstwhile ETC Networks Limited. Further, the Company has created adequate securities in respect of secured debentures except assignment of lease deed for which extension has been granted by the debenture holders.

20) The Company has not raised any money by public issue during the period.

21) On the basis of our examination and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period.

For MGB & Co Chartered Accountants Registration No- 101169W

Sanjay Kothari Partner Membership No. 48215 Mumbai, 20 May, 2011

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BALANCE SHEET AS AT 31 MARCH, 2011 (`in million) Particulars Schedule March 31,2011 Sources of funds Shareholders’ fund Share Capital 1 122.74 Reserves and Surplus 2 527.58 650.31 Loan Funds Secured Loans 3 500.00 Unsecured Loans 4 41.00 541.00

Total 1,191.31

Application of Funds Fixed Assets 5 Gross Block 53.19 Less: Depreciation/ Amortization 7.49 Net Block 45.70 Capital Work in Progress 863.59 909.28 Investments 6 0.01

Deferred tax assets 13.25 Current Assets, Loans and Advances 7

Inventories 46.15 Sundry Debtors 31.00 Cash and Bank Balances 59.68 Loans and Advances 322.88 459.71 Less: Current Liabilities and Provisions Current Liabilities 8 184.74 Provisions 9 6.19 190.93

Net Current Assets 268.77 Total 1,191.31

Significant Accounting Policies and Notes to Accounts 17

As per our attached report of even date For and on behalf of Board

For MGB & Co Chartered Accountants Sumeet Mehta Surjit Banga Whole Time Director Director

Sanjay Kothari Samir Raval Partner Company Secretary Mumbai, 20 May, 2011

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PROFIT AND LOSS ACCOUNT FOR THE PERIOD JANUARY 4, 2010 TO MARCH 31, 2011 (`in million) Particulars Schedule March 31, 2011 Income Revenue from operations 10 438.98 Other Income 11 10.88

Total 449.86 Expenditure Operational expenses 12 124.24 Personnel cost 13 129.58 Administrative and Other expenses 14 79.31 Selling and Distribution expenses 15 82.33 Financial expenses 16 1.46 Depreciation 7.53

Total 424.44

Profit before Tax 25.42 Provision for Taxation - Current 7.78 - Deferred Tax (Refer Note 4 of Schedule 17B) (0.88) Net Profit after Tax for the period 18.52 Balance brought forward - Balance carried to Balance Sheet 18.52

Basic and Diluted Earnings per share of face value of `1 each 0.19

Significant Accounting Policies and Notes to Accounts 17

As per our attached report of even date For and on behalf of Board

For MGB & Co Mr. Sumeet Mehta - Surjit Banga Chartered Accountants Whole Time Director Director

Sanjay Kothari Samir Raval Partner Company Secretary Mumbai, May 20, 2011

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SCHEDULE FORMING PART OF BALANCE SHEET AS AT 31 MARCH, 2011 (`in million) Particulars March 31, 2011 SCHEDULE 1 Share Capital Authorized 15,00,00,000 Equity Shares of `1 each 150.00 150.00

Issued, Subscribed and Paid up 12,27,38,599 equity shares of `1each 122.74 (Out of the above 122,238,599 equity shares of `1 each fully paid up were issued for consideration other than cash in pursuant to the Composite Scheme of Arrangement (Refer Note 2A (b) (iii) of Schedule 17B) Total 122.74

SCHEDULE 2 Reserves and Surplus General Reserve As per last balance sheet - Add : Adjusted pursuant to the Composite Scheme of Arrangement (Refer Note 2A (b) 509.05 (ii) of Schedule 17B) 509.05 Profit and Loss Account 18.52

Total 527.58

SCHEDULE 3 Secured Loans Debentures 500.00 (Refer Note 3 of Schedule 17B) Total 500.00

SCHEDULE 4 Unsecured Loans Inter Corporate Deposit 41.00

Total 41.00

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SCHEDULE FORMING PART OF BALANCE SHEET AS AT 31 MARCH, 2011

SCHEDULE 5: FIXED ASSETS (At Cost) (`in million) Gross Block Depreciation/ Amortisation Net Block Acquired Pursuant to the Upto Description of Assets As at 31.03. For the As at March Composite Additions Deductions Deductions March 31, 2011 period 31, 2011 Scheme of 2011 Arrangement* Intangibles Content Development 2.08 0.65 - 2.73 0.89 - 0.89 1.84 Softwares 2.00 10.96 - 12.96 1.63 - 1.63 11.33 Tangibles Freehold Land** 0.58 - - 0.58 - - - 0.58 Leasehold Asset Improvements 1.86 2.64 - 4.50 1.10 - 1.10 3.40 Equipments 5.61 4.11 - 9.72 1.03 - 1.03 8.69 Computer 7.03 11.81 0.07 18.77 2.29 0.03 2.25 16.52 Furniture and Fixtures 1.20 2.06 - 3.26 0.53 - 0.53 2.74 Vehicles 0.66 - - 0.66 0.06 - 0.06 0.60 TOTAL 21.04 32.22 0.07 53.19 7.53 0.03 7.49 45.70 * Refer Note 2A (b) (ii) of Schedule 17B ** Refer Note 2A (b) (iv) of Schedule 17B

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(`in million) Particulars 31 March 2011 SCHEDULE 6 : INVESTMENTS Long Term - (At Cost) - Unquoted - Non Trade National Savings Certificate 0.01 ( Pledged with Sales Tax authorities) TOTAL 0.01 SCHEDULE 7 : CURRENT ASSETS, LOANS AND ADVANCES A. Current Assets (a) Inventories (as taken, Valued and certified by the management) (valued at lower of cost or estimated net realizable value) Educational Goods and Equipment 46.15 TOTAL 46.15 (b) Sundry Debtors (Unsecured and Considered Good unless otherwise stated) More than six months (includes doubtful ` 31.33 million) 33.31 Others (includes doubtful ` 0.62 million) 29.64 62.95 Less : Provision for doubtful debts 31.95 TOTAL 31.00 (c) Cash and Bank Balances Cash in hand 0.09 Balances with scheduled bank - in current accounts 23.46 - in fixed deposit* 36.13 (*Pledged ` 0.05 million with Sales tax authorities and ` 15.14 million as Security for Debentures as referred in Note 3 of Schedule 17B) TOTAL 59.68 B. Loans and Advances (Unsecured and considered good unless otherwise stated) Advances (recoverable in cash or in kind or for value to be received) Other advances 16.48 Deposits 308.58 325.06 Less : Provision for doubtful advances/ deposits 2.18 TOTAL 322.88 SCHEDULE 8 : CURRENT LIABILITIES Sundry Creditors - for goods and expenses 87.48 - for others 4.47 Trade advances/ deposits received 91.74 Interest Accrued but not due 1.06 TOTAL 184.74 SCHEDULE 9: PROVISIONS For Taxation (net of advances) 1.90 For Retirement benefits 4.29 TOTAL 6.19

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Schedule forming part of Profit and Loss Account for the period January 4, 2010 to March 31, 2011

(`in million) Particulars 31 March 2011 SCHEDULE 10 : REVENUE FROM OPERATIONS Sale of Educational Goods and Equipments 176.82 Education and Other Services 262.16 TOTAL 438.98 SCHEDULE 11 : OTHER INCOME Interest ( Gross)( TDS `million 0.62) 6.35 Miscellaneous Income 1.37 Liabilities no longer required written back (net) 3.16 TOTAL 10.88 SCHEDULE 12 : OPERATIONAL EXPENSES Educational Goods and Equipments Opening Stock - Add: Acquired Pursuant to the Composite Scheme of Arrangement 29.09 (Refer note 2A (b) (ii) of schedule 17B) Add: Purchases 106.55 135.64 Less: Closing Stock 46.15 Cost of Goods sold 89.49 Education Centre Operation expenses 31.00 Professional fees 3.76 TOTAL 124.24 SCHEDULE 13 : PERSONNEL COST Salaries, Allowances and Bonus 108.86 Contribution to Provident and Other Funds 3.57 Staff welfare expenses 7.97 Recruitment cost 9.18 TOTAL 129.58 SCHEDULE 14 : ADMINISTRATIVE AND OTHER EXPENSES Rent 13.78 Rates and Taxes 3.92 Insurance 0.96 Repairs – Others 2.31 Electricity charges 3.36 Legal and Professional charges 8.38 Communication expenses 7.35 Printing and Stationary 2.62 Conveyance and Travelling 24.29 Vehicle expenses 3.41 Miscellaneous expenses 7.64 Provision for doubtful debts 1.22 Loss on sale of fixed asset (net) 0.03 Preliminary expenses written off 0.02 TOTAL 79.31

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Schedule forming part of Profit and Loss Account for the period January 4, 2010 to March 31, 2011 (`in million) Particulars 31 March 2011 SCHEDULE 15 : SELLING AND DISTRIBUTION EXPENSES Advertisement and Publicity expenses 72.18 Business Promotion expenses 10.15 TOTAL 82.33 SCHEDULE 16 : FINANCIAL EXPENSES Interest- others 1.28 Bank charges 0.18 TOTAL 1.46

SCHEDULE: 17 NOTES TO ACCOUNTS

Significant Accounting Policies and Notes to Accounts

Background

ZEE Learn Limited ("the Company") was incorporated in State of Maharashtra on 4 January, 2010. The Company is one of the most diversified premium education companies (business demerged under a Composite Scheme of Arrangement – Refer Note 2A of Part B below), which delivers learning solutions and training through its multiple products viz. Kidzee, Zee Schools, Zee Institute of Media Arts (ZIMA), Zee Institute of Creative Arts (ZICA) and E - Learning Online Education and Testing.

A. Significant Accounting Policies

1. Basis of Accounting The Financial Statements have been prepared under the historical cost convention and on accrual basis in accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

2. Use of Estimates The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the period. Actual results could differ from these estimates. Any revision to estimates is recognized prospectively in current and future periods.

3. Fixed Assets a) Fixed assets are stated at original cost of acquisition/ installation net of accumulated depreciation, amortization and impairment losses. The cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. b) Educational Content and software are capitalized as intangible assets in the year it is put to use. c) Cost incurred on development / improvement of leasehold assets is capitalized. d) Capital Work in progress includes expenditure incurred upto the date of Balance sheet, advances for capital expenditure etc.

4. Borrowing Costs Borrowing Costs attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. All other borrowing costs are charged to revenue.

5. Impairment of Assets At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by

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discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

6. Depreciation / Amortization a) Depreciation on tangible fixed assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 except Training equipments which is amortized on straight line basis over a period of three years based on management‘s estimate of useful life b) Leasehold improvements are amortized over the period of Lease. c) Intangible assets are amortized on straight line basis over a period of three years based on management‘s estimate of useful life.

7. Investments Long term investment is carried at cost. Provision for diminution in value of investment other than temporary is made, wherever applicable.

8. Revenue Recognition a) Educational Services (i) Course fees and Royalty income is recognized over the duration of the course. (ii) Franchise fees is recognized as per the agreed terms of the agreement. b) Sale of Educational goods and equipments is recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch. c) Interest income is recognized on accrual basis.

9. Inventories Educational goods and Equipments are valued at lower of cost or estimated net realizable value. Cost is determined on the basis of weighted average cost. Cost of inventory includes cost of purchase, freight and other expense incurred in bringing the inventories to their present location and condition.

10. Employee Benefits a) Defined Contribution Plan

The retirement benefits in the form of provident fund, the contribution payable by the Company is charged to Profit and Loss account of the year.

b) Defined Benefit Plan

The Present value of defined benefit obligations and the related current service cost are measured using the projected unit credit method with actuarial valuation being carried out at each balance sheet date. The defined benefit obligations are not funded.

c) Leave encashment:

Liability for leave encashment is provided on the basis of actuarial valuation at the balance sheet date.

d) Gratuity:

Liability for gratuity for the year is provided on the basis of actuarial valuation, as per defined retirement plan covering eligible employees. The plan provides payment to vested employees on retirement, death or termination of employment of an amount based on the respective employee‘s salary and the terms of employment with the Company.

11. Accounting for Taxes on Income a) Current Tax is determined as the amount of tax payable in respect of taxable income for the period as per the provisions of the Income Tax Act, 1961. b) Deferred tax is recognized, subject to consideration of prudence, on timing difference, being the difference between taxable incomes and accounting income that originate in one period

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and are capable of reversal in one or more subsequent periods and measured using relevant enacted tax rates.

12. Operating Lease Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease rentals under operating leases are recognized as expense on accrual basis in accordance with the terms of respective lease agreements.

