Draft Prospectus

BRAHMA INTERACTIVE LIMITED (The Company was incorporated as Brahma International Limited on January 3, 1995 under the Companies Act, 1956 and obtained Certificate of Commencement of Business on January 31, 1995. The name was changed to Brahma Interactive Limited on June 19, 1996.)

Registered Office: Tagore Centre, Rear Block “B”, 13-14 Ravindra Nath Tagore Marg, Behind Dawa Bazar Indore – 452 001 Tel: 91-731- 2704800/801/80; Fax: 91-731-2704804; E-mail: [email protected]; website:www.velocitycinemas.com Contact person: Mr. G.Muralidharan Pillai

PUBLIC ISSUE OF 50,00,800 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT A PREMIUM OF RS. 17 PER SHARE AGGREGATING TO RS. 1,350.22 LACS, INCLUDING EMPLOYEE RESERVATION OF 5,00,000 EQUITY SHARES OF RS. 10/- EACH AT A PREMIUM OF RS. 17 PER SHARE AGGREGATING TO RS. 135.00. AND NET ISSUE TO THE PUBLIC OF 45,00,800 EQUITY SHARES OF RS. 10/- EACH AT A PREMIUM OF RS. 17 EACH AGGREGATING TO RS. 1,215.22 LACS. THE FACE VALUE OF THE EQUITY SHARES RS.10/- PER EQUITY SHARE AND THE ISSUE PRICE OF RS. 27 PER SHARE IS 2.7 TIMES OF THE FACE VALUE.

RISK IN RELATION TO FIRST ISSUE This being the first issue of Equity Shares of Brahma Interactive Limited (the “Company”), there has been no formal market for the Equity Shares of the Company. The face value of shares is Rs.10/- and the issue is 2.7 times of the face value. The Issue Price (as has been determined and justified by the Lead Manager and Brahma Interactive Limited as stated herein under the paragraph on the Basis for the Issue price) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of the Company or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Draft Prospectus.The Issue is not graded by any Credit Rating Agency. Specific attention of the investors is invited to the summarized and detailed statements in Risk Factors beginning on page [•] of this Draft Prospectus.

COMPANY’S ABSOLUTE RESPONSIBILITY The Company having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Prospectus contains all information with regard to the Company and the Issue, which is material in the context of the Issue, that the information contained in this Draft Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

CENTRUM CAPITAL LIMITED INTIME SPECTRUM REGISTRY LIMITED SEBI Regn No. INM000010445 SEBI Regn No. No. INR000003761 UIN No. 100016915 UIN No. 100002071 AMBI Reg. No: AMBI /087 C-13, Pannalal Silk Mills Compound, Khetan Bhavan, 5th Floor, L.B.S. Marg, 198, J Tata Road, Churchgate, Bhandup (West), Mumbai:400078 MUMBAI 400 020. Tel: +91 – 22 – 25960320 Tel: +91–22– 2202 3838 Fax: +91 – 22 – 25960329 Fax: +91–22– 2204 6096 Website: www.intimespectrum.com Website: www.centrum.co.in Email: [email protected] Email: [email protected] Contact Person: Mr Vishwas Attavar Contact Person: Ms.Sangeeta Sanghvi ISSUE SCHEDULE ISSUE OPENS ON: [•] ISSUE CLOSES ON: [•]

LISTING The Equity Shares issued through this Draft Prospectus are proposed to be listed on National Stock Exchange of India Limited and Bombay Stock Exchange Limited. Brahma Interactive Limited has received in-principle approval from these Stock Exchanges for the listing of their Equity Shares pursuant to letters dated [y]. Bombay Stock Exchange Limited will be the designated Stock Exchange. TABLE OF CONTENTS

TITLE Page No. SECTION I: DEFINITIONS AND ABBREVIATIONS

SECTION II: RISK FACTORS 1. FORWARD-LOOKING STATEMENTS 2. RISK FACTORS SECTION III: INTRODUCTION 1. SUMMARY 2. GENERAL INFORMATION 3. CAPITAL STRUCTURE 4. OBJECTS OF THE ISSUE SECTION IV: ABOUT BRAHMA INTERACTIVE LIMITED 1. INDUSTRY OVERVIEW 2. BUSINESS OVERVIEW 3. HISTORY OF THE COMPANY 4. MANAGEMENT OF THE COMPANY 5. PROMOTERS OF THE COMPANY 6. RELATED PARTY TRANSACTIONS 7. DIVIDEND POLICY SECTION V: FINANCIAL STATEMENTS 1. FINANCIAL INFORMATION OF THE COMPANY 2. FINANCIAL INFORMATION OF GROUP COMPANIES 3. CHANGES IN ACCOUNTING POLICIES IN THE LAST 3 YEARS 4. MANAGEMENT DISCUSSIONS AND ANALYSIS SECTION VI: LEGAL AND OTHER INFORMATION 1. OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS 2. GOVERNMENT APPROVALS SECTION VII: REGULATORY AND STATUTORY DISCLOSURES SECTION VIII: OFFERING INFORMATION 1. TERMS OF THE ISSUE 2. ISSUE PROCEDURE SECTION IX: DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION SECTION X: OTHER INFORMATION 1. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTIONS 2. DECLARATION Brahma Interactive Limited

SECTION: I: DEFINITIONS AND ABBREVIATIONS

I. CONVENTIONAL / GENERAL TERMS:

TERM DESCRIPTION Articles / Articles of Association / AoA Articles of Association of the Company Companies Act The Companies Act, 1956, as amended from time to time for the time being in force Depository A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time. Depositories Act The Depositories Act, 1996, as amended from time to time for the time being in force Depository Participant A depository participant as defined under the Depositories Act FEMA Foreign Exchange Management Act, 1999, as amended from time to time and the regulations framed there under for the time being in force Financial Year/FY / Fiscal Period of twelve months ended March 31st of that particular year FIs Financial Institutions FII/ Foreign Institutional Investor Foreign Institutional Investor (as defined under SEBI (Foreign Institutional Investors) Regulations, 1995) registered with SEBI under applicable laws in India Indian GAAP Generally Accepted Accounting Principles in India I–T Act The Income-Tax Act, 1961, as amended from time to time and for the time being in force Memorandum / Memorandum of The Memorandum of Association of Brahma Interactive Limited Association / MoA NRI / Non-Resident Indian A person resident outside India, as defined under FEMA and who is a citizen of India or a Person of Indian Origin under FEMA (Transfer or Offer of Security by a Person Resident Outside India) Regulations, 2000. OCB Overseas Corporate Bodies SCRR Securities Contracts (Regulations) Rules, 1957 as amended from time to time SEBI The Securities and Exchange Board of India constituted under the SEBI Act SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time and for the time being in force SEBI Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI on January 27, 2000, as amended, including instructions and clarifications issued by SEBI from time to time

II. ISSUE RELATED TERMS:

TERM DESCRIPTION Allotment Unless the context otherwise requires, issue of equity shares pursuant to this Issue Allottee The successful applicant to whom the Equity Shares are being / or have been issued or transferred Applicant Any prospective investor who makes an application pursuant to the terms of this Draft Prospectus Application Forms The Form in terms of which the investors shall apply for the equity shares of the company. Banker(s) to the Issue The Bank with which the investors will not be allowed to apply for shares under the issue. Issue Opening Date The date on which the issue opens for subscription. Issue Closing Date The date on which the issue closes for subscription. Issue Period The period between the Issue Opening Date and the Issue Closing Date inclusive of both days and during which prospective applicants can submit their application forms Lead Manager Lead Manager to the Issue, in this case being Centrum Capital Limited BSE Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Limited D/E Ratio Debt-Equity Ratio Designated Stock Exchange BSE DP Depository Participant Equity Shares Equity shares of face value of Rs.10 each of the Company unless otherwise specified in the context thereof Face Value Face Value of equity shares of the Company being Rs. 10/- each First Applicant The applicant whose name appears first in the Application Form GIR Number General Index Registry Number INR/ Rs Indian National Rupee Fresh Issue/ Issue/ Offer/ Public Issue Public issue of 50,00,800 Equity Shares of Rs.10/- each for cash at the issue price of Rs. 27/- aggregating to Rs. 1350.22 lacs by the company in terms of the Draft Prospectus Issuer Brahma Interactive Limited Net Issue Public Issue of 45,00,800 equity shares of Rs. 10/- each for cash at the issue price of Rs. 27/- aggregating to Rs. 1215.22 lacs by the company in terms of the Draft Prospectus Issue Price Rs. 27 per share Non-Retails Applicants All applicants that are not Retail Individual applicants Non-Retail Portion The portion of the Issue that is available for allocation to Non-Retail Applicants, in this being a minimum of 22,50,400 Equity Shares of Rs.10 each NSE National Stock Exchange of India Limited PAN Permanent Account Number Permanent Employees Permanent Employees as on 31st January 2006 RoC Registrar of the Companies, Gwalior, Madhya Pradesh Registrar / Registrar to the Issue Registrar to the Issue, in this case being Intime

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Spectrum Registry Limited, having its registered office as indicated on the cover page of this Draft Prospectus Retail Individual Investor Means an investor who applies for securities of or for a value of not more than Rs. 1,00,000 Retail Portion The portion of the Issue being 22,50,400 Equity Shares of Rs.10 each available for allocation to Retail applicant(s) Stock Exchanges BSE and NSE

III. COMPANY/ INDUSTRY-RELATED TERMS:

TERM DESCRIPTION AGM Annual General Meeting Articles / Articles of Articles of Association of the Company Association / AoA AS Accounting Standards as issued by the Institute of Chartered Accountants of India Auditors The statutory auditors of the Company M/s O.T. Gandhi & Co., Chartered Accountants Unless the context otherwise indicates or implies refers to Brahma Brahma Interactives Interactive Limited, a public limited company incorporated under the Limited/We/ Us/ the provisions of the Companies Act, 1956 with its registered office at Tagore Company/ the issue Centre, Rear Block “B”,13-14 Ravindra Nath Tagore Marg, Behind Dawa Bazar Indore – 452 001 Board of Directors The Board of Directors of Brahma Interactive Limited or a committee thereof Director(s) Director(s) of the Company unless otherwise specified Equity Shares Equity shares of face value of Rs.10 each of the Company unless otherwise specified in the context thereof Equity Shareholders Persons holding Equity shares of the Company unless otherwise specified in the context otherwise. Face Value Value of paid-up Equity Capital per Equity Share, in this case Rs. 10/- each. F & B Food and Beverages Occupancy The ratio of number of seats sold to the number of seats available for a particular show. Patron Any person attending a movie Admissions/ Foot falls The number of patrons visiting the multiplex Memorandum / The Memorandum of Association of the Company Memorandum of Association / MoA Non-Resident A person who is not a NRI, FII or a person resident in India Promoter(s) Mr. Yashveer Bindal, Mr. Bharat Bindal, Mr. B N Bindal, Mr. Sudhir Bindal, Ms. Devki Rani Bindal, Ms. Sarita Bindal, Ms. Anju Bindal, Yashveer Bindal & Sons (HUF), Bharat Bindal & Sons (HUF), B N Bindal & Sons (HUF), Sudhir Bindal & Sons (HUF), Devki Leasing & Finance Limited., Jupiter Securities & Properties Private Limited, Brahma Builders, Devki Cyber Securities Prospectus The Prospectus, filed with ROC containing all the things that are required as per the SEBI (Disclosure & Investor Protection) Guidelines, 2000 Registered Office of the Registered Office of the Company situated at Tagore Centre, Rear Block Company “B”,13-14 Ravindra Nath Tagore Marg, Behind Dawa Bazar Indore – 452 001

In the section entitled “Main Provisions of Articles of Association of Brahma Interactive Limited”, defined terms have the meaning given to such terms in the Articles of Association of the Company.

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IV. ABBREVIATIONS:

ABBREVIATION FULL FORM AGM Annual General Meeting AHU Air Handling Unit AS Accounting Standards as issued by the Institute of Chartered Accountants of India AY Assessment Year BIFR Board For Industrial & Financial Reconstruction BSE Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate Capex Capital Expenditure CDSL Central Depository Services (India) Limited Centrum Centrum Capital Limited CIT Commissioner Of Income Tax D/E Ratio Debt Equity Ratio BIL Brahma Interactives Limited DP Depository Participant DPID Depository Participant Identification EBDITA Earnings Before Depreciation, Interest, Tax and Amortization EGM Extraordinary General Meeting EO Executive Officer EPS Earnings Per Equity Share i.e. profit after tax divided by outstanding number of Equity Shares at the year end. FCNR / FCNR Account Foreign Currency Non-Resident Account FEMA Foreign Exchange Management Act, 1999 read with rules and regulations thereunder and amendments thereto. FII(s) Foreign Institutional Investors registered with SEBI under applicable laws. FIPB Foreign Investment Promotion Board FIs Financial Institutions FY / Fiscal Financial year ending March 31st GAAP Generally Accepted Accounting Policy. GIR Number General Index Registry Number GoI Government of India HOD Head Of Department HR Human Resources HUF Hindu Undivided Family INR/ Rs Indian National Rupee KVA Kilo Vatt Amphere MNC Multi National Company MoU Memorandum of Understanding MP Act The Madhya Pradesh Cinemas (Regulation) Act, 1952 MP Entertainment The Madhya Pradesh Entertainments Duty and Advertisements Tax Act, 1936 MP Rules The Madhya Pradesh Cinemas (Regulation) Rules, 1972 N. A. / n.a. Not Available NAV Net Asset Value being paid-up Equity Share Capital plus free reserves (excluding reserves created out of revaluation) less deferred expenditure not written off (including miscellaneous expenses not written off) and debit balance of Profit & Loss account, divided by number of issued Equity Shares. NRE / Account Non-Resident External Account NRI Non-Resident Indian NRO Account Non Resident Ordinary Account NSDL National Securities Depositories Limited

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NSE National Stock Exchange of India Ltd OCB Overseas Corporate Bodies p.a. Per annum P/E Ratio Price/Earnings Ratio PAN Permanent Account Number RBI The Reserve Bank of India RoC The Registrar of Companies, M.P. & C.C., Sanjay Complex, 3rd Floor, A Wing, Jayendra Ganj, Lashkar, Gwalior – 474009 RoNW Return on Net Worth SEBI Securities & Exchange Board of India Sec. Section Sq. Ft. Square Feet SRO Sub Regional Office TR Tons of Refrigeration UIN Unique Identification Number

SECTION II: RISK FACTORS

1. FORWARD-LOOKING STATEMENTS AND MARKET DATA:

FORWARD-LOOKING STATEMENTS

This Draft Prospectus contains certain “forward-looking statements”. These forward looking statements can generally be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. All forward looking statements are subject to risks, uncertainties and assumptions about the company that could cause actual results to differ materially from those contemplated by the relevant forward looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others:

For further discussion of factors that could cause our actual results to differ, please see the sections titled “Risk Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included on pages [•],[•] and [•] in this Draft Prospectus respectively. In the light of inherent risks and uncertainties, the forward-looking statements, events and circumstances discussed in this Draft Prospectus might not occur and are not guarantees of future performance. Neither our Company, our Directors and officers, nor any of their respective affiliates has any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, for purposes of the Issue, our Company & the Lead Manager will ensure that investors in India are informed of material developments relating to our business until such time as the grant of listing and trading permission by the Stock Exchange.

MARKET DATA

Industry and market data used throughout this Draft Prospectus has been obtained from industry publications and internal Company reports. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although the Company believes industry and market data used in this Draft Prospectus is reliable, it has not been independently verified. Similarly, internal Company reports, while believed by the company to be reliable, have not been verified by any independent sources.

All reference to “Rupees” or “Rs.” are to Indian Rupees, the official currency of the Republic of India.

CURRENCY OF PRESENTATION

In this Draft Prospectus, all references to “Rupees” and “Rs.” and “Indian Rupees” are to the legal currency of the Republic of India. In this Prospectus, any discrepancies in any table between total and the sum of the amounts listed are due to rounding-off.

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2. RISK FACTORS An investment in equity shares involves a high degree of risk. Prospective investors should carefully consider all the information in this Draft Prospectus including the risks described below, in addition to the other information contained in this Draft Prospectus, before making any investment decision relating to the Equity Shares. If any of the following risks actually occur, the Company’s business, results of operations and financial condition could suffer, the trading price of the Company’s Equity Shares could decline, and the investor may lose all or part of his investment. Note: Unless specified or quantified in the relevant risk factors below, the Company is not in a position to quantify the financial or other implication of any risks mentioned herein under:

Materiality:

The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality:

a) Some events may not be material individually, but may be found material collectively. b) Some events may have material impact qualitatively instead of quantitatively. c) Some events may not be material at present but may be having material impacts in future.

The risk factors are as envisaged by the management along with the proposals to address the risk, if any. Wherever possible, the financial impact of the risk factors has been quantified.

A. RISK FACTORS SPECIFIC TO THE PROJECT AND INTERNAL TO THE COMPANY:

OUTSTANDING LITIGATIONS

The following litigations are outstanding against the Company:

Against the Company:

Litigation: Civil Cases

Sr. Party Place of Court before which the Date Claim No. Litigation Litigation is pending Instituted Amount 1 Mr. Sanjay Indore District Consumer 30/04/2005 Rs. 80,000 Maheshwari Forum, Indore 2 Ms. Sandhya Bapna Indore District Consumer 10/01/2005 Rs. 12,800 Forum, Indore

Case History: Case filed by Mr. Sanjay Maheshwari on 30th April 2005 regarding the loss of Vehicle from the Parking lot of the multiplex, Velocity III. The Company has furnished its opinion by denying the charges filed by the party. At present the case is pending with the District Consumer Forum at Indore.

Case filed by Ms. Sandhya Bapna on 10th January 2005 for not providing the amenities at multiplex, Velocity III, as promised. The Company has furnished its opinion by denying the charges filed by the party. At present the case is pending with the District Consumer Forum at Indore.

The charges mentioned above have already been denied before the appropriate court of law. However, the matter is sub-judice and no further comments would be appropriate.

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Possible Delay In Project Implementation

Any delay in implementation of the Project of Multiplex at Indore & Bhopal like construction delays, delay in receipt of government approvals could lead to cost overruns making the Project unviable.

The Company has already commissioned such project, first of its kind in the whole of state of Madhya Pradesh, in time and hence, they do not envisage any delay in its implementation. However any cost escalation due to delay, if any, for reasons beyond the control of the management, has been duly taken care of under the contingency already provided for.

Loss By Promoter Group Company

The promoter group company Jupiter Securities & Properties Private Limited has incurred a loss of Rs. 65.51 thousand during the year ended 31st March 2005 & a loss of Rs.3.86 thousand in the year ended 31st March 2004.

The loss for two years is less than Rs 70,000/-.

Retention of Key Technical Employees

The Company is dependent on the senior members of its managerial team. The future performance of the Company might be affected if any of these managerial personnel discontinues working with the Company. The loss of any members of its key personnel may have a material adverse effect on its business and financial condition.

The Company has a very low employee turnover. The promoters have been in diversified business for more than two decades and they feel there is no dearth of qualified and technical personnel in India, hence, there is no likely hood of any adverse material effect on the projects.

Orders for equipment

The total cost of equipments for the proposed Multiplex to be set up at Indore and Bhopal is Rs. 1118.00 lacs. Company has not placed orders for the equipments to be placed at the Multiplex.

The Quotation for almost all the equipments has been received. The company does not foresee any problems in obtaining all the necessary equipments as the order can be placed two months before the launch of Multiplex. Therefore, the Company feels that the appropriate time for placing orders has not yet come.

Statutory Approvals

The Company has not received all the statutory approvals from the government for implementation of the Multiplex project in Indore and Bhopal.

The company would be required to obtain the following licences/approvals when the company will commence operations in Indore & Bhopal:

a. Permission for land use for the project b. Permission of Municipal Corporation for construction of Multiplex c. License from District Collector for running cinema d. Registration under Shops & Establishments Act e. Approvals for safety measures in the multiplex

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The chronology of aforesaid operations is statutory and prescribed. All the aforesaid permissions are subject to fulfillment of prescribed conditions. The management does not anticipate any apparent obstruction in fulfillment of those conditions because the promoters are pioneers of multiplex business in the state of Madhya Pradesh.

Appraisal of the Project

The objects of the issue for which the funds are being raised have not been appraised by any bank or financial institution or any independent agency. The company has estimated the total fund requirement internally.

The entire debt portion to meet the total cost of project has already been sanctioned by the banks. The debt is more than 40% in the total means of finance. Hence, there is no further need of any appraisal by any independent agency.

Purchase of Property

For the proposed project of building the multiplex at Indore and Bhopal, the company is yet to purchase the land. The location of a multiplex in a particular city plays a very important role in the success of that multiplex. Since the location is not identified, it is possible that company will have adverse affect on its revenue.

The Company is at advanced stage of identification of the suitable land for both the projects and negotiations are already on. Considering the current state of the matter, the Company do not envisage any delay due to this factor.

Competition

The company currently has competition only from single cinema theatres. But very soon two large players with the multiplex business will set up the Multiplex in Indore. PVR Limited will set up a Multiplex in Indore which is five Kilometers from the Multiplex – Velocity III. It will be a five screen multiplex having a total seating capacity 1,180. Adlabs is launching multiplex in Indore by December 2005 with the multiplex of four screens and number of seats as 1200. This will increase the competition for the Company and might adversely affect our business and results of operations, if the Company is not able to compete effectively.

The Company is of the firm opinion that the influx of more multiplexes in the city will only add depth to the market and strengthen the cinema going habit of the public at large.

Substitutes For Cinema

Substitutes for cinema like piracy and home viewing may have adverse impact on our business as there is inadequate enforcement of anti-piracy laws in India and there is increasing demand for home viewing options.

With the advent of multiplexes and availability of better movie products, the footfalls to such places has substantially increased over a period of time. The multiplexes have been identified by the public at large as safe and secure place for family entertainment; hence, the influx of more multiplexes has added depth to the market and strengthened the cinema going habit.

Revenue Of Multiplex

The number of patrons will be high in the multiplex only if the films that the company displays are a hit film. From time to time, the film industry fails to produce block bluster films or the films with widespread appeal. Therefore, the display of unpopular films leads to decline in the number of patrons.

There are other streams of revenue like advertising, rental, food and beverages etc to supplement the overall revenue in multiplexes.

Dependence

The Company fully depends on the standard functioning process for the proper running of multiplex. If there is any failure in this process then it will affect the performance and financial condition of the Company.

The functioning process is not very technical and the industry standards of the equipments used are of very high quality and suitable safeguards would always be inbuilt in to the system to prevent any failure in the process.

No Monitoring Agency

There has been no appointment of Monitoring Agency that would have monitored the deployment of funds raised through this public issue.

The entire debt portion to meet the total cost of project has already been sanctioned by the banks. The debt is more than 40% in the total means of finance hence, the Company is of the opinion that there is no further need of any monitoring by any independent agency.

Property in respect of Multiplex is not owned by the Company

The land where multiplex, Velocity III is situated is on a long term lease for 30 years which is extendable for further period of 60 years in two installments.

The long term lease is an established and legal mode of ownership in immovable properties wherein the lease premium is actually a substitute and equivalent to sale consideration. This is entirely different from rental properties.

Promoters will have significant control in the Company

After completion of this, the promoters of the Company will continue to own 51% of the Equity Shares. As a result, the promoters will have decision making power over all the matters requiring shareholder’s approval.

This kind of control is essential to take crucial operating decisions which are a must for the good functioning of the company. However, the policy decisions require holding in shares beyond 75%, hence, there the shareholders will always play a decisive role.

Unionisation of employees in future

The employees are not represented by any labour union. But in future, employees may unionise which might restrict the labour policies.

As on date there is no labour union and Company do not foresee any problem arising out of this in future.

Non Declaration of Dividend in Previous Years

The Company has not declared any dividend in previous five years.

In a closely held company non distribution of dividend and redeployment of profits in the project is always a preferred action.

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Allotment of shares at a price lower than the Issue Price.

The Company has allotted 20,68,050 Equity Shares to its Existing Shareholders and Associates at a price of Rs. 22/- per share on 24th January 2006. The Issue Price of this allotment is less than the price at which the shares are being issued under this Prospectus.

The promoters have put in lot of efforts and financial stake in the company during last three years and have created a company which is asset rich and is fully geared to earn substantially in the immediate future. Moreover, the promoters have also brought in shares at a premium. The promoters feel that the valuation of shares for public subscription is fully justified in view of the future earning potential of the company.

Further issuance of Equity Share may dilute the stake of Investors

If there is any further issue of Equity Share or Convertible Securities by the Company then that may dilute the stake of investors in the Equity Shares. Inaddition any perception by investors that such issuances or sales might occur could also affect the Market Price of the Equity Shares.

Any decision on issue of further capital will always be taken by the shareholders with special majority and hence, there should not be any such apprehension.

Entertainment Tax Exemption will expire in next three years

The Multiplex Velocity III enjoys the Entertainment tax exemption sanctioned by Commercial Tax Department of Madhya Pradesh from the year 2003-04 . The details of it is as follows:

Period of Exemption % of Exemption First, second and third year after completion of the multiplex complex, i.e., 100% first three years from the date of commercial exhibition of a movie in any of the cinema halls of such complex. Fourth year 75% Fifth year 50%

The exemption will start reducing from the year 2006-07 and from the year 2008-09 the benefits of entertainment tax exemption will not be available to the Company.

The savings on account of exemption of entertainment tax is intended to offset capital cost of the project. The operations are not likely to be affected owing to cessation of the tax exemption after two years.

Results fluctuate due to seasonal business

The Entertainment business, specially the exhibition of films, has been seasonal. Because the financial performance of the Company keeps on fluctuating from Quarter to Quarter.

Entertainment business is seasonal only to the extent of examinations of students which is less than two months in a year. Seasonality to such an extent applies to every business. Therefore, the operations are not likely to be affected owing this.

Changes In The Technology

The Company depends on the traditional projection equipment for screening the movie. But gradually the emerging digital projection technologies may replace the traditional celluloid projection technologies. Therefore, the company may have to invest in new technology. This investment will increase our capital expenditure.

The project is equipped with the best technology available as on date which is scalable to the new and upgraded technology which may be available in future

B. RISK FACTORS EXTERNAL TO THE COMPANY:

Changes In The Technology

The project is equipped with the best technology available as on date which is scalable to the new and upgraded technology which may be available in future.

Changes in the domestic tax laws:

Any changes in the tax laws in India particularly income tax might lead to increased Tax Liability of the Company thereby putting pressures on profitability. Change in tax laws, particularly income tax, can have an impact on the post-tax profits of the Company However, changes in domestic laws would be applicable to the industry as a whole where this project alone will not be affected.

Post-issue volatilty in prices of the script:

The price of the Company’s equity shares in Indian stock exchanges may fluctuate after this Issue as a result of several factors, including: a) Volatility in the Indian and Global securities market; b) The results of operations and performance; c) Perceptions about the Company’s future performance or the performance of other Indian companies in the same industry; d) Performance of the Company’s competitors in the industry and market perception of investments in the sector; e) Adverse media reports on the Company or on the industry; f) Change in the estimates of the Company’s performance or recommendations by financial analysts; g) Significant development in India’s economic liberalization and deregulation policies; and h) Significant development in India’s fiscal and environmental regulations.

The Company would always strive for best efforts for timely implementation of the project and its successful operations thereafter. The financial and operating strengths of the project would largely depend on these factors.

Active Trading

There can be no assurance that an active trading market for the equity shares will develop or be sustained after this Issue, or that prices at which the Company’s equity shares are initially offered will correspond to the prices at which the Company equity shares will trade in the market subsequent to this Issue. The Company’s share price could be volatile and may also decline.

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NOTES TO RISK FACTORS

1. Public Issue of 50,00,800 Equity Shares of Rs. 10/- each for cash at a Price of Rs. 27/- per Equity Share comprising employee reservation of 5,00,000 Equity Shares and net offer to the public of 45,00,800 Equity Shares for cash aggregating to Rs. 1350.22 Lacs. 2. Book value of the Equity Shares of the Company as on 30th September 2005 is Rs. 20.26 and as on March 31 2005 is Rs. 21.30 per Equity Share. Investors are advised to refer to the paragraph on "Basis for Issue Price" on page [•] of this Draft Prospectus before making an investment in this Issue. 3. The average cost of acquisition of Equity Shares by the Company’s Promoters, is as follows:

Sr. No. Name of the Promoter Average Cost of Acquisition (in Rs.) 1 Barmanand Bindal 7.77 2 Sudhir Bindal 20.07 3 Yashveer Bindal 14.04 4 Bharat Bindal 14.99 5 Devki Rani Bindal 8.22 6 Sarita Bindal 7.86 7 Anju Bindal 7.50 8 Barmanand Bindal & Sons HUF 8.52 9 Sudhir Bindal & Sons HUF 8.25 10 Yashveer Bindal & Sons HUF 6.10 11 Bharat Bindal & Sons HUF 9.63 12 Devki Leasing & Finance Ltd. 15.47 13 Devki Cyber Securities Pvt. Ltd. 7.50 14 Jupiter Securities & Properties Pvt. Ltd. 15.19 15 Brahma Builders Ltd. 21.26 16 Concast Properties Private Limited 22.00

4. The Networth of the Company (as restated), 30th September 2005 is Rs. 453.41 Lacs and as on March 31, 2005 was Rs. 370.90 lacs. For details please refer to Chapter on ‘Financial Information’ on page [•] of this Draft Prospectus. 5. Investors are advised to refer the paragraph on “Basis of Issue Price” on page [•] of this Draft Prospectus before making an investment in the Issue. 6. Investors can contact the Lead Manager or the Compliance Officer of the Company for any clarifications/ complaints. Mr. G. Muralidharan, the Compliance Officer of the Company will be available at the following address: Tagore Centre, Rear Block “B”,13-14 Ravindra Nath Tagore Marg, Behind Dawa Bazar Indore – 452 001 Tel: 0731- 2704800/801/80; Fax: 0731-270 4804. 7. Details of Related Party Transactions is given under the heading “financial information “ of this draft prospectus on page [•]. 8. Please refer to page [•] of this Draft Prospectus for details on Loans and Advances. 9. All information shall be made available by the Lead Manager and the Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever. 10. In the event of over-subscription, allotment shall be made on a proportionate basis in accordance with the SEBI guidelines and in consultation with BSE (The Designated Stock Exchange) as per the prevailing guidelines in this regard. If the Issue is oversubscribed, the Designated Stock Exchange along with the concerned Post Issue Lead Manager and Registrar

xiii to the Issue shall be responsible to ensure that the basis of allotment is finalized in a fair and proper manner.

xiv Brahma Interactive Limited

SECTION III: INTRODUCTION

1 Summary

(i) Summary of the Industry and Business of the Company

Investors should read the following summary with the Risk Factors appearing on page number [•] of this Draft Prospectus and detailed information about the Company and the financial statements included elsewhere in this Draft Prospectus.

Industry

The Indian Entertainment Industry is one of the fastest growing sectors of the Indian economy riding on the economic growth and rising income levels that India has been experiencing in the past few years. The Industry comprises of television, music, radio and live shows. The total Industry is at over Rs. 20,000 crore which is expected to grow at 18% p.a. to reach at Rs. 45,000 crore by 2009.

The film segment contributes 28% to the total industry revenue. It is the most popular form of entertainment in India. The Indian Film Industry is the largest in the world in terms of number of films produced and admissions. Hindi Films share the major contribution followed by the regional films in Telugu, Tamil, Kannada and Malayalam.

Film Industry is divided into three sections: Production – process of making the film. Distribution – buys distribution rights from the film produces to exhibit the films in the cinemas across the country. Exhibition – deals with exhibiting the film in cinemas.

Film Industry is expected to rise on the basis of following factors: a. Growth of multiplexes, b. Increasing Indian Diaspora, c. Popularity of international movies, d. Funding by NRIs to bollywood, e. Use of animation, f. Digital distribution formats, g. Emergence of Integrated Film Companies h. Developments in terms of corporatisation i. Organised fundings from Banks & Financial Institutions

The rapid growth of multiplex has ensured that there is a platform to screen movies that appeals to niche audience in the overall movie viewer market. This in turn has successfully created a demand for small budget movies catering to such niche tastes and has effectively broadened the Indian Film market. It has also brought back the urban Indian film viewers to the movie halls.

The key factors for the growth of multiplex are:

Organised Retail Boom – One of the key elements driving the success of a mall is its ability to drive footfalls consistently. Multiplexes are one of the anchor tenants to large format malls, as they provide increase footfalls in shopping malls by 40-50 percent.

Quality Theatre Complexes – Although multiplex tickets are usually priced at premium as compared to the ticket prices of single screens, they continue to attract patrons (both individuals and families), as they offer better quality of service and ambience.

Alternate sources of content – They are experimenting with New software content like live sporting events – Football, Cricket, 1-Grand Prix, Music Concerts, Beauty Pageants etc. are experimented to get the alternative source.

Entertainment Tax – Many state governments have announced entertainment tax benefits policy, so that there is rise in investment in film exhibition business. This has led to the growth of Multiplex Cinemas and also conversion of single-screen theaters into Multiplexes.

Film Distribution

Distribution has evolved from mass-film production. Increasing importance of multiplexes with many screens has encouraged this trend of segment-specific films. Film distributors play various roles for the Film Industry. They are:

Part Financing of films Marketing of the films Selection of exhibition centre Managing the logistics of physical prints distribution

The film distribution system in India is a territory based. The country is geographically divided into 14 distribution territories and film producers tend to sell distribution rights for each territory.

The major players in the Indian film distribution sector are VIP Enterprises, Yashraj Films, Shri Ashtavinayak Films, Shringar Films Private Limited, Rajshri, UTV, Gini Art, GV Mehta, Mukta Movies, Gunjan Films, PVR Pictures and Piyali Films.

Business

Company is into exhibition business from the year 2003. It was the first Company to launch the multiplex, Velocity III, in the state of Madhya Pradesh in Indore. VELOCITY III is fully air- conditioned and along with three big cinema screens to seat a total of 1052 patrons has the facilities which include AC hall, acoustics, imported quality projectors and sound system, modern architecture.

In addition to 3 cinema screens, VELOCITY III has a full fledged restaurant, coffee shop, book shop, multiple product shopping, childrens’ game arena and a few other ancillary facilities and amenities.

Alongwith exhibition business, Company also started the distribution in the year 2003. Some of the films which are distributed by VELOCITY III are Page 3, Maine Pyaar Kyun Kiya, Mumbai Xpress, Netaji Subhash Chandra Bose etc.

2 Brahma Interactive Limited

(ii) Issue details in brief:

Equity Shares offered: Fresh Issue by the company 50,00,800 Equity Shares of Face Value of Rs. 10 each with a share premium of Rs. 17 aggregating to Rs. 1350.22 Lacs. Of which: Reservation of permanent employees 5,00,000 Equity Shares of face value Rs. 10/- each with a share premium of Rs. 17 aggregating to Rs. 135.00 Lacs NET OFFER TO THE PUBLIC IN THE ISSUE 45,00,800 Equity Shares of face value Rs. 10/- each with a share premium of Rs. 17 aggregating to Rs. 1215.22 Lacs

Retail Investors(1) 22,50,400 Equity Shares of face value Rs. 10/- each with a share premium of Rs. 17/- constituting 50% of the net offer to the public (Allocation on Proportionate Basis)

Non- Retail Investors(1) 22,50,400 Equity Shares of face value Rs. 10/- each with a share premium of Rs. 17 (Allocation on Proportionate Basis) Equity Shares Outstanding Before the Issue 50,10,870 Equity Shares of face value Rs. 10 each After the Issue 1,00,11,700 Equity Shares of face value Rs. 10 each Use of Issue proceeds Please see section entitled “Objects of the Issue” on page [•] this Draft Prospectus for additional information.

(1) Under-subscription, if any, in any of the above categories would be allowed to be met with spill-over inter-se from any other categories, at the sole discretion of the Company and Lead Manager.

(iii) Summary financial, operating and other data:

Summary of Financial Data under Indian GAAP

Statement of Profits & Losses as Restated (Rs. in lacs) Period Six PARTICULARS Months Year Ended March 31 30.09.2005 2005 2004 2003 2002 2001 Income : Income from Exhibition 299.68 379.52 270.20 0.00 0.00 0.00 F & B Sales 54.50 73.10 42.26 0.00 0.00 0.00 Film Distribution Income 33.42 62.78 0.00 0.00 0.00 0.00 Other Income 31.84 59.72 20.53 0.34 0.49 1.94 Increase(Decrease in Inventories) 21.49 16.03 0.00 0.00 0.00 0.00 440.93 591.15 332.99 0.34 0.49 1.94 Expenditure: Raw Material Opening Stock 16.03 Staff Cost 19.13 30.64 19.26 0.00 0.00 0.76 Selling & Distribution Cost 247.97 376.68 191.94 0.00 0.00 0.18 Administrative Cost 10.26 12.83 6.15 0.19 0.29 0.65 293.39 420.15 21.35 0.19 0.29 1.59 Earnings Before Interest, Depreciation & Tax 147.54 171.00 115.64 0.16 0.20 0.35

Interest 29.94 22.68 17.49 0.00 0.00 0.07 Depreciation 26.99 45.82 36.50 0.07 0.18 0.24

Earnings before Tax and Extra ordinary items 90.61 102.50 61.65 0.09 0.02 0.04

Provision for Taxation 0.00 1.58 2.37 0.03 0.01 0.02 Current Tax 0.00 Deferred Tax 0.00 25.42 31.53 0.00 0.00 0.00

Profit Before Extra Ordinary Items 90.61 75.50 27.75 0.05 0.01 0.03 . Extra Ordinary Items 1.44 0.00 0.00 0.00 0.00 0.00 Adjustment on account of prior Period Items 1.89 2.20 0.00 0.00 0.00 0.00 Adjusted Net Profit 87.28 77.70 27.75 0.05 0.01 0.03

4 Brahma Interactive Limited

Statement of Assets and Liabilities as Restated (Rs. In lacs) Period Six Months As At March 31 PARTICULARS 30.09.2005 2005 2004 2003 2002 2001 Fixed Assets Gross Block 1216.22 1203.44 797.46 2.16 2.16 2.16 Less: Depreciation and amortization 108.98 82.84 37.01 1.59 1.52 1.34 Net Block 1107.24 1120.6 760.45 0.57 0.64 0.82 Add: Capital WIP 28.64 14.94 149.31 825.06 244.19 93.43 Total (A) 1135.88 1135.54 909.76 825.63 244.83 94.25 Investments : (B) 0.57 0.57 0.57 45.82 72.82 14.07 Current Assets ,Loans And Advances : Inventories 21.49 16.04 0.00 0.00 0.00 0.00 Sundry Debtors 10.05 38.33 11.91 17.29 0.00 0.00 Cash and Bank Balances 5.54 5.56 2.56 5.13 0.65 2.87 Loans and Advances 41.87 11.75 48.11 5.33 2.8 3.27 Total (C) 78.95 71.68 62.58 27.75 3.45 6.14

Liabilities and Provisions : Secured Loans 480.13 502.1 451.81 375.17 27.45 0.00 Unsecured Loans 201.00 225.99 177.24 56.35 110.04 45.11 Deferred Tax Liability 56.95 56.95 31.53 0.00 0.00 0.00 Current Liabilities& Provisions 62.43 51.85 19.18 302.4 23.33 32.15 Total (D) 800.51 836.89 679.76 733.92 160.82 77.26 Miscellaneous Expenditure 3.30 - 0.04 0.08 0.12 0.16 (to the extent not w/off) Net Worth (A+B+C-D) : 414.89 370.9 293.15 165.28 160.28 37.2 Represented by Share Capital 248.98 197.99 164.63 164.63 159.43 18.73 Share Application Money 0.00 0.00 100.08 0.00 0.29 17.97 Reserves and Surplus 207.73 172.91 28.48 0.73 0.68 0.66 Total 456.71 370.90 293.19 165.36 160.40 37.36 Net Worth (G-E) 453.41 370.90 293.15 165.28 160.28 37.20

2. General Information

BRAHMA INTERACTIVE LIMITED Registered Office: Tagore Centre, Rear Block “B”,13-14 Ravindra Nath Tagore Marg, Behind Dawa Bazar Indore – 452 001 Tel: 91-731- 2704800/801/802; Fax: 91-731-270 4804 ; E-mail: [email protected]; website: www.velocitycinemas.com Registered with Registrar of Companies, M.P. & C.C, Sanjay Complex, 3rd Floor, A Wing, Jayandra Ganj, Lashkar, Gwalior – 47400910. Company Registration No.: 10-08908

I. General information :

Pursuant to Section 81(1A) of the Companies Act, 1956, the present issue of equity shares has been authorized vide Special Resolution passed at the Annual General Meeting of the Company held on 30th September 2005 and a resolution passed by the Board of Directors at its meeting held on on 30th September 2005

This is a public issue of equity shares of Rs. 10/- each at a price of Rs. 27/- per share .

As per clause 1.2.1 (xxiii) of SEBI DIP Guidelines public issue means an invitation by a company to public to subscribe to the securities offered through a prospectus.

Board of Directors

The company is currently managed by Board of Directors comprising of 6 directors. Our Board of Directors consists of the following persons:

NAME OF THE DIRECTOR DESIGNATION STATUS Chairman & Managing Mr. Yashveer Bindal Executive & Non - Independent Director Mr. Bharat Bindal Wholetime Director Executive & Non – Independent Mr. Manish Trivedi Director Independent Director Mr. Ashok Mehta Director Independent Director Mr. Alkesh Bothra Director Independent Director Mr. Rahul Modi Director Independent Director

Brief profile of the Managing/Wholetime Directors

Mr. Yashveer Bindal

Mr. Yashveer Bindal (37 years) is a graduate in commerce and law. He is into business for last 15 years and has rich working and handling experience in variety of business activities covering transport, finance, export-import, construction and entertainment. At present he is a managing director of the company and is taking care of internal management, administration and distribution activities of company’s multiplex VELOCITY III.

Mr. Bharat Bindal

6 Brahma Interactive Limited

director in the company and is taking care of resource management, liaisoning and marketing fields of company’s multiplex VELOCITY III. Compliance Officer

G Muralidharan Pillai Tagore Centre, Rear Block “B”, 13-14 Ravindra Nath Tagore Marg, Behind Dawa Bazar Indore – 452 001 Tel: 91-731- 2704800/801/802 Fax: 91-731-270 4804

Company Secretary

Chhaya Gupta Tagore Centre, Rear Block “B”, 13-14 Ravindra Nath Tagore Marg, Behind Dawa Bazar Indore – 452 001 Tel: 91-731- 2704800/801/802 Fax: 91-731-270 4804

Legal Advisors To The Issue

Pankaj Chandra Bagadia 205, Embassy Towers A-1, New Palasia, Indore Tel: +91-0731-2540924, 2540915

Bankers To The Company

Amit Bannerjee State Bank of Indore H. O. – Y. N. Road Indore Tel: +91-731-2433225 Fax: +91-731-2540248 Email: mail@ sbindore.co.in

Lead Manager

Centrum Capital Limited SEBI Regn No. INM000010445 UIN No. 100016915 Khetan Bhavan, 5th Floor, 198, J Tata Road, Churchgate, Mumbai: 400 020. Tel: +91–22– 2202 3838 Fax: +91–22– 2204 6096 Email: [email protected] Website: www.centrum.co.in Contact Person: Ms. Sangeeta Sanghvi

Registrar to the Issue

Intime Spectrum Registry Limited SEBI Regn No. INR000003761 UIN No. 100002071 C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai-400078 Tel: +91 – 22 – 25960320 Fax: +91 – 22 – 25960329 Website: www.intimespectrum.com Email: [email protected] Contact Person: Mr. Vishwas Attavar

Bankers To The Issue

The Bankers to the Issue will be appointed before filing of the Draft Prospectus with ROC.

Brokers To The Issue

All members of the recognized Stock Exchanges would be eligible to act as Brokers to the Issue.

Auditors

M/s O. T. Gandhi & Co. Chartered Accountants Basketball Complex, Race Course Road INDORE - 452003 Tel: +91+ 731 – 2547700 Fax: +91- 731- 2547733

Credit Rating

This being an equity issue no credit rating or appointment of debenture trustee is required.

Trustees

As this is an Issue of Equity Shares, the appointment of Trustees is not required.

Monitoring Agency

The company has not appointed the monitoring agency to monitor the deployment of funds.

Underwriting Agreement

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

Inter Allocation Of Resonsibilities

Centrum Capital Limited is the sole Lead Manager to the Issue.

Initial Public Issue Of Brahma Interactive Limited

Public Issue of 50,00,800 Equity Shares of Rs 10/- each issued for cash at a premium of Rs.17 per share for cash aggregating to Rs. 1350.22 Lacs.

8 Brahma Interactive Limited

3 Capital Structure Of The Company

SHARE CAPITAL IN RUPEES FACE VALUE TOTAL VALUE INCLUDING PREMIUM A. AUTHORIZED CAPITAL 1,05,50,000 Equity shares of Rs.10/- each 10,55,00,000 4,50,000 Redeemable Preference Shares of Rs. 10 each 45,00,000 B. ISSUED SUBSCRIBED AND PAID-UP CAPITAL 50,10,870 Equity shares of Rs.10 /- each fully paid- 5,01,08,700 up C. PRESENT ISSUE IN TERMS OF THIS DRAFT 5,00,08,000 PROSPECTUS Out of which: • Reserved for Permanent Employees 50,00,000 1,35,00,000 5,00,000 Equity Shares of Rs. 10 each • Net Offer to the Public 4,50,08,000 12,15,21,600 45,00,800 Equity Shares of Rs. 10 each D. PAID-UP EQUITY CAPITAL AFTER THE ISSUE 10,01,16,700 1,00,11,670 Equity Shares of Rs. 10 each E. SHARE PREMIUM ACCOUNT • Before the Issue 3,40,90,050 • After the Issue 11,91,03,650

Details of Increase in Authorised Capital:

Increased from Increased to Number of Number of Amount Date Shares Amount Shares 30-09-2005 20,00,000 2,00,00,000 1,10,00,000 11,00,00,000 01-08-2005 19,50,000 1,95,00,000 20,00,000 2,00,00,000 01-01-2002 15,00,000 1,50,00,000 19,50,000 *1,95,00,000 30-11-2001 5,00,000 50,00,000 15,00,000 1,50,00,000 On Incorporation - - 5,00,000 50,00,000

*The increase in authorised capital on 01-01-2002 is the introduction of redeemable preference shares of Rs. 45 Lacs.

Notes to the Capital Structure:

1. Share Capital history of the Company a) The following is the history of the equity share capital of our Company:

Date of Number Face Issue Consideration Nature of Cumulative Cumulative Allotment of Value Price (in Rs.) Allotment Number of Share Equity Rs. Rs. (Bonus,Rights Equity Premium Shares Etc.) Shares Rs. 7-12-1994 70 10 10 700 Cash 70 0 1-4-1995 54195 10 10 541950 Cash 54265 0 27-01-1997 133000 10 10 1330000 Cash 187265 0 31-08-2001 283100 10 10 2831000 Cash 470365 0 11-12-2001 334500 10 10 3345000 Cash 804865 0 28-12-2001 150000 10 10 1500000 Cash 954865 0 16-10-2002 23200 10 10 232000 Cash 978065 0 31-01-2002 189500 10 10 1895000 Cash 1167565 0 31-01-2002 450000 10 10 4500000 Cash 1617565 0 31-03-2003 28700 10 10 287000 Cash 1646265 0 1-8-2004 333600 10 30 10008000 Cash 1979865 6672000 30.09.2005 509955 10 0 5099550 Bonus 20398200 0 07.01.2006 453000 10 27 4530000 Cash 29428200 7701000 24.01.2006 450000 10 0 - Conversion of 24898200 0 Preference shares into Equity Shares 24.01.2006 2068050 10 22 20680500 Cash 50108700 24816600

*450000 Preference shares of Rs. 10/- each is converted into 450000 Equity Shares of Rs. 10/- each.

(b) The following is the history of the preference share capital of our Company:

Date of No. of Face Value Issue Price Consideration % of Allotment Preference Preference shares Share Capital 31-01-2002 4,50,000 10 10 45,00,000 100

2. Promoters Contributions and Lock-In The following equity shares shall be locked in for the period of three yearsas a part of promoter’s contribution

Name of the % of Promoter Post Number Issue Date when Nature of of Face Issue Paid – Date of made fully payment or Equity Value Price Up allotment paid-up consideration Shares (Rs.) (Rs.) Capital Mr. Yashveer 30/09/2005 30/09/2005 Bonus 20619 10 - 0.21 Bindal 01/08/2004 01/08/2004 Cash 27000 10 30 0.27 Total 47619 0.48

Mr. Bharat 30/09/2005 30/09/2005 Bonus 23034 10 - 0.23 Bindal 01/08/2004 08/01/2004 Cash 34500 10 30 0.34 04/06/2003 06/04/2003 Cash 11000 10 10 0.11 Total 68534 0.68

10 Brahma Interactive Limited

Mr.Sudhir 30/09/2005 30/09/2005 Bonus 24766 10 - 0.25 Bindal 01/08/2004 08/01/2004 Cash 62300 10 30 0.62 04/06/2003 04/06/2003 Cash 2500 10 10 0.02 Total 89566 0.89

Mr.Barmanand 24/01/2006 24/01/2006 Cash* 8000 10 10 0.08 Bindal 30/09/2005 30/09/2005 Bonus 16360 10 - 0.16 04/06/2003 04/06/2003 Cash 24000 10 10 0.24 Total 48360 0.48

Barmanand 24/01/2006 24/01/2006 Cash* 21000 10 10 0.21 Bindal & Sons 30/09/2005 30/09/2005 Bonus 7667 10 - 0.08 31/03/2003 31/03/2003 Cash 3300 10 10 0.03 Total 31967 0.32

Yashveer 30/09/2005 30/09/2005 Bonus 7567 10 - 0.08 Bindal & Sons 31/03/2003 31/03/2003 Cash 3700 10 10 0.04 Total 11267 0.11

Bharat Bindal 24/01/2006 24/01/2006 Cash* 11000 10 - 0.11 & Sons 30/09/2005 30/09/2005 Bonus 467 10 - 0.00 04/06/2003 04/06/2003 Cash 1400 10 10 0.01 Total 12867 0.13

Sudhir Bindal 24/01/2006 24/01/2006 Cash* 12500 10 - 0.12 & Sons 30/09/2005 30/09/2005 Bonus 7233 10 - 0.07 31.03/2003 31/03/2003 Cash 3000 10 10 0.03 Total 22733 0.23

Jupiter 24/01/2006 24/01/2006 Cash* 191500 10 - 1.91 Securities 07/01/2006 07/01/2006 Cash 167000 10 27 1.67 Private Ltd. 30/09/2005 30/09/2005 Bonus 100300 10 - 1.00 04/06/2003 04/06/2003 Cash 293600 10 10 2.93 08/01/2004 08/01/2004 Cash 7300 10 30 0.07 Total 759700 7.59

Devki Leasing 24/01/2006 24/01/2006 Cash* 150000 10 - 1.50 & Finance Ltd 07/01/2006 07/01/2006 Cash 156000 10 27 1.56 30/09/2005 30/09/2005 Bonus 167500 10 - 1.67 08/01/2004 08/01/2004 Cash 202500 10 30 2.02 28/12/2001 28/12/2001 Cash 27721 10 10 0.28 Total 703721 7.03

Brahma 07/01/2006 07/01/2006 Cash 130000 10 27 1.30 Builders Ltd. 30/09/2005 30/09/2005 Bonus 17833 10 - 0.18 04/06/2003 04/06/2003 Cash 53500 10 10 0.53 Total 201333 2.01

Devki Cyber 30/09/2005 30/09/2005 Bonus 4667 10 - 0.05 Securities Total 4667 0.05 Total Promoters Contribution 2002334 20.00 *4,50,000 Preference Shares were converted into Equity Shares on 24th January 2006.