13. Transactions in Foreign Currency a) Foreign currency transactions are accounted at the exchange rates prevailing on the date of such transactions. b) Foreign Currency monetary assets and liabilities at the Balance sheet date are translated at the closing rate. Gains and losses resulting on settlement / translation of monetary assets and liabilities on the closing date are recognized in the Profit and Loss account.

14. Earnings per Share Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of common and dilutive common equivalent shares outstanding during the period, except when the results would be anti-dilutive.

15. Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

B. Notes to Accounts 1. The financial statements for the current period are from the date of incorporation i.e. 4January, 2010 to 31 March, 2011. This being the first accounting year, previous year‘s figures are not applicable.

2. Restructuring A. Scheme of Amalgamation and Arrangement between ETC Networks Limited, Zee Entertainment Enterprises Limited and the Company

a) The Composite Scheme of Amalgamation and Arrangement (‗the Composite Scheme‘) between ETC Networks Limited (‗ETC‘), Zee Entertainment Enterprises Limited (‗ZEEL‘) and the Company and their respective shareholders was approved by the Hon‘ble High Court of Mumbai on July 16, 2010, and upon filing of the certified copy of the said order with the Registrar of Companies, Mumbai, the said Composite Scheme became effective on August 30, 2010. Pursuant to the Composite Scheme the ETC has merged and vested in ZEEL on March 31, 2010 and upon such merger the education business undertaking stand demerged from ZEEL and vested in the Company at book value on April 1, 2010.

b) Pursuant to the said Composite Scheme coming into effect on August 30, 2010:

(i) The Composite Scheme has been given effect in these financial statements.

(ii) As approved by the Board of Directors of ZEEL, the whole of the undertaking, assets, properties and liabilities of the education business undertaking of ZEEL are transferred to/and are vested with the Company with effect from April 1, 2010 at book value. The difference between the book value of assets and the book value of liabilities is credited to General Reserve account of the company. (`in millions) Particulars Fixed Assets (including Capital WIP) 800.65 Investments 0.01

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Particulars Current Assets, Loans and advances Inventories 29.09 Sundry Debtors (net) 12.10 Cash and Bank Balances 207.01 Loans and Advances (including Deferred Tax asset) 236.64 484.84

Total Assets 1285.50

Secured and Unsecured Loans 500.19 Current Liabilities and Provisions 154.01 654.20

Total Liabilities 654.20 Net Assets 631.29 Less: Shares issued and allotted on October 14, 2010 122.24 Surplus taken to General Reserve 509.05

(iii) The Company has issued and allotted 122,238,599 equity shares of `1 each to the shareholders of ZEEL on October 14, 2010, in the ratio of one equity share of the Company for every four equity shares held in the ZEEL.

(iv) The title of the Freehold land and other assets which were vested in the Company pursuant to the Composite Scheme is in the process of transfer in the name of the Company.

B. Scheme of Amalgamation Essel Entertainment Media Limited (EEML) with the Company

With a view to consolidate the Education Infrastructure assets, the Board of Directors has approved Scheme of Amalgamation of EEML with the Company on the Appointed Date March 31, 2011. In Pursuance of the said Scheme 1 (One) fully paid up equity share of `1 each of the Company would be issued and allotted to the shareholders of EEML for every 5 (Five) equity shares of `1 each held by them in EEML i.e. the Company shall be required to issue 140,000,000 shares. Pursuant to the Scheme, all the assets and liabilities as at the close of March 31, 2011 on the Appointed Date shall be recorded by the Company at their respective book values.

Pending final approval by the Hon‘ble High Court of Bombay to the said Scheme, no effect of the Scheme, is given in these financial statements.

Note:

The assets and liabilities of Essel Entertainment Media Limited as on March 31, 2011 are as below:

(`in million) Particulars Fixed Assets - Investments 1060.00 Current Assets, Loans and advances Cash and Bank Balances 0.32 0.32 Total Assets 1060.32 Unsecured Loans 6.92 Current Liabilities and Provisions 0.33 7.25

Total Liabilities 7.25 Net Assets 1053.07

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3. Secured Loans

Debentures i) 500, 12% Secured Redeemable Non-Convertible Debentures of `1 million each fully paid up aggregating `500 million (issued by ETC and vested with the company as part of the Composite Scheme of Arrangement) are redeemable at par in four equal installments with the earliest redemption being on January 6, 2012 and last being on January 6, 2015.

ii) 12% Secured Redeemable Non-Convertible Debentures are:  Secured by first charge on Freehold land;  Secured by way of first charge on all fixed assets and current assets including certain fixed deposits, and first charge on escrow account through which all the receivables of the Company will be routed;  Secured by first charge on the Reserve Account and DSRA Undertaking by Zee Entertainment Enterprises Limited;  Secured by assignment of all the benefits under agreement for operations of school.

iii) In the absence of adequate profits Debenture Redemption Reserve aggregating to `31.25 million has not been created in these financial statements.

iv) Installment of Debenture due within one year aggregating to `125 million

4. Taxation a) Provision for taxation is made on the income as per the provisions of Income Tax Act, 1961. b) The components of deferred tax balances as at March 31, 2011:

(`in million) Particulars 31 March 2011 Deferred Tax Assets Provision for retirement benefits 1.35 Provision for doubtful debts 10.06 Depreciation 0.83 Other Timing difference 1.01 Deferred Tax Assets 13.25

5. (i) Capital work in progress includes capital advances of `778.96 million and borrowing cost of `60 million in compliance with AS 16 "Borrowing Costs"

(ii) Capital advances includes `750 million paid for acquiring rights for 30 years for operating a school in Bandra Kurla Complex, Mumbai and shall be treated as an intangible asset on the date of commencement of operation of the school to be amortized over the period of the rights.

(iii) Deposits under schedule 7B of the Balance Sheet includes `290 million being the refundable security deposits paid by the company against school operating rights under two arrangements

6. The foreign exchange gain of `0.01 million on settlement or realignment of foreign exchange transactions has been adjusted in respective heads of the Profit and Loss account.

7. During the period, the Company has granted 1,107,000 stock options to eligible employees and independent directors at an exercise price of `26.05 per share. The Vesting of said Stock Options shall commence at the end of one year from the date of grant i.e. on and from 26th January 2012 and that the said options shall vest in tranches over a period of 3 years from the date of grant in the ratio of 50% of options granted to vest at the end of 1st year from the date of grant; 35% of options granted to vest at the end of 2nd year from the date of grant and balance 15% of options granted shall vest at the end of 3rd year from the date of grant and that all the vested options shall be entitled to be exercised by the Option

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Grantee within a period of 4 years from respective vesting dates.

The options are granted to the employees at an exercise price, being the latest market price as per SEBI (ESOS) Guidelines, 1999. In view of this, there being no intrinsic value on the date of grant (being the excess of market price of share under the Scheme over the exercise price of the option), the Company is not required to account the intrinsic value of options as per SEBI Guidelines.

8. Leasing Arrangements

The Company leases office premises and training centres under cancelable / non-cancelable agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The initial tenure of the lease is generally for 11 to 60 months.

In respect of assets taken on operating lease during the period: (`in million) Particulars March 31, 2011 Lease rental charges for the period 18.29 Future lease rental obligation payable (Under non cancellable leases) Not later than one year 5.15 Later than one year but not later than five years 2.63

9. Contingent Liabilities not provided for (`in million) Particulars 31 March 2011 Claims against Company not acknowledged as debts 5.44 Disputed Indirect tax demands 19.81

10. Disclosures a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is `250.86 million. b) The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the period end together with interest paid/payable as required under the said Act have not been furnished. c) Miscellaneous Expenses includes Auditors Remuneration (excluding service tax) as under: (`in million) Particulars March 31, 2011 Audit Fees 1.00 Tax Audit Fees 0.15 Certification and Other Matters 0.97

11. Managerial Remuneration a) As approved by the Members of the Company on October 1, 2010 Mr. Sumeet Mehta - has been appointed as Whole-time Director of the Company for a period of 3 years with effect from September 1, 2010. b) Particulars of remuneration paid by the Company to Mr. Sumeet Mehta - from the date of Appointment till March 31, 2011 is as detailed herein: (`in million) Particulars March 31, 2011 Salaries and Allowances 3.70 Provident fund contribution Provident fund contribution 0.25 Total 3.95 Maximum permissible remuneration to Managing Director as per Schedule XIII (excluding Provident fund contribution) 2.80 Excess Remuneration paid 0.89 Remuneration as per Central Government approval # #In respect of remuneration payable to the Whole Time Director in excess of the limits prescribed

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under section 198 read with Schedule XIII, the Company has applied for approval from the Central Government which is still pending

Note: Salary and Allowances includes basic salary, house rent allowance, other allowance but excluding leave encashment and gratuity provided on the basis of actuarial valuation

c) No Commission is paid/payable to any Director and hence the computation of profits under Section 198 / 349 of the Companies Act, 1956 is not required.

12. Employee Benefits

Defined Benefit plans: (`in million) Gratuity(Non Funded) March 31, 2011 I. Expenses recognized during Period ended 31 March 2011 1) Current Service Cost 1.39 2) Interest Cost 0.18 3) Actuarial Losses / (Gains) (0.77) Total Expenses 0.81 II. Net Asset/(Liability) recognized in the Balance Sheet as at 31 March 2011 1) Present value of defined benefit obligation 2.72 2) Net Asset / (Liability) (2.72) II Reconciliation of Net Asset / (Liability) recognized in the Balance Sheet I. during the Period ended 31st March, 2011 Net Asset/(Liability) at the beginning of period (2.12) Expense as per I above (0.81) Employer contributions 0.21 Net Asset/(Liability) at the end of the Period (2.72) I Actuarial Assumptions: V. 1) Discount rate 8.30% 2) Expected rate of salary increase 6% 3) Mortality LIC (1994-96)Ultimate Notes: a) Amounts recognized as an expense and included in the Schedule 13: "Personnel Cost" are Gratuity `0.81 million and Leave encashment `0.32 million. b) The estimates of future salary increases considered in the actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. c) "Contribution to provident and other funds" is recognized as an expense in Schedule 13 of the Profit and Loss Account.

13. Related Party Transactions

Other Related parties with whom transactions have taken place during the period and balance outstanding at the period end.

Cyquator Media Services Private Limited, Digital Ventures Private Limited, E-City Project Constructions Private Limited, Himgiri Nabh Vishwavidhyalaya, Pan India Paryatan Private Limited, Pan India Network Infravest Private Limited, Packaging India Private Limited; Premier Finance and Trading Co. Limited, TALEEM Research Foundation, Wire and Wireless India Limited, Zee Entertainment Enterprises Limited, and Zee News Limited

Directors / Key Managerial Personnel:

Mr. Himanshu Mody, Mr. Sumeet Mehta, Dr. Manish Agrawal, Mr. Surjit Banga (with effect from

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September 1, 2010)

(`in million) A) Transactions with Other Related Parties March 31, 2011 Total Amount Amount Unsecured Loans taken 41.00 41.00 Premier Finance and Trading Co. Limited Purchase of Capital assets 0.90 0.80 Cyquator Media Services Private Limited 0.10 Packaging India Private Limited Loans, advances and deposits given 332.75 200.00 Digital Ventures Private Limited 90.00 Himgiri Nabh Vishvavidyalaya 42.75 Zee Entertainment Enterprises Limited Loans, advances and deposits given repaid 236.64 199.18 TALEEM Research Foundation 37.46 Zee Entertainment Enterprises Limited Interest expense 1.17 1.17 Premier Finance and Trading Co. Limited Other Expenses 8.55 1.84 E-City Project Constructions Private Limited 1.60 Packaging India Private Limited 1.10 Pan India Network Infravest Private Limited 2.29 Pan India Paryatan Private Limited 1.62 Zee Entertainment Enterprises Limited 0.10 Zee News Limited Sundry Balances Written Back 1.02 1.02 Pan India Paryatan Private Limited B) Balances outstanding as at 31 March 2011 Unsecured Loans 41.00 41.00 Premier Finance and Trading Co. Limited Capital Work in Progress 750.00 750.00 Digital Ventures Private Limited Loans, Advances and Deposits 295.10 200.00 Digital Ventures Private Limited 90.00 Himgiri Nabh Vishwavidhyalaya 5.10 Zee Entertainment Enterprises Limited Sundry Creditors 10.75 0.23 Packaging India Private Limited 0.14 Pan India Network Infravest Private Limited 0.12 Pan India Paryatan Private Limited 10.26 Zee News Limited Interest Accrued but not Due 1.06 1.06 Premier Finance and Trading Co. Limited # Managerial Remuneration as referred in Note B 11.

Note: Related parties are identified by the Company based on the information available and relied by the auditors.

14. Segment Reporting

The Company is primarily engaged in the business of educational services and other related activities. The entire business has been considered as a single segment in terms of Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India. There being no business outside India, the entire business is considered as a single geographic segment.