3. Promoter’s Shareholding

Name of the Nature of % of Post Lock-in Promoter Date when payment or Number of Face Issue Issue Paid Period(in made fully considerati Equity Value Price – Up years) paid-up on Shares (Rs.) (Rs.) Capital Mr. Yashveer Bindal 30/09/2005 Bonus 20619 10 - 47,619 0.83 shares 01/08/2004 Cash 27000 10 30 shall be 31/08/2001 Cash 20800 10 10 locked in 01/04/1995 Cash 14048 10 10 for three years, 07/12/1994 Cash 10 10 10 balance 82477 for 1 year

Mr. Bharat Bindal 30/09/2005 Bonus 23034 10 - 68,534 0.91 shares 08/01/2004 Cash 34500 10 30 shall be 06/04/2003 Cash 11000 10 10 locked in 11/12/2001 Cash 1000 10 10 for 3 years, 31/08/2001 Cash 8000 10 10 balance 27/01/1997 Cash 2500 10 10 for 1 year 04/01/1995 Cash 12091 10 10 07/12/1994 Cash 10 10 10 92135

Mr.Sudhir Bindal 30/09/2005 Bonus 24766 10 - 22,733 0.98 shares 08/01/2004 Cash 62300 10 30 shall be 04/06/2003 Cash 2500 10 10 locked in 04/01/1995 Cash 9487 10 10 for 3 years, 07/12/1994 Cash 10 10 10 balance 99063 for 1 year

24/01/2006 Cash 8000 10 10 48,630 Mr.Barmanand 0.65 shares 30/09/2005 Bonus 16360 10 - Bindal shall be 04/06/2003 Cash 24000 10 10

12 Brahma Interactive Limited

Name of the Nature of % of Post Lock-in Promoter Date when payment or Number of Face Issue Issue Paid Period(in made fully considerati Equity Value Price – Up years) paid-up on Shares (Rs.) (Rs.) Capital 27/01/1997 Cash 6500 10 10 locked in for 3 04/01/1995 Cash 18569 10 10 years, 07/12/1994 Cash 10 10 10 balance 73439 for 1 year

Ms. Devki Rani 24/01/2006 Cash 23000 10 10 All Shares Bindal 0.79 will be 30/09/2005 Bonus 14203 10 - locked in 04/06/2003 Cash 4000 10 10 for 1 year 31/03/2003 Cash 4600 10 10 16/10/2002 Cash 3300 10 10 11/12/2001 Cash 10700 10 10 31/08/2001 Cash 20000 10 10 07/12/1994 Cash 10 10 10 79813

Ms. Sarita Bindal 24/01/2006 Cash 10000 10 10 All Shares 0.70 will be 30/09/2005 Bonus 14953 10 - locked in 04/06/2003 Cash 10000 10 10 for 1 year 31/03/2003 Cash 4600 10 10 16/10/2002 Cash 5450 10 10 11/12/2001 Cash 5500 10 10 31/08/2001 Cash 19300 10 10 07/12/1994 Cash 10 10 10 69813

Ms. Anju Bindal 30/09/2005 Bonus 23403 10 - All Shares 0.94 will be 04/06/2003 Cash 4100 10 10 locked in 31/03/2003 Cash 26500 10 10 for 1 year 16/10/2002 Cash 7800 10 10 11/12/2001 Cash 5900 10 10 31/08/2001 Cash 25900 10 10 07/12/1994 Cash 10 10 10 93613

Jupiter Securities 24/01/2006 Cash 727300 10 22 7,59,700 Private Ltd. 23.18 shares 24/01/2006 Cash* 191500 10 10 shall be 07/01/2006 Cash 167000 10 27 locked in 30/09/2005 Bonus 100300 10 - for 3 years, 04/06/2003 Cash 293600 10 10

Devki Leasing &24/01/2006 Cash 48000 10 22 7,03,721 Finance Ltd. 10.23 shares 24/01/2006 Cash* 150000 10 10 shall be 07/01/2006 Cash 156000 10 27 locked in 30/09/2005 Bonus 167500 10 - for 3 years, 08/01/2004 Cash 202500 10 30 balance 28/12/2001 Cash 27725 10 10 for 1 year 28/12/2001 Cash 22275 10 10 12/11/2001 Cash 250000 10 10 1024000

Brahma Builders Ltd 24/01/2006 Cash 320000 10 22 2,01,333 11.90 shares 07/01/2006 Cash 130000 10 27 shall be 30/09/2005 Bonus 17833 10 - locked in 04/06/2003 Cash 53500 10 10 for three years, balance 1156717 for 1 year

Bharat Bindal & Sons 24/01/2006 Cash* 11000 10 10 0.25 All shares are locked 30/09/2005 Bonus 467 10 - in for 3 years 04/06/2003 Cash 1400 10 10 12867

Yashveer Bindal & 30/09/2005 Bonus 7567 10 - 0.6 11,267 Sons shares 31/03/2003 Cash 3700 10 10 shall be 11/12/2001 Cash 1000 10 10 locked in for three 31/08/2001 Cash 18000 10 10 years, balance 30267 for 1 year

Sudhir Bindal & Sons 24/01/2006 Cash* 12500 10 10 22,733 0.82 shares 30/09/2005 Bonus 7233 10 - shall be 31/03/2003 Cash 3000 10 10 locked in 31/08/2001 Cash 18700 10 10 for three years, balance 41433 for 1 year

14 Brahma Interactive Limited

Barmanand Bindal & 1.03 31,967 Sons 24/01/2006 Cash* 21000 10 10 shares shall be 30/09/2005 Bonus 7667 10 - locked in for three 31/03/2003 Cash 3300 10 10 years, balance 31/08/2001 Cash 19700 10 10 for 1 year 51667

Concast Properties 9.72 All shares Pvt. Ltd. will be locked in 24/01/2006 Cash 972750 10 27 for 1 year 972750

*4,50,000 Preference Shares were converted into Equity Shares on 24th January 2006.

In accordance with the SEBI Guidelines 20% of the Post-Issue Capital would be locked-in for a period of three years from the date of allotment in this Issue. The Equity Shares issued/ transferred last shall be locked-in first.

The above promoters have vide their letter dated 6th February 2006 given their consent for lock. Shares issued last shall be locked in first. The Equity Shares of the promoters will be locked-in for the period specified above from the date of allotment of Equity Shares in this Issue.

Locked-in Equity Shares held by the Promoters can be pledged with banks or financial institutions as collateral security for loans granted by such banks or financial institutions, provided the pledge of shares is one of the terms of the sanction.

In terms of clause 4.16 (b) of the SEBI Guidelines, Equity Shares held by the Promoters may be transferred to and amongst the Promoters/ Promoter Group or to a new promoter or persons in control of the Company subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with SEBI Takeover Regulations, as applicable.

Further, in terms of clause 4.16 (a) of the SEBI Guidelines, Equity Shares held by shareholders other than the Promoters may be transferred to any other person holding shares which are locked-in as per Clause 4.14 of the SEBI Guidelines, subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with SEBI Takeover Regulations, as applicable .

Other than as stated above, the entire pre-Issue equity share capital of the Company will be locked-in for the period of one year from the date of allotment of Equity Shares in this Issue.

4. Equity Shares held by top ten shareholders:

a. Our top ten shareholders and the Equity Shares held by them on the date of filing the Draft Prospectus.

Sr. Name of the shareholders No. of % age No shares

1 Jupiter Securities & Properties Private Ltd. 1487000 29.68 2 Devki Leasing & Finance 1024000 20.44 3 Concast Properties Private Limited 972750 19.41 4 Brahma Builders 521333 10.40 5 Sudhir Bindal 99063 1.98 6 Anju Bindal 93613 1.87 7 Bharat Bindal 92135 1.84 8 Shweta Bindal 84067 1.68 9 Yashveer Bindal 82477 1.65 10 Devki Rani Bindal 79813 1.59

b. Our top ten shareholders and the Equity Shares held by them ten days prior to the date of filing the Draft Prospectus with SEBI are as follows:

Sr. Name of the shareholders No. of % age No shares

c. Our top ten shareholders and the Equity Shares held by them two years prior to filing of this Draft Prospectus:

Sr. Name of the shareholders No. Of % age No shares 1 Millennium Cybertech Ltd. 437500 36.57 2 Devki Leasing & Finance Ltd. 300000 25.08 3 Anju Bindal 45710 3.82 4 Shweta Bindal 44550 3.72 5 Devkirani Bindal 38610 3.23 6 Rajesh Bindal Family Welfare Trust 35900 3.00 7 Sarita Bindal 34860 2.91 8 Yashveer Bindal 34858 2.91 9 Barmanand Bindal 25079 2.10 10 Bharat Bindal 23601 1.97

5. There are no outstanding warrants, options or rights to convert debentures, loans or other financial instruments into our Equity Shares.

16 Brahma Interactive Limited

6. Shareholding pattern of the Company prior and post this Issue

Sr. Pre-issue as on 31st Pre-Issue No. Category January 2006 No. of % holding No. of % holding Shares Shares A Promoters’ Holding 1 Promoters - Individuals 726587 14.50 726587 7.26 - Body Corporates 4023750 80.30 4023750 40.20 2 Persons acting in Concert 2.60 (Friends and Associates) 260533 5.20 260533

B Non Promoter Holding: Employees 0 0.00 500000 4.99 Public 0 0.00 4500800 44.95 Total 5010870 100 10011670 100

7. Buyback and Standby Arrangements:

Neither we nor our Directors or the Promoters, their respective directors or the Lead Managers have entered into any buyback and/or standby arrangements for the purchase of our Equity Shares from any person.

8. The Promoters including Promoter Group and Associates and Directors have purchased / sold Equity Shares of the Company, during the period of six months preceding the date on which Draft Prospectus is filed with RoC. The details are as given below:

Date of Issue Price No. of Shares Category Allotment 07/01/2006 4,53,000 27 Corporate Bodies Promoter 24/01/2006 20,68,050 22 Corporate Bodies Promoter 24/01/2006 4,50,000 Conversion Corporate Bodies Promoter, of preference Director and relative shares

9. The Equity Shares offered through this Public Issue will be fully paid-up.

10 As of the date of the Draft Prospectus, there are no outstanding financial instruments or warrants or any other right that would entitle the existing Promoter or Shareholders, or any other person any option to receive Equity Shares after the offering.

11. There would be no further issue of capital whether by way of issue of bonus shares, preferential allotment, and rights issue or in any other manner during the period commencing from submission of the Draft Prospectus with SEBI until the Equity Shares offered through this Draft Prospectus have been listed.

12. At any given point of time, there shall be only one denomination for the Equity Shares of the Company, unless otherwise permitted by law. The Company shall comply with such disclosure and accounting norms specified by SEBI from time to time.

13. The Company presently do not intend or propose to alter its capital structure for a period of six months from the date of opening of the Issue, either by way of split or consolidation of the Equity Shares or by way of further issue of Equity Shares (including issue of securities

convertible into or exchangeable, directly or indirectly for Equity Shares) whether preferential or otherwise, or if the Company enters in for acquisitions or joint ventures, it may consider raising additional capital to fund such activity or use Equity Shares as currency for acquisition and/ or participation in such joint ventures.

14. No single applicant can make an application for number of shares, which exceeds the number of shares offered, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investor.

15. The total numbers of members of the Company as on 31st January 2006 are 49.

16. An over subscription to the extent of 10% of the Issue size can be retained for the purpose of rounding off to the nearer multiple of minimum allotment lot while finalising the allotment

17. No shares have been allotted through a public issue in the last two years nor has the Company bought back its equity shares in the last six months.

18. Promoters’ Contribution has been brought in to the extent of specified minimum lot from persons defined as ‘Promoters’ under the guidelines.

18 Brahma Interactive Limited

4 Objects Of The Issue

The Company proposes the Present Issue to:

A) Proposed plan to come out with two more multiplexes at Bhopal & Indore with variety of activities. B) To meet the expenses of the issue C) To list the equity shares of the company to be issued through the Prospectus on BSE Limited & NSE.

Funds Requirement The Company has estimated funds requirement as under:

Sr Proposed No Particulars Cost 1 Land 400.00 2 Building & Other Civil Constructions 1050.00 3 Interiors & Furnishings 312.00 4 Equipments & Instruments 1118.00 5 Preliminary & Pre-Operative Expenses 150.00 6 Contingency Cost 70.00 Total 3100.00

Funding Plans (Means of Finance)

The funding plans proposed by the company are as under: Amount (in Sr. No. PARTICULARS Lacs) 1 Promoters Contribution 575.00 2 Funds through IPO 1350.22 3 Term Loan* 1174.78 Total Means Of Finance 3100.00

*Notes: • The company has received a sanction letter dated 24th November 2005 from State Bank of Indore for the Term Loan of Rs. 850 lacs and a sanction letter dated 10th January 2006 from State Bank of Hyderabad for the Term Loan of Rs. 994 lacs.

i. Land The company has identified the locations and it is in the process to acquire a piece of land admeasuring about 40000 square feet on ownership or lease basis each at Annapurna Area at Indore (West) & Hoshangabad Road at Bhopal. On the basis of prevalent market prices of land at these areas, total cost of both the lands has been estimated including cost of site development which will be consisting of cost of leveling of land, cost of compound walls, wall lighting, tubewell and gates. ii. Building & Other Civil Constructions Building at both the project sites would be almost identical. The complete building plan has been divided in six floors. The total construction area proposed for 85000 sq.ft. each of the entertainment complex .

The civil construction of the building will be done by promoters themselves being experienced people in this line. The building map & designs are prepared by Architect Vivek Verma, Mumbai and the day to day supervision of the building work will be looked after by Architect Sandhya Patil. Consultant V.V. Sapre Consultants Pvt. Ltd. has provided the total cost estimate of Rs. 5 crores for each project. Floor wise Construction Plan for each of the Entertainment Complex would be as under:

Area Of Floor Particulars Of Construction Construction Lower Ground - Parking & Power Backup Arrangement Ground Floor 30000 Sq.Ft. Commercial Complex- Shopping Mall First Floor 20000 Sq.Ft. Gaming Zone, Restaurant, Lobby, Circulation Area Second & Third Floor 25000 Sq.Ft. 4 Cinema Theaters & 3 Concession Stands Fourth Floor 10000 Sq.Ft. Projection & Machine Rooms. Total 85000 Sq.Ft. iii. Interiors & Furnishings The projects being multiplexes will have high footfalls and heavy public exposure and need to be highly visible, striking and with most modern and functional outlook. The cost of project includes cost of furnishing and interiors comprising of acoustic treatment, wall paneling, acoustical doors, cinemas screen frame, furniture, carpeting, painting ,false ceiling, electrification, lighting, etc.

Sr. No Particulars Amount (Rs. in Lacs) 1 Furniture 80.00 2 Acoustics 101.28 3 Other Interiors & furnishing 130.72 Total 312.00 iv. Equipments & Instruments

The Company is currently negotiating with various suppliers for supply of various fixtures, furniture, equipments, hardware, software etc required to operate a multiplex. The details of the proposed equipment suppliers and consultants are as given.

Sr. Equipment Suppliers Amount No. (Rs. in Lacs) 1 Projectors, console and platters MRH Digital Systems Pvt. Ltd. 134 etc. 2 Main and surround speakers, MRH Digital Systems Pvt. Ltd. 172 Amplifiers 3 Cinema Concession Banaco Overseas / Kitchenrama 42 Equipments 4 Video Games HG Electronics 502 5 Wood wool boards Anutone Accaustics Pvt. Ltd. 58 6 Carpet A-Z Carpets Pvt. Ltd. 60 7 Air conditioning Dikshit Consultants Pvt. Ltd. 160 8 Electrical fittings Dikshit Consultants Pvt. Ltd. 210 9 Fire fighting & others Dikshit Consultants Pvt. Ltd. 170 10 Hardware & Software Big Tree Entertainment Ltd. 30 11 Kitchen Equipments Bindal Equipments 32 Total 1118

20 Brahma Interactive Limited

v. Preliminary & Pre-operative Expenses The total cost of preliminary & preoperative expenses comprises of IPO Expenses, Expenses on Preparation of project report and collection of information, traveling expenses, interest during construction period, legal expenses , insurance and establishment expenses. vi. Contingencies A provision has been made towards the contingencies in the total cost of project keeping in view the inflation trend and project implementation schedule. The provision for contingency has been provided @ 2% on cost of total assets.

Rationale for setting up multiplexes at Bhopal and Indore

Multiplex at Bhopal

Brahma Interactive Limited has identified Bhopal as a target market and a City which is absolutely ready for a Multiplex. The city with a large population spread out over 286 Sq. K.M. With a huge service class/student population, Industrialisation and business community alongwith burgeoning middle class with high aspirations and latent desire for the movie going habit which is at present unfulfilled due to the non-availability of multiplexes and the dilapidated state of old cinemas.

Brahma Interactive Limited has plans to locate the multiplex at Hoshangabad road which is thickly populated and conveniently accessible to the posh as well as the middle class areas of Bhopal including the Arera Colony, University area, BHEL, M.P. Nagar etc. Bhopal at present has approximately 13 Cinemas with the total seating capacity of 13451.

Multiplex at Indore

BIL will set up another multiplex in western part of Indore. The western part of the city represents old city spread over in 10 SQ.KM. Comprises of Rajwada, Jawahar Marg, Cloth Market, Bada Ganpati, Aerodrome Road, Rajmohalla, MOG Lines, Gumashta Nagar, Lalbaugh, Sindhi Colony, Annapurna, Sudama Nagar, Juni Indore, Laxamibai Nagar, Harsidhi etc. The 40% of population of Indore is situated in western part total population of 0.80 million. The proposed plan of cinema will take care of local public expectations for better entertainment avenue in western Zone. Company has planned to set up entertainment complex there where there are only two cinemas.

The proposed multiplexes are most likely to be one of the most attractive visiting places for the residents of that geographical location. The multiplexes, comprising of 4 screens, are expected to house some of the prominent brands and establishments, thus ensuring adequate visibility.

The company is in the process of getting possession of the land. On receiving the possession of the site, the company will furnish the theater and install equipments required for operating a multiplex. All the approvals for operating the multiplex will be obtained in due course by the time construction of the site. The approximate cost for whole project is estimated at Rs. 3100 Lakhs. The grant of entertainment tax exemption for the proposed multiplex will be under the provisions of Government of Madhya Pradesh Notification No (37)-B-5-16-2000/Comm Tax-5(1) dated 25.10.2001. The company expect to commence the operation of first of the proposed multiplex by March 07 and subsequently the operation of the second multiplex is likely to commence by September 07.

The company has drawn out a developed model for these multiplexes which would take care of need of bigger space to accommodate variety of activities including full fledged restaurant, coffee shop, book shop, multiple product shopping, childrens’ game and other ancillary facilities and amenities to provide the viewers unique entertainment experience of international standards.

Each of the twin multiplex projects would, barring unforeseen circumstances, comprise of the followings:

a. Centrally Air Conditioned with adequate power back up facilities b. Land area of about 60,000 square feet in potential geographical location c. Construction area of about 1,00,000 square feet with most modern architecture and latest infrastructural facilities d. Multi Screen Cinema having an aggregate capacity of about 1100 seats e. Shopping arena of about 30,000 square feet f. Other facilities which would include food court, restaurant, coffee shop, book shop, exhibition/party hall, gaming zone, discotheque etc

Multiplex of this kind will open attractive business avenues for well known Indian and International retail and food chains to open their outlets there at the multiplexes. In other words, the multiplex facilities will attract retail brands and brand product outlets will add attraction to the multiplex. The visiting public to the multiplex will be the actual beneficiary in this scenario.

Schedule of Implementation for both the projects

Expected Expected Date Date Total Fund of of Item Commencement Completion Deployment Amount (Rs. In Lacs) Acquisition of Land Jan-06 Apr-06 400 Civil construction & Interior May-06 Dec-07 1362 Equipments & Instruments Dec-06 Dec-07 1118 Public Issue & Contingencies Oct-05 Apr-06 220

Proposed Deployment of Funds in the Project (Rs. in Lacs) Item Fiscal 2006-07 Fiscal 2007-08 Upto Mar-06 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Total Jan-07 Apr-06 Jul-06 Oct-06 to Apr-07 Jul-07 Oct-07 to to to Mar- to to to Jun-06 Sep-06 Dec-06 07 Jun-07 Sep-07 Dec-07 Acquisition of Land - 400 ------400 Civil Construction - 50 100 100 150 150 200 300 1050 Interiors & Furnishings - - - 30 60 60 60 102 312 Equipments & Instruments - - - 75 150 250 300 343 1118 Public Issue & Contingencies 100 60 10 10 10 10 10 10 220 Total 510 110 215 370 470 570 755 3100

22 Brahma Interactive Limited

Funds Deployed

Funds already deployed by the Company towards the Objects of the Issue as on 31st January 2006 are Rs. 582.28 Lacs. The same has been certified by M/S. O.T. Gandhi & Co., Chartered Accountants, vide their certificate-dated 1st February 2006. The details of funds already deployed are as under:

Sr. No. Details Amount in lacs

1 Land 0 2 Building & Other Civil Constructions 0 3 Interiors & Furnishings 0 4 Equipments & Instruments 0 5 Preliminary & Pre-Operative 100.00 6 Contingency Cost 0 8 Issue Expenses 0 Total Funds deployed 100.00

Sources of Financing of Funds already deployed:

The above amount of Rs.582.28 lakhs has been spent from the sources of financing as detailed below: ( Rs. in Lacs) Sr. No. PARTICULARS Amount 1 Promoters contribution 577.28 2 Unsecured Loan 4.00 Total 581.28

Details Of Balance Fund Deployment

The balance amount of Rs. 482 Lacs is invested in liquid funds

Appraisal

The project of the Company has not been appraised by any bank or financial institution.

Interim Use of Funds

Pending utilization of funds as stated above, the Company intends to invest the proceeds of this Issue in high quality, interest / long term liquid instruments including deposits with banks for the necessary duration. These investments would be authorized by the Board or a duly authorized committee thereof.

Basis for Issue Price:

Investors should read the following summary with the Risk Factors included from [y] to [y] and the details about the Company and its financial statements included in this Draft Prospectus. The trading price of the Equity Shares of the Company could decline due to these risks and the investor may lose all or part of his investment.

Qualitative Factors:

The company is the first Company to launch the three screen multiplex, Velocity III, in the state of Madhya Pradesh. Concentration on B class cities where it has the first mover advantage and a large catchment area. Tie-up with international chains such as Café Coffee Day, Book Café, The Home Store for sale of their brand output through retail counters at Velocity III. Velocity III has been established in the consumers mind due to marketing through newspaper ads, joint promos with media partner Radio Mirchi and providing services such as tele-booking, sms based services, home delivery of tickets. Experience in film distribution helps the company in understanding different film genres and their box-office potential.

Quantitative Factors:

1. Adjusted earning per share (EPS) weighted

Year EPS Weightage 12 Months Ended 31st March 2003 0.004 1 12 Months Ended 31st March 2004 2.319 2 12 Months Ended 31st March 2005 4.935 3 Weighted average 3.24 6

2. Price Earning ratio (P/E ratio) in relation to the Issue Price of Rs 27 per share

Issue Price of Rs. 27 per share

(a) Based on EPS of 12 Months Ended 31st March 2005 5.47 (b) Based on weighted average (EPS) 8.33 (c) PE Multiple Entertainment Industry Highest 91.5 Lowest 1.6 Average 37.1

Source: Capital Market Volume XX/22, dated Jan 30-Feb 12, 2006 ; Category: Entertainment/Electronic Media Software

3. Return on Net worth:

Year RONW Weightage (%) 12 Months Ended 31st March 2003 0.03 1 12 Months Ended 31st March 2004 20.22 2

24 Brahma Interactive Limited

12 Months Ended 31st March 2005 27.21 3

Weighted Average 20.35 6

4. Minimum Return on Increased Net Worth required to maintain pre-issue EPS

For Issue at Rs. 27.00 Total Networth After Issue (Rs. In Lacs) 2380.91 No. of Equity shares after the Issue (in Lacs) 100.11 Profits required to get required EPS (Rs. in Lacs) 494.04 Min. Required RONW for maintaining above EPS 20.75%

5. Net Asset Value (NAV) per share (Rs.) a) As on March 31st, 2005 24.25 b) As on March 31st, 2004 24.51 c) After Issue 23.78 d) Issue Price 27

6. Comparison of accounting ratios of the company with the peer group:

The Company is in Entertainment business. The accounting ratios of companies in the Industry Group Entertainment are as follows:

Company EPS (Rs.) P/E Ratio RONW (%) NAV (Rs.)

Brahma Interactives Limited 12 4.94 5.47 27.21 24.25 Months Ended 31st March 2005 Shringar Cinemas – 31st March 2005 - - - 19.8 PVR 1.6 - 8.7 79.4 Adlabs Films – 31st March 2005 5.5 49.4 18.6 100.7

Source: Capital Market Volume XX/22, dated Jan 30-Feb 12, 2006; Category: Entertainment/Electronic Media Software

7. The face value of Equity Shares of Brahma Interactives is Rs. 10/- and the Issue Price is Rs. 27. The Issue price is 2.7 times of the face value.

Tax Benefits

Statement Of Tax Benefits

Auditors’ report on Statement of Possible Tax Benefits Available to the Company and its Shareholders.

We hereby report that the enclosed annexure states the possible tax benefits available to Brahma Interactive Limited (‘the Company’) and its shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company and its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling the relevant conditions, which based on business imperatives it faces in the future, it may or may not choose to fulfill.

The benefits discussed below are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of tax consequences and the changing tax laws, each investor is advised to consult their own tax consultants with respect to specific tax implications arising out of their participation in the issue.

We do not express any opinion or provide any assurance as to whether: a) the Company or its shareholders will continue to obtain these benefits in future; or b) the conditions prescribed for availing the benefits have been/would be met with.

The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company.

For O.T.GANDHI & CO., Chartered Accountants,

Sd/- (A. B. Doshi) Partner Mem. No. 31460

Place : Indore Dated : 18.11.2005

26 Brahma Interactive Limited

Annexure - Statement of possible tax benefits available to Brahma Interactive Limited and its shareholders.

The following tax benefits shall be available to the Company and the prospective shareholders under Direct Tax.

A. BENEFITS AVAILABLE UNDER THE INCOME-TAX ACT, 1961 (“the Act”)

1. BENEFITS AVAILABLE TO THE COMPANY

1.1 Benefit under section 80IB(7A): The Company is eligible to claim benefits under section 80IB(7A) in respect of its business of operating multiplex theatres, subject to satisfaction of prescribed conditions. The benefit under section 80IB(7A) is not available in respect of a multiplex theatre located within municipal jurisdiction of Chennai, Delhi, Mumbai or Kolkata. Further, in order to avail the benefits under section 80IA(7), the Company must build, own and operate the multiplex theatre (as defined). The eligible deduction would be fifty per cent of the profits and gains derived from such multiplex theatre, for a period of five consecutive years beginning from the initial year of the said multiplex theatre.

1.2 Income from Mutual Fund units: Income, if any, received by the Company on units of a Mutual Fund specified under Section 10(23D) of the Act will be tax-exempt under Section 10(35) of the Act.

1.3 Capital gains: Capital assets are to be categorized into short term capital assets and long term capital assets based on the period of holding. All capital assets (except shares held in a Company or any other listed securities or units of UTI or Mutual Fund units) are considered to be long-term capital assets if they are held for a period in excess of 36 months. Shares held in a Company or any other listed securities or units of UTI and Mutual Fund units are considered as long term capital assets if these are held for a period exceeding 12 months.

Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for deduction of cost of acquisition/improvement and expenses incurred in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. However, in respect of long term capital gains, for resident shareholders it is permitted to substitute the cost of acquisition/improvement with the indexed cost of acquisition/improvement, which adjusts the cost of acquisition/improvement by a cost inflation index, as notified from time to time.

From 1 October 2004, long-term capital gains arising on sale of equity shares and units of equity oriented mutual fund (as defined) under Section 10(23D) on a recognized stock exchange are exempt from tax under Section 10(38) of the Act on being subject to Securities Transaction Tax levied under Chapter VII of the Finance (No. 2) Act of 2004.

From 1 October 2004, under the provisions of section 111A of the Act, short-term capital gains arising on sale of equity shares and units of equity oriented mutual fund (as defined) under Section 10(23D) on recognized stock exchange are subject to tax at the rate of 11.22 per cent (basic rate of 10% to be increased by a surcharge of 10 per cent and the total to be increased by an additional surcharge by way of education cess at the rate of 2 per cent), provided the transfer is chargeable to Securities Transaction Tax being levied under Chapter VII of the Finance (No. 2) Act of 2004.

Under the provisions of Section 112 of the Act, long-term gains are subject to tax at a rate of 22.44 percent (basic rate of 20% to be increased by a surcharge of 10 per cent and the total to be increased by an additional surcharge by way of education cess at the rate of 2 per cent).

As per the proviso to Section 112(1), the long term capital gains arising on transfer of listed securities or units is restricted to 11.22 per cent (basic rate of 10% to be increased by a surcharge of 10 per cent and the total to be increased by an additional surcharge by way of education cess at the rate of 2 per cent) of gains without indexation benefit.

As per Section 54EC of the Act and subject to conditions specified therein, taxable long-term capital gains are not chargeable to tax to the extent they are invested in certain notified bonds within six months from the date of transfer. If the Company transfers or converts the notified bonds into money (as stipulated therein) within a period of three years from the date of their acquisition, the amount of gain exempted earlier would become chargeable in such year. The bonds specified for this Section are bonds issued by National Bank for Agriculture and Rural Development (NABARD), the National Highway Authority of India (NHAI), the National Housing bank (NHB), the Rural Electrification Corporation Ltd. (REC) and Small Industrial Development Bank of India (SIDBI).