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15. Additional Information pursuant to the provisions of Paragraph 3, 4C, 4D of Part II of Schedule VI of the Companies Act, 1956: a) Quantitative Details of Educational goods and equipments:

(Quantity in Numbers,` in million) Particulars 31 March 2011 Quantity Amount Pursuant to Scheme of Demerger 573,034 11.98 - Equipments - 17.11 - Others Total 573,034 29.09 Purchase/ Production/ Acquisition 2,117,986 - Equipments - 37.62 - Others 68.93 Total 2,117,986 106.55 Revenue from Operations Educational Materials and Equipments 1,949,854 64.08 - Equipments - 112.74 - Others Total 1,949,854 176.82 Closing Stock - Equipments 741,166 13.23 - Others - 32.92 Total 741,166 46.15

b) Other Additional Information required to be given pursuant to Part II of Schedule VI to the Companies Act 1956 is as follows:

Particulars 31 March 2011 Expenditure in Foreign Currency 0.31 Traveling Expenses CIF Value of Imports Capital Goods 2.38

16. Earnings per Share: Calculation of EPS - Basic and Diluted

Particulars 31 March 2011 Profit after Tax (`in million) 18.52 Weighted average number of shares 99,210,373 Nominal value of equity shares (`) 1 Earnings per share – Basic and Diluted 0.19

Note: Stock options if any outstanding at the yearend are anti dilutive, hence ignored while computing dilutive EPS.

As per our attached report of even date For and on behalf of the Board

For MGB & Co. Chartered Accountants

Sanjay Kothari Sumeet Mehta- Surjit Banga Partner Whole Time Director Director

Samir Raval Mumbai, May 20, 2011 Company Secretary

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CASH FLOW STATEMENT FOR THE PERIOD JANUARY 4, 2010 TO MARCH 31,2011

(`in million) Particulars March 31,2011 A. Cash Flow from Operating Activities Net Profit before tax 25.42 Adjustments for: Depreciation / Amortization 7.53 Interest Income (6.35) Interest Expense 1.28 Provision for doubtful debts 1.22 Loss/ (Profit) on sale of fixed assets 0.03 Operating Profit before Working Capital Changes 29.13 Adjustments for: Decrease / (Increase) in Trade and other receivables (118.74) Decrease / (Increase) in Inventories (17.06) Increase / (Decrease) in Trade and other payables 33.96 Cash Generated from Operations (72.71) Direct Taxes paid (5.88) Net Cash from Operating Activities (A) (78.59) B. Cash Flow from Investing Activities Purchase of fixed assets (including Capital Work in Progress) (116.19) Sale of fixed assets 0.01 Interest received 6.35 Net Cash from Investing Activities (B) (109.83) C. Cash Flow from Financing Activities Proceeds from Issue of Share capital 0.50 Proceeds from Inter corporate deposits 41.00 Repayment of Borrowings (0.19) Interest paid (0.22) Net Cash from Financing Activities ( C ) 41.09 Net Changes in Cash and Cash Equivalent (A+B+C) (147.33) Cash and Cash Equivalents transferred as per the Scheme of Arrangement (Refer Note 2 of Schedule 17B) 207.01 Cash and Cash Equivalents at the end of the period 59.68 Notes: The Composite Scheme of Arrangement (Refer Note 2A b) (ii) of Schedule 17B) is (i) not considered in the above cash flow statement being non cash transaction

(ii) Cash and Cash Equivalents at the end of the period Cash in hand 0.09 Balance with Scheduled Banks in - Current Accounts 23.46 - Fixed Deposits 36.13 TOTAL 59.68

As per our attached report of even date For and on behalf of the Board

For MGB & Co. Chartered Accountants

Sanjay Kothari Sumeet Mehta- Surjit Banga Partner Whole Time Director Director

Samir Raval Mumbai, May 20, 2011 Company Secretary

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AUDITORS REPORT FOR THE YEAR ENDED MARCH 31, 2012 – CONSOLIDATED

To The Board of Directors Zee Learn Limited

1. We have audited the attached Consolidated Balance Sheet of Zee Learn Limited ("the Company") and its subsidiary (collectively referred to as "the Group") as at 31 March, 2012, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow statement for the year then ended on that date, annexed thereto. These financial statements are the responsibility of the Company‘s management and have been prepared by the Management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

3. The financial statements of subsidiary with total assets (net) of `2,080,342,475 as at 31 March, 2012 and total revenues (net) of `Nil for the year ended on that date have not been audited by us. These financial statements have been audited by other auditors whose report have been furnished to us and in our opinion, in so far it relates to the amounts included in respect of those subsidiaries is based solely on the report of the other auditors.

4. We draw reference to

(a) Note 24 regarding Amalgamation of Essel Entertainment Media Limited with the Company w.e.f. close of 31 March, 2011 as per the Scheme of Amalgamation u/s 391 to 394 and other applicable provisions, approved by the Hon‘ble High Court at Bombay and effect thereof is given in these financial statements as per the pooling of interest method as per AS 14 and the resultant difference of ` 888,125,054 is adjusted against General Reserve.

(b) Note 32 regarding Managerial Remuneration for the year is subject to approval of Central Government.

5. We report that the Consolidated Financial Statements have been prepared by the Company‘s management in accordance with the requirements of the Accounting Standard (AS) 21 "Consolidated Financial Statements", as notified by the Companies (Accounting Standards) Rules,2006.

6. Based on the audit as aforesaid, and on the consideration of reports of other auditors on the separate financial statements and on the other financial information of the components and to the best of our information and according to the explanations given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India :

(a) In case of Consolidated Balance Sheet, of the State of Affairs of the Group as at 31 March,2012;

(b) In case of Consolidated Statement of Profit and Loss, of the Loss of the Group for the year ended on that date; and

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For MGB & Co Chartered Accountants Firm Registration Number 101169W

Sanjay Kothari Partner Membership Number 048215

Mumbai, 16 May, 2012

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AUDITORS REPORT FOR THE YEAR ENDED MARCH 31, 2012 – STANDALONE

To The Members, Zee Learn Limited

1. We have audited the attached Balance Sheet of Zee Learn Limited ("the Company") as at 31 March, 2012, the Statement of Profit and Loss and the Cash Flow statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company‘s management. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We draw reference to

(b) Note 26 regarding Managerial Remuneration for the year is subject to approval of Central Government

5. Further to our comments in the annexure referred to in paragraph (3) above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in Section 211 (3C) of the Act;

(e) On the basis of written representations received from the directors, as at 31 March, 2012 and taken on record by the Board, we report that none of the Directors is disqualified as at 31 March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to

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us, the said accounts read together the significant accounting policies and notes thereon, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2012;

ii) In the case of the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and

iii) In the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

For MGB & Co Chartered Accountants Firm Registration Number 101169W

Sanjay Kothari Partner Membership Number 048215

Mumbai, 16 May, 2012

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Annexure referred to in Paragraph (3) of Auditors’ Report to the members of Zee Learn Limited on the accounts for the year ended 31 March, 2012

1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The Company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years except assets lying with third parties. In our opinion, this periodicity of the physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

2) (a) The inventory has been physically verified by the management at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on such verification between physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

3) (a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. During the course of our audit, no major weaknesses were noticed in the internal control system in respect of the aforesaid areas.

5) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register maintained in pursuance to Section 301 of the Act.

6) The Company has not accepted any deposits from the public during the year.

7) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8) We are informed that the Central Government has not prescribed the maintenance of cost accounting records under Section 209 (1) (d) of the Act in respect of the Company‘s activities.

9) According to the records of the Company examined by us and information and explanations given to us:

(a) Undisputed Statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with appropriate authorities except delay in few cases. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at 31 March, 2012 for a period of more than six months from the date they became payable except tax deducted at source of Rs 292,236 which have been since deposited.

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(b) There are no disputed dues including income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess which has not been deposited except as stated under: (`in million) Name of the Nature of Amount Period to which the Forum where Statute the Dues amount relate dispute is pending Maharashtra Sales Tax 7.56 F.Y. 2005-2006 Deputy Commissioner Value Added of Sales Tax Tax Act, 1944 4.65 (Appeals) Central Sales Sales Tax 0.34 F.Y. 2003-2004 Deputy Commissioner Tax Act 0.62 F.Y. 2004-2005 of Sales Tax 5.29 F.Y. 2005-2006 (Appeals) Bombay Sales Sales tax 0.31 F.Y. 2002-2003 Deputy Commissioner Tax Act 0.37 F.Y. 2003-2004 of Sales Tax 0.67 F.Y. 2004-2005 (Appeals)

10) The Company has been registered for a period of not more than five years. Hence, the requirement of Clause (x) of paragraph 4 of the said order is not applicable.

11) The Company has not defaulted in repayment of dues to banks and financial institutions during the year.

12) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not a chit fund or a nidhi / mutual benefit fund / society.

14) The Company is not dealing in or trading in shares, securities, debentures and other investments.

15) In our opinion, the terms and conditions of guarantees given by the Company for loans taken by subsidiaries is prima-facie not prejudicial to the interests of the Company.

16) The term loan raised by the Company during the year has been utilized for the purpose it is raised.

17) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investments.

18) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

19) The Company has not issued any secured debentures during the year.

20) The Company has not raised any money by public issue during the year.

21) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co Chartered Accountants Firm Registration Number 101169W

Sanjay Kothari Partner Membership Number 048215 Mumbai, 16 May, 2012

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CONSOLIDATED BALANCE SHEET FOR THE YEAR ENDED MARCH 31, 2012

(`in million) Note March 31, 2012 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 3 262.74 Reserves and Surplus 4 1,139.53 1,402.27 Non-Current Liabilities Long-Term Borrowings 5 1,322.79 Long-Term Provisions 6 9.58 Other Long-Term Liabilities 7 3.05 1,335.42 Current Liabilities Trade Payables 8 177.07 Other Current Liabilities 8 610.66 Short-Term Provisions 6 3.79 791.52 Total 3,529.20 ASSETS Non-Current Assets Fixed Assets Tangible assets 9 145.39 Intangible assets 9 27.53 Capital work-in-progress 9 691.28 Intangible assets under development 9 1,245.98 2,110.18 Non-Current Investments 10 0.01 Deferred Tax Assets (net) 11 13.25 Long-Term Loans and Advances 12 1,072.18 Other Non-Current Assets 13 23.15 1,108.59 Current Assets Inventories 14 87.29 Trade Receivables 15 42.77 Cash and Bank Balances 16 144.34 Short-Term Loans and Advances 12 35.40 Other Current Assets 13 0.64 310.43 Total 3,529.20 Notes forming part of the Consolidated financial statements 1-35

As per our attached report of even date For and on behalf of the Board

For MGB & Co. Chartered Accountants Sumeet Mehta Himanshu Mody Whole-time Director Chairman Sanjay Kothari Partner

Arun Kabra Samir Raval Chief Financial Officer Company Secretary Place: Mumbai Date : 16 May, 2012

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CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2012

(`in million) Note March 31, 2012 Revenue Revenue from Operations 17 610.03 Other Income 18 6.27 Total 616.30 Expenses Cost of materials 19 142.03 Operational expenses 19 31.08 Employee benefits expense 20 251.61 Other expenses 21 403.43 Finance costs 22 32.42 Depreciation and amortization expense 23 30.21 Total 890.78 Loss before tax (274.49) Tax expense: Current tax- Current year - Earlier years 1.68 Deferred tax - Loss for the year (276.17) Earnings per equity share of face value of `1 each Basic and Diluted 29 (1.05)

Notes forming part of financial statements 1-35 As per our attached report of even date For and on behalf of the Board

For MGB & Co. Chartered Accountants Sumeet Mehta Himanshu Mody Whole-time Director Chairman

Sanjay Kothari Partner

Arun Kabra Samir Raval Chief Financial Officer Company Secretary

Place: Mumbai Date: 16 May, 2012

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NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

1. Background Zee Learn Limited and its subsidiary (collectively referred to as "the Group") is one of the most diversified premium education companies which delivers learning solutions and training through its multiple products viz. Kidzee, Mount Litera Zee Schools, Brain Cafe, Mount Litera World Preschool, Zee Institute of Media Arts (ZIMA), Zee Institute of Creative Arts (ZICA) and E - Learning Online Education and Testing.