As per Section 54ED of the Act and conditions specified therein, long term capital gains arising on listed securities or units are not be chargeable to tax to the extent such gains are invested in acquiring equity shares forming part of an “eligible issue of share capital”. The investment needs to be within six months from the relevant date of transfer. ‘Eligible issue of capital’ means an issue of equity shares that satisfied the following conditions:

• The issue is made by a public company formed and registered in India; and • The shares forming part of the issue are offered for subscription to the public.

There is a legal uncertainty over whether the benefit under this Section can be extended to shares forming part of the offer for sale by the selling shareholders. At this stage, it may be relevant to note that under Section 10(36) of the Act, the Central Board of Direct Taxes (‘CBDT’) has clarified vide Circular no.7/2003 dated 5 September 2003, that ‘public issue’ shall include the offer of equity shares in a company to the public through a prospectus, whether by the company or by the existing shareholders of the company.

2. BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS

2.1 Dividend income: Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in Section 115-O of the Act is exempt from income-tax in the hands of the shareholders.

2.2 Capital gains: As outlined in paragraph 1.3 above. Further, as per the provisions of Section 54F of the Act and subject to conditions specified therein, any taxable long term capital gains (other than on residential house but including those on shares) arising to an individual or Hindu Undivided Family are exempt from capital gains tax if the net sales consideration is utilized, within a period of one year before, or two years after the date of transfer, in purchase of a new residential house, or for construction of residential house within three year from the date of transfer, provided that the individual should not own more than one residential house. In case of a resident individual, the applicable surcharge is 10 per cent if the total income exceeds Rs. 1,000,000 and needs to be factored in before levy of additional surcharge by way of education cess of 2 per cent. In other cases the applicable surcharge is nil and additional surcharge by way of education cess of 2 per cent.

2.3 Credit for Securities Transaction Tax (STT): The STT paid by the shareholder in respect of the taxable securities transactions entered into in the course of the business would be eligible for rebate from the amount of income-tax on the income chargeable under the head ‘Profits and Gains under Business or Profession’ arising from taxable securities transactions.

28 Brahma Interactive Limited

3. BENEFITS AVAILABLE TO NON-RESIDENT SHAREHOLDERS

3.1 Dividend income: As outlined in paragraph 2.1 above.

3.2 Capital gains: As outlined in paragraph 1.3 above except that under first proviso to Section 48 of the Act, the taxable capital gains arising on transfer of capital assets being shares or debentures of an Indian Company need to be computed by converting the cost of acquisition, expenditure on connection with such transfer and full value of the consideration received or accruing as a result of the transfer into the same foreign currency in which the shares were originally purchased. The resultant gains thereafter need to be reconverted into Indian currency. The conversion needs to be at the prescribed rates prevailing on dates stipulated. In view of this mechanism, in computing such gains, the benefit of indexation is not available to non-resident shareholders. In case of a non-resident individual, the applicable surcharge is 10 per cent if the total income exceeds Rs. 1,000,000 and needs to be factored in before levy of additional surcharge by way of education cess of 2 per cent. In other cases the applicable surcharge is nil and additional surcharge by way of education cess of 2 per cent.

3.3 Tax Treaty Benefits: As per Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the non-resident. Thus, a nonresident can opt to be governed by the beneficial provisions of an applicable tax treaty.

4. BENEFITS AVAILABLE TO NON-RESIDENT INDIAN SHAREHOLDERS

4.1 Dividends: As outlined in paragraph 2.1 above.

4.2 Capital gains: Under Section 115I of the Act, a Non-resident Indian (NRI) as defined therein has the option to be governed by the normal provisions of the Act as outlined in paragraph 1.3 or the provisions of Chapter XII-A of the Act through appropriate declaration in the return of income. The said Chapter inter alia entitles NRI to the benefits stated hereunder in respect of income from shares of an Indian company acquired, purchased or subscribed in convertible foreign exchange.

As per the provisions of Section 115D read with Section 115E of the Act and subject to the conditions specified therein, taxable long term capital gains arising on transfer of an Indian company’s shares, will be subject to tax at the rate of 10.20 percent (basic rate of 10 per cent to be increased by additional surcharge by way of education cess of 2 per cent) (if the total income exceeds Rs. 1,000,000 then a surcharge of 10% needs to be factored before levy of additional surcharge).

As per the provisions of Section 115F of the Act and subject to the conditions specified therein, gains arising on transfer of a long-term capital asset being shares in an Indian Company would not be chargeable to tax. To avail this benefit the entire net consideration received on such transfer needs to be invested within the prescribed period of six months in any specified asset or savings certificates referred to in Section 10(4B) of the Act.

If part of such net consideration is invested within the prescribed period of six months in any specified asset or savings certificates referred to in Section 10(4B) of the Act then such gains would not be chargeable to tax on a proportionate basis. For this purpose, net consideration means full value of the consideration received or accrued as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.

The specified asset or savings certificates in which the investment has been made are restricted from being transferred within a period of three years from the date of investment. In the event of such a transfer the amount of capital gains tax exempted earlier would become chargeable to tax

29 as long-term capital gains in the year in which such specified asset or savings certificates are transferred.

As per the provisions of Section 115G of the Act, Non-Resident Indians are not obliged to file a return of income under Section 139(1) of the Act, if:

• Their only source of income is income from investments or long term capital gains earned on transfer of such investments or both; and • The tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

As per Section 115H of the Act, when a NRI becomes a resident in India, the provisions of the Chapter XII-A can continue to apply in relation to investment made when he was a NRI. Towards this, the NRI needs to furnish a declaration in writing to the Assessing Officer along with his return of income.

4.3 Tax Treaty Benefits: As outlined in paragraph 3.3 above

5. SPECIAL BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FIIS’)

5.1 Dividend income: As outlined in paragraph 2.1 above.

5.2 Capital gains: As per the provisions of Section 115AD of the Act, FIIs are taxed on the capital gains income at the following rates:

Nature of income Rate of tax (%)

Long term capital gains 10 Short term capital gains 30

The above tax rates would need to be increased by the applicable surcharge of 10 per cent and the total to be increased by an additional surcharge of 2 per cent towards education cess. In case of Noncorporate FIIs (e.g. trusts) the surcharge is 10% if their total income exceeds Rs. 1,000,000, otherwise it is nil. This has to be increased by additional surcharge of 2%. The benefits of indexation and foreign currency fluctuation protection as provided by Section 48 of the Act are not available to a FII.

From 1 October 2004, long-term capital gains arising on sale of equity shares and units of equity oriented mutual fund (as defined) under Section 10(23D) on the recognized stock exchange are exempt from tax under Section 10(38) of the Act on being subject to Securities Transaction Tax as levied under Chapter VII of the Finance (No. 2) Act of 2004.

From 1 October 2004, Short-term capital gains arising on sale of equity shares and units of equity oriented mutual fund (as defined) under Section 10(23D) on the recognized stock exchange to Corporate FIIs are subject to tax at the rate of 11.22 per cent (basic rate of 10% to be increased by a surcharge of 10 per cent and the total to be increased by an additional surcharge of 2 per cent by way of education cess) on being subject to Securities Transaction Tax levied under Chapter VII of the Finance (No. 2) Act of 2004. In case of Non-corporate FIIs (e.g. FII), the applicable surcharge is 10% if their total income exceeds Rs. 1,000,000.

5.3 Tax Treaty Benefits: As outlined in paragraph 3.3 above.

6. BENEFITS AVAILABLE TO MUTUAL FUNDS

30 Brahma Interactive Limited

As per the provisions of Section 10(23D) of the Act, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made thereunder, Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorized by the Reserve Bank of India, would be exempt from income tax, subject to the prescribed conditions.

7. BENEFITS AVAILABLE TO VENTURE CAPITAL COMPANIES / FUNDS

As per the provisions of Section 10(23FB) of the Act, any income of Venture Capital Companies/Funds registered with the Securities and Exchange Board of India, would be exempt from income tax, subject to the conditions specified.

B. BENEFITS AVAILABLE UNDER THE WEALTH-TAX ACT, 1957

Asset as defined under Section 2(ea) of the Wealth Tax Act, 1957 does not include shares in companies and hence, shares are not liable to wealth tax.

C. BENEFITS AVAILABLE UNDER THE GIFT-TAX ACT

Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares will not attract gift tax.

SECTION IV: ABOUT BRAHMA INTERACTIVE LIMITED

1. Industry Overview

Indian Entertainment Industry

The Indian Entertainment Industry comprises of films, television, music, radio and live shows. According to the Report published by KPMG-CII titles Indian Entertainment Industry Focus 2010: Dreams to reality, the Industry has grown from Rs. 19,600 crore in 2003 to around Rs. 22,200 crore in 2004.

Overall, the industry is expected to grow at the rate of 18% per annum to touch Rs. 58,800 crore by 2010. This expected growth will be powered by new technological breakthroughs, increasing content variety ans a series of enabling regulatory actions – all of which are expected to change the way content is produced, delivered and consumed.

This growth will also be significantly aided by overall economic growth of India and of its rapidly growing, affluent consuming classes, which now spreads beyond the cities, and by the rising penetration of Indian Content outside India.

The bulk of the Entertainment Industry’s growth will continue to come from television, which is expected to cross Rs. 37000 crores by 2010 by leveraging the opportunities presented by new addressable delivery platforms like DTH, IP-TV and digital cable, which will drive pay revenues. The film industry is also expected to grow significantly, crossing Rs. 14000 crore by 2010, powered by increasing discipline and rising efficiency levels and penetration into hitherto uncharted overseas markets.

The pie chart below sets forth the percentage contribution of various revenue sources to the total revenue of the Indian Entertainment Industry in 2004

Entertainment Industry Revenue

28%

Live Event, 4% 65% Music, 2% Radio, 1%

Source : FICCI -PwC

Indian Film Industry

The Indian film Industry till recently was not corporatised and was associated with a few producers and financers. With the advent of new generation producers & directors, a large degree of professionalism is coming into the Indian Film Industry.

32 Brahma Interactive Limited

The making of a film starts with the producers identifying either an idea or a story to be made into a film. The producer appoints the director and both together select the script writer, actors and all the other paraphernalia required for making of the film. At this juncture the movie is either financed by the producers or financers. Once the movie is complete the last stop as far as financial control is concerned lies with the processing lab which processes the prints. The film is then sold on territory-wise basis to various distributors which shall pay for their territory to the producer or the processing lab and collect the prints. The distributor purchases the rights to exhibit the film in a territory for different tenure depending on the agreement and the distributor now either rents cinemas in small centers or enters into revenue sharing arrangements with the multiplexes and large cinemas in bigger centers. The exhibitor or the cinema owner shall exhibit the movie after paying entertainment tax if applicable, sharing the revenue with the distributor.

Films have always been the most popular form of entertainment in India. The film segment has experienced a steady growth in the last few years with over 900 films released in 2004. Hindi Films share the major contribution followed by the regional films in Telugu, Tamil, Kannada and Malayalam. Though the segment has primarily been in the hands of unorganized sector till late, several developments in terms of corporatisation and organized fundings from Banks & Institutions have changed the face of the film industry.

Indian Film Industry is the largest in the world in terms of number of films produced & admissions. Admissions during the year 2004 reached a record 3100 million. The total admissions of Europe, Middle East and Africa (EMEA) were only 1,200 million and that of United States was 1,500 million. The rest of Asia/Pacific was also only at about 1,000 million. The industry has grown over 3% since the year 2003, India continues to outperform the United States by over 50% in terms of the number of admissions

The Film Industry has been dominated by the growth of multiplexes. The increase in the number of multiplexes is making the movie goers, especially in urban India, experience a new way of enjoying movies. The rise in multiplexes in many ways has also impacted the movie-making business. Smaller size theatres provide the incentive for low budget niche films & experimental cinema. There has been change in terms of shortening of the average release time in theatres which provides a growth opportunity in the home video segment and increase the revenues from satellite and cable rights.

With the ever increasing Indian Diaspora around the world, the Indian film producers have tapped this population by producing films with cross over themes. Out of the total 15 films that were simultaneously released in local and international market, it is said that 7 films performed really well in the international markets. In 2004, estimated five movies generated more than USD 2 million each, in the UK & USA.

The International movies, especially Hollywood movies, are also very popular in India. Sony Pictures Releasing of India (formerly Columbia TriStar) is one of the largest international film distributors in India. The distributors adopt dual strategy of going for a wide portfolio of films and aggressive marketing across all types of markets which help them in achieving high revenue numbers.

The industry has started using various techniques like use of animation, running the film on the mobile phone, digital film making etc. to market the movies so that the movies run successfully.

There has also been the emergence of Integrated film companies i.e. film production and film exhibition companies venture into film distribution and vice-versa. Also the home video market is emerging in India in a big way. India boasts os having over five million home video and DVD subscribers in 2004, having grown over 50% from the previous year. After Satellite TV and overseas market, home video is turning out to be the next big source of revenue for Indian films.

Some of the growth drivers for the Indian Film Industry are:

o International Cinema is being dubbed in the Indian languages. This has contributed to higher admissions in theatres and increased spend on advertsing/promotions.

o Increasing importance of regional cinema - According to Industry estimates, Hindi language films command only a 40% share in the Indian film market whereas a large portion of the films made in India are produced in the south and east regions of India in their respective local languages. The regional language films too have the international viewership catering to the demands of regional base of Indians across the globe.

o Advertising in movie halls guarantees a captive audience unlike Television which has the capacity to show more commercials but does not ensure an audience. As movie watching is becoming more organized, advertising in theatres can help reach this “hard-to-get” demographic profile.

o Sale of merchandise products/promotional items is a new trend picking up in India. This is contributing significantly to the increased box office collection revenues of the segment.

Source: FICCI -PwC

Multiplexes

Though the concept of multiplex is not very old, its evolution across the country has been very swift. After IT and Mass Communication, this is probably the fastest developing sector in India. Growth of Multiplexes has ensured that there is a platform to screen movies that appeals to niche audience in the overall movie viewer market. This in turn has successfully created a demand for small budget movies catering to such niche tastes and has effectively broadened the Indian Film market. It has also brought back the urban Indian film viewers to the movie halls. The availability of a niche audience and smaller screening options have encouraged film producers to produce niche and low budget films and make a decent return on investment from such films. The multiplex boom has stimulated filmmakers to advertise and market their product in the right prospective and to right eyeballs.

Key Drivers

Organised Retail Boom

There has been a boom in the organized retail market in India. There are malls coming up in many cities and towns. One of the key elements driving the success of a mall is its ability to drive footfalls consistently. Hence each mall design looks at a mix of tenants – large and small. Multiplexes are one of the anchor tenants to large format malls, as they provide increase footfalls in shopping malls by 40-50 percent. At Multiplexes, any customer will be ready to spend on gaining total experience of entertainment in the form of a movie, a premium coffee and snacks and should be able to unveil a high indulgence.

Quality Theatre Complexes

Films are key destination for entertainment. Exhibition is the last mile in the film value chain where the patron interacts with the film. The poor condition of most single screens has turned away family audiences. Although multiplex tickets are usually priced at premium as compared to the ticket prices of singl screens, they continue to attract patrons (both individuals and families), as they offer better quality of service and ambience.

34 Brahma Interactive Limited

Alternate sources of content

In addition to film-based content, a new window of opportunity is being explored internationally by multiplexes. They are experimenting with new software content like live sporting events – Football, Cricket, 1-Grand Prix, Music Concerts, Beauty Pageants etc.

Entertainment Tax

The existing rate of entertainment tax in various states is high, which has affected profitability of players in the exhibition business. As a result, exhibitors (especially the single screen owners) have not been able to channelise investments for maintaining and/or upgrading their theatres. A worsening quality of theatres has resulted in a lower audience turnout, which further puts a strain on profitability.

Multiplexes offer significant economic advantages over similar size single screen theatres as they are entitled to entertainment tax exemptions based on certainsriteria in some states.

The key economic advantages are as follows

Better Occupancy

Multiplexes have multiple screens, with different seating capacities. The multiplex operator can choose to show a movie in a larger or a smaller theatre, based on its expected potential. This enables the Multiplex operator to maintain higher capacity utilization, as compared to a single screen. Multiplex enjoys an average of 50-60 percent occupancy per screen as opposed to 30-35 percent of standalone theatres

Greater Number of Shows

Each film has a different screening duration. Since multiple films are available for screening, the multiplex operator has the flexibility to decide on the screening schedule so as to maximize the number of shows in the multiplex, thus enabling it to generate higher number of patrons.

Better Exploitation of Films

Typically, a Film has a large audience in the first week of release. A multiplex operator could therefore commence screening by showing the film on multiple screens in the first week, then gradually reduce it to one screen and finally move it to the smallest seating hall with the complex. This enables better exploitation of the revenue potential of the film.

Better Cost Management

A multiplex complex benefits from a set of shared facilities such as concession stands and entertainment products, which results in better cost management.

Tax Rebates

The government has accorded various tax rebates for multiplexes.

Dynamic Ticket Pricing

There is a scope for dynamic ticket pricing, allowing them to change ticket prices according to demand and supply.

After blazing through the big cities, the multiplex revolution is now sweeping through small towns in the country. The concept of multiplex has received almost identical overwhelming response irrespective of culture, caste, creed or colour of the state and its residents hence, whether the state is Maharashtra or Gujarat or Karnataka or New Delhi or Rajasthan or Madhya Pradesh, multiplex has now become first choice of cinemagoers. Buoyed perhaps, by the high returns associated with multiplexes in metros over the last decade, the last few years have seen a number of players in the entertainment business coming up with multi-screen cinemas, in cities like Ghaziabad, Meerut, Kanpur, Indore, Faridabad, Jamnagar and Ludhiana. A sudden splurge in stylish multiplexes in these small towns has broadened entertainment options for viewers in these places, which earlier had to contend with watching movies either in the existing single- screen theaters or on a DVD player.

Various state governments have framed specific policies for multiplexes and their development which include tax holidays, tax deferments, other attractive commercial incentives and financial concessions. These are very good signs so far as the future growth of multiplexes in India is concerned.

Source: FICCI – PwC

Around 30 percent of the films generate 90 percent of the industry revenues. This is not surprising considering that out of around 150 mainstream films produced annually, 40-50 percent would not be considered financially viable in a corporatised environment. These laggards include

9 Very low budget (Category D) films with weak scripts, completely unknown cast and inexperienced producers and directors 9 Certain category AA (super budget) films that suffer due to cost overruns and a higher risk quotient and 9 Several B Grade (mid-budget) films that suffer due to a serious mismatch between the products' cost and revenue potential.

Multiplex gathers increased momentum in the categorization of films. Briefly, it can be analysed as under:

Category AA films are typically 'big banner' films. These films have a strong star cast, high level of technological sophistication and typically, socially acceptable themes. The key factor in an AA category film is that the producer and the director have a very strong track record and have the ability and the experience to complete the film on time. Category 'AA costs are assumed to range from INR 150 to 300 million. Apart from domestic theatrical and other revenues, these films have an overseas potential as well, depending on the presence of certain lead actors.

Category A films have costs that are assumed to range from INR 80-150 million. The costs cover variables like type of shoot, locations, number of shifts, the type of agreements with artists, post-production costs, capitalised interest, and so on. At the same time, they enjoy multiple cash flows on the sale of satellite rights, music rights, cable rights, internet rights and sponsorships. Generally, these films recover their costs in the first four weeks after release, unless they have been made at a disproportionately high cost.

Category B films are typically made by relatively financially weaker producers. In many cases, the completion of the film gets delayed due to the lack of last-mile finance. The producer also does not have his own sources of finance and usually taps the market for funds. Sometimes, the directors of these films have a mediocre track record with negligible past box office success to their credit. The star cast here may not be top grade and may include actors who have not been completely accepted by the mainstream audience. Often,

36 Brahma Interactive Limited these films are not completed due to lack of funds. Their costs are assumed to range from INR 30-80 million.

Category C films comprise of a heterogeneous mix of low budget, high quality content films at one end with a high profit potential, to still-born projects characterised by a lack of quality, content, and good artists fashioned on run-of-the-mill subjects, espousing mediocre music and virtually no market. Their costs are assumed to be between INR 10-30 million.

Category D films, which comprise of virtual non-starters in terms of finance, content, and technical quality, have not been included in the sample examined due to their inability to get past the approval stage in a more corporatised environment.

It should be noted that the above analysis is indicative and not comprehensive. it is intended to serve just as an illustration. It is nevertheless observed that B and AA category films have proved to be relatively more risky investments for production houses, followed by A and C category which show lesser variation in their respective returns. B category films also perform poorly in the overall returns ranking, followed by AA and A category films that share the same return characteristics, with category C films finishing on top once again. The combined ranking for both the years shows that category A and C films are better investment prospects in terms of the balance between their risk-return characteristics, followed by category AA (super budget) films and, finally, category 8 (mid budget) films which appear to be the riskiest.

Film Distribution

Film distribution is an essential part of the film value chain. Film Distributors are the ones who buy theatrical distribution rights from film producers to exhibit the film into various theatres.

Recent Trends Distribution has evolved from mass-film production. Increasing importance of multiplexes with many screens has encouraged this trend of segment-specific films. Another trend observed in the past few years is that, there has been an unrealistic increase in acquisition prices of film products for distribution. This situation is expected to get automatically corrected in near future. Apart from this there are attempts to consolidate the film value-chain to include two or more elements of the value chain i.e. Production, distribution, and exhibition. The company has a strong position in distribution and exhibition.

Corporatisation In the 1990s, the Indian film industry was completely fragmented, with no individual entity - content producer, financier, distributor, exhibitor, music company and satellite broadcaster - commanding any considerable presence across the value chain. As a result, the revenue earning capacity of any given film became a function of the relative bargaining power of the concerned parties. Consequently, creative freedom and quality of content suffered. Risk mitigation, contracts and insurance were alien terms, while time and cost overruns were commonplace. A corporatised approach to production implies and includes the following mix of initiatives or actions:

9 Intelligent selection of scripts which factors in an understanding of consumer preferences and market trends 9 Project feasibility analysis for target audience preferences, box office results talent popularity and story viability in domestic and international markets 9 Active participation and consent of each activity head at the green-lighting stage 9 Investing in equipment, technology and management information systems to bring down costs and build in flexibility in shooting schedules 9 Control over production timelines, budgets and quality with periodic monitoring

9 Outsourcing non-critical functions to focus on the core aspects of film- making 9 Introducing a profit sharing system thereby reducing initial risk on full upfront payment etc.

Organised film financing Till 2000, films were mostly financed through private sources, since commercial lending agencies considered the industry to be a risky and low-priority sector. The two major sources for finance were:

9 Distributors and music companies. who would pay advances to established filmmakers and films with reputed star casts to acquire the theatrical/ music rights. 9 High-net worth individuals

Due to the unorganised nature of this funding and its perceived riskiness, the interest rates charged were usurious.

Curiously, despite several downturns and the apparent riskiness, private financing continued unabated, even during lean periods. This indicates that the industry was able to generate sufficient returns, despite the high financing cost. This also implies that it is quite likely that the costs of production may have been grossly overstated in the past whereas it is possible that the bottom-line for the industry may actually have been much healthier over the last few years than what it was believed to be.

2. Business Overview

Exhibition Business

The Company was the first company to establish the Multiplex, VELOCITY-III, in the state of Madhya Pradesh, in Indore, in the year 2003. The multiplex is constructed in the area of 25000 Sq. Ft. which alongwith three cinema screens, also includes

A full fledged restaurant, Coffee shop, Book shop, Multiple product shopping, Children’s game arena and few other ancillary facilities and amenities.

The construction of project was completed at a total cost of about Rs. 1200 lakhs.

All the three cinema screens have the facilities which include AC hall, acoustics, imported quality projectors and sound system, modern architecture. The number of seats per screen is given below:

Screen No. of Seats Screen I 578 Screen II 242 Screen III 232 Total 1052

The total number of patrons in Velocity III for the year ended 31st March 2005 is 2,89,200.

Revenues a) Box Office Revenue : The box office revenue is affected by the number of patrons and average ticket price . The details of Box Office revenue is as follows:

38 Brahma Interactive Limited

Period: 1st April 2004 to 31st March 2005

Week Days Audi No No of Patrons Cost Average (Rs. in Ticket Lacs Price I 175873 150.36 85.50 II 59354 51.83 87.33 III 53972 47.45 87.92 Weekends I 106751 75.21 70.45 II 39718 27.39 68.95 III 38815 26.46 68.17

Period: 1st April 2005 to 31st October 2005

Week Days Audi No No of Patrons Cost Average (Rs. in Ticket Lacs Price I 114808 117.82 102.62 II 38841 40.60 104.53 III 38554 40.86 105.98 Weekends I 104927 67.88 64.69 II 38319 24.71 63.69 III 38609 25.49 66.02 b) Food & Beverages Revenue Food & Beverages revenue is the second largest source of revenue for the Company. Food & Beverages revenue includes canteen and restaurant sales. Canteen sales include food & beverages like popcorn, sandwiches, soft drinks and confectionery etc. The total revenue from canteen sale is Rs. 47.96 lacs. Restaurant sales include the food & beverages like snacks, Chinese, Punjabi dishes etc. The total revenue from restaurant sale is Rs. 25.13 lacs. c) Advertisement Revenue Various brands like Bharati Cellular, Idea, Bajaj Auto, Kinetic, Soni India, Philips, Maruti Udyog, LIC, Standard Chartered Bank etc. The advertisement revenue for the year 31st March 2003 is Rs. 8.00 lacs. d).Franchise Revenue The franchise fees as on 31st March 2005 is Rs. 3.13 lacs.

Distribution Business

Company started its distribution business in the year 2003. Some of the films distributed by VELOCITY III in the past two years are as follows

Film Territory Ab Tak 56 Indore Muskaan Central India Krishna Cottage Central India Gayab Central India Julie Central India

Tumsa Nahin Dekha Central India Vaastu Shastra Central India Naach Central India Batman Central India Page 3 Central India C U At 9 Central India Mumbai Xpress Central India Starwars Central India Mr. & Mrs. Smith Central India Maine Pyaar Kyun Kiya Central India Pyaar Mein Twist Central India Yahaan Central India

Collaborations

The Company has entered into consortium agreement with Neha Resorts & Hotels Pvt. Ltd. on 20-08-2005 to bid for project of Delhi Metro Rail Corporation Ltd.

Utilities

The main utilities required in working of multiplex are:

a. Electric Power Supply: Velocity III has the sanctioned power load of 270 KVA and transformer of 315 KVA b. Power Back Up: Two DG sets of 180 KVA and 320 KVA each. c. Water : Two tube wells d. Fire-Fighting: b) Underground water tank of 1.00lac litres c) Diesel Pump of 30 KVA d) Smoke Detectors in AHU’s and projection and A/C plant room e) Fire Alarm and hooter system f) Fire Extinguishers g) Wet riser h) Hose Reels e. Air Conditioning: Two air conditioners of 132 TR and 48 TR each

Competition

Many national chains like Adlabs, PVR, Shringar etc. are expanding all over the country. The focus of this entire plan into chains in metro centric to start with and is percolating to non-metros in a slow fashion.

The company currently has Competition only from single cinema theatres, but the key players in this industry like PVR Limited and Adlabs Films Ltd. are planning to launch the multiplex in the city of Indore. This will reduce the market share of the Company.

PVR Limited will set up a Multiplex in Indore which is Five Kilometers from our Multiplex. It will be a five screen multiplex having a total seating capacity 1,180. Adlabs is launching multiplex in Indore by December 2005 with the multiplex of four screens and number of seats as 1200.