2. Basis of Consolidation i) The Consolidated Financial Statements (CFS) of the Group are prepared under historical cost convention on going concern basis in accordance with Generally Accepted Accounting Principles in India and the Accounting Standard -21 on "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India (ICAI), to the extent possible in the same manner as that adopted by the parent company for its separate financial statements by regrouping, recasting or rearranging figures, wherever considered necessary.

ii) The CFS is prepared using uniform accounting policies for transactions and other events in similar transactions.

iii) The consolidation of the financial statements of the parent company and its subsidiary is done to the extent possible on a line-by-line basis by adding together like items of assets, liabilities, income and expenses. Figures pertaining to the subsidiary company have been reclassified wherever necessary to bring them in line with the Group financial statements. All significant inter-group transactions, unrealized inter-company profits and balances have been eliminated in the process of consolidation.

The CFS includes the Financial Statements of the parent company and the subsidiary Company Digital Ventures Private Limited (Extent of holding- 100%).

2.1 Significant Accounting Policies a Use of Estimates The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods.

b Tangible fixed assets i) Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost includes all expenses incurred to bring the assets to its present location and condition.

ii) Capital work in progress comprises cost of fixed assets and related expenses that are not yet ready for their intended use at the reporting date.

c Intangible assets i) Intangible assets are recognised in the year it is put to use at cost. Intangible assets are carried at cost less accumulated amortization and accumulated impairment loss if any.

ii) Intangible assets under development comprises of purchase price, borrowing cost and directly attributable cost incurred on asset that are not ready for their intended use at the reporting date.

d Borrowing Costs

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Borrowing Costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as a part of the cost of respective asset. All other borrowing costs are expenses in the period they occur. e Impairment of tangible and intangible assets At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value. f Depreciation on tangible assets i) Depreciation on fixed assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 except Training equipments which is amortized on straight line basis over a period of three years based on management‘s estimate of useful life

ii) Leasehold Improvements are amortized over the period of Lease. g Amortization on intangible assets Intangible assets are amortized on straight line basis, based on management's estimate of useful life. h Investments Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Long term investments are carried at cost. Provision for diminution in value of investment other than temporary is made wherever applicable.

i Transactions in foreign currencies i) Foreign currency transactions are accounted at the exchange rates prevailing on the date of such transactions.

ii) Foreign currency monetary items are retranslated using the exchange rates prevailing at the reporting date. Exchange differences are recognised as income or expense in the period in which they arise.

j Revenue recognition a) Services

i) Course fees and Royalty income is recognized over the duration of the course.

ii) Franchise fees is recognized as per the agreed terms of the agreement. b) Sale of Educational goods and equipments is recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch. c) Interest income is recognised on a time proportion basis taking into account outstanding and the applicable interest rate. k Inventories Educational goods and Equipments are valued at lower of cost or estimated net realizable value. Cost is determined on the basis of weighted average cost. Cost of inventory includes cost of purchase, freight and other expense incurred in bringing the inventories to their present location and condition.

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l Retirement and other employee benefits i) Short-term employee benefits are expensed at the undiscounted amount in the statement of profit and loss in the year employee renders the service.

ii) Post employment and other long term employee benefits are recognised as an expense in the statement of profit and loss in the year the employee renders the service. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of Profit and Loss.

m Accounting for taxes on income i) Current Tax is determined as the amount of tax payable in respect of its taxable income as per the provisions of the Income Tax Act, 1961.

ii) Deferred tax is recognized, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using tax rates and laws enacted.

n Operating Lease Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expense on accrual basis in accordance with the terms of respective lease agreements.

o Earnings Per Share Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive.

p Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

(`in million) 2012 3 Share Capital (a) Authorised 1,000,000,000 equity shares of `1 each 1,000.00 1,000.00 (b) Issued , Subscribed and Paid up 262,738,599 equity shares of `1 each 262.74 Total 262.74 (c) Reconciliation of number of shares and Equity Share capital 2012 Number of equity shares (in million) At the beginning of the period 122.74 122.74 Add : Issue of Shares Pursuant to Scheme of Amalgamation (Refer Note 24) 140.00 140.00 Outstanding at the end of the period 262.74 262.74 (d) Terms/ rights attached to equity shares

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The Company has only one class of equity shares having a par value of `1 each. Each holder of equity shares is entitled to one vote per share. The Company so far has not declared any dividend. The final dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(e) Details of aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years 2012 Number of equity shares in Million Equity Shares Allotted as fully paid for consideration other than cash : As per the Composite Scheme of Arrangement 122.23 As per the Scheme of Amalgamation (Refer Note 24) 140.00 (f) Details of Shareholders holding more than 5 % of the aggregate shares in the Company Name of Shareholders 2012 Number of % shares held in Shareholding Million Jayneer Capital Private Limited. 72.39 27.55% Asian Satellite Broadcast Private Limited. 63.05 24.00% Jayneer Enterprises LLP 15.00 5.71% (g) Employees Stock Option Scheme (ESOP): The Company has instituted an Employee Stock Option Plan (ZLL ESOP 2010) as approved by the Board of Directors and Shareholders of the Company in 2010 for issuance of stock options convertible into equivalent number of equity shares to the employees of the Company and also to non-executive directors including independent directors of the Company at the market price determined as per the SEBI (ESOS) Guidelines, 1999. The said scheme is administered by the Remuneration Committee of the Board.

During the year ended 31 March 2012, the Company granted 1,609,700 stock options to eligible employees and also to non executive directors including independent directors. The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. The options granted vests in the ratio of 50:35:15 at the expiry of one, two and three years from the date of grant and once vested, these would be exercisable at any time within a period of four years and the equity shares arising on exercise of options shall not be subject to any lock in.

The options were granted to the employees at an exercise price, being the latest market price as per the SEBI (ESOS) Guidelines 1999. In view of this, there being no intrinsic value on the date of the grant (being the excess of market price of share under the Scheme over the exercise price of the option), the Company is not required to account the accounting value of options as per the SEBI guidelines.

The details of activity under the Employee Stock Option Plan (ESOP) 2010 are summarised below

2012 Outstanding at the - beginning of the year 1,086,000 - granted during the year 1,609,700 - lapsed during the year 134,500 - exercised during the year - Outstanding at the end of the year 2,561,200

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(`in million) 2012 4 Reserves and Surplus a General Reserve Opening balance 509.05 Add: Adjusted pursuant to the Scheme of Amalgamation* (Refer Note 24) 888.13 1,397.18 b Surplus/(Deficit) in the Statement of Profit and Loss ** Opening balance 18.52 Add : Loss for the year (276.17) (257.65) Total 1,139.53 * As per the Scheme of Amalgamation of Essel Entertainment Media Limited with the Company approved by the Honarable High Court of Judicature at Bombay the General Reserve on amalgamation shall not be used for the purpose of declaring dividend (Refer Note 24) ** In view of the loss incurred during the year Debenture Redemption Reserve aggregating to `250 million has not been created.

(` in million) Non Current Current 2012 2012 5 Long-Term Borrowings Debentures - Secured 375, 12% Secured Redeemable Non-Convertible Debentures of 250.00 125.00 `1,000,000 each fully paid up

Term Loan from Bank - Secured 950.00 -

Intercorporate Deposits from shareholders - Unsecured 122.79 256.53

1,322.79 381.53 The above amount includes: Secured Borrowings 1,200.00 125.00 Unsecured Borrowings 122.79 256.53 Amount disclosed under the head "Other current Liabilities" (note 8) - (381.53) 1,322.79 - a) 12% Debentures are redeemable at par in four equal installments of 25% each beginning the end of 2nd year from the date of allotment, viz 6 January, 2010.Secured by first charge on free hold land, all fixed and current assets including fixed deposits, escrow account, Reserve account, assignment of all benefits under agreement for Operation of school and further DSRA Undertaking by Zee Entertainment Enterprises Limited. b) Term loan from Bank `325 million was taken during the year and carries interest @12.25% (base rate). The loan is repayable in 8 half yearly installments beginning from 30 June, 2013. The loan is secured by first pari passu charge on all the fixed and current assets (present & future) of the company and also reserve account and DSRA Undertaking by Zee Entertainment Enterprises Limited c) Term loan from Bank `300.00million is secured by first charge on entire movable and immovable assets (present & future), entire cash flows, mortgage of leasehold land owned by Taleem Research Foundation and Corporate Guarantee from Essel Infraprojects Limited and Taleem Research Foundation

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2012 d) Term loan of `325 million from Bank was taken during the year and carries interest @3.5% plus base rate. The loan is repayable in 36 quarterly yearly installments beginning from 4th year i.e FY 2015. The loan is secured by first charge on all immovable, movable assets and entire current assets of the Project (present & future), escrow account, hypothecation in favor of lenders of all the present and future rights, titles and interests of the Project from all contracts, insurances, documents, which the company is party to including contracts or letter of credit, guarantee, performance bond provided by any party to the company; pledge of shares in Zee Learn Limited to the extent of 30% of `4,06.70 million and Corporate Guarantee from the Company and non disposal undertaking for 51%shares held by Zee Learn Limited in subsidiary company viz Digital Ventures Private Limited. e) Intercorporate Deposits from shareholders carry interest @ 0% to 13.5% and are repayable after 2-3 years from the respective dates of deposit. (ìn million) Long-Term Short-Term 2012 2012 6. Provisions Provision for employee benefits - for Gratuity 5.49 0.62 - for Leave benefits 4.09 0.46 Others Provision for litigation - 2.71 Provision for taxation (net of advances) - - Total 9.58 3.79 (ìn million) 2012 7. Other Long Term Liabilities Unearned Revenue 2.05 Interest free deposits from customers 1.00 Total 3.05 (ìn million) 2012 8. Current Liabilities Trade Payables- others 177.07 177.07 Other Current Liabilities Current maturities of debentures 125.00 Current maturities of deposits from related parties 256.53 Interest accrued but not due 27.44 Unearned Revenue 59.98 Interest free deposits from customers 0.45 Advance from customers 89.63 Creditors for capital goods 15.59 Statutory dues 36.06 610.66 Total 787.73

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Notes forming part of the Consolidated Financial Statements 9. Fixed Assets (`in million) Description of Assets Gross Block Depreciation/ Amortization Net Block As at 1 April Additions Deductions As at 31 Up to 31 For the year Deductions Up to 31 As at 31 2011 March March March 2012 March 2012 2012 2011 Tangibles Freehold Land* 0.58 64.23 - 64.82 - - - - 64.82 Leasehold Asset 4.50 16.55 - 21.05 1.10 4.30 - 5.39 15.65 Improvements Office Equipments 9.72 33.02 0.62 42.12 1.03 7.77 0.07 8.72 33.39 Computer 18.77 15.88 0.41 34.25 2.25 4.74 0.13 6.86 27.39 Furniture and Fixtures 3.26 2.58 0.01 5.82 0.53 1.15 0.00 1.68 4.15 Vehicles 0.66 - 0.66 - 0.06 0.05 0.12 - - Total 37.49 132.26 1.71 168.05 4.97 18.01 0.32 22.65 145.39 Intangibles Content Development 2.73 25.76 - 28.50 0.89 7.75 - 8.64 19.86 Softwares 12.96 0.79 - 13.75 1.63 4.45 - 6.08 7.67 Total 15.69 26.55 - 42.25 2.53 12.20 - 14.72 27.53 Capital Work in Progress 691.28 Intangible assets under 1,245.98 development** *The title of the Freehold land `0.58 million (acquired pursuant to the Composite Scheme of Arrangement) is in the process of transfer in the name of the Company ** Intangible assets under development consists of amount paid towards development rights with underlying rights of a deemed owner and includes borrowing costs of `56.60 million

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Notes forming part of the Consolidated Financial Statements (`in million ) 2012 10 Non Current Investments In National Savings Certificate 0.01 (Pledged with Sales Tax Authorities) Total 0.01

11 a) Deferred Tax Asset In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income" (AS 22) issued by ICAI, deferred tax assets and liabilities should be recognized for all timing differences in accordance with the said standard. However, considering the present financial position and requirement of the accounting standard regarding certainty / virtual certainty, deferred tax asset of `102.04 million for the year is not provided. However, the same will be reassessed at a subsequent balance sheet date and will be accounted for in the year of certainty / virtual certainty in accordance with the aforesaid accounting standard (`in million) 2012 Deferred Tax Assets Arising on account of timing differences in Employee 1.35 Retirement Benefit Provision for doubtful debts 10.06 Allowable on payment basis 1.01 Depreciation 0.83 Total 13.25 Deferred Tax Liabilities - Deferred Tax Assets (Net) 13.25 b) Current Tax In view of losses, no provision for current tax is made as per provisions of the Income-Tax Act, 1961.