Many national chains like Adlabs, PVR, and Shringar etc. are expanding all over the country. The focus of this entire plan into chains in metro centric to start with and is percolating to non-

40 Brahma Interactive Limited metros in a slow fashion. VELOCITY on the other hand is entirely concentrating of non-metros like Indore and Bhopal where it either has first mover advantage or a large catchment area to feed the Multiplex. VELOCITY is very focused on customer services like free home delivery, internet booking, and acceptance of credit cards etc. which make the movie going experience a very convenient and pleasurable one. For the future in a competitive environment the multiplexes which offer the best services at reasonable prices shall survive and flourish.

The advent of many multiplexes chain also results in better market penetration and depth at result in better customer awareness and higher levels of aspirations which in turn drives the patrons to watch the movies in multiplexes.

Business Strategy

Based on the above analysis and considering the knowledge, experience and competence available with the promoters of VELOCITY III, they have drawn out marketing strategy for the upcoming multiplexes. The salient features of the marketing plan are as under: a. Facility of home delivery of tickets b. Facility of computerized booking and ticketing c. Customised price matrix which include differential weekend pricing and week days pricing of tickets d. Attractive events and activities round the year e. Facility of tele-booking and SMS based booking f. Facility of Internet booking through secured payment gateway g. Facility of multiple show timings – shows starting from 10.00 am to 10.00 p.m. h. Joint promos with other media partners like RADIO MIRCHI etc i. Joint promos with other international retail brands.

The Company is proposing to develop an amusement park at Shastri Park, New Delhi on the land to be leased by Delhi Metro Rail Corporation Limited. In this respect the company has filed a bid in collaboration with Neha Resorts and Hotels Limited, Mumbai, which is a company promoted by internationally known RUCHI Group.

This joint venture is objectively looking for tourism and entertainment sector which it feels, constitutes the fundamental building block for any thriving economy. This sector happens to be one of the most employment generators and also has a direct impact on all the downstream industries such as Hotels, Aviation, and Infrastructure etc.

Brahma Interactive Limited operates today with three screens will strengthen the Company’s presence in the territory as it will lead the Company in a better position to deal with the distributors due to the larger coverage of cities and number of screens. It will also add impetus to the Company’s Distribution business wherein the Distribution business shall have captive and in-house screens for the movies that are being distributed by the Distribution Division. By having both exhibition and distribution business in the same banner, the Company shall have immense strength to tap the entertainment business which is a sunrise industry and on a high growth path.

Location plays a very important role for the success of the multiplex. The locations have been selected after studying the spending habits, demographics, existing facilities and total vacuum for multiplexes. The proposed locations provide huge catchment area to respond to the need for a multiplex.

Competitive Strengths 1. The promoters have rich experience of entertainment business 2. The company belongs to the well-known and reputed Bindal family.

3. The promoters of VELOCITY III have set a benchmark for other multiplexes in economy in capital cost and efficiency in management pre and post implementation of the project. 4. The promoters have proven record of project management skills.

Insurance

1. The Company has taken four types of Insurance Policy from National Insurance Co. Ltd. The details of the policy are hereunder:

Sr. Date Policy No. Policy Type From To Amount Premium No. 1 9th April 2005 321100/11/05 Fire Policy 10th April 9th April Rs. 4,10,00,000 Rs. 1,26,510 /3100149 2005 2006 2 9th April 2005 321100/48/05 Money 10th April 9th April Rs. 5,05,00,000 Rs. 9,505 /7600035 Insurance 2005 2006 Policy 3 9th April 2005 321100/41/05 Workmen 10th April 9th April Rs. 6,00,000 Rs. 3,739 /8600001 Compensatio 2005 2006 n Policy 4 9th April 2005 321100/46/05 Public 10th April 9th April Rs. 40,00,000 Rs. 10,416 /8700113 Liability 2005 2006 Insurance Policy

2. Keyman Insurance Policies purchased from Max New York Life Insurance Company Limited on the lives of following persons:-

Sr. Category of Effective Policy Sum Assured Plan No. Persons Date of Number Coverage 1. Yashveer Bindal 23rd April ‘05 254944473 Rs. 10,00,000/- Whole life Par 2. Bharat Bindal 23rd April ‘05 254944481 Rs. 10,00,000/- Whole life Par

PROPERTY

Property on Lease

Location Nature of Security Nature of Lessor Date of Consideration Deposit/Premium Contract Expiry Plot No. 18A Yearly Rent Premium Rs. Agreement Indore 30 Years Velocity III, Indore of Rs. 78,14,763 for Lease Developme from 28th 1,56,295 dated 28th nt March March Authority 2002 2002 extendabl e for further period of 60 years in two instalmen ts Plot No. 18B Yearly Rent Premium Rs. Indore 30 Years Velocity III, Indore of Rs. 1,00,52,010 Developme from 21st

42 Brahma Interactive Limited

1,63,933 nt July 2003 Authority Unit No. 101, Monthly Rent Rs. 2,00,000 Agreement Mr. B.N. For the Tagore Centre of Rs. 1000 for Lease Bindal period of Rear Block B, 13-14, dated 28th 3 years R.N.T Marg, March from 1st Indore 2002 April 2003

Servicing Behaviour

There has been no default in payment of statutory dues or of the interest or principal in respect of the Company’s borrowings.

Our Financial Indebtedness:

Name of the Sanction Loan Amount Interest Repayment Security Created Lender Amount Documentations Outstanding Rate Schedule (Rs in (Rs in Lacs) Lacs) State Bank of 450 FCNR (B) 415 3.50% In one lumpsum on Primary Security Indore Demand Loan over 12 the due date of First charge over months repayment in the entire fixed assets LIBOR foreign currencyin of the company which the loan has by way of been disbursed hypothecation on nplant and machinery and other movable assets and by way of equitable mortgage of Land & Building Collateral Security Equitable Mortgage of immovable properties of Mr. Brahmanand Bindal at Saket Nagar, Indore Personal Guarantee: Guarentee of Mr. Brahmanand Bindal, Mr. Yashveer Bindal, Mr. Bharat Bindal

Name of the Sanction Loan Amount Interest Repayment Security Created Lender Amount Documentations Outstanding Rate Schedule (Rs in (Rs in Lacs) Lacs) State Bank of 240 Corporate Loan 240 9.00% On Demand Primary Security Indore by way of Clean First charge over Overdraft entire fixed assets of the Company by way of hypothecation on plant and machinery ond other movable assets and by way of equitable mortgage ofland and building and other immovable assets present and future Collateral Security Equitable mortgage of immovable properties belonging to Mr. Brahmanand Bindal at Saket Nagar, Indore Personal Guarantee: Guarentee of Mr. Brahmanand Bindal, Mr. Yashveer Bindal, Mr. Bharat Bindal

44 Brahma Interactive Limited

Name of the Sanction Loan Amount Interest Repayment Security Created Lender Amount Documentations Outstanding Rate Schedule (Rs in (Rs in Lacs) Lacs) State Bank of 160 Corporate Loan 153.21 9.00% In 23 equal Primary Security Indore installments of Rs. First charge over 6.79 lac each and entire fixed assets one installment of of the Company Rs. 3.83 lac from by way of December 2005 hypothecation on plant and machinery ond other movable assets and by way of equitable mortgage ofland and building and other immovable assets present and future Collateral Security Equitable mortgage of immovable properties belonging to Mr. Brahmanand Bindal at Saket Nagar, Indore Personal Guarantee: Guarentee of Mr. Brahmanand Bindal, Mr. Yashveer Bindal, Mr. Bharat Bindal

Name of the Sanction Loan Amount Interest Repayment Security Created Lender Amount Documentations Outstanding Rate Schedule (Rs in (Rs in Lacs) Lacs) State Bank of 572 Term Loan 459.58 10% In 7 years. Primary Security Indore Repayment will be First Charge over in 28 quarterly entire fixed assets instalment that of the company commenced from by way of 30.09.04. The hypothecation on Schedule is as plant and follows machinery and - Frist three other movable installments of assets and by way Rs. 23,45,000/- of equitable each mortgage of land - Next 16 and building and instalments of other immovable Rs. 21,03,500 present and each future - Next 4 Collateral Security instalments of Equitable Rs. 17,39,750/- mortgage of each immovable - Next 4 properties instalments of belonging to Mr. Rs. 16,18,500 Brahmanand each Bindal at Saket - Last one Nagar, Indore installment of Personal Rs. 30,75,000/- Guarantee: Guarentee of Mr. Brahmanand Bindal, Mr. Yashveer Bindal, Mr. Bharat Bindal

HDFC Bank 6 Vehicle Loan 4.81 9.11 48 Equated Primary Security Monthly Instalment First Charge over of Rs. 14,850 started the vehicle, from 23/05/05 Mahindra Scorpio SLX, by way of hypothecation on it ICICI Bank 3 Vehicle Loan 2.64 5 36 Equated Primary Security Monthly Instalment First Charge over of Rs. 8,950 started the vehicle by from 01/10/2005 way of hypothecation on it.

46 Brahma Interactive Limited

Key Industry- Regulations:

For the Entertainment Industry there are state specific regulations which govern the license requirements for construction of the Multiplex. The laws for imposition of taxes on cinemas by way of Entertainment tax is also state specific.

For our Company, The Madhya Pradesh Cinemas (Regulation) Act, 1952 (the “MP Act”) and The Madhya Pradesh Cinemas (Regulation) Rules, 1972 (the “MP Rules”) is applicable for getting licences for Multiplex. MP Rules lay down specifications that cinemas must comply with right from construction of a Cinema to the precautions for unforeseen circumstances. The Company who wishes to construct a Cinema or wants to convert existing premises into a cinema should apply for attaining the “No Objection Certificate” from the licensing authority. The licensing authority will submit a report to the State Government with its recommendation after checking the application and the documents enclosed with the application.The State Government will finally decide whether or not to provide the permission. The permissions are normally valid for two years, within these two years construction period of the cinema should be completed. After the completion of construction, an application is made for the grant of cinema licence. The documents like building permission certificate, electrical installation, etc must be enclosed with the application for cinema licence. These licences are valid for a one year.

Entertainment Tax

The Madhya Pradesh Entertainments Duty and Advertisements Tax Act, 1936 (the “MP Entertainment Act”) is applicable for Entertainment Tax. The tax is levied on admission charges paid for entry to entertainments, which includes any exhibition, performance or amusement to which persons are admitted for payment. Without the payment of admission charges a person cannot be admitted to entertainment shows unless the entertainment tax for the full value of ticket has been paid. If the person is admitted without the payment of entertainment tax then the licences granted for exhibition of entertainment shows may be suspended or revoked.

The Act allows the state government to exempt any entertainment or class of entertainments from the liability to pay entertainment tax or advertisement tax. Currently, entertainment tax at the rate of 50% of the net ticket price or 33.33% of the gross ticket price is payable by cinemas in the state of Madhya Pradesh.

Under the terms of notification no. B-5-16-2000-CT-V dated October 25, 2001, the state government of Madhya Pradesh has exempted “integrated family entertainment multiplex centres” from payment of entertainment tax to the following extent:

The notification specifies that the aforesaid exemption from entertainment duty shall not exceed the amount of capital investment made in the construction of the complex. Consequently, notwithstanding the five year period of relief, entertainment tax shall be payable from such date as the entertainment tax relief obtained equals the capital investment made in the Multiplex.

Grant of relief from payment of entertainment tax is also subject to compliance with the following conditions:

• The multiplex shall compulsorily be run for an additional period for five years, after the period of grant of entertainment tax relief has expired, failing which the entire amount of exemption availed, along with interest, shall be recovered. • A minimum amount of Rs. 30,000,000 must be spent as capital investment on the project. • The project must have at least three cinema halls with a combined capacity of 1,000 spectators. • The complex must also contain a video games arcade, fast food centre, place and facility for children’s entertainment, and place for vehicle parking.

3. History and Corporate Structure of the Company:

History and Major Events

The Company was incorporated on 3rd January 1995 as Brahma International Limited. The name of the Company was changed to Brahma Interactive Limited on 19th June 1996.

The Company was started with the objective of carrying on the business of recognized export house/trading house along with working as clearing and forwarding agent.

The company diversified its activities into the business of multiplex entertainment and other activities related to entertainment in the year 2000-01.

In the year 2003, company started its Multiplex Velocity III and its distribution business. Company has distributed the films like Netaji Subhash Chandra Bose, Vaastu Shastra, Page 3, etc.

The Company is proposed to develop an amusement park at Shastri Park, New Delhi on the land to be leased by Delhi Metro Rail Corporation, for which the company has filed a bid in collaboration with Ruchi Group.

Year Event 1995 Incorporation of the Company with the objective of carrying on the business of recognized export house/ trading house. 1996 Company changed its name from Brahma International to Brahma Interactive 2000 Changed the line of business from export and trading services to entertainment activities 2003 9 Started first Multiplex, Velocity III, in the state of Madhya Pradesh 9 Tied with International chains such as Café Coffee Day, Book Café, The Home Store for sale of their brand output through retail counters 9 Started the distributing the films in Indore and other parts of Madhya Pradesh 2005 Filed a bid in collaboration with Neha Resorts and Hotels Limited to develop entertainment and recreational park in Delhi to be leased by Delhi Metro Rail Corporation

Main Objects of the Company:

The main objects of the Company as stated in the Memorandum are as under:

“ To carry on the business of any mode of cinema, theaters, wired media, entertainment and cultural shows anywhere in India whether in open arena rounder roof including construction of cinema halls, theaters, auditoriums, studios, restaurants, shopping arcades, multiplex and multipurpose entertainment and amusement complexes including distribution and screening of India and foreign films, staging of Indian and foreign cultural and film shows and such other incidental and ancillary activities as may be required for these business from time to time whether independently or in collaboration with other firms or bodies corporate.”

The proposed activities are authorized by the Memorandum and Articles of Association of the Company.

48 Brahma Interactive Limited

Subsidiaries of Our Company

The Company has no subsidiaries.

Shareholders’ Agreement

There is no Shareholders’ Agreement existing as on date.

Other Agreements

Except the Agreements, as mentioned under the sub-heading “Collaborations” on page [●] of this Draft Prospectus, the Company has not entered into any other Agreement/ Contract.

Strategic Partners

Presently, our Company does not have any strategic partners.

Financial Partners

Presently, our Company does not have any financial partners.

4. Management of the company:

Our Company is a professionally managed organization, which functions under the control of a Board consisting of 6 Directors. The day-to-day management of our Company is entrusted to Mr. Yashveer Bindal who is the Chairman & Managing Director, who is assisted by a team of qualified and experienced professionals in technical, financial and other areas of management. Name, Age, Address, Date of Other Directorships Compensation Designation and Appointment FY ( 2005 -06) Occupation Mr. Yashveer Bindal 1st April 2004 Nil Rs. 18,000 per Age: 37 month Address: 50 – 51, Manishpuri, Indore Designation: Chairman & Managing Director Occupation: Business Mr. Bharat Bindal 1st April 2005 Devki Cyber Securities Rs 18,000 per Age:34 Private Ltd. month Address: 50 – 51, Manishpuri, Indore Designation: Wholetime Director Occupation: Business Mr. Manish Trivedi 25th September Nil Only Sitting Age: 31 2001 Fees for the Address: 1, Netaji Subhash Meeting Chandra Marg, Indore - 452007 Designation: Director Occupation: Service Mr. Ashok Mehta 1st March 2004 Madhya Pradesh Stock Only Sitting Age: 48 Exchange Fees for the Address: 6, Morai Mohalla, Hod Laboratories Ltd. Meeting Indore -452001 Porwal Auto Components Designation: Independent Ltd. Director M.P. Glychem Industries Ltd. Occupation: Practicing D&H Secheron Electrodes Pvt Company Secretary Ltd. Mr. Alkesh Bothra 1st November Palriwala Finance Pvt. Ltd. Only Sitting Age: 40 2005 Fees for the Address: 6, Silver Enclave Meeting colony, (Behind Greater Kailash Hospital), 11/2, Old Palasia, Indore- 452018 Designation: Independent Director Occupation: Practicing Chartered Accountant Mr. Rahul Modi 1st November Pharmaceuticals Machinery Only Sitting Age: 34 years 2005 Manufacturing Works. Fees for the Address: 6/7, Mahesh Niche Securities Pvt. Ltd. Meeting Nagar, Indo Tech Machines Pvt. Ltd. Indore Designation: Independent

50 Brahma Interactive Limited

Name, Age, Address, Date of Other Directorships Compensation Designation and Appointment FY ( 2005 -06) Occupation Director Occupation: Business

Profile of the directors of the company is given below:

Brief Profile of Directors are as follows:

Mr. Yashveer Bindal:

Mr. Yashveer Bindal (37 years) is a graduate in commerce and law. He is into business for last 15 years and has rich working and handling experience in variety of business activities covering transport, finance, export-import, construction and entertainment. At present he is a whole time director of the company and is taking care of internal management, administration and distribution activities of company’s multiplex VELOCITY III.

Mr. Bharat Bindal:

Mr. Bharat Bindal (34 years) is also a graduate in commerce and law. He is also into business for last about 13 years and has rich working and handling experience in variety of business activities covering transport, finance and entertainment. At present he is a whole time director in the company and is taking care of resource management, liaisoning and marketing fields of company’s multiplex VELOCITY III.

Mr Manish Trivedi

Mr. Manish Trivedi (31 years) is a post graduate in commerce. He has the experience of working as an accountant with various Chartered Accountants, Corporates and Broking Firms. Currently he is handling accounts of Devki Leasing and Finance.

Mr. Ashok Mehta

Mr. Ashok Mehta (48 years) is a post graduate in commerce and a practising Company Secretary. He is into the profession for the past 24 years, he has the experience of working as a corporate manager in the Steel and chemical companies. He was the Chairman of the Western region council of the Institute of Company Secretaries of India. Currently, he is practicing as a corporate counseller on Company Law, FEMA, Merchant Banking, SEBI & RBI Regulations etc.

Mr Alkesh Bothra

Mr. Alkesh Bothra (40 years) is a graduate in commerce and a fellow practising chartered accountant. He has the experience of 16 years in this field. He is specialized in the field of project financig, project palnnin, loan syndications and funds tie-up arrangement. Currently, he is rendering services for large number of corporate clients in and around Indore.

Mr Rahul Modi

Mr. Rahul Modi (34 years) is a chemical engineer and have done MBA in Finance. He has the experience of working in companies which are engaged in metal cutting machines & tools. Currently, he is working as a partner in M/s Pharmaceutical Machinery works and a director in Niche Securities.

Details of the Borrowing Powers

The resolution passed at the Extra Ordinary General Meeting of the members of the company held on 5th November 2005 in respect of borrowing powers, the Board of Directors is authorized to borrow amount not exceeding Rs. 5000 lacs.

Remuneration to Managing Director/Whole time Director

Mr. Yashveer bindal

Mr Yashveer Bindal was appointed as a Managing Director of the Company w.e.f 1st April 2004 for a period of 3 years at the Extra Ordinary General Meeting of the Company held on 1st April 2004.

The Remuneration of the Mr Yashveer Bindal was fixed as under: Salary: Rs. 18000/- per month.

Mr. Bharat Bindal

Mr. Bharat Bindal was appointed as a Managing Director of the Company w.e.f 1st April 2005 for a period of 3 years at the Extra Ordinary General Meeting of the Company held on 1st April 2005.

The Remuneration of the Mr. Bharat Bindal was fixed as under: Salary: Rs. 18000/- per month.

Compliance with corporate governance requirements:

Our company being an unlisted company, the provisions of Corporate Governance are not applicable as on date. However, the company undertakes to take the necessary steps to comply with all the requirements of the SEBI Guidelines on Corporate Governance as may be applicable to the company upon listing of its equity shares, including broad basing its board of directors, and also setting up such committees as may be necessary under the requirement of SEBI Guidelines.

COMPOSITION OF BOARD OF DIRECTORS The Board of Directors of the Company has an optimum combination of executive and non- executive Directors as envisaged in Clause 49 of the Listing Agreement. Accordingly not less than 50% of the Board of Directors comprises of non-executive and independent Directors.

Sr. No. Name of Director Status* 1 Mr. Yashveer Bindal Managing Director 2 Mr. Bharat Bindal Whole Time Director 3 Mr. Ashok Mehta Independent Director 4 Mr. Rahul Modi Independent Director 5 Mr. Manish Trivedi Independent Director 6 Mr. Alkesh Bothra Independent Director

* As per Clause 49 of the Listing Agreement

There is no service contract between the Company and its Executive Directors, which provides for benefits upon termination of employment.

Our Company has formed the following Committee out of the Members of the Board. The Committee was constituted on 09-09-2005.

52 Brahma Interactive Limited

AUDIT COMMITTEE:

Audit Committee is constituted by Board of Directors. It consist of 3 directors, 2 of them are Non- executive independents, Directors namely Mr. Alkesh Bothra, Mr. Manish Trivedi. Mr. Ashok Mehta acts as the Chairman of the Committee.

Scope and function: The Audit Committee provides directors to and reviews of the Audit Department. The Committee evalutes internal audit policies, plans, procedures and performance and reviews the other function through various internal audit reports and other year-end certificates issued by the statutory auditors. Quarterly and Annual will be reviewed by the Audit committee, prior to their presentation to the board along with recommendations of the Audit Committee. Besides, Audit Committee will be authorized to exercise all such powers as are required under the amended Clauses 49 of the Listing Agreement.

Composition of Audit Committee:

Sr. No. Name of Director Designation Nature of Directorship 1 Mr. Ashok Mehta Chairman Independent Director 2 Mr. Alkesh Bothra Member Independent Director 3 Mr. Manish Trivedi Member Independent Director

Power of the Audit Committee It shall have the authority to investigate into any matter in relation to the items specified in section 292A of the Companies Act 1956 or referred to it by the Board and for this purpose, shall have full access to information contained in the records of the company and external professional advice, if necessary.

To investigate any activity within its terms of reference;

Oversight if the Company’s financial reporting process and the discloser of its financial information to ensure that the financial statements are correct, sufficient and credible.

Reviewing with the management the annual financial statements.

Reviewing with the management, external and internal auditors and the adequacy of internal control systems.

Reviewing the adequacy of internal audit function including the structures in the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

Reviewing the company’s financial and risk management policies.

It shall have discussion with the Auditors periodically about internal control systems, the scope of audit including the observation of the auditors and review the quarterly, half- yearly, and annual financial statements before submissions to the Board.

The constitution of the Audit Committee is in compliance with the corporate governance requirements under clause 49 of the Listing Agreement.

SHAREHOLDERS/ INVESTORS GRIEVANCE COMMITTEE

The Shareholders/ Investors Grievance Committee constituted by Board of Directors consist of 3 directors all of them are Non-executive independent Directors.

Scope and functions:

The Committee inter alia, approves issue of Duplicate share certificates & reviews all maters connected with the Securities transfer. The committee also looks into redressing of Shareholders/Investors Compliance like transfer of shares, Non receipt of Balance sheet, Non- receipt of Divided warrants & also handles the queries/ complaints relating to dematerialisation of shares etc. The committee overseas the performance of the Registrar & transfer agent & recommends measures for the overall improvement of the quality of Investors services.

Composition of Investors Grievance Committee

REMUNERATION COMMITTEE:

The Remuneration Committee constituted by Board of Directors consist of 3 directors all of them are Non-executive independent Directors.

Scope and functions:

The Remuneration Committee determines the Company’s on specific Packages for Executive Directors.

Composition of Remuneration Committee:

Shareholding of Directors in the Company

Sr No. Name of Director Number of Equity Shares (Pre-Issue) 1 Mr. Yashveer Bindal 82,477 2 Mr. Bharat Bindal 92,135 3 Mr. Ashok Mehta Nil 4 Mr. Rahul Modi Nil 5 Mr. Manish Trivedi Nil 6 Mr. Alkesh Bothra Nil

Interest of the Directors

Except as stated in "Related Party Transactions" on page [•] of this Draft Prospectus, and to the extent of shareholding in the Company, the directors do not have any other interest in the business. The directors are interested to the extent of shares allotted to them. Except to the extent of their compensation as mentioned on page [•] of this Prospectus, and their shareholding or shareholding of companies they represent, the Directors, other than the Promoters who are also Directors, do not have any other interest in the Company.

54 Brahma Interactive Limited

All Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by the Company with any company in which they hold Directorships or any partnership firm in which they are partners as declared in their respective declarations.

Except as stated otherwise, in this Prospectus, the Company has not entered into any contract, agreements or arrangements during the preceding two years from the date of the Draft Prospectus in which the directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed to be made to them.

The Articles of Association provide that the Directors and officers shall be indemnified by the Company against loss in defending any proceeding brought against Directors and officers in their capacity as such, if the indemnified Director or officer receives judgment in his favour or is acquitted in such proceeding.

Changes in the Board of Directors in the last 3 years

The following are the changes in the Board of Directors in the last 3 years and no changes thereafter have taken place:

Name Date of Appointment Date of Cessation Reason Mr. Sudhir Bindal 30th September 2000 1st March 2004 Resigned from the Board of Directors Mr. Bharat Bindal 3rd January 1995 1st March 2004 Resigned from the Board of Directors Mr. Ashok Mehta1 1st March 2004 ---- Appointed as Additional Director Mr. Bharat Bindal2 10th June 2004 ---- Appointed as Additional Director Mr. Alkesh Bothra 1st November 2005 ---- Appointed as Additional Director Mr. Rahul Modi 1st November 2005 ---- Appointed as Additional Director

1 At the AGM held on 10th June 2004, Mr. Ashok Mehta was re-appointed as an Independent Director. 2 At the Extra Ordinary General Meeting held on 1st April 2005, Mr. Bharat Bindal was reappointment as wholetime director

4 MANAGEMENT OF THE COMPANY

Management Organization Chart

BOARD OF DIRECTORS

Yashveer Bharat Manish Ashok Bindal Bindal Trivedi Mehta

General Manager

Mgr Mgr Mgr Mgr Mgr Mgr Mgr Mgr Mgr Mgr Box House EDP Restaur Servic Progra Conces Inventory A/Cs Perso Office Keeping ant es mming sions + Support nnel

EDP A/Cs Asst Mgr Projection/El Asst. Mgr Asst. Staff Staff Staff Mgr Kitchen ectrical/DG/ Concessio Box Mgr A.C.Plant Office House Room /Staff Keeping Restaura Staff nt/ Box Kitchen Office Sec. Supervisor Support Staff

Sec.+ House Keeping Staff

56 Brahma Interactive Limited

Key Management Personnel

As on September 30, 2005, the company has a total strength of 49 employees.

Sr. Name Designation Age Qualificati Experi Date of Functional Previously Salary N on ence Joining Responsibi Employed Paid o (Years) lity During 2004 - 2005 1 G.Muralidhar Compliance 51 B.Com 32 27.08.2003 Account,A Millenium 1,50,000 an Pillai Officer dministrati Cyber Tech on & Limited Liason Works 2 Brig. A.K. General 58 MSc., Retire 01.05.2003 Administra Indian Army 1,08,000 Mishra Manager MMS d from tion Indian Army 3 Smt. Sunita Manager 55 B.A. 20 02.04.2004 Full OTG Group 1,07,400 Chauhan (F&B) Incharge of restaurant 4 Sunil Kumar Maintenance 35 Diploma in 16 01.01.2000 Incharge of Brahma 91,200 Jain Manager Engineerin Maintenanc Builders g e 5 Manoj Kumar E.D.P.Inchar 32 B.Com & 10 11.06.2004 Incharge of Automation 96,665 Singh ge Diploma in EDP System Computer Section House Science Information Technology Pvt Ltd 6 Ms. Chaya Company 29 B.Com & 3 04.01.2006 Incharge of Vijayesh 75,000 Gupta Secretary CS Company Atre & Co. Secreterial Work

G. Muralidharan Pillai, Compliance Officer, has the responsibility of Accounts, administration & Liason Works. He is B.Com by qualification and has over 30 years of working experience in accounting.

Brigadier A K Mishra, General Manager, has the responsibility of Administration Department. He has done M.Sc in Defence Studies & MMS (Master of Management Science) in Defence Management He has 30 years of rich experience in administration of human beings, geographical areas & material resources.

Mr. Sunil Kumar Jain, Maintenance Manager, has 16 years of experience in this field. Done diploma in Engineering & he was working for Brahma Builders before joining Brahma Interactives.

Ms. Sunita Chauhan, Manager (F&B), is full incharge of the Restaurant. She is B.A. by qualification and has experience in maintaining the restaurants. She was working with OTG Group as a Manager.

Mr. Manoj Kumar Singh, EDP Incharge, has 10 years experience in IT field. He has done Diploma in computer science and was working with Automation System House Information Technology Private Limited.

Ms. Chhaya Gupta, Company Secretary, has experience of looking after secretarial matters. She was previously employed with Vijayesh Atre & Co.

All the key managerial personnel mentioned above are the permanent employees of the Issuer Company.

Shareholding of the Key Managerial Personnel:

None of the managerial persons of the company, as on the date of the filing of the prospectus, have any shares in the company.

Bonus or Profit Sharing Plan for our Key Managerial Personnel

There is no Bonus or Profit Sharing Plan for our Key Managerial Personnel

Changes in the Key Managerial Personnel in one year prior to the date of filing Draft Prospectus:

There have been no changes in the key managerial personnel in the last one year prior to the date of filing except the following:

Name Designation Date of Joining Date of Leaving Remarks Ms. Chhaya Company 04.01.2006 NA Appointed Gupta Secretary

Employees

The present strength of the Company is 49 employees as on January 31st , 2006

Disclosures Regarding Employees Stock Option Scheme / Employees Stock Purchase Scheme

Till date, the Company has not introduced any Employees Stock Option Scheme / Employees Stock Purchase Scheme, as required by the Guidelines or Regulations of SEBI relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme.

Payment or Benefit to Officers of the Company

Except the payment of salaries and perquisites and reimbursement of expenses incurred in the ordinary course of business, neither have the company paid / given benefit within the two preceding years nor the company intend to pay / give benefit to any officer of our Company.

58 Brahma Interactive Limited

5 Promoters/ Principal Shareholders:

A) Details of promoters being individuals

(i) Name: Mr. Yashveer Bindal Designation: Managing Director & Chairman

Permanent Account Number ABSPB5358H Passport Number E1890245 Voter ID Number MP/37/274/330136 Driving License Number MP 09/02934/02 Address: 50 & 51, Manishpuri, Indore, M.P. - 452018

Mr Yashveer Bindal aged 37 years is a graduate in commerce and law. He is into business for last 15 years and has rich working and handling experience in variety of business activities covering transport, finance, export-import, construction and entertainment. At present he is a whole time director in the company and is taking care of internal management, administration and distribution activities of company’s multiplex VELOCITY III.

(ii) Name: Mr. Bharat Bindal Designation: Wholetime Director

Permanent Account Number ACFPB4396P Passport Number E8216779 Voter ID Number MP/37/274/330137 Driving License Number B15309/88 Address: 50 & 51, Manishpuri, Indore, M.P. - 452018

Mr Bharat Bindal aged 35 years is also a graduate in commerce and law. He is also into Business for last about 13 years and has rich working and handling experience in variety of business activities covering transport, finance and entertainment. At present he is a whole time director in the company and is taking care of resource management, liaisoning and marketing fields of company’s multiplex VELOCITY III.

(iii) Name: Mr. Barmanand Bindal Designation: -----

Permanent Account Number ABSPB5361N Passport Number A2344535 Voter ID Number MP/37/274/330133 Driving License Number MP09/028016/03 Address: 50 & 51, Manishpuri, Indore, M.P. - 452018

Mr Barmanand Bindal aged 71 years is a graduate in B.Sc. Textiles. He has 33 years of experience as a director of Transport & Logistics Company and 13 years of experience as a Director of the Brahma Group. He also has the experience of working for Construction, Finance and Entertainment sector.

(iv) Name: Mr. Sudhir Kumar Bindal Designation: -----

Permanent Account Number AFEPS1672P Passport Number E7269295 Voter ID Number MP/37/274/330135 Driving License Number S69968/99 Address: 50 & 51, Manishpuri, Indore, M.P. - 452018

Mr Sudhir Kumar Bindal aged 41 years is a graduate in commerce and has done DCMA. He has 20 years of experience in manufacturing and trading activities in electronics. Currently he is a Managing Director of Devki Leasing & Finance Ltd., and has an exposure in Construction, Finance & Entertainment business.

(v) Name: Ms. Devki Rani Bindal Designation: -----

Permanent Account Number ABSPB5360P Passport Number E3720085 Voter ID Number MP/37/274/330134 Driving License Number - Address: 50 & 51, Manishpuri, Indore, M.P. - 452018

Ms. Devki Rani Bindal (69 Years) is a Honours in Hindi from Punjab University and is a House Wife.

(vi) Name: Ms. Sarita Bindal Designation: -----

Permanent Account Number ABSPB5359G Passport Number A8737411 Voter ID Number MP/37/274/330138 Driving License Number 92080554 Address: 50 & 51, Manishpuri, Indore, M.P. - 452018

Ms. Sarita Bindal (37 Years) is a Commerce Graduate and is actively involved in the day to day running of the Restaurant, VILLAIN'S DEN at VELOCITY III.

(vi) Name: Ms. Anju Bindal Designation: -----

Permanent Account Number ABSPB5363Q Passport Number E8216544 Voter ID Number MP/37/274/330139 Driving License Number 3227/93 Address: 50 & 51, Manishpuri, Indore, M.P. - 452018

Ms. Anju Bindal (34 Years) is a B.A. Honours in Psychology and is activitly involved in the Construction Company, Brahma Builders Ltd.

60 Brahma Interactive Limited

B) Details of promoter being HUF:

(i) Barmanand Bindal & Sons

Permanent Account Number : AAAHB6614B Date of Incorporation : Not Applicable Address : 50 & 51, Manishpuri, Indore, M.P. - 452018

Financials of Barmanand Bindal & Sons (Rs. in Lacs) Particulars For the year ended 31st March 2005 2004 2003 Capital Account 6.37 6.37 6.50 Fixed Assets and 5.50 5.15 6.75 Investments Net Profit 0.36 (0.39) 0.29

(ii) Sudhir Bindal & Sons

Permanent Account Number : AABHS7295E Date of Incorporation : Not Applicable Address : 50 & 51, Manishpuri, Indore, M.P. - 452018

Financials of Sudhir Bindal & Sons (Rs. in Lacs) Particulars For the year ended 31st March 2005 2004 2003 Capital Account 6.16 6.16 5.49 Fixed Assets and 4.31 3.94 5.61 Investments Net Profit 0.36 (0.39) 0.27

(iii) Yashveer Bindal & Sons

Permanent Account Number : AAAHY0566P Date of Incorporation : Not Applicable Address : 50 & 51, Manishpuri, Indore, M.P. - 452018

Financials of Yashveer Bindal & Sons (Rs. in Lacs) Particulars For the year ended 31st March 2005 2004 2003 Capital Account 4.85 4.84 4.96 Fixed Assets and 4.54 4.21 5.21 Investments

Net Profit 0.36 (0.39) 0.28

(iv) Bindal Bindal & Sons

Permanent Account Number : AAAHB6613G Date of Incorporation : Not Applicable Address : 50 & 51, Manishpuri, Indore, M.P. - 452018

Financials of Bharat Bindal & Sons (Rs. in Lacs) Particulars For the year ended 31st March 2005 2004 2003 Capital Account 0.16 0.05 0.05 Fixed Assets and 0.49 0.00 0.00 Investments Net Profit 0.35 (0.002) (0.002)

C) Details of promoter being a company:

(I) Devki Leasing & Finance Ltd.

Permanent Account Number : AACD9975A Company Registration No. : 10-07522 dated 15th February 1993 Address of RoC : Sanjay complex, 3rd Floor, A-Blok, Jeyendra Ganj, Gwalior 474 009 Nature of Business : Leasing & Finance

History: The Company was incorporated in year 1993. The company’s registered office and corporate office, both are situated at Indore. The company is a listed public company engaged in the business of leasing, hire-purchase and other finance activities. The company is a profit making and RBI registered NBFC for last about a decade.

Promoters: Mr. Barmanand Bindal Mr. Sudhir Bindal Mr. Bharat Bindal Mr. Yashveer Bindal Rajesh Bindal Family Welfare Trust Mr. Bajranglal D Bajaj Mr. Ravindra Kumar Bajaj Mr. Yash R Bajaj Mr. Manoj Kumar Bajaj Mr. S.B. Bajaj B. Sanjiv Kuamar Kuar HUF B.L. Manoj Kumar HUF Mr. Raj Ravindra Kumar Bajaj Mr. Sushila Devi Bajaj Mr. Sauhard Bindal

62 Brahma Interactive Limited

Ms. Devki Rani Bindal Mr. Harsh Sanjiv Kumar Sudhir Kumar HUF B.N. Bindal Sons HUF Yashveer Bindal & Sons HUF Ms. Anju Bindal Ms. Shweta Bindal

Shareholding Pattern as on 30th June 2005:

Number of Equity Name of shareholders % of holding Shares Promoters 1153700 32.87 Non-Promoters Holding : Private Bodies Corporate 621000 17.69 Indian Public 1734900 49.34 Total 3509600 100.00

The Board of Directors comprises of:

Sr. Name Designation No 1. Barmanand Bindal Director 2. Sudhir Bindal Director 3. Sunil Kumar Jain Director 4. Jitendra Yadav Director 5. Manoj Kumar Singh Director

The brief financials are given below: Rs in Lacs Consolidated Unconsolidated For the Year Ended 31st March 2005 2004 2003 2002

Total Income 76.30 71.86 874.32 93.41 Profit / (Loss) After Tax 4.94 2.04 0.22 1.60 Equity Share Capital 344.87 344.87 344.87 344.87 Reserves & Surplus (excluding revaluation 25.13 20.18 18.13 17.90 reserve) Share Holders Funds / Net Worth 370.00 365.06 363.01 362.78 NAV per share of FV Rs. 10/- each (Rs.) 10.73 10.40 10.53 10.52 EPS of FV Rs. 10/- each (Rs.) 0.14 0.06 0.01 0.05

The company is listed at Bombay Stock Exchange.

Stock Market Data for the last six months

Month High Low No of Net Shares Turnover in Traded ('000s) Jan-06 4.72 3.76 15087 64.11 Dec-05 5.77 3.30 124 214.48 Nov-05 4.62 3.09 115 118.16 Oct-05 5.50 2.99 102 103.50 Sep-05 10.27 5.69 371 890.19 Aug-05 14.70 5.11 1284 3212.93 (Source: www.bseindia.com)

Other Details:

Public or rights Issue in the preceding three years No Whether the company has become a sick company within the meaning of the No Sick Industrial Companies (Special Provisions) Act, 1995 or is under winding up Whether the company has made a loss in the immediately preceding year and if No so, the profit or loss figures for the immediately preceding three years

There are no defaults in meeting any statutory/bank/institutional. No proceedings have been initiated for economic offences against the Company.

(II) Jupiter Securities & Properties Private Limited

Permanent Account Number : AAACJ4293R Company Registration No. : 10 – 009152 dated 10th March 1995 Address : Sanjay complex, 3rd Floor, A-Blok, Jeyendra Ganj, Gwalior - 474 009 Nature of Business : Leasing & Finance

History: The Company was incorporated in year 1995. Jupiter Securities & Properties is the principal investment and holding company for the group companies of Brahma and BIL.

Promoters: Mr. Barmanand Bindal Mr. Sudhir Bindal Mr. Yashveer Bindal Mr. Bharat Bindal Brahma Builders Ltd.

64 Brahma Interactive Limited

Shareholding Pattern as on 30th June 2005:

Number of Equity Name of shareholders % of holding Shares Promoters 316500 71.63 Non-Promoters Holding: Private Bodies Corporate 75000 16.98 Indian Public 50300 11.39 Total 441800 100.00

The Board of Directors comprises of:

Sr. Name Designation No 1. Mr. Prerak Dubey Director 2. Mr. Rishab Chandra Jain Director

The brief financials are given below: Rs in Lacs For the Year Ended 31st March 2005 2004 2003

Total Income 900.00 5.87 19.25 Profit / (Loss) After Tax (65.51) (3.86) 6.46 Equity Share Capital 4618.00 4418.00 4418.00 Reserves & Surplus (excluding revaluation (50.33) 15.17 17.03 reserve) Share Holders Funds / Net Worth 4567.66 4433.17 4435.02 NAV per share of FV Rs. 10/- each (Rs.) 9.89 10.03 10.04

There are no defaults in meeting any statutory/bank/institutional dues. No proceedings have been initiated for economic offences against the Company.

(III) Devki Cyber Securities Private Limited

Permanent Account Number : AACCD1156H Company Registration No. : 10 – 14109 dated 15th March 2000 Address : Sanjay complex, 3rd Floor, A-Blok, Jeyendra Ganj, Gwalior - 474 009 Nature of Business : Stock Broking

History: The Company was incorporated in year 2000. Devki Cyber Securities Pvt Ltd is holding a membership card of Madhya Pradesh Stock Exchange.

Promoters: Mr. Ashok Mehta Mr. Bharat Bindal

Shareholding Pattern as on 30TH September 2005:

Number of Equity Name of shareholders % of holding Shares Promoters 200 0.2 Non-Promoters Holding: - - Private Bodies Corporate 99800 99.80 Indian Public - - Total 100000 100.00

The Board of Directors comprises of:

Sr. Name Designation No 1. Mr. Bharat Bindal Director 2. Mr. S. N. Iyer Director

The brief financials are given below: Rs in Lacs For the Year Ended 31st March 2005 2004 2003

Total Income 0.03 0.03 0.03 Profit / (Loss) After Tax (0.05) (0.03) 0.005 Equity Share Capital 10.00 10.00 10.00 Reserves & Surplus (excluding revaluation (0.06) (0.01) 0.01 reserve) Share Holders Funds / Net Worth 12.87 12.90 12.91 NAV per share of FV Rs. 10/- each (Rs.) - - -

There are no defaults in meeting any statutory/bank/institutional dues. No proceedings have been initiated for economic offences against the Company.

(V) Brahma Builders Limited

Permanent Account Number : AAACB7109E Company Registration No. : 10 – 7494 dated 5th Feb 1993 Address : Tagor Centre, Rear Block – B, 13-14 RNT Marg, Indore - 452001 Nature of Business : Construction

The Company was incorporated on in the year 1993 & is situated in Indore. The Company is engaged in construction of Bungalows, Multistoried Complexes and Row Houses.

Board of Directors (as on 30th September 2005)

Sr. No Name 1 Murlidharan Pillai

66 Brahma Interactive Limited

2 Surendra Joshi 3 Nitesh Gupta

Shareholding Pattern (as on 30th September 2005):

Name of the Shareholder No. of Shares % Holding Promoters 331400 82.86 Non Promoters Holding: Public 57100 14.29 Institutes 11500 2.85 Total 400000 100.00

Brief Financial Performance (For Last Four Years): (Rs. in Lacs) Particulars 2005 2004 2003 2002 Share Capital 40.00 40.00 40.00 40.00. Reserves (Excluding Revaluation Reserve) 0 0 0 0 Net Worth 40.00 40.00 40.00 40.00 Total Income 8.26 12.06 42.19 33.64 PAT 1.50 0.49 -13.28 -14.25

(V) Concast Properties Private Limited

Permanent Account Number : AABCC0710E Company Registration No. : 11-82272 dated 21st October 1994 Address : 74, Guruwar Peth, Karad Dist. Satara Nature of Business : Securities

The Company was incorporated on in the year 1994 & is situated in Satara, Maharashtra. The Company is dealing in Shares, Securities, Debentures and other Investments. Company purchased the shares of Concast Properties on 12th December 2005.

Board of Directors

Sr. No Name 1 Rupesh Suresh Namdev 2 Sanjay John Hyde

Shareholding Pattern:

Particulars No. of Shares

Equity Shares with face value of Rs. 10 each 40000 Equity Shares with face value of Rs. 100 each 46000 Total 86000

Brief Financial Performance (For Last Four Years): (Rs. in Lacs) Particulars 2005 2004 2003 2002 Share Capital 64.00 64.00 64.00 64.00 Reserves (Excluding Revaluation Reserve) 23.77 13.38 9.04 8.93 Net Worth 87.77 77.38 73.04 72.93 Total Income 10.51 4.56 4.35 0.10 PAT 10.38 4.45 4.24 0.00

Declaration

The PAN, Bank Account details and Passport Number of the Promoters and Group Promoters is being submitted to the stock exchanges on which Equity Shares are proposed to be listed.

Common Pursuits

Except as otherwise stated in this Draft Prospectus, currently there are no existing common pursuits between the promoters and the Company

Full Particulars Of The Nature And Extent Of The Interest, If Any, Of Every Promoter:

Except as otherwise stated in this draft prospectus, neither the promoters nor the Firms or Companies in which they are members have any interest in the business of the company, except to the extent of their shareholding, for which they are entitled to receive the dividend declared if any, by the Company.

Payment Or Benefit To Promoters Of The Company

Other than the remuneration of the Promoter Directors, referred to in the section titled “Remuneration to Managing Director/Wholetime Director” on page [y] of this prospectus there are no payment or benefit to promoters of the Company.

68 Brahma Interactive Limited

6 Related party transactions as per the financial statements:

The details of related party transactions please refer to Annexure IV of the Financial Statement on page [•]

7 Dividend Policy

The company don’t have any written policy for dividend payment. However, dividends may be declared at our AGM based on a recommendation by our Board. Our Board may recommend dividends, at its discretion, to be paid to our members. Generally, the factors that may be considered by our Board, but not limited to, before making any recommendations for the dividend include future expansion plans and capital requirements, profits earned during the financial year, cost of raising funds from alternate sources, liquidity, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time and money market conditions. Uptill now, however, the company did not declare or pay any dividends.

SECTION V: FINANCIAL STATEMENTS

We the lead managers to the offer, confirm that all the notes to accounts, significant accounting policies as well as the auditor’s qualification have been incorporated.

1. FINANCIAL INFORMATION OF BRAHMA INTERACTIVE LIMITED:

AUDITOR’S REPORT

To, The Board of Directors Brahma Interactive Limited 101 Tagore Centre 13-14 R.N.T. Marg Indore

Dear Sirs,

We have examined the financial information of Brahma Interactive Limited (‘the Company’), annexed to this report, as approved by the Board of Directors, for the purpose of inclusion in the Offer Document which has been prepared in accordance with the requirements of Paragraph B(1) of Part II of Schedule II to the Companies Act, 1956 (‘the Act’) and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 issued by the Securities and Exchange Board of India (SEBI) on January 19, 2000 in pursuance to Section 11 of the Securities and Exchange Board of India Act, 1992, as amended by Notification SEBI/CFD/DIL/DIP/16/2005/19/19 dated September 19, 2005 (‘the Guidelines’) and related clarifications, and in accordance with the instructions received by us from the Company requesting us to carry out work in connection with the Offer Document being issued by the Company in connection with its Initial Public Offering of Equity Shares (‘the Issue’).

A. Financial Information as per the audited financial statements

We have examined: a) The attached restated Balance Sheets of the Company as at 30 th September 2005, 31 st March 2005, 31st March 2004, 31st March 2003, 31st March 31, 2002 and March 31, 2001 (Annexure I) b) The attached restated statements of Profit and Loss Account for the six months period ended 30 th September 2005 and years ended 31 st March 2005, 31 st March 2004 and 31 st March 2003 respectively (Annexure II) c) The attached restated statements of Cash Flows for the six months period ended 30 th September 2005 and years ended 31 st March 2005, 31 st March 2004, 31 st March 2003, 31 st March 31, 2002 and March 31, 2001 respectively (Annexure V)

These Restated Summary Statements have been extracted from the financial statements after making such adjustments and regroupings as in our opinion are appropriate to this report for these periods audited by us and have been approved/adopted by the Board of Directors/members for the respective periods.

Based on our examination of these Restated Summary Statements, we confirm that:

1. The accounting policies have been consistently applied by the Company (as disclosed in Annexure III) and are consistent with those used in the previous year; 2. There are no qualifications in the auditors’ report in the period covered by the Restated Summary Statements; and

70 Brahma Interactive Limited

B. Other financial information

We have examined the following financial information relating to Brahma Interactive Limited proposed to be included in the Offer Document, as approved by you and annexed to this report: 1. Significant Notes to Accounts (Annexure IV) 2. Accounting Ratios on restated profits (Annexure VI) 3. Capitalisation statement as at 30 th September 2005 (Annexure VII) 4. Details of Secured Loans (Annexure VIII) 5. Tax Shelter Statement (Annexure IX) 6. Details of Loans and Advances, as restated (Annexure X) 7. Details of Sundry Debtors (Annexure XI)

In our opinion, the financial information of the Company, as attached to this report, as mentioned in paragraphs (A) and (B) above, has been prepared in accordance with Part II of Schedule II of the Act and the Guidelines.

This report is intended solely for use for your information and for inclusion in the Offer Document in connection with the Issue and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For O.T. Gandhi & Co.,

Sd/- A. B. Doshi Place: Indore Dated: 30.12.2005

INDEX OF FINANCIAL INFORMATION

Annexure I : Statement of Assets and Liabilities as restated

Annexure II : Statement of Profits and Losses as restated

Annexure III : Summary of Significant Accounting Policies

Annexure IV : Significant Notes to Accounts

Annexure V : Statement of Cash Flows as restated

Annexure VI : Statements of Accounting Ratios

Annexure VII : Capitalisation Statement

Annexure VIII : Statement of Secured loans

Annexure IX : Statement of Tax Shelters

Annexure X : Statement of Loans & Advances

Annexure XI : Statement of Sundry Debtors

72 Brahma Interactive Limited

Annexure I STATEMENT OF ADJUSTED ASSETS AND LIABILITIES The assets and liabilities of the Company at the end of period 30th Sept 2005 & Financial Year i.e March 31, 2005, March 31, 2004, March 31, 2003, March 31, 2002 and March 31, 2001 audited by us after making such adjustments and subject to the notes appearing hereinafter are set out below : Rs. in Lacs Period Six Months As At March 31 PARTICULARS 30.09.2005 2005 2004 2003 2002 2001 A) Fixed Assets Gross Block 1216.22 1203.44 797.46 2.16 2.16 2.16 Less: Depreciation and amortization 108.98 82.84 37.01 1.59 1.52 1.34 Net Block 1107.24 1120.6 760.45 0.57 0.64 0.82 Add: Capital WIP 28.64 14.94 149.31 825.06 244.19 93.43 Total (A) 1135.88 1135.54 909.76 825.63 244.83 94.25 B) Investments : (B) 0.57 0.57 0.57 45.82 72.82 14.07 C) Current Assets ,Loans and Advances : Inventories 21.49 16.04 0.00 0.00 0.00 0.00 Sundry Debtors 10.05 38.33 11.91 17.29 0.00 0.00 Cash and Bank Balances 5.54 5.56 2.56 5.13 0.65 2.87 Loans and Advances 41.87 11.75 48.11 5.33 2.8 3.27 Total (C) 78.95 71.68 62.58 27.75 3.45 6.14 D) Liabilities and Provisions : Secured Loans 480.13 502.1 451.81 375.17 27.45 0.00 Unsecured Loans 201.00 225.99 177.24 56.35 110.04 45.11 Deferred Tax Liability 56.95 56.95 31.53 0.00 0.00 0.00 Current Liabilities& Provisions 62.43 51.85 19.18 302.4 23.33 32.15 Total (D) 800.51 836.89 679.76 733.92 160.82 77.26 E) Miscellaneous Expenditure 3.30 0.00 0.04 0.08 0.12 0.16 (to the extent not w/off) F) Net Worth (A+B+C-D) : 414.89 370.9 293.15 165.28 160.28 37.2 G) Represented by Share Capital 248.98 197.99 164.63 164.63 159.43 18.73 Share Application Money 0.00 0.00 100.08 0.00 0.29 17.97 Reserves and Surplus 207.73 172.91 28.48 0.73 0.68 0.66 Total 456.71 370.90 293.19 165.36 160.40 37.36 H) Net Worth (G-E) 453.41 370.90 293.15 165.28 160.28 37.20 Note: The accompanying significant accounting policies and notes are integral part of this statement.

Annexure II RS.in Lacs Period Six Months Year Ended March 31 PARTICULARS 30.09.2005 2005 2004 2003 2002 2001 Income : Income from Exhibition 299.68 379.52 270.20 0.00 0.00 0.00 F & B Sales 54.50 73.10 42.26 0.00 0.00 0.00 Film Distribution Income 33.42 62.78 0.00 0.00 0.00 0.00 Other Income 31.84 59.72 20.53 0.34 0.49 1.94 Increase(Decrease in Inventories) 21.49 16.03 0.00 0.00 0.00 0.00 440.93 591.15 332.99 0.34 0.49 1.94 Expenditure: Raw Material Opening Stock 16.03 0.00 0.00 0.00 0.00 0.00 Staff Cost 19.13 30.64 19.26 0.00 0.00 0.76 Selling & Distribution Cost 247.97 376.68 191.94 0.00 0.00 0.18 Administrative Cost 10.26 12.83 6.15 0.19 0.29 0.65 293.39 420.15 21.35 0.19 0.29 1.59 Earnings Before Interest, Depreciation & Tax 147.54 171.00 115.64 0.16 0.20 0.35

Interest 29.94 22.68 17.49 0.00 0.00 0.07 Depreciation 26.99 45.82 36.50 0.07 0.18 0.24

Earnings before Tax and Extra ordinary items 90.61 102.50 61.65 0.09 0.02 0.04

Provision for Taxation 0.00 1.58 2.37 0.03 0.01 0.02 Current Tax 0.00 0.00 0.00 0.00 0.00 0.00 Deferred Tax 0.00 25.42 31.53 0.00 0.00 0.00

Profit Before Extra Ordinary Items 90.61 75.50 27.75 0.05 0.01 0.03

Extra Ordinary Items 1.44 0.00 0.00 0.00 0.00 0.00 Adjustment on account of prior Period Items 1.89 2.20 0.00 0.00 0.00 0.00 Adjusted Net Profit 87.28 77.70 27.75 0.05 0.01 0.03

Note: Deferred Tax Liability calculated for the first time in the year ending 31.3.03, was a transitional provision which was adjusted with the opening balance of Reserves & Surplus of that year.