(`in million) Long- Term Short-Term

2012 2012 12. Loans and Advances Capital Advances 215.32 - Security Deposits Unsecured considered good 597.99 1.23 Doubtful - 1.44 Less: Provision for doubtful deposit - (1.44) 597.99 1.23 Loans and Advances to Related Parties 258.70 5.78 Other loans and advances Loans to employees - 0.49 Advances, unsecured and considered good - 8.31 Prepaid expenses 0.17 2.54 Balance with government authorities Advance Direct Taxes - 1.78 Advance Indirect Taxes - 15.28 Total 1,072.18 35.40

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(`in million) Non Current 2012 Current 2012

13. Other Assets Unamortized expenditure Preliminary expenses 0.36 - Interest accrued on deposits - 0.64 Deposit with banks maturity more than 12 Months * (Refer Note 16) 22.79 - Total 23.15 0.64 * Pledged `0.05 million with sales tax authorities and `22.74 million as Security for Debentures (`in million) 2012 14. Inventories Finished Goods (valued at lower of cost or estimated net realisable value) Educational Goods and Equipments 87.29 Total 87.29

(`in million) 2012 15. Trade Receivables Over six months Unsecured, considered good 14.01 Unsecured, considered Doubtful 24.23 Others Unsecured, considered good 28.76 Unsecured, considered Doubtful 4.67 71.67 Less: Provision for doubtful receivables 28.90 Total 42.77

(`in million) Non Current 2012 Current 2012 16. Cash and Bank Balances Cash and Cash Equivalent Balances with Banks - in currrent accounts - 133.42 Cash in Hand - 0.13 - 133.55 Other bank balances Balances with Banks - - in Short term bank deposits - 10.79 - in Deposit with banks maturity more than 12 Months 22.79 - Amount disclosed under the head "Other current assets" (Refer (22.79) - Note 13) Total - 144.34 (`in million) 2012 17. Revenue from Operations Sales - Educational Goods and Equipments 264.08 Services - Education and Other Services - Course Fees/Royalty 177.33 - Franchisee Fee 161.85 - Others 5.18 Other Operating Revenue 1.58 Total 610.03

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(`in million) 2012 18. Other Income Interest on Bank Deposits 2.78 Net gain on exchange difference 0.07 Liabilities/excess provision written back (net) 3.41 Total 6.27

(`in million) 2012 19. Cost of Material / Operational Expenses a) Cost of Material (Educational Goods and Equipments) Opening 46.15 Add: Purchases 183.17 229.32 Less: Closing 87.29 142.03 b) Operational Expenses (EducationCenter Operation Expenses) 31.08 Total 173.11

(`in million) 2012 20. Employee Benefits expense Salaries and allowances 227.14 Contribution to provident and other funds 4.24 Training and Recuritment cost 17.76 Staff Welfare expenses 2.48 Total 251.61

(`in million) 2012 21. Other Expenses Rent 25.89 Repairs and Maintenance - Others 12.97 Insurance 0.77 Rates and Taxes 2.72 Electricity and Water charges 5.06 Communication expenses 12.63 Printing and Stationery 2.80 Travelling and Conveyance expenses 49.39 Vehicle expenses 2.30 Legal and Professional charges 10.51 Payment to Auditor (Refer Note 33) 1.36 Bad Debts and Advances written off 27.84 Less: Provision written back 27.74 0.11 Provision for doubtful debts and advances 23.95 Loss on sale / discard of fixed assets 1.34 Share issue and preliminary expenses written off - Advertisement and Publicity expenses 232.70 Bank charges 0.27 Freight charges 11.75 Miscellaneous expenses 6.89 Total 403.43

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(`in million) 2012 22. Finance Cost Interest on Loan 8.60 Interest on Others 18.68 Processing fees 5.15 Total 32.42 (`in million) 2012 23. Depreciation and amortization expense Depreciation on tangible assets 18.01 Amortization on intangible assets 12.20 Total 30.21

24 Scheme of Amalgamation of Essel Entertainment Media Limited (EEML) and the Company i. The Scheme of Amalgamation of EEML with the Company u/s 391 to 394 of the Companies Act, 1956 is approved by the Hon'ble High Court of Bombay on 17 June, 2011 and upon filing the said order with the Registrar of Companies, Maharashtra on 30 June, 2011, the said scheme became effective on and from that date ii. The scheme has been given effect in these financial statements and in pursuant to the said Scheme:

(a) The said approved Scheme of Amalgamation has been given effect in these financial statements as per the "pooling of interest method" as prescribed by Accounting Standard 14 "Accounting for Amalgamations". Accordingly the assets and liabilities of the transferor company i.e. EEML is vested and transferred to the Company at book values on the appointed date i.e. close of 31 March, 2011

(b) 1 (One) fully paid up equity share of `1 each of the Company is issued and allotted to the shareholders of EEML for every 5 (Five) equity shares of `1 each held by them in EEML i.e the Company has issued 140 million shares

(c) The difference between transferred assets and liabilities and expenses incurred on amalgamation is adjusted against General Reserve, as detailed below:

(`in million)

Investments 0.10 Current Assets, Loans and advances 1,060.00 Cash and Bank Balances 0.32 Total Assets 1,060.42 Unsecured Loans 6.92 Current Liabilities and Provisions 0.38 Total Liabilities 7.30 Net Assets 1,053.12 Less: Shares issued and allotted to the shareholders of EEML 140.00 Less: Amalgamation expenses 24.99 Surplus taken to General Reserve 888.13 25 Operating Leases: The Company has taken office, residential facilities,plant and machinery (including equipments) and land etc. on lease under cancellable/non-cancellable agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The initial tenure of the lease generally is for 11 months to 33months (`in million) 2012 a) Lease rental charges for the year 36.19

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b) Future Lease rental obligation payable (Under non-cancellable lease) - Not later than one year 36.93 Later than one year but not later than five year 116.01 26 Related Party Transactions (i) Other Related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year. Cyquator Media Services Private Limited, E-City Project Constructions Private Limited, Essel Infraprojects Limited, Essel Sports Private Limited, Himgiri Nabh Vishwavidhyalaya, Pan India Infrastructures Private Limited, Pan India Paryatan Private Limited, Pan India Network Infravest Private Limited, Packaging India Private Limited; Premier Finance and Trading Company Limited, TALEEM Research Foundation, Wire and Wireless India Limited, Zee Entertainment Enterprises Limited, Zee News Limited. Directors / Key Management Personnel Mr. Himanshu Mody, Mr. Sumeet Mehta Transactions with Related Parties (`in million) 2012 A) Transactions with Other Related Parties Intercorporate Deposits from shareholders (unsecured) 372.92 Essel Infraprojects Limited 2.40 Premier Finance and Trading Company Limited 370.53 Capital advances given 142.70 Essel Sports Private Limited 142.70 Repayment of Intercorporate Deposits from shareholders (unsecured) 155.00 Premier Finance and Trading Company Limited 155.00 Loans, advances and deposits given 16.00 E-City Project Constructions Private Limited 16.00 Interest expense 21.51 Premier Finance and Trading Company Limited 21.51 Other Expenses 27.91 E-City Project Constructions Private Limited 20.07 Packaging India Private Limited 0.77 Pan India Network Infravest Private Limited 1.38 Pan India Paryatan Private Limited 2.09 Cyquator Media Services Private Limited 0.10 Zee Entertainment Enterprises Limited 2.65 Zee News Limited 0.85 Purchase of Fixed Assets 152.20 Essel Sports Private Limited 152.20 B) Balances outstanding Unsecured Loans taken 388.64 Premier Finance and Trading Company Limited 256.53 Essel Infraprojects Limited 132.11 Loans, Advances and Deposits 264.48 Himgiri Nabh Vishwavidhyalaya 90.00 Zee News Limited 0.79 E-City Project Constructions Private Limited 16.00 Taleem Research Foundation 10.00 Essel Sports Private Limited 142.70 Zee Entertainment Enterprises Limited 4.98 Sundry Creditors 0.35 Pan India Network Infravest Private Limited 0.22 E-City Project Constructions Private Limited 0.13 Interest Accrued but not Due 20.83 Premier Finance and Trading Company Limited 20.83

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For managerial remuneration refer note 32 (`in million) 27 Contingent Liabilities 2012 (a) Claims against the Company not acknowledged as debts 6.99 (b) Disputed Indirect Taxes 19.81 (c) Corporate guarantee for subsidiaries to the extent of loans availed/outstanding 11.14

28 Capital and other commitments (a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is `1,503.66 million. (b) Non disposal undertaking for 51% shares held by the Company in Digital Ventures Private Limited for loan taken by subsidiary Company.

29 Earnings Per Share (EPS) 2012 (a) Profit/ (Loss) after Tax (`) (276.20) (b) Weighted Average number of equity shares for Basic EPS (Nos.) 262.74 (c ) Weighted Average number of equity shares for Diluted EPS (Nos.) 262.74 (d) Nominal value of equity shares (`) 1 (e) Basic EPS (1.05) (f) Diluted EPS (1.05)

30 Deposits shown in Note 12 includes `240 million being refundable security deposits paid by the Company against school operating rights under two arrangements

31 Payments to the auditor For Standalone 2012 Audit fees 1.00 Tax Audit Fees 0.15 Tax Representation 0.05 Certification Services - Total 1.20 For Subsidiary 2012 Audit fees 0.17 Total 0.17

32 Managerial Remuneration Remuneration paid or provided to Whole-time Director, included in Employee benefits expense is as under: 2012 Salary and Allowances 9.93 Provident fund contributions 0.52 Perquisites 0.32 Total 10.76 Maximum permissible remuneration to Managing Director as per Schedule XIII 4.80 (excluding Provident fund contribution) Excess Remuneration paid 5.44 Remuneration as per Central Government approval#

#In respect of remuneration payable to the Whole-time Director in excess of the limits prescribed under section 198 read with Schedule XIII, the Company has applied for approval from the Central Government which is still pending.

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Note: Salary and Allowances includes basic salary, house rent allowance, leave travel allowance and performance bonus but excluding leave encashment and gratuity provided on the basis of actuarial valuation. 33 The subsidiary has acquired lands at four locations on lease for the purposes of setting up educational institutions. The civil work for construction of the buildings is in progress. The development right acquired by the Company is also for the said purpose. 34 Projects under execution A development agreement dated 5 January 2010 on BOT basis for constructing a building to set up an educational institution had been entered into by and between the Company and Taleem Research Foundation (Taleem). The Company had undertaken to develop a piece and parcel of land given for eighty years on lease to Taleem by MMRDA, Bandra Mumbai vide lease deed dated. 16 December 2009. In consideration of a lumpsum development fee of `1,050 million had been paid within six months from 5 January 2010 and an annual fee of `3 lakhs, the company will have development rights for 30 years w.e.f. 1 January 2010. The civil work is going on and a sum of `1,269.8 million had been spent thereon excluding ` 1,050 million given as development fee. Further the Company has also undertaken new projects at three locations by acquiring the leased lands and further project execution works relating thereto are underway. 35 Comparatives a) Digital Ventures Private Limited has become subsidiary of the company from this financial year. This being the first year of consolidation the previous year figures are not applicable b) Schedule VI to the Companies Act, 1956 is revised and has become effective from 1 April 2011. This has significantly impacted the disclosure and presentation made in the financial statements.