74 Brahma Interactive Limited

Annexure III

1.SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING i) Unless otherwise stated hereunder, the financial accounts have been prepared on historical cost convention, in accordance with the generally accepted accounting standard issued by the institute of chartered Accountant of India and the provisions of the Companies Act, 1956. ii) The company adopts accrual method of accounting & recognizes income expenditure on accrual basis except leave encashment which is on cash basis. iii) These Financial Statements are prepared on going concern basis.

Fixed assets: - Fixed assets are stated at cost less accumulated depreciation. Cost of building, plant and machinery and other related facility includes interest on borrowings till the date of commissioning of the assets.

Depreciation: -Depreciation is provided on the "Straight line method” on a “pro-rata basis”, at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Investment: - Current investments are valued at lower of cost and net realizable value. Long- term investments are stated at cost less provision, if any, for diminution in value.

Inventories: - Inventories are valued at lower of cost or net realisable value.

Borrowing cost: - Borrowing costs that are attributable to the construction of integrated entertainment complex and acquisition of plant and machinery and other related facility are capitalized as a part of the cost of the respective capital assets till the date of completion of physical completion/mechanical completion of the integrated entertainment complex.

Taxes on income: - Provisions for taxation for the year comprises of current tax and deferred tax. Current tax is the amount of income tax determined to be payable in respect of taxable income for the year. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax liabilities / assets, on timing difference, being the difference between taxable income and accounting income that originate in one or more period and are being capable of reversal in one or more subsequent periods.

Capital-work-in-progress:- All capital expenditure including advances paid for the construction/acquisition of fixed assets to the extent not completed/acquired are shown as capital-work-in-progress until completion of the project or put to use. These costs are capitalized to the relevant items of the fixed assets on physical completion/mechanical completion or putting to use.

Retirement benefits: - Retirement benefits in form of Provident Fund, E.S.I.C. Etc whether in pursuance of law or otherwise is accounted on accrual basis and charged to profit & loss account of the year.

Annexure IV

SIGNIFICANT NOTES TO ACCOUNTS

Year 2001

In the opinion of Directors, Current assets have the value at which they are stated in Balance sheet if realized in the ordinary course of business and provisions have been made for all known liabilities Balance of Debtors and loans/advances are subject o confirmation

Share purchased by the Company Yet to transferred in the Companies name.

Contingent liability in respect of cinema project cannot be ascertained hence not provided for .The Company has allotted 2312.06 Sq.mt land from IDA on 30 year lease. The premium in respect of leased land Rs.599830/- paid in the year and Rs.2483964/- is payable for which provision has been made.

Year 2002

During the previous year the Company has increased its Authorized share capital from 5,00,000 Equity shares of Rs.10/ each to 15,00,000/ Equity shares of Rs.10/ each fully paid up & 4,50,000 – 10 % Redeemable preferential shares of Rs.10/-each.Fully paid up passing a special resolution in the Extra ordinary General Meeting on 1st day of January 2002

Year 2003

Contingent Liabilities.

Estimated amount of Rs. 20,00,000/- contract remaining to be executed on capital account and not provided for is unascertainable.

In the opinion of the Board and to the best of their knowledge and belief the aggregate value of current assets, loans and advances have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated in balance sheet.

Balances under the main head Sundry Debtors, Current Liabilities, and Loans and Advances are subject to confirmation by respective parties.

Payment made to the Auditors is Rs. 5,250/- (2002 – Rs. 1,050/- ) inclusive of Service Tax.

SECURED LOANS:

Company has taken Rs. 375.00 Lacs @ 15.50% Interest on Term Loan from Madhya Pradesh Financial Corporation against the mortgage of leasehold land situated at 18-A, IDA Scheme No. 94-C, Ring Road, Indore, with all he building and equipments, present or future, of the upcoming Integrated Entertainment Complex. Company has taken Rs. 3.00 Lacs @ 14% Interest on Term Loan for 36 months under hypothecation agreement with ICICI Bank Ltd., on Santro Car.

During the year company has imported capital goods of Rs. 4,44,209/- in foreign currency.

Other additional information pursuant to the provisions of Paragraph 3 and 4 of Part II and Part IV of Schedule VI of the Companies Act, 1956, is not applicable to the Company.

76 Brahma Interactive Limited

DEFERRED TAXES:

As per accounting standard AS-22, issued by the Institute of Chartered Accountants of India the deferred Taxes liability is accounted for in respect of timing difference.

YEAR 2004 & 2005

Contingent Liabilities: Contingent Liabilities that may arise due to delayed / non-compliance of certain fiscal statutes amounts are unascertainable.

NOTES ON ACCOUNTS:- A) In the opinion of the management and to the best of their knowledge and belief, the aggregate value of the current assets and loans & advances, on realization in the ordinary course of business, will not be less than the amount at which they are stated in the Balance Sheet. Authorized Share Capital of the Company has been increased from Rs. 1,50,00,000/- to Rs. 1,55,00,000/- divided into 1550000 Equity Shares @ Rs. 10/- each. On vide resolution passed on 01.08.2004. The company has issued 33,600 Equity Shares of Rs. 10/- each on a premium of Rs. 20/- on 01.08.2004 B) Balances under the head Sundry Debtors, Creditors, Loans & Advances and others are subject to confirmation and reconciliation with respective parties. C) Secured Loan: Company has taken Rs. 375.00 Lacs @ 15.50% and Rs. 100.00 Lacs @ 14.50% interest as term loan from Madhya Pradesh Financial Corporation against the mortgage of leasehold land situated at 18A, IDA Scheme No. 94-C, Ring Road, Indore with all the building and equipments, present and future, of the integrated entertainment complex.

Secured Loan: Company has taken Rs. 572.00 Lacs @ 10% interest as Term Loan from State Bank of Indore, Y.N. Road Branch, Indore against the mortgage of leasehold land situated at 18A, IDA Scheme No. 94-C, Ring Road, Indore with all the building and equipments, present and future, of the integrated entertainment complex.

Payment made to the Auditors is Rs. 8,400/- (2004) & Rs. 8,960/- (2005)

D) AS PER AS-18 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA THE COMPANIES RELATED PARTIES ARE DISCLOSED BELOW:-

Promoter/Keymanagments: a) Barmanand Bindal b) Yashveer Bindal, c) Bharat Bindal d) Sarita Bindal e) Shweta Bindal f) Sudhir Bindal

The summarised details of transaction with related parties for the year 2004 and 2005:

1. Barmanand Bindal Rent Paid Rs. 0.12 Lacs 2. Yashveer Bindal Remuneration paid Rs. 2.16 Lacs Interest Paid Rs. 0.68 Lacs for 2005 and 1.18 Lacs for 2004 3. Bharat Bindal Interest paid Rs. 0.09 Lacs for 2005 and 1.18 Lacs for 2004 4. Sarita Bindal Salary Paid Rs. 1.07 Lacs for 2005 and 0.95 Lacs for 2004 5. Shewta Bindal Salary Paid Rs. 1.07 Lacs for 2005 and 0.93 Lacs for 2004 6. Sudhir Bindal Interest Paid Rs. 1.25 Lacs for 2004

D) Earning share 31.03.04 31.03.05 Net Profit available for Equity Shareholders 2775247 7550965 Weighted average number of equity share outstanding 1196265 1529865 Basic and diluted earning per equity share of face value Of Rs. 10/- each 1.03 4.94

E) Other additional information pursuant to the provisions of Para 3 and 4 of Part II and Part VI of Schedule VI of the Companies Act, 1956, is not applicable to the company. F) The Company has received an order from The Commercial Tax Department of Madhya Pradesh dated 18th August 2003, providing exemption from payment of Entertainment Tax and the Advertisement Tax, 100% for the first three years, commencing from the first day of the commercial play of movie, followed by 75% exemption in the Forth year and 50% in the Fifth year of such date. G) The Company is entitled for the Deduction under Section 80 IB of the Income Tax Act 1961, for first Five years starting from the financial year 2003-2004.

For the period ended 30.09.2005 a) Authorised Share Capital of the Company has been increased from Rs.2,00,00,000/- to Rs.11,00,00,000/- divided into 1,55,00,000 Equity Shares @Rs.10/- each and 4,50,000, 10% redeemable preference Shares of Rs.10/-each vide resolution dated 30.09.2005. The company has issued 509955 bonus share of Rs. 10/- each in the ratio of 1:3 by capitalizing the share premium of Rs. 5099550/- vide Resolution dated 30.09.2005. b) Payment made to the auditors is Rs.11,250/-(2005- Rs. 8960/-) inclusive of service tax. c) AS PER AS-18 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA THE COMPANIES RELATED PARTIES ARE DISCLOSED BELOW:-

Promoter/Keymanagments: a) Barmanand Bindal b) Yashveer Bindal, c) Bharat Bindal d) Sarita Bindal e) Shweta Bindal

The summarised details of transaction with related parties during the period: 1. Barmanand Bindal Rent Paid Rs. 0.06 Lacs 2. Yashveer Bindal Remuneration paid Rs. 1.08 Lacs Interest Paid Rs. 0.38 Lacs 3. Bharat Bindal Remuneration paid Rs. 1.08 Lacs Interest Paid Rs. 0.43 Lacs 4. Sarita Bindal Salary Paid Rs. 0.50 Lacs 5. Shewta Bindal Salary Paid Rs. 0.50 Lacs

D) Earning share 30.09.2005 31.03.2005 Net Profit available for Equity Shareholders - 7550965 Weighted average number of equity share outstanding 2039820 1529865 Basic and diluted earning per equity share of face value Of Rs. 10/- each - 4.94 e) Contingent liabilities: - NIL.

78 Brahma Interactive Limited f) The Company has given advance of Rs. 5,00,000/- to M/s Apple International Indore in which the company has entered into the partnership with effect from 01.10.2005 having 90% share in profit/Loss along with two other partners.

Annexure V RESTATED CASH FLOW STATEMENT Rs.inLacs Particulars Period Six Months Year Ended March 31, 30.09.2005 2005 2004 2003 2002 2001 Cash Flows from Operating Activities Net Profit Before Taxation 89.16 102.5 61.65 0.09 0.02 0.04 Adjustments for: 0 0 0 Depreciation 26.99 45.82 36.51 0.07 0.18 0.24 Interest/Dividend Income -0.16 -0.31 -0.49 -0.03 -0.03 -0.06 Loss on sale of Assets 1.43 Extra Ordinary Item -51.00 66.72 0 0 0 0 Preliminary expenses Written off 0.00 0.04 0.04 0.04 0.04 0.04 Interest Paid 29.94 22.68 17.49 0.00 0.00 0.07 Exchange Gain Operating Profit before Working 96.36 237.45 115.2 0.17 0.21 0.33 Capital Changes Change in Trade and Other Receivables 28.28 -26.42 -11.91 -17.29 0 0.02 Change in Inventories -5.46 -16.03 0 0 0 0 Change in Other Current Assets -30.12 36.37 -25.48 -0.54 0.47 7.56 Change in Current Liabilities 10.58 32.67 -283.23 260.32 -8.82 32 Income- taxes paid 0.00 0.00 0.00 0.00 0.00 0.00 Prior Period Expenditure 0.00 0.00 0.00 0.00 0.00 0.00 Net Cash Flow from Operating 99.64 264.04 -205.42 242.66 -8.14 39.91 Activities Cash Flow from Investing Activities Purchase of Fixed Assets -30.27 -405.98 -718.23 0 0 0 Sale of Fixed Assets 1.50 134.37 597.6 -582.87 -150.76 -93.43 Investments Purchased 0.00 0 45.25 27 -58.75 -8.5 Net Cash Flow used in Investing -28.77 -271.61 -75.38 -555.87 -209.51 -101.93 Activities Cash Flows from Financing Activities 70.87 -7.57 -280.8 -313.21 -217.65 -62.02 Changes in Borrowings -46.95 99.04 197.52 312.79 92.38 45.11 Proceeds from Issuance of Capital 51.00 -66.72 100.08 4.9 123.03 17.97 Miscellaneous Exp incurred -3.30 0.00 0.00 0.00 0.00 0.00 Interest Received 0.16 0.31 0.49 0.03 0.03 0.06 Exchange Gain 0.00 0.00 0.00 0.00 0.00 0.00 Direct Taxes -1.88 0.62 -2.37 -0.04 0.00 0.00 Dividend Paid/Interest -29.94 -22.68 -17.49 0.00 0.00 -0.07 Net Cash Flow from Financing -30.91 10.57 278.23 317.68 215.44 63.07 Activities Net increase in cash and cash 39.96 3 -2.57 4.47 -2.21 1.05 equivalents

80 Brahma Interactive Limited

Cash and Cash Equivalents (Opening Balance) 5.56 2.56 5.13 0.66 2.87 1.82 Cash and Cash Equivalents 45.52 5.56 2.56 5.13 0.66 2.87 (Closing Balance)

Annexure VI STATEMENTS OF ACCOUNTING RATIOS

Particulars Period Six Months Year Ended March 31, 30.09.2005 2005 2004 2003 2002 2001 Earnings per share (Rs.) 4.28 4.94 1.03 0.00 0.00 0.01

Net Asset value per share (Rs.) 20.26 21.30 12.38 10.06 10.05 10.27

Return on Net Worth (%) 21.12 23.17 11.18 0.04 0.00 0.08

Weighted average number of equity 2039820 1529865 1196265 1196265 1144365 187265 shares in the period (in Nos.)

Fromula: 1.Earnings per share(Rs.) = Net profit attributable to equity shareholders Weighted average number of equity shares outstanding during the period

Net Worth excluding revaluation reserve at the end of 2.Net Asset Value per share (Rs.) = the period/year Weighted average number of equity shares outstanding during the period

3.Return on Net Worth (%) = Net profit attributable to equity shareholders Net Worth excluding revaluation reserve at the end of the period/year

Annexure VII

CAPITALISATION STATEMENT Rs. Lacs Particulars Pre Issue as at Post Issue ** 30.09.2005

Borrowings: Short-term Debt 201.00 165.00 Long-term Debt 480.14 580.00 Total Debt 681.13 745.00

Shareholder's Funds : Equity Share Capital 203.98 1001.00 Reserves and Surplus 209.20 325.00 Total Shareholder's Funds 413.18 1326.00

Long-term Debt/Equity ratio (%) 2.35 0.58

** Post Issue figures are based on an estimated basis.

82 Brahma Interactive Limited

Annexure VIII-A

STATEMENT OF SECURED LOANS AS ON MARCH 31, 2005 Rs.Lacs

Rate of Sanctioned Amount Interest Repayment Bank Nature of Loan Amount Outstanding P.A. (%) Terms Securities Offered

1 ICICI BANK HYPOTHECATION 3 0.08 14 3 years Car Santro

2 ICICI BANK HYPOTHECATION 3 0.95 8 2 years Car Opel

3 State Bank of Indore FCNR 447 449.97 4+libor 7 years Movable assets and

4 State Bank of Indore Term Loan 125 51.08 10 7 years land and building and properties mortgage

Annexure VIII-B

STATEMENT OF SECURED LOANS AS ON SEPTEMBER 30th, 2005 Rs.Lacs

Rate of Sanctioned Amount Interest Repayment Securities Bank Nature of Loan Amount Outstanding P.A. (%) Terms Offered

1 HDFC BANK HYPOTHECATION 6 5.32 9 4 years Car Scorpio

2 ICICI BANK HYPOTHECATION 3 2.91 5 2 years Car Indica

3 ICICI BANK HYPOTHECATION 3 0.25 8 2 years Car Opel Movable assets 4 State Bank of Indore FCNR 447 398.20 3.50+ libor 7 years and land and 5 State Bank of Indore Term Loan 125 73.45 10 7 years building and properties mortgage

Annexure IX STATEMENT OF TAX SHELTER Rs.Lacs Particulars For the Period Year Ended March 31, 30.09.2005 2005 2004 2003 2002 2001 Proft/Loss before tax as per audited accounts 89.16 102.5 61.65 0.09 0.02 0.04

Tax at Notional Rate(%) 33.66 36.6 35.9 36.8 35.77 39.2 Adjustments: Export Profits 0 0 0 0 0 0 Difference between Tax Depreciation and Book Depreciation 37.26 88.54 59.68 0.03 0.07 0.1 Other Adjustments 26.67 6.98 0.5 0.02 Net Adjustments 63.93 95.52 60.18 0.05 0.07 0.1

Tax Saving Thereon 21.52 34.96 21.6 0.02 0.02 0.04

Total Taxation 8.98 2.56 0.18 0.04 0.08 0.06 Taxation on extra-ordinary Items 0 0 0 0.01 0 0 Tax on Profits before extraordinary items 8.98 2.56 0.18 0.03 0.08 0.06

84 Brahma Interactive Limited

Annexure X STATEMENT OF LOANS AND ADVANCES

Rs. Lacs Particulars 31.03.2005 30.09.2005

Advances Recoverable in Cash or in Kind or for the value to be received - From Directors 0.00 0.00 - From Others 4.49 34.60 Security Deposits 7.26 7.27 Excise Duty Balances 0.00 0.00 11.75 41.87

Annexure XI STATEMENT OF SUNDRY DEBTORS

Rs. Lacs Particulars 31.03.2005 30.09.2005

(Unsecured, considered doubtful) - Outstanding for a period less than six months 0.00 0.00 - Outstanding for a period exceeding six months 0.00 0.00

(Unsecured, considered good) - Outstanding for a period less than six months 38.13 10.05 - Outstanding for a period exceeding six months 0.2 0.00 38.33 10.05

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2. Financial information of the group companies:

Other than the promoter companies, the financial details of which are appearing on page [•] of the Draft Prospectus, the Company does not have any other Group Company.

3. Change in accounting policies in the last three years:

The changes in accounting policies, if any, during preceding three years are disclosed as part of the Auditors’ Report.

4. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS:

Overview of the Business of the Issuer Company:

The Company is engaged in the business of operating Multiplex Cinemas alongwith other retail activities in the State of Madhya Pradesh.

The Company was the pioneer in the States of Madhya Pradesh and Chhatisgarh wherein the Company constructed and setup and operates the first and only Multiplex.

Factors that may affect Results of the operations

• General economic and business conditions; • Company’s ability to successfully implement its strategy and growth plans; • Factors affecting entertainment industry; • Increasing competition in the entertainment industry; • Increases in costs of manpower, equipments and insurance premiums; • Changes in laws and regulations that apply to the industry; • Changes in fiscal, economic or political conditions in India;

Summary of Past Financial Results (Restated) (Rs. In Lacs ) Period Six Year Ended March 31 Months Particulars 30.09.05 2005 2004 2003 2002 2001

Sales 387.59 518.54 330.32 0.00 0.00 0.00 Other Income 31.84 56.58 2.67 0.34 0.49 1.94 Increase/(Decrease) in Stock 5.45 16.03 0.00 0.00 0.00 0.00 Total Income 424.88 591.15 332.99 0.34 0.49 1.94

Variable Expenses 244.47 356.89 190.93 0.00 0.00 0.00 Administrative Expenses & Other 32.89 63.22 26.37 0.15 0.25 1.55 Expenses Financial Expenses 29.94 22.68 17.49 0.00 0.00 0.07 Depreciation 26.99 45.82 36.50 0.07 0.18 0.24 Prov. For Doubtful Debts 0.00 0.00 0.00 0.00 0.00 0.00 Extraordinary Items 1.44 0.04 0.04 0.04 0.04 0.04 Profit before Tax 89.16 102.50 61.65 0.09 0.02 0.04 Current Tax 1.58 2.37 0.03 0.01 0.02 Deffered Tax 25.42 31.53 0.00 0.00 0.00 Other tax adjustment 1.88 -2.20 0.00 0.00 0.00 0.00 Profit for the year 87.28 77.70 27.75 0.05 0.01 0.02

Comparison of Six Months Ended 30.09.05 vis-vis 12 months ended on 31.03.05

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Sales:

The Gross sales for the half year ended 30.09.05 stood at Rs. 387.59 Lakhs.

On per month basis, the sales for the half year ended September 30th 2005 stood at Rs. 64.59 Lakhs, the average monthly sales for the fiscal 2004-05 stood at Rs. 43.21 Lakhs. There has therefore been an increase of 50% in sales during half year ended September 30th, 2005 as compared to last fiscal 2005

Other Income:

The other income stood at Rs. 31.84 Lakhs for the half year ended 30th September 2005, Major Heads of receipts were on account of Rental Income, Restaurant Receipts, Parking Charges, Advertisement Revenues etc.

On per month basis, the other income for the half year ended September 30th 2005 stood at Rs. 5.30 Lakhs, the average monthly other income for the fiscal 2004-05 stood at Rs. 4.71 Lakhs. There has therefore been an increase of 12% in other income during half year ended September 30th, 2005 as compared to last fiscal 2005

Expenditure:

During the half year ended September 30, 2005, the variable expenses are 63.07% of sales against 68.82 % of sales in fiscal 2005, showing a marginal improvement, also the administrative expenses have shown marginal improvement both of which are due to economies of scale.

Financial Expenses:

There has been an increase in the financial expenses by 76.65% in the half year ended September 30, 2005 as compared to the last fiscal 2005, this is mainly due to increase in term liability. The Company has avail additional term loans resulting in increase in financial expenses.

Depreciation:

Depreciation has increased on a per month basis from Rs. 3.81 Lakhs in fiscal 2005 to Rs. 4.49 Lakhs in the half year ended September 30, 2005 due to addition of fixed assets.

Net Profit after Tax:

On a per month basis the profit for the half year ended September 30, 2005 stood at Rs. 14.54 Lakhs. There has therefore been an increase of 124.65 % in profit during the half year ended September 30, 2005 as compared to last fiscal 2005. The company has during the half year seen the release of many blockbusters and increased occupancy resulting in economies of scale and improvement in the bottomline.

Comparison of 12 months ended on 31.03.05 vis-vis 12 months ended on 31.03.04

Sales:

The Gross sales for the fiscal 2005 stood at Rs. 518.54 Lakhs in comparison to Rs. 330.32 Lakhs for the fiscal 2004 thereby posting a growth of 56.98%. The Company has during the year improved the footfalls and average per head spend resulting in growth in the topline.

Other Income:

The other income stood at Rs. 56.58 Lakhs for the fiscal 2005, in comparison to Rs. 2.67 Lakhs in the fiscal 2004. Major Heads of receipts were on account of Rental Income, Restaurant Receipts, Parking Charges, Advertisement Revenues etc. The Restaurant and Rental Incomes started in this fiscal, thereby resulting in substantial improvement over fiscal 2004.

Expenditure:

The variable expenses are 68.82% of sales in fiscal 2005 as against 57.80% of sales in fiscal 2004. There has also been an increase in the administrative expenses of the Company from 7.98% of sales in fiscal 2005, in comparison to 5.29% of sales in fiscal 2004. This has been on account of increase in the cost of inputs and services and increased cost of manpower.

Financial Expenses:

There has been an increase in financial expenses of 29.67% as compared to last fiscal 2004 due to additional availment of fund based facilities from our Bankers.

Depreciation:

The Company has charged depreciation of Rs. 45.82 Lakhs for the fiscal 2005 which is 25.53% higher than the depreciation charged for the fiscal 2004 due to addition of fixed assets.

Net Profit after Tax:

The Company has posted a higher PAT of Rs. 77.70 Lakhs for the fiscal 2005 as compared to Rs. 27.75 Lakhs for the fiscal 2004 which is 180 % higher on account of better topline, increase in other income and better efficiencies of scale.

Comparison of 12 months ended on 31.03.04 vis-vis 12 months ended on 31.03.03

The Commercial launch of the Company’s Multiplex took place on 11th April 2003. Therefore all the figures prior to 11.04.2003 are not comparable on account of no major commercial activity having been undertaken by the Company.

Sales:

The gross sales stood at Rs. 330.32 Lakhs for the fiscal ending 2004 which is substantially more than that of the previous fiscal 2003. The commercial operation as mentioned above took place on 11th April 2003, therefore the entire financials accrued starting fiscal 2004.

90 Brahma Interactive Limited

Other Income:

The other income for the fiscal 2004 is Rs. 2.67 Lakhs while it was Rs. 0.34 Lakhs in the fiscal 2003.

Expenditure:

The variable expenditure is Rs. 190.93 Lakhs in the fiscal 2004 as against nil in the fiscal 2003.

Financial Expenses:

The financial expenses is Rs. 17.49 Lakhs in the fiscal 2004 as against nil in the fiscal 2003.

Depreciation:

The Company has charged depreciation of Rs. 36.50 Lakhs for the fiscal 2004 which is higher than Rs. 0.07 Lakhs charged for the fiscal 2003 due to addition of fixed assets.

Net Profit after Tax:

The Company has earned PAT of Rs. 27.75 Lakhs as compared to Rs. 0.05 Lakhs for the fiscal 2003.

Comparison of 12 months ended on 31.03.03 vis-vis 12 months ended on 31.03.02

Sales:

The Company has posted nil sales in the fiscal 2003 and the fiscal 2002. This is on account of no commercial activity having taken place in these two years.

Other Income:

The Company has posted Rs. 0.34 Lakhs in the fiscal 2003 as other income in comparison to Rs. 0.49 Lakhs in the fiscal 2002. This is on account of interest and other incidental income.

Expenditure:

The Company has posted nil expenditure in the fiscal 2003 and the fiscal 2002. This is on account of no commercial activity having taken place in these two years.

Financial Expenses:

The Company has posted nil financial expenses in the fiscal 2003 and the fiscal 2002. This is on account of no commercial activity having taken place in these two years.

Depreciation:

The Company has charged depreciation of Rs. 0.07 Lakhs for the fiscal 2003 & Rs. 0.18 Lakhs for the fiscal 2002.

Net Profit after Tax:

The Company has posted Rs. 0.05 Lakhs for the fiscal 2003 as compared to Rs. 0.01 Lakhs for the fiscal 2002.

Comparison of 12 months ended on 31.03.02 vis-vis 12 months ended on 31.03.01

Sales:

The Company has posted nil sales in the fiscal 2002 and the fiscal 2001. This is on account of no commercial activity having taken place in these two years.

Other Income:

The Company has posted Rs. 0.49 Lakhs in the fiscal 2002 as other income in comparison to Rs. 1.94 Lakhs in the fiscal 2001. This is on account of interest and other incidental income.

Expenditure:

The Company has posted nil expenditure in the fiscal 2002 and the fiscal 2001. This is on account of no commercial activity having taken place in these two years.

Financial Expenses:

The Company has posted nil financial expenses in the fiscal 2002 and Rs. 0.07 Lakhs for the fiscal 2001.

Depreciation:

The Company has charged depreciation of Rs. 0.18 Lakhs for the fiscal 2002 & Rs. 0.24 Lakhs for the fiscal 2001.

Net Profit after Tax:

The Company has posted Rs. 0.01 Lakhs for the fiscal 2002 as compared to Rs. 0.02 Lakhs for the fiscal 2001.