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CONSOLIDATED CASHFLOW STATEMENT FOR THE YEARS ENDED MARCH 31, 2012

2012 A. Cash Flow from Operating Activities Net Profit/ (Loss) before tax (274.49) Adjustments for: Depreciation / Amortisation 30.21 Interest Income (5.61) Net gain on exchange difference (0.07) Interest expense 30.13 Provision for doubtful debts (net) (3.78) Loss on sale / discard of fixed assets 1.34 Operating Profit before Working Capital Changes (222.28) Adjustments for: Decrease / (Increase) in trade and other receivables (141.70) Decrease / (Increase) in inventories (87.29) Increase / (Decrease) in Trade and other payables 131.15 Cash Generated from Operations (320.11) Direct Taxes paid (5.83) Net Cash from Operating Activities (A) (325.94) B. Cash Flow from Investing Activities Purchase of fixed assets (including Capital Work in Progress) (358.18) Sale of fixed assets 0.04 Interest received 3.76 Investments in bank deposits (having original maturity of more than 12 (7.07) months) Net Cash from Investing Activities (B) (361.44) C. Cash Flow from Financing Activities Proceeds from Issue of Share capital - Proceeds from long-term borrowings 697.72 Proceeds from short-term borrowings 215.53 Repayment of short-term borrowings (125.00) Interest paid (7.00) Net Cash from Financing Activities ( C ) 781.24 Net Changes in Cash and Cash Equivalent (A+B+C) 93.86 Cash and Cash Equivalents at the beginning of the year 50.48 Cash and Cash Equivalents at the end of the period 144.34 1 Previous year's figures have been regrouped, recast wherever necessary. 2 Scheme of Amalgamation is not considered in the above cash flow statement, being non cash transaction. Components of cash and cash equivalents Cash in hand 0.13 Balance with Scheduled Banks in - Current Accounts 133.42 - Fixed Deposits 10.79 Total cash and cash equivalents 144.34

As per our attached report of even date For and on behalf of the Board

For MGB & Co. Chartered Accountants Sumeet Mehta Himanshu Mody Whole-time Director Chairman

Sanjay Kothari Partner Arun Kabra Samir Raval Chief Financial Officer Company Secretary

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STANDALONE BALANCE SHEET FOR THE YEARS ENDED MARCH 31, 2012

(`in million) Note 2012 2011 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 3 262.74 122.74 Reserves and Surplus 4 1,139.91 527.58 1,402.65 650.31 Non-Current Liabilities Long-Term Borrowings 5 584.32 416.00 Long-Term Provisions 6 9.58 3.87 Other Long-Term Liabilities 7 3.05 1.58 596.95 421.44 Current Liabilities Trade Payables 8 176.24 80.54 Other Current Liabilities 8 593.05 225.19 Short-Term Provisions 6 3.79 5.04 773.08 310.77 Total 2,772.68 1,382.53

ASSETS Non-Current Assets Fixed Assets Tangible assets 9 81.16 32.53 Intangible assets 9 27.53 13.17 Capital work-in-progress 9 0.86 0.64 Intangible assets under development 9 195.98 112.95 305.52 159.28 Non-Current Investments 10 0.11 0.01 Deferred Tax Assets (net) 11 13.25 13.25 Long-Term Loans and Advances 12 1,177.75 1,060.10 Other Non-Current Assets 13 25.34 15.72 1,216.44 1,089.08 Current Assets Inventories 14 87.29 46.15 Trade Receivables 15 42.77 31.00 Cash and Bank Balances 16 71.81 43.96 Short-Term Loans and Advances 12 1,048.20 11.72 Other Current Assets 13 0.64 1.34 1,250.71 134.17 Total 2,772.68 1,382.53 Notes forming part of the financial statements 1-37

As per our attached report of even date For and on behalf of the Board

For MGB & Co. Chartered Accountants

Sumeet Mehta Himanshu Mody Whole-time Director Chairman Sanjay Kothari Partner

Place: Mumbai Arun Kabra Samir Raval Date: 16 May, 2012 Chief Financial Officer Company Secretary

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PROFIT AND LOSS STATEMENT FOR THE YEARS ENDED MARCH 31, 2012

(`in million) Note 2012 2011 Revenue Revenue from Operations 17 610.03 427.48 Other Income 18 9.10 9.51 Total 619.12 436.98 Expenses Cost of materials 19 142.03 89.49 Operational expenses 19 31.08 24.64 Employee benefits expense 20 251.61 129.58 Other expenses 21 403.07 159.05 Finance cost 22 35.23 1.28 Depreciation and amortization expense 23 30.21 7.53 Total 893.23 411.56 Profit / (Loss) before tax (274.11) 25.42 Tax expense: Current tax- Current year - 7.78 - Earlier years 1.68 - Deferred tax - (0.88) Profit / (Loss) for the year (275.79) 18.52 Earnings per equity share of face value of `1 each Basic and Diluted 32 (1.05) 0.19 Notes forming part of the financial statements 1-37

As per our attached report of even date For and on behalf of the Board

For MGB & Co. Chartered Accountants

Sumeet Mehta Himanshu Mody Whole-time Director Chairman Sanjay Kothari Partner

Place: Mumbai Arun Kabra Samir Raval Date: 16 May, 2012 Chief Financial Officer Company Secretary

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ZEE LEARN LIMITED

Notes forming part of the Financial Statements

1 Background Zee Learn Limited ("the Company") was incorporated in State of Maharashtra on 4 January, 2010. The Company is one of the most diversified premium education companies which delivers learning solutions and training through its multiple products viz. Kidzee, Mount Litera Zee Schools, Braincafe, Mount Litera World Preschool, Zee Institute of Media Arts (ZIMA), Zee Institute of Creative Arts (ZICA) and E - Learning Online Education and Testing.

2 Significant Accounting Policies a Basis of Preparation of financial statements These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis and comply in all material aspects with the accounting standards notified under Section 211 (3C), Companies(Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). b Use of Estimates The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as of the date of the financial statements and the reported amount of revenue and expenses of the year. Actual results could differ from these estimates. Any revision to estimates is recognised prospectively in current and future periods. c Tangible fixed assets (i) Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost includes all expenses incurred to bring the assets to its present location and condition.

(ii) Capital work in progress comprises cost of fixed assets and related expenses that are not yet ready for their intended use at the reporting date. d Intangible assets (i) Intangible assets are recognised in the year it is put to use at cost. Intangible assets are carried at cost less accumulated amortization and accumulated impairment loss if any.

(ii) Intangible assets under development comprises of purchase price, borrowing cost and directly attributable cost incurred on asset that are not ready for their intended use at the reporting date. e Borrowing Costs Borrowing Costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as a part of the cost of respective asset. All other borrowing costs are expenses in the period they occur. f Impairment of tangible and intangible assets At each Balance Sheet date, the Company reviews the carrying amount of fixed assets to determine whether there is an indication that those assets have suffered impairment loss. If any such indication exists, the recoverable amount of assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value. g Depreciation on tangible assets (i) Depreciation on fixed assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 except Training equipments which is amortized on straight line basis over a period of three years based on management‘s estimate of useful life

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(ii) Leasehold Improvements are amortized over the period of Lease. h Amortization on intangible assets Intangible assets are amortized on straight line basis, based on management's estimate of useful life. i Investments Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Long term investments are carried at cost. Provision for diminution in value of investment other than temporary is made wherever applicable . j Transactions in foreign currencies (i) Foreign currency transactions are accounted at the exchange rates prevailing on the date of such transactions. (ii) Foreign currency monetary items are retranslated using the exchange rates prevailing at the reporting date. Exchange differences are recognised as income or expense in the period in which they arise. k Revenue recognition (i) Services (a) Course fees and Royalty income is recognized over the duration of the course.

(b) Franchise fees is recognized as per the agreed terms of the agreement.

(ii) Sales- Educational goods and equipments is recognized when the risk and rewards of ownership are passed onto the customers, which is generally on dispatch.

(iii) Interest income is recognised on a time proportion basis taking into account outstanding and the applicable interest rate. l Inventories Educational goods and Equipments are valued at lower of cost or estimated net realizable value. Cost is determined on the basis of weighted average cost. Cost of inventory includes cost of purchase, freight and other expense incurred in bringing the inventories to their present location and condition. m Retirement and other employee benefits (i) Short-term employee benefits are expensed at the undiscounted amount in the statement of profit and loss in the year employee renders the service.

(ii) Post employment and other long term employee benefits are recognised as an expense in the statement of profit and loss in the year the employee renders the service. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of Profit and Loss. n Accounting for taxes on income (i) Current Tax is determined as the amount of tax payable in respect of its taxable income as per the provisions of the Income Tax Act, 1961.

(ii) Deferred tax is recognized, subject to consideration of prudence in respect of deferred tax asset, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and measured using tax rates and laws enacted. o Operating Lease

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Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expense on accrual basis in accordance with the terms of respective lease agreements. p Earnings Per Share Basic earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the period. Dilutive earnings per share is computed and disclosed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period, except when the results would be anti-dilutive. q Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

(`in million) 2012 2011 3 Share Capital a) Authorised 1,000,000,000 (150,000,000) Equity 1,000.00 150.00 Shares of `1 each 1,000.00 150.00 b) Issued , Subscribed and Paid up 262,738,599 (122,738,599) Equity Shares 262.74 122.74 of `1 each Total 262.74 122.74 c) Reconciliation of number of shares and Equity Share capital (`in million) 2012 2011 Number of Number of equity shares equity shares At the beginning of the period 122,738,599 122.74 500,000 0.50 Add : Issue of Shares Pursuant to the - - 122,238,599 122.24 Composite Scheme of Arrangement Add : Issue of Shares Pursuant to Scheme of 140,000,000 140.00 - - Amalgamation (Refer Note 24) Outstanding at the end of the period 262,738,599 262.74 122,738,599 122.74 d) Terms/ rights attached to equity shares The Company has only one class of equity shares having a par value of `1 each. Each holder of equity shares is entitled to one vote per share. The final dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Company so far has not declared any dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. (e) Details of aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years 2012 2011 Number of equity Number of equity shares shares Equity Shares allotted as fully paid for consideration other than cash :

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2012 2011 As per the Composite Scheme of Arrangement 122,238,599 122,238,599 As per the Scheme of Amalgamation (Refer Note 24) 140,000,000 - (f) Details of Shareholders holding more than 5 % of the aggregate shares in the Company Name of Shareholders 2012 2011 Number of % Number of % shares held Shareholding shares held Sharehold ing Premier Finance and Trading Company - - 12,698,648 10.35% Limited Delgrada Limited - - 12,861,036 10.48% Jayneer Capital Private Limited. 72,391,275 27.55% - - Asian Satellite Broadcast Private Limited. 63,052,512 24.00% - - Jayneer Enterprises LLP 15,000,000 5.71% - - (g) Employees Stock Option Scheme (ESOP): The Company has instituted an Employee Stock Option Plan (ZLL ESOP 2010) as approved by the Board of Directors and Shareholders of the Company in 2010 for issuance of stock options convertible into equivalent number of equity shares to the employees of the Company and also to non-executive directors including independent directors of the Company at the market price determined as per the SEBI (ESOS) Guidelines, 1999. The said scheme is administered by the Remuneration Committee of the Board.

The details of activity under the Employee Stock Option Plan (ESOP) 2010 are summarised below:

2012 2011 Outstanding at the - beginning of the year 1,086,000 - - granted during the year 1,609,700 1,107,000 - lapsed during the year 134,500 21,000 - exercised during the year - - Outstanding at the end of the year 2,561,200 1,086,000 2012 2011 4 Reserves and Surplus a) General Reserve As per last Balance Sheet 509.05 - Add: Adjusted pursuant to the Scheme of 888.13 - Amalgamation* (Refer Note 24) Add: Adjusted pursuant to the Composite Scheme of - 509.05 Arrangement 1,397.18 509.05 b) Surplus/(Deficit) in the Statement of Profit and Loss ** As per last Balance Sheet 18.52 -

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2012 2011 Add : Profit/(Loss) for the year (275.79) 18.52 (257.27) 18.52 Total 1,139.91 527.58 * As per the Scheme of Amalgamation of Essel Entertainment Media Limited with the Company approved by the Honarable High Court of Judicature at Bombay the General Reserve on amalgamation shall not be used for the purpose of declaring dividend (Refer Note 24)

** In view of the loss incurred during the year Debenture Redemption Reserve aggregating to `250 million (`125 million) has not been created. (`in million) Non Current Current 2012 2011 2012 2011 5 Long-Term Borrowings Debentures - Secured 375 (500), 12% Secured Redeemable Non- 250.00 375.00 125.00 125.00 Convertible Debentures of `1,000,000 each fully paid up Term Loan from Bank- Secured 325.00 - - - Intercorporate Deposits from shareholders- 9.32 41.00 256.53 - Unsecured 584.32 416.00 381.53 125.00 The above amount includes: Secured Borrowings 575.00 375.00 125.00 125.00 Unsecured Borrowings 9.32 41.00 256.53 - Amount disclosed under the head "Other - - (381.53) (125.00) Current Liabilities" (Refer Note 8) Total 584.32 416.00 - - a) 12% Debentures are redeemable at par in four equal installments of 25% each beginning at the end of 2nd year from the date of allotment, viz 6 January, 2010. Secured by first charge on free hold land, all fixed and current assets including fixed deposits, escrow account, Reserve account, assignment of all benefits under agreement for Operation of school and further DSRA Undertaking by Zee Entertainment Enterprises Limited. b) Term loan from Bank carries interest @12.25% (base rate). The loan is repayable in 8 half yearly installments beginning from 30 June, 2013. The loan is secured by first pari passu charge on all the fixed and current assets (present & future) of the company and also reserve account and DSRA Undertaking by Zee Entertainment Enterprises Limited c) Intercorporate Deposits from shareholders carry interest @ 0% to 13.5% and are repayable after two years from the respective dates of deposit

(`in million) Long- Term Short- Term 2012 2011 2012 2011 6 Provisions Provision for employee benefits - Gratuity 5.49 2.45 0.62 0.27 - Leave benefits 4.09 1.42 0.46 0.16 Others Provision for litigation - - 2.71 2.71 Provision for taxation (net of advances) - - - 1.90 Total 9.58 3.87 3.79 5.04

2012 2011 7 Other Long Term Liabilities

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Unearned Revenue 2.05 0.58 Interest free deposits from customers 1.00 1.00 Total 3.05 1.58

2012 2011 8 Current Liabilities Trade Payables 176.24 80.54 176.24 80.54 Other Current Liabilities Current maturities of debentures 125.00 125.00 Current maturities of Inter-corporate Deposits from shareholders 256.53 Interest accrued but not due 24.18 1.06 Unearned Revenue 59.98 34.90 Interest free deposits from customers 0.45 4.16 Advance from customers 89.63 51.10 Creditors for capital goods 7.06 4.22 Statutory dues 30.22 4.75 593.05 225.19 Total 769.29 305.73

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9. Fixed Assets (`in million) Gross Block Depreciation/ Amortization Net Block As at 31 Up to 31 Up to 31 As at 31 Description of Assets As at 1 For the As at 31 Additions Deductions March March March March April 2011 year Deductions March 2011 2012 2011 2012 2012 Tangibles Freehold Land* 0.58 - - 0.58 - - - - 0.58 0.58 Leasehold Asset 4.50 16.55 - 21.05 1.10 4.30 - 5.39 15.65 3.40 Improvements Equipments 9.72 33.02 0.62 42.12 1.03 7.77 0.07 8.72 33.39 8.69 Computer 18.77 15.88 0.41 34.25 2.25 4.74 0.13 6.86 27.39 16.52 Furniture and Fixtures 3.26 2.58 0.01 5.82 0.53 1.15 0.00 1.68 4.15 2.74 Vehicles 0.66 - 0.66 - 0.06 0.05 0.12 - - 0.60 Total 37.49 68.03 1.71 103.81 4.97 18.01 0.32 22.65 81.16 32.53 Previous year - 37.56^ 0.07 37.49 - 5.00 0.03 4.97 32.53 -

Intangibles Content Development 2.73 25.76 - 28.50 0.89 7.75 - 8.64 19.86 1.84 Softwares 12.96 0.79 - 13.75 1.63 4.45 - 6.08 7.67 11.33 Total 15.69 26.55 - 42.25 2.53 12.20 - 14.72 27.53 13.17 Previous year - 12.01^ - 15.69 - 2.53 - 2.53 13.17 -

Capital Work in Progress 0.86 0.64

Intangible assets under 195.98 112.95 development**

*The title of the Freehold land (acquired pursuant to the Composite Scheme of Arrangement) is yet to be transferred in the name of the Company and is mortgaged against the Secured Debentures. **Intangible assets under development includes Borrowing Cost of `56.60 million (`60 million) ^ includes `21.03 million acquired pursuant to the Composite Scheme of Arrangement

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(`in million) 2012 2011 10 Non Current Investments (i) Trade Investments (valued at cost unless stated otherwise) In Subsidiaries- Wholly Owned- Unquoted* 10,000 (Nil) Equity shares of `10 each of Digital Ventures Private 0.10 - Limited (ii) Others- Unquoted In National Savings Certificate 0.01 0.01 (Pledged with Sales Tax Authorities) Total 0.11 0.01 * Non disposal undertaking for 51% shares held by the Company for loan taken by subsidiary Company viz Digital Ventures Private Limited 11 a) Current Tax In view of losses, no provision for current tax is made as per provisions of the Income-Tax Act, 1961. b) Deferred tax balances are as under:- In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income" (AS 22) issued by ICAI, deferred tax assets and liabilities should be recognized for all timing differences in accordance with the said standard. However, considering the present financial position and requirement of the accounting standard regarding certainty / virtual certainty, deferred tax asset (net) of `102,044,800 for the year is not provided. However, the same will be reassessed at a subsequent balance sheet date and will be accounted for in the year of certainty / virtual certainty in accordance with the aforesaid accounting standard (`in million) 2012 2011 Deferred Tax Assets Arising on account of timing differences in Employee Retirement 1.35 1.35 Benefit Provision for doubtful debts 10.06 10.06 Allowable on payment basis 1.01 1.01 Depreciation 0.83 0.83 13.25 13.25 Deferred Tax Liabilities - - Deferred Tax Assets (Net) 13.25 13.25

(`in million) Long-Term Short-Term 2012 2011 2012 2011 12 Loans and Advances Capital Advances 755.96 751.52 - - Security Deposits Unsecured considered good 7.49 308.58 1.23 1.26 Unsecured considered doubtful - - 1.44 0.91 7.49 308.58 2.67 2.17 Less: Provision for doubtful deposit - - 1.44 0.91 7.49 308.58 1.23 1.26 Advance Share Application money given to 50.00 - 1,010.00 - subsidiary Loans, Advances and Deposits to related parties 364.13 - 5.78 5.10 Other loans and advances Advances Unsecured and considered good - - 8.79 3.38 Unsecured and considered doubtful - - - 1.27 - - 8.79 4.65

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Long-Term Short-Term 2012 2011 2012 2011 Less: Provision for doubtful advances - - - 1.27 - - 8.79 3.38 Prepaid expenses 0.17 - 2.34 1.70 Balances with government authority Advance Direct Taxes (net of provisions) - - 1.73 - Advance Indirect Taxes - - 18.33 0.28 Total 1,177.75 1,060.10 1,048.20 11.72

(`in million) Non Current Current 2012 2011 2012 2011 13 Other Assets Interest accrued but not due 2.55 - 0.64 1.34 Deposits with Banks (Refer Note 16)* 22.79 15.72 - -

Total 25.34 15.72 0.64 1.34 * Pledged `0.05 million (`0.05 million) with sales tax authorities and `22.74 million (`15.14 million) as Security for Debentures

(`in million) 2012 2011 14 Inventories Finished Goods (valued at lower of cost or estimated net realisable value) Educational Goods and Equipments 87.29 46.15 Total 87.29 46.15

15 Trade Receivables Over six months Unsecured, considered good 14.01 1.98 Unsecured, considered Doubtful 24.23 31.33 Others Unsecured, considered good 28.76 29.02 Unsecured, considered Doubtful 4.67 0.62 71.67 62.95 Less: Provision for doubtful receivables 28.90 31.95 Total 42.77 31.00

Non Current Current 2012 2011 2012 2011 16 Cash and Bank Balances Cash and Cash Equivalents Balances with Banks - in current accounts - - 60.96 23.46 Cash in Hand - - 0.06 0.09 - - 61.03 23.55 Other bank balances Balances with Banks - - - - - in Short term bank deposits - - 10.79 20.41 in Deposit with banks maturity more than 12 22.79 15.72 - - Months Amount disclosed under the head "Other (22.79) (15.72) - -

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Non Current Current 2012 2011 2012 2011 Assets" (Refer Note 13) Total - - 71.81 43.96

17 Revenue from operations Sales - Educational Goods and Equipments 264.08 176.82 Services - Education and Other Services - Course Fees/Royalty 177.33 113.16 - Franchisee Fees 161.85 129.74 - Others 5.18 6.38 Other Operating Revenue 1.58 1.37 Total 610.03 427.48

18 Other Income Interest Income - from Bank Deposits 2.78 6.35 - from Others 2.83 - Net gain on exchange difference 0.07 - Liabilities/excess provision written back (net) 3.41 3.16 Total 9.10 9.51

19 Cost of Material / Operational Expenses a) Cost of Material (Educational Goods and Equipments) Opening 46.15 - Add: Acquired Pursuant to the Composite - 29.09 Scheme of Arrangement Add: Purchases 183.17 106.55 229.32 135.64 Less: Closing 87.29 46.15 Total 142.03 89.49 b) Operational Expenses (Education Center 31.08 24.64 Operation Expenses) Total 173.11 114.13

20 Employee benefits expense Salaries and allowances 227.14 108.86 Contribution to provident and other funds 4.24 3.57 Training and Recruitment cost 17.76 9.18 Staff Welfare expenses 2.48 7.97

Total 251.61 129.58 21 Other expenses Rent 25.89 11.02 Repairs and Maintenance - Others 12.97 2.31 Insurance 0.77 0.96 Rates and Taxes 2.72 3.92 Electricity and Water charges 5.06 3.36 Communication expenses 12.63 7.35 Printing and Stationery 2.80 2.62 Travelling and Conveyance expenses 49.39 24.29 Vehicle expenses 2.30 3.41 Legal and Professional charges 10.46 8.22 Payment to Auditor (Refer note 36) 1.20 2.12

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Non Current Current 2012 2011 2012 2011 Bad Debts and Advances written off 27.84 - - Less: Provision written back 27.74 0.11 - Provision for doubtful debts and advances 23.95 1.22 Loss on sale / discard of fixed assets 1.34 0.03 Share issue and preliminary expenses written off - 0.02 Advertisement and Publicity expenses 232.68 76.61 Bank charges 0.25 0.18 Freight charges 11.75 5.71 Miscellaneous expenses 6.80 5.69 Total 403.07 159.05

22 Finance cost Interest on Loan 8.60 - Interest on Others 21.51 1.28 Processing fees 5.12 - Total 35.23 1.28 23 Depreciation and amortization expense Depreciation on tangible assets 18.01 5.00 Amortization on intangible assets 12.20 2.53 Total 30.21 7.53

24 Scheme of Amalgamation of Essel Entertainment Media Limited (EEML) and the Company (i) The Scheme of Amalgamation of EEML with the Company u/s 391 to 394 of the Companies Act, 1956 is approved by the Hon'ble High Court of Bombay on 17 June, 2011 and upon filing the said order with the Registrar of Companies, Maharashtra on 30 June, 2011, the said scheme became effective on and from that date

(ii) The scheme has been given effect in these financial statements and in pursuant to the said Scheme: (a) The said approved Scheme of Amalgamation has been given effect in these financial statements as per the "pooling of interest method" as prescribed by Accounting Standard 14 "Accounting for Amalgamations". Accordingly the assets and liabilities of the transferor company i.e. EEML is vested and transferred to the Company at book values on the appointed date i.e. close of 31 March, 2011 (b) (One) fully paid up equity share of `1 each of the Company is issued and allotted to the shareholders of EEML for every 5 (Five) equity shares of `1 each held by them in EEML i.e. the Company has issued 140,000,000 shares (c) The difference between transferred assets and liabilities and expenses incurred on amalgamation is adjusted against General Reserve, as detailed below:

(`in million) Investments 0.10 Current Assets, Loans and advances 1,060.00 Cash and Bank Balances 0.32 Total Assets 1,060.42 Unsecured Loans 6.92 Current Liabilities and Provisions 0.38 Total Liabilities 7.30 Net Assets 1,053.12 Less: Shares issued and allotted to shareholders of EEML 140.00 Less: Amalgamation expenses 24.99 Surplus taken to General Reserve 888.13

25 Operating Leases: The Company has taken office, residential facilities and plant and machinery (including equipments)

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etc. on lease under cancellable/non-cancellable agreements that are renewable on a periodic basis at the option of both the lessee and the lessor. The initial tenure of the lease generally is for 11 months to 60 months. 2012 2011 a) Lease rental charges for the year 32.89 18.29 b) Future Lease rental obligation payable (Under non-cancellable lease) Not later than one year 20.73 5.15 Later than one year but not later than five year 25.84 2.63

26 Managerial Remuneration Remuneration paid or provided to Whole-time Director, included in Employee benefits expense is as under: Salary and Allowances 9.93 3.69 Provident fund contributions 0.52 0.25 Perquisites 0.32 - Total 10.76 3.95 Maximum permissible remuneration to Managing Director as per 4.80 2.80 Schedule XIII (excluding Provident fund contribution) Excess Remuneration paid 5.44 0.89 Remuneration paid or provided to Whole-time Director, included in Employee benefits expense is as under:

Remuneration as per Central Government approval#

27 Employee Benefits A Defined Benefit Plans Gratuity Non Funded 2012 2011 I. Expenses recognized during the year 1 Current Service Cost 2.96 1.39 2 Interest Cost 0.22 0.18 3 Actuarial Losses / (Gains) 0.31 (0.77) Total Expenses 3.49 0.81

II. Net Asset/(Liability) recognized in the Balance Sheet as at 31 March 1 Present value of defined benefit obligation 6.11 2.72 2 Net Asset / (Liability) (6.11) (2.72) III. Reconciliation of Net Asset/(Liability) recognized in the Balance Sheet as at 31 March 1 Net Asset/(Liability) at the beginning of year (2.72) (2.12) 2 Expense as per I above (3.49) (0.81) 3 Employer contribution 0.10 0.21 4 Net Asset/(Liability) at the end of the year (6.11) (2.72) IV. Actuarial Assumptions: 1 Discount rate 8.60% 8.30% 2 Expected rate of salary increase 6.00% 6.00%

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3 Mortality LIC (1994-96) LIC (1994-96) Ultimate Ultimate Notes: (a) Amounts recognized as an expense and included in the Note 20: "Employee benefits expense" are Gratuity `3.49 million (`0.80 million) and Leave benefits `3.43 million (`0.3 million) (b) The estimates of future salary increases considered in the actuarial valuation taking into account the rate of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

B Defined contribution plan: "Contribution to provident and other funds" is recognized as an expense in Note 20 of the Statement of Profit and Loss Account.

28 Related Party Transactions (i) List of Parties where control exists Subsidiary Company-Wholly owned Digital Ventures Private Limited (ii) Other Related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year. Cyquator Media Services Private Limited, Digital Ventures Private Limited, E-City Project Constructions Private Limited, Essel Infraprojects Limited, Himgiri Nabh Vishwavidhyalaya, Pan India Paryatan Private Limited, Pan India Network Infravest Private Limited, Packaging India Private Limited; Premier Finance and Trading Company Limited, TALEEM Research Foundation, Wire and Wireless India Limited, Zee Entertainment Enterprises Limited, Zee News Limited.

Directors / Key Management Personnel Mr. Himanshu Mody, Mr. Sumeet Mehta. Transactions with Related Parties 2012 2011 A) Transactions with Related Parties Purchase of Capital assets - 0.90 Cyquator Media Services Private Limited - 0.80 Packaging India Private Limited - 0.10 Intercorporate Deposits from shareholders (unsecured) 372.92 41.00 Essel Infraprojects Limited 2.40 - Premier Finance and Trading Company Limited 370.53 41.00 Repayment of Intercorporate Deposits from shareholders 155.00 - (unsecured) Premier Finance and Trading Company Limited 155.00 - Loans, advances and deposits given 153.63 332.75 E-City Project Constructions Private Limited 16.00 - Digital Ventures Private Limited # 137.63 200.00 Himgiri Nabh Vishvavidyalaya - 90.00 Zee Entertainment Enterprises Limited - 42.75 Loans, advances and deposits given repaid (non current) 79.50 236.64 Digital Ventures Private Limited # 79.50 - TALEEM Research Foundation - 199.18 Zee Entertainment Enterprises Limited - 37.46 Interest expense 21.51 1.17 Premier Finance and Trading Company Limited 21.51 1.17 Other Expenses 27.91 8.55 E-City Project Constructions Private Limited 20.07 1.84 Packaging India Private Limited 0.77 1.60 Pan India Network Infravest Private Limited 1.38 1.10 Pan India Paryatan Private Limited 2.09 2.29 Cyquator Media Services Private Limited 0.10 -

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Zee Entertainment Enterprises Limited 2.65 1.62 Zee News Limited 0.85 0.10 Interest Income 2.83 - Digital Ventures Private Limited # 2.83 - Sundry Balances Written Off - 1.02 Pan India Paryatan Private Limited - 1.02

B) Balances outstanding Intercorporate Deposits from Shareholders 265.85 41.00 Premier Finance and Trading Company Limited 256.53 41.00 Essel Infraprojects Limited* 9.32 - Capital Advances 750.00 750.00 Digital Ventures Private Limited # 750.00 750.00 Investment 0.10 - Shares of Digital Ventures Private Limited * 0.10 - Loans, Advances and Deposits 1,429.90 295.10 Digital Ventures Private Limited # 258.13 200.00 Himgiri Nabh Vishwavidhyalaya 90.00 90.00 Share application money to Digital Ventures Private Limited* 1,060.00 - E-City Project Constructions Private Limited 16.00 - Zee News Limited 0.79 - Zee Entertainment Enterprises Limited 4.98 5.10 Sundry Creditors 0.35 10.75 Pan India Network Infravest Private Limited 0.22 0.14 E-City Project Constructions Private Limited 0.13 - Packaging India Private Limited - 0.23 Pan India Paryatan Private Limited - 0.11 Zee News Limited - 10.26 Interest receivable 2.55 - Digital Ventures Private Limited # 2.55 - Interest Accrued but not Due 20.83 1.06 Premier Finance and Trading Company Limited 20.83 1.06 For managerial remuneration refer note 26 * The assets and liabilities have been transferred from Essel Entertainment Media Limited Pursuant to the Scheme of Amalgamation.

# Subsidiary Company w.e.f. 1st April, 2011. 30 Contingent Liabilities 2012 2011 (a) Claims against the Company not acknowledged as debts 6.99 5.44 (b) Disputed Indirect Taxes 19.81 19.81 (c) Corporate guarantee for subsidiaries to the extent of loans 11.14 - availed/outstanding

31 Capital and other commitments (a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is `272.39 million (`250.86 million) (b) Non disposal undertaking for 51% shares held by the Company in Digital Ventures Private Limited for loan taken by subsidiary Company. 32 Earnings Per Share (EPS) 2012 2011 a) Profit/ (Loss) after Tax (`) (275.79) 18.52 b) Weighted Average number of equity shares for Basic EPS (Nos.) 262,738,599 99,158,204 c ) Weighted Average number of equity shares for Diluted EPS 262,738,599 99,158,204 (Nos.)

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d) Nominal value of equity shares (`) 1 1 e) Basic EPS (1.05) 0.19 f) Diluted EPS (1.05) 0.19 33 Deposits shown in Note 12 includes `240 million (`290 million) being refundable security deposits paid by the Company against school operating rights under two arrangements. 34 CIF Value of Imports for capital equipment is `28.42 million (`2.38 million) 35 Expenditure in foreign currency includes 2012 2011 (a) Travelling expenses 0.23 0.31 (b) Legal and Professional charges 0.22 -

36 Payments to the auditor 2012 2011 Payments to the auditor as Audit fees 1.00 1.00 Tax Audit Fees 0.15 0.15 Tax Representation 0.05 - Certification Services - 0.97 Total 1.20 2.12

37 Prior year Comparatives (a) Schedule VI to the Companies Act, 1956 is revised and has become effective from 1 April 2011. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classifications / disclosures.

(b) The financial statements for the previous period were from the date of incorporation i.e 4 January, 2010 to 31 March, 2011. However the operating results are from 1 April, 2010 to 31 March, 2011.

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Cash Flow Statement for the year ended 31 March (`in million) 2012 2011 A. Cash Flow from Operating Activities Net Profit/ (Loss) before tax (274.11) 25.42 Adjustments for: Depreciation / Amortisation 30.21 7.53 Interest Income (5.61) (6.35) Net gain on exchange difference (0.07) - Interest expense 30.10 1.28 Provision for doubtful debts (net) (3.78) 1.22 Loss on sale / discard of fixed assets 1.34 0.03 Operating Profit before Working Capital Changes (221.92) 29.13 Adjustments for: Decrease / (Increase) in trade and other receivables (95.55) (119.02) Decrease / (Increase) in Inventories (41.14) (17.06) Increase / (Decrease) in Trade and other payables 166.37 34.24 Cash Generated from Operations (192.24) (72.71) Direct Taxes paid (5.31) (5.88)

Net Cash from Operating Activities (A) (197.56) (78.59)

B. Cash Flow from Investing Activities Purchase of fixed assets (including Capital Work in Progress) (182.27) (116.19) Sale of fixed assets 0.04 0.01 Interest received 3.76 6.35 Investments in bank deposits (having original maturity of more than (7.07) (15.72) 12 months)

Net Cash from Investing Activities (B) (185.54) (125.55)

C. Cash Flow from Financing Activities Proceeds from Issue of Share capital - 0.50 Proceeds from Intercorporate Deposits 372.92 41.00 Repayment of intercorporate deposits (155.00) (0.19) Proceeds from borrowings 325.00 - Repayment of borrowings (125.00) - Interest paid (6.98) (0.22)

Net Cash from Financing Activities ( C ) 410.94 41.09

Net Changes in Cash and Cash Equivalent (A+B+C) 27.85 (163.05) Cash and Cash Equivalents at the beginning of the year 43.96 207.01 Cash and Cash Equivalents at the end of the period 71.81 43.96

Components of cash and cash equivalents Cash in hand 0.06 0.09 Balance with Scheduled Banks in - Current Accounts 60.96 23.46 - Fixed Deposits 10.79 20.41

Total cash and cash equivalents 71.81 43.96

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Notes 1 Previous year's figures have been regrouped, recast wherever necessary 2 Scheme of Amalgamation is not considered in the above cash flow statement, being non cashtransaction.

As per our attached report of even date For and on behalf of the Board For MGB & Co. Chartered Accountants

Sumeet Mehta Himanshu Mody Whole-time Director Chairman Sanjay Kothari Partner

Arun Kabra Samir Raval Place: Mumbai Chief Financial Officer Company Secretary Date:16 May, 2012

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UN-AUDITED FINANCIAL RESULTS FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2012 (`in million)

Quarter Quarter Quarter Nine Nine Year ended ended ended Months Months Sr. ended Particulars ended ended No. 31st Dec, 30th Sept, 31st 31st Dec, 31st Dec, 31st March, 2012 2012 Dec,2011 2012 2011 2012 Unaudited Unaudited Unaudited Unaudited Unaudited Audited 1 Income Revenue from operations 214.695 188.359 125.250 636.465 403.928 610.029 Total Income from operations (Net) 214.695 188.359 125.250 636.465 403.928 610.029 2 Expenditure (a) Purchase/direct cost of education goods 76.290 32.773 162.747 80.623 183.168 and content 25.248 (b) (Increase)/decrease in stock of (10.953) (6.396) (17.926) (11.512) 9.119 (41.136) education goods and content (c) Operating Cost 9.861 9.540 6.372 28.365 19.543 31.082 (d) Employee benefits expense 76.461 87.123 62.723 242.804 176.994 251.614 (e)Depreciation & amortization expenses 21.127 14.242 10.430 46.226 21.778 30.205 (f) Other expenses 108.408 67.345 159.060 277.324 287.809 403.072 Total Expenses 281.195 204.627 245.907 745.955 595.866 858.005 3 Profit / ( Loss ) from Operations before (66.499) (16.268) (120.657) (109.489) (191.938) (247.976) other income, finance costs and tax 4 Other Income 1.950 5.958 0.941 11.839 2.997 9.095 5 Profit / ( Loss ) before finance costs and tax (64.550) (10.310) (119.716) (97.651) (188.941) (238.881)

6 Finance costs 15.526 14.699 8.478 41.066 13.119 35.228 7 Profit / ( Loss ) before Tax (80.075) (25.009) (128.194) (138.717) (202.060) (274.110) 8 Tax expenses - - (1.768) - (3.159) 1.681 9 Net Profit / ( Loss ) after Tax (80.075) (25.009) (126.426) (138.717) (198.901) (275.790) 10 Paid up Equity Share Capital (Face value 262.951 262.739 262.739 262.951 262.739 262.739 Re. 1 per share) Reserves excluding Revaluation Reserves - - - - - 1139.910 Earnings per Share - Basic & Diluted (₹) (0.30) (0.10) (0.48) (0.53) (0.76) (1.05)

Notes:

1. The above results were reviewed by the Audit Committee and thereafter approved by the Board of Directors in its meeting held on 30th January, 2013 2. As the Company‘s business activity falls within a single primary business segment viz ―Educational Services‖, the disclosure requirements of Accounting Standards (AS – 17) ―Segment Reporting‖ is not applicable. 3. Other Expenses for the quarter ended 31st December, 2012 includes advertisement and publicity expenses of Rs. 490.52 Lacs and Rs. 1108.79 Lacs for the quarter ended 31st December, 2011. 4. The Statutory Auditors have carried out a ―Limited Review‖ of the above standalone financial results for the quarter/ nine months ended 31st December, 2012. 5. Previous period/ years figures have been regrouped, wherever necessary.

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REGISTERED OFFICE OF THE COMPANY

Zee Learn Limited, Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai - 400018

LEAD MANAGER

First International Group PLC 61-63 Brook Street, London W1K 4HS, United Kingdom

DEPOSITARY CUSTODIAN LISTING AGENT

DEUTSCHE BANK TRUST DEUTSCHE BANK AG, Deutsche Bank Luxembourg S.A. COMPANY AMERICA MUMBAI BRANCH

60 Wall Street 222, Kodak House, 2, Boulevard Konrad Adenauer New york, NY 10005 Dr.D.N.Road, Fort L-1115 Luxembourg Mumbai - 400 001

LEGAL ADVISORS TO THE COMPANY

204-207, Krishna Chambers 59, New Marine Lines Mumbai 400020,India

LEGAL ADVISORS TO THE DEPOSITARY

Linklaters LLP

One Silk Street, London, EC2Y 8HQ, United Kingdom

AUDITORS

Jolly Bhavan 2, 1st Floor, 7, New Marine Lines, Churchgate, Mumbai 400 020

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