Information Regarding: a) Unusual or infrequent events or transactions:

There have been no unusual or infrequent transactions that have taken place during the last three years. b) Significant Economic changes that materially affected or are likely to affect income from continuing operations:

Government's focus on entertainment Industry will have major bearing on the companies involved in this sector. The Government’s positive outlook towards entertainment and retail supports the Company and such support is likely to continue in the foreseeable future. c) Known trends or uncertainties

92 Brahma Interactive Limited

Apart from the risks as disclosed on page [•] under heading “Risk Factors” in this Draft Prospectus, there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations. d) Future changes in relationship between costs and revenues

Increase in ticket revenues, higher per head spend and efficiencies of scale and common infrastructure shall result in suitably offsetting increase in cost, if any. e) Total turnover of the Industry

The Company’s turnover is only from one segment i.e. Entertainment. f) Status of any publicly announced new products or business segment

Introducing new products is an ongoing process in our regular business initiative. g) Extent of seasonality of business

Entertainment business is seasonal only to the extent of examinations of students which is less than two months in a year. Seasonality to such an extent applies to every business. The promoters are of the opinion that operations are not likely to be affected owing to this. h) Significant dependence on a single or few suppliers or customers

Our revenue is dependant on very large number of customers and footfalls, therefore loss of few clients would not affect revenues adversely.

The inputs are standardized and there are a lot of suppliers for the requisite raw material and therefore there is no over reliance on the suppliers. i) Competitive conditions

The Company currently faces competition only from single screen cinemas. Multiplexes, when they open in competition belong to national chains who are large sized and therefore have comparatively larger overheads. Also more Multiplexes will add depth to the market and enhance the cinema going habit. The Company is also increasing its geographical reach by targeting untapped locations.

CONCLUSION:

Given the increasing movie going habit in the country and the increased spending patterns alongwith high disposable incomes in the Indian Metros and Non-Metros the Company is of the firm opinion that incremental topline and bottomline growth can be achieved by expanding our presence in other untapped locations.

The expertise of the Promoters in timely execution and running of a Multiplex shall be of key importance for the growth of the Company.

SECTION VI: LEGAL AND OTHER INFORMATION

1. Outstanding Litigations And Material Developments

The company certifies that except as stated herein, there are no:

• Other pending litigations against the company.

• Outstanding litigations, defaults etc pertaining to matter likely to affect operations and finances of the company including prosecution under any enactment in respect of Schedule XIII of the Companies Act 1956 (1 of 1956).

• Such cases of pending litigations, defaults etc in respect of Companies/firms/ventures with which the promoters were associated in the past but are no longer associated, and their names continue to be associated with particular litigation.

• Disciplinary action/ investigation has been taken by Securities and Exchange Board of India (SEBI)/ Stock Exchanges against the Company, its directors, promoters and their other business ventures (irrespective of the fact whether or not they fall under the purview of section 370(1B) of the Companies Act 1956.

• Cases against the Company or its Promoters of economic offences in which penalties were imposed on promoters.

• Pending litigations, defaults, non payment of Statutory dues, proceedings initiated for economic offences/civil offences, any disciplinary action taken by the Board /Stock Exchanges against the Company/Promoters and their business ventures/Directors other than those mentioned in this Prospectus and that no litigations have arisen after the issue of SEBI’s Observation letter and the Company and its Directors take full responsibility of the information mentioned in the Prospectus.

Outstanding Litigations involving Brahma Interactive Limited

Filed Against The Company

Pertaining to Civil Laws:

94 Brahma Interactive Limited

Filed By The Company

Pertaining to Criminal Laws

Place Sr. Name of the of Court before which the Date Claim No. Opposite Party Litigati Litigation is pending Instituted Amount on JMFC VIII Indore District 1 Mr. Manoj Jain Indore 17/12/2003 Rs. 1,00,000 Court JMFC VIII Indore District 2 Mr. Sunil Jain Indore 23/01/2004 Rs. 74,575 Court JMFC VIII Indore District 3 C.K. Arts Indore 21/06/2005 Rs. 77,088 Court

Case History:

Case File against Mr. Manoj Jain, proprietor of M/S Nilesh Printers, on 17th December 2003 u/s 138 of Negotiable Instruments Act for recovery of Rs. 1,00,000 against dishonour of cheque. Court has issued bailable warrant against the party.

Case File against Mr. Sunil Jain, for Real Games Distributors, on 23rd January 2004 u/s 138 of Negotiable Instruments Act for recovery of Rs. 74,575 against dishonour of cheque. Court has issued Summons against the party.

Case File against C.K. Arts on 21st June 2005 u/s 138 of Negotiable Instruments Act for recovery of Rs. 77,088 against dishonour of cheque. Court has issued Summons against the party.

Outstanding Litigations involving Promoters’ Group Companies

Except as stated herein, there are no criminal, securities, statutory or other litigations against any of the Group/Associate Companies. There are no outstanding litigations, disputes, penalties including tax liabilities economic offence, criminal/civil prosecutions for any offence irrespective of whether specified under any enactment in paragraph (1) of Part (1) of schedule XIII of Companies Act 1956 against the Group companies / Associate Concerns promoted by the Promoters.

There are no outstanding litigations, defaults, etc., pertaining to matters likely to affect operations and finances of the Company including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII to the Companies Act, 1956 (1 of 1956).

Devki Leasing & Finance Limited

Filed by Devki Leasing & Finance

Place Sr. Name of the of Court before which the Date Claim No. Opposite Party Litigati Litigation is pending Instituted Amount on Ravindra Indore District First Class 1 Indore 18/03/1999 20000 Lashkari Magistrate Indore District First Class 2 Sanjay Thakker Indore 27/06/1997 7143 Magistrate Indore District First Class 3 Vijay Patil Indore 15/07/1997 62000 Magistrate

Place Sr. Name of the of Court before which the Date Claim No. Opposite Party Litigati Litigation is pending Instituted Amount on Indore Indore District First Class 4 Usha Soni 28/05/1999 19500 Magistrate Indore Indore District First Class 5 Mushtaq Ali 19/12/1996 12840 Magistrate Indore Indore District First Class 6 Devbrat Singh 16/08/1999 89030 Magistrate Girdharilal Indore Indore District First Class 7 22/05/1999 80000 Joshi Magistrate Indore Indore District First Class 8 Gopal Kodwani 31/08/1999 45000 Magistrate Kailash Chand Indore Indore District First Class 9 16/10/1998 59000 Bina Magistrate Anokhilal Indore Indore District First Class 10 29/10/1998 57370 Parashar Magistrate Rukmani Indore Indore District First Class 11 22/05/1999 180000 Sharma Magistrate Subhash Indore Indore District First Class 12 20/01/1999 270000 Solanki Magistrate Rajendra Indore Indore District First Class 13 04/03/1999 200000 Sharma Magistrate Indore Indore District First Class 14 Jagdish Sharma 16/08/1999 261000 Magistrate Indore Indore District First Class 15 Ramesh C Shah 19/07/1999 540000 Magistrate Manohar Indore Indore District First Class 16 04/08/1998 77580 Verma Magistrate Nikunj Sachin Indore Indore District First Class 17 08/10/1999 36666 Parikh Magistrate Prakash Indore Indore District First Class 18 22/10/1999 170000 Dedolkar Magistrate Ashok Kumar Indore Indore District First Class 19 25/10/1999 375000 Jain Magistrate Sushil Kumar Indore Indore District First Class 20 25/10/1999 90000 Tiwari Magistrate Indore Indore District First Class 21 Devbrat Singh 19/01/2000 106836 Magistrate Champalal Indore Indore District First Class 22 22/03/2000 167000 Patidar Magistrate Nikunj Singh Indore Indore District First Class 23 08/06/2000 312000 Parikh Magistrate Kailash Vikas Indore Indore District First Class 24 17/07/2000 21406 Shivare Magistrate Indore Indore District First Class 25 Santosh Bhatti 01/03/2001 42000 Magistrate Shripad Madho Indore Indore District First Class 26 15/05/2001 15495 Kapil Magistrate Atma Ram Indore Indore District First Class 27 15/05/2001 403000 Malviya Magistrate Parmanand Indore Indore District First Class 28 25/09/2001 339000 Patel Magistrate

96 Brahma Interactive Limited

Place Sr. Name of the of Court before which the Date Claim No. Opposite Party Litigati Litigation is pending Instituted Amount on Indore Indore District First Class 29 Madanlal Patel 10/10/2001 60000 Magistrate Rajaram Indore Indore District First Class 30 28/02/2002 18400 Malviya Magistrate Indore Indore District First Class 31 Jitendra Tiwari 01/04/2002 43000 Magistrate Indore Indore District First Class 32 Prem Kalwani 01/04/2002 17000 Magistrate Deepak Kumar Indore Indore District First Class 33 26/04/2002 97000 Rathore Magistrate Radheyshyam Indore Indore District First Class 34 26/04/2002 118000 Chouhan Magistrate Indore Indore District First Class 35 Ranjan Traders 10/06/2002 20000 Magistrate Indore Indore District First Class 36 Satveer Yadav 24/06/2002 56700 Magistrate Indore Indore District First Class 37 Sarafat Khan 24/07/2002 150000 Magistrate

Material developments since the last Balance Sheet as on 30.09.2005:

Following Material Developments have taken place in the Company since the last audited Balance Sheet for the half year ended 30.09.2005

a) 4,53,000 Equity Shares of Rs. 10 each at a price of Rs. 27 fully paid aggregating to Rs. 1,22,31,000 were allotted to the bodies corporate. b) 4,50,000 Preference Shares of Rs. 10 each were converted into Equity Shares of Rs. 10 each. c) 20,68,050 Equity Shares of Rs. 10 each at a price of Rs. 22 fully paid up aggregating to Rs. 454.97 Lacs.

2. GOVERNMENT APPROVALS/ LICENSING ARRANGEMENTS

The Company has received all the necessary licenses, permissions and approvals from the Central and State Governments and other government agencies/certification bodies required for its business and no further approvals are required by the company for carrying on the business activities of the Company. It must, however, be distinctly understood that in granting the above approvals, the Government and other authorities do not take any responsibility for the financial soundness of the Company or for the correctness of any of the statements or any commitments made or opinions expressed.

In view of the approvals listed below, the Company can undertake this Issue and its current business activities and no further major approvals from any statutory authority are required to continue those activities.

The following statement sets out the details of licenses, permissions and approvals taken by the Company under various Central and State Laws for carrying out its business.

1. Letter dated 20th November 2000 issued by MPSEB regarding no objection for working of Multiplex.

2. Letter No. CE/IR/HT/COM/F-771/507, dated 10th January 2003 given by Madhya Pradesh State Electricity Board, Indore Region, to the company for Sanction of Power to the extent of 200 KVA to the Multiplex, Velocity III.

3. Permission letter dated 3rd October 2003 and 13th May 2005 for first and second generator respectively, received from MPSEB

4. Canteen Licence No. 90188503 issued by Indore Municipal Coporation on 27th April 2005 with Registration No. as 2003/90106706.

5. Restaurant/Hotel License No. 90188502 issued by Indore Municipal Corporation under rules 366 & 427 of the Prevention of Adulteration Act 1954 dated- 1st April 2005, valid till 31st March 2006 with registration no. as 2004/90120080

6. Cinema License No. 90188504 issued by Indore Municipal Corporation under rules 366 & 427 of the Prevention of Adulteration Act 1954 dated- 1st April 2005, valid till 31st March 2006 with registration no. as 2003/90106457.

7. Cinema License issued by Indore District Collector on 24th April 2002.

8. Registration of “VELOCITY” under Copyright Act 1957 with the Registeration No. A- 70833/2005 dated 28.04.2005

9. Operating license issued by Indore Excise Commissioner on 9th April 2003.

10. Completion Certificate issued by Indore Muncipal Corporation on 7th January 2003.

11. Letter of building permission issued by Indore Muncipal Corporation on 19th October 2001.

12. Permission of Construction of Multiplex and N.O.C with respect of location of Multiplex given by Indore District Collector on 28th May 2002.

13. Certificate of registration of Trade Mark, Velocity III, under Trade Marks Act, 1999 with Trade Mark no. 1241379.

98 Brahma Interactive Limited

14. Registration under Shops and Establishments Act, 1958 dated 2nd February 2005.

Incorporation and Other Statutory Compliances level of the company:

1. Certificate of Incorporation bearing number 10-08908 dated 3rd January 1995 issued by Registrar of Companies, Madhya Pradesh, Gwalior.

2. Certificate for commencement of business bearing number 10-08908 dated 3rd January 1995 issued by Registrar of Companies, Madhya Pradesh, Gwalior.

3. The Permanent Account Number (PAN) issued by Income Tax Department, Government of India bearing number AAACB7108F

4. NOC dated 15th February 2001 issued by Indore Superitendent of Police, Indore District.

5. NOC dated 12th February 2001 issued by Excise Department.

6. NOC dated 7th December 2001 issued by Tehshildar, Indore.

7. NOC dated 13th February 2001 issued by Indore Muncipal Corporation.

8. NOC dated 2nd January 2001 issued by Zilla Panchayat.

9. NOC dated 26th December 2001 issued by Indore Development Authority.

10. NOC dated 21st January 2002 issued by Town and Country Planning Development.

11. NOC dated 14th February 2002 and 7th February 2002 issued by Asst. Excise Commissioner.

12. NOC dated 16th October 2000 issued by District Collector.

13. Order of Excise Department dated 18th August 2003 regarding Entertainment Tax Exemption.

SECTION VII: REGULATORY AND STATUTORY DISCLOSURES

AUTHORITY FOR THE ISSUE

The Issue has been authorized pursuant to a resolution of the Board of Directors of the Company passed at its meeting held on 30th September 2005 and by a Special Resolution passed under section 81(1A) of the Companies Act, 1956 at the Extra Ordinary General Meeting of the Company held on 30th September 2005.

PROHIBITION BY SEBI

The Company, its directors, its Promoters and persons in control of the Company, the subsidiaries, the group companies and companies with which the Company’s directors are associated,as directors have not been prohibited from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under any order or direction passed by SEBI.

For Public Issue

The Company is eligible to make offer under Clause 2.2.1 of the Sebi Guidelines since, based on the unconsolidated financial statements of the Company inder Indian GAAP: The Company has net tangible assers of at least Rs. 3 crores in each of the preceding three full years of which not more than 50% is held in monetary assets; The Company has the track record of distributable profits in terms of Section 205 of Companies Act, for atleast three of the immediately preceding five years. The Company has a pre issue net worth of atleast Rs.1 crore in each of the three preceding full years; (Rs in lacs) Particulars 2004-05 2003-04 2003-02 2002-01 Net Fixed Assets 1135.54 909.76 825.63 244.83 Investments 0.57 0.57 45.82 72.82 Net Current Assets 19.83 43.40 (274.65) (19.88) Net Tangible Assets 1155.94 953.70 596.8 297.77 Net Worth 370.90 293.15 165.28 160.28 Profit After Tax 77.70 27.75 0.05 0.01

The proposed Offer size, including all previous public issues in the same financial year, is not expected to exceed five times the pre-Offer net worth of the Company; There has been no change in the name of the Company in last one year.

DISCLAIMER CLAUSE

AS REQUIRED, A COPY OF THIS PROSPECTUS HAS BEEN SUBMITTED TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE OFFER IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE PROSPECTUS. THE LEAD MANAGER CENTRUM CAPITAL LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED OFFER.

100 Brahma Interactive Limited

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE OFFERER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE PROSPECTUS, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD MANAGER CENTRUM CAPITAL LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED 10TH FEBRUARY 2006 WHICH READS AS FOLLOWS:

“1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE PROSPECTUS PERTAINING TO THE SAID OFFER;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE OFFER, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY;

WE CONFIRM THAT: a. THE PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE OFFER; b. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID OFFER AS ALSO THE GUIDELINES, INSTRUCTIONS ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; c. THE DISCLOSURES MADE IN THE PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO INVESTMENT IN THE PROPOSED OFFER; d. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE PROSPECTUS ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID; e. WE HAVE SATISFIED OURSELVES ABOUT THE WORTHOF THE UNDERWRITERS TO FULFILL THEIR UNDERWRITTING COMMITMENTS

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

THE FILING OF THE PROSPECTUS DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCE AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED OFFER. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME,

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WITH THE LEAD MANAGER(S) (MERCHANT BANKERS) ANY IRREGULARITIES OR LAPSES IN THE PROSPECTUS.

GENERAL DISCLAIMER

The Company, the Directors and the Lead Manager accept no responsibility for statements made otherwise than in the Prospectus or in the advertisements or any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information, including the Company’s website, www.velocitycinemas.com would be doing so at his/ her own risk.

The Lead Manager accepts no responsibility, save to the limited extent as provided in the Memorandum of Understanding entered into between the Lead Manager and the Company .

All information shall be made available by the Company and the Lead Manager to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road show presentations, in research or sales reports or at bidding centers etc.

DISCLAIMER IN RESPECT OF JURISDICTION

This Issue is being made in India to persons resident in India including Indian nationals resident in India who are majors, Hindu Undivided Families (HUFs), companies, corporate bodies and societies registered under the applicable laws in India and authorized to invest in shares, Indian mutual funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), Trusts registered under the Societies Registration Act, 1860, as amended from time to time, or any other Trust law and who are authorized under their constitution to hold and invest in shares), permitted Insurance Companies and to non-residents including NRIs and FIIs as defined under the Indian Laws. This Prospectus does not, however, constitute an issue to sell or an invitation to subscribe to Equity Shares Issued hereby in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this Prospectus comes is required to inform himself / herself about and to observe any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Mumbai only.

No action has been or will be taken to permit a public issuing in any jurisdiction where action would be required for that purpose, except that this Prospectus has been submitted to the SEBI. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Prospectus may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Prospectus nor any sale hereunder shall, under any circumstances create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to this date.

Investors may please note that Central Government/ RBI does not take any responsibility for the financial soundness or correctness of the statements disclosed in this Prospectus.

DISCLAIMER CLAUSE OF THE BOMBAY STOCK EXCHANGE LTD.:

As required, a copy of the Prospectus has been submitted to BSE (the Designated Stock Exchange). The BSE has given vide its letter dated [•] granted permission to this Company to use the BSE’s name in this prospectus as one of the stock exchanges on which this Company’s securities are proposed to be listed. The BSE has scrutinized this prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company.

The BSE does not in any manner:

102 Brahma Interactive Limited a) warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus ; or b) warrant that this Company’s securities will be listed or will continue to be listed on the BSE; or c) take any responsibility for the financial or other soundness of this Company, its Promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed to mean that this Prospectus has been cleared or approved by the BSE. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

DISCLAIMER CLAUSE OF THE NATIONAL STOCK EXCHANGE (NSE):

As required, a copy of the Prospectus has been submitted to NSE. NSE has given vide its letter [•], granted permission to the Company to use the NSE’s name in this Prospectus as one of the stock exchanges on which this Company’s securities are proposed to be listed subject to the Company fulfilling the various criteria for listing including the one related to paid up capital and market capitalization (i.e. the paid up capital shall not be less than Rs 10 crore and the market capitalization shall not be less than Rs 25 crores at the time of listing). The NSE has scrutinized the Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed to mean that this Prospectus has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus; nor does it warrant that this Company’s securities will be listed or will continue to be listed on the NSE; nor does it take any responsibility for the financial or other soundness of the Company, its Promoters, its management or any scheme or project of the Company.

Every person who desires to apply for or otherwise acquires any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

FILING

A copy of the Prospectus has been filed with the Corporate Finance Department of SEBI at First Floor, Mittal Court, “B” Wing, Nariman Point, Mumbai 400 021.

A copy of the Prospectus, along with the documents required to be filed under 60B of the Companies Act would be delivered for registration to the Registrar of Companies, Madhya Pradesh, Gwalior and a copy of the Prospectus to be filed under Section 60 of the Companies Act would be delivered for registration with RoC.

LISTING

Applications have been made to the National Stock Exchange of India Limited & Bombay Stock Exchange Limited for permission to deal in and for an official quotaion of the Equity Shares of the Company. BSE will be the Designated Stock Exchange.

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In case, the permission for listing of the equity shares is not granted by any of the above mentioned Stock Exchanges, the Company shall forthwith repay, without interest, all moneys received from the applicants in pursuance of this Prospectus. If such money is not repaid within 8 days after the day from which the Issuer becomes liable to repay it, then the Company and every director of the Company who is an officer in default shall, on and from expiry of 8 days, be jointly and severally liable to repay that money with interest as prescribed under Section 73 of the Companies Act, 1956.

The Company shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at the stock exchange mentioned above are taken within seven working days of finalization and adoption of the Basis of Allotment for the Issue.

IMPERSONATION Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, which is reproduced below: “Any person who: a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

CONSENTS

Consents in writing of: (a) the Directors, the Company Secretary and Compliance Officer, the Auditors, Legal Advisors, Bankers to the company; and (b) Lead Manager and Registrar to the Issue, to act in their respective capacities, have been obtained and filed along with a copy of the Prospectus, with the Registrar of Companies, Madhya Pradesh, Gwalior as required under Section 60 of the Companies Act and such consents have not been withdrawn up to the time of delivery of this Prospectus for registration. The consent of the Bankers to the Issue will be obtained once they are appointed, and will be filed with the other consents along with a copy of the Draft Prospectus, as aforesaid.

M/s. O. T. Gandhi & Co., Auditors of the Company, have given their written consent to the inclusion of their report in the form and context in which it appears in this Prospectus and such consent and report has not been withdrawn up to the time of delivery of this Prospectus.

EXPERT OPINION

Except as stated elsewhere in this Prospectus, the Company has not obtained any expert opinions.

EXPENSES OF THE ISSUE

The expenses of the Issue include interalia underwriting and management fees, selling commission, printing and distribution expenses, legal fees, statutory advertisement expenses and listing fees. The estimated Issue expenses are as follows:

Activity Amount % of the % of total (Rs. In total issue issue size Lacs) expenses

Lead Managers & Registrar Fees, 31.88 37.56 2.36 Audit Fees & Consultancy

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12.75 15.02 0.94 Printing & Stationery / Dispatch 20.25 23.86 1.50 Brokerage & Selling Commission Advertisement & marketing 12.00 14.14 0.89 Expense Other Expenses (Listing Fees, 8.00 9.42 0.59 Depository Charges etc.) TOTAL 84.88 100.00 6.29

FEES PAYABLE TO THE LEAD MANAGER

The total fees payable to the lead manager will be as per the memorandum of understanding executed between the Company and the Lead Manager dated 2nd December 2005 a copy of which is available for inspection at the Registered Office.

FEES PAYABLE TO THE REGISTRAR TO THE ISSUE

The fees payable to the Registrar to the Issue, M/s Intime Spectrum Registry Limited will be as per the Memorandum of Understanding between the Company and the Registrar dated 4th October 2005, copy of which is available for inspection at the registered office.

Adequate funds will be provided to the Registrar to the Issue to enable them to send refund orders or allotment advice by registered post.

BROKERAGE AND SELLING COMMISSION

Brokerage will be paid by the Company at the rate of 1.5% on the issue price of Equity Shares offered to the public on the basis of allotment made against applications bearing the stamp of the members of any recognized Stock Exchanges in India in the broker’s column. Brokerage at the same rate will also be payable to the Bankers to the Issue in respect of allotments made against applications procured by them provided the relevant forms of applications bear their respective stamps in the Broker’s column.

PREVIOUS PUBLIC OR RIGHTS ISSUE (DURING THE LAST 5 YEARS):

The company has not made any issue during the last five years.

PREVIOUS ISSUE OF SHARES OTHERWISE THAN FOR CASH:

The company has not issued any Equity Shares for consideration other than for cash.

COMMISSION OR BROKERAGE ON PREVIOUS ISSUES:

The issuer company has not made any public issue at any point of time so far.

PARTICULARS IN REGARD TO CAPITAL ISSUE DURING THE LAST THREE YEARS

Neither the company, nor any other listed companies under the same management within the meaning section 370 (1)(B) of the Companies Act, 1956, has made any capital issue during the last three years.

WITHDRAWAL OF THE ISSUE

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The company, in consultation with the Lead Manager, reserve the right not to proceed with the Issue anytime after the Issue Opening Date without assigning any reason there-for.

PROMISE VIS-À-VIS PERFORMANCE

Issuer

There being no public issue of any kind of securities by the issuer company, there is nothing to report or disclose as comparison of promises vis-à-vis performance.

Issue of Group/Promoter Companies

There is only one Promoter Company, Devki Lesing and Finance, which made a public issue in the year 1995 of 24,93,500 Equity Shares @ Rs.10 each for cash at par aggregating to Rs.2,43,95,000/- to raise resources for proposed enhancement in leasing and finance activities to augment its resources to meet the needs of its projected growth of the Company. As per the above object, the Company continues to be in operation and its profitable.

Actual Performance Vis-à-vis Projections in the Prospectus. (Rs. in Lacs) Year ending Projections Actuals Projections Actuals Projections Actuals Projections Actuals March, 31 1994-95 1994-95 1995-96 1995-96 1996-97 1996-97 1997-98 1997-98 Sales 12.23 14.58 164.40 57.50 246.42 73.86 323.20 114.81 Profit Before Tax 4.07 6.37 107.14 7.74 159.77 -7.29 212.27 4.19 Profit After Tax 4.07 6.37 107.14 7.34 149.84 -6.89 151.93 2.58

OUTSTANDING DEBENTURES OR BOND ISSUE OR PREFERENCE SHARES:

The Company has no outstanding debentures or bond issue or redeemable preference shares.

STOCK MARKET DATA FOR THE COMPANY’S EQUITY SHARES

This being the initial public offering of the company, the Equity Shares of the Company are not listed on any such stock exchange

INVESTORS’ GRIEVANCES REDRESSAL MECHANISM

Intime Spectrum Registry Limited, the Registrar to the Issue, will handle investors’ grievances pertaining to this issue. A fortnightly status report of the complaints received and redressed by them would be forwarded to the Company. The Company would also be coordinating with the Registrar to the issue in attending to the grievances of the investors. The Company assures that the Registrar, in respect of the complaints, if any, to be received shall adhere to the following schedules:

Sr. No. Nature of the Complaint Time Taken 1. Non-receipt of the refund Within 7 days of receipt of complaint, subject to production of satisfactory evidence. 2. Change of Address notification Within 7 days of receipt of information. 3 Any other complaint in relation Within 7 days of receipt of complain to Public Issue with all relevant details.

The Company has appointed Mr. G. Muralidharan Pillai Company Secretary and Compliance Officer of the Company who would directly liaise with SEBI with respect to

106 Brahma Interactive Limited implementation/compliance of various laws, rules, regulations and other directives issued by SEBI and matters related to investor complaints. The investors may contact the Compliance Officer in case of any pre issue/post issue related problems.

CHANGES IN AUDITORS DURING THE LAST THREE YEARS WITH REASONS THEREOF:

There has been no change in auditors of the company during the last 3 years.

CAPITALISATION OF RESERVES OR PROFITS DURING THE LAST FIVE YEARS:

There has not been any capitalisation of reserves or profits during the last five years.

REVALUATION OF ASSETS DURING LAST 5 YEARS

There has not been any revaluation of assets during the last five years

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SECTION VIII: OFFERING INFORMATION

1. Terms of the issue:

Principal terms and conditions of the issue

The equity shares being issued are subject to the terms of this Prospectus, the terms and conditions contained in the Application Form, the Memorandum and Articles of Association of the Company, provisions of the Act, other applicable Acts and the Letters of Allotment/Equity Share Certificates or other documents and the Guidelines issued from time to time by the Government of India, SEBI and the concerned Stock Exchanges.

Ranking Of Equity Shares

The Equity Shares being offered shall be subject to the provisions of the Memorandum and Articles of Association and shall rank pari passu in all respects with the other existing shares of the Company including in respect of the rights to receive dividends. The allottees will be entitled to dividend or any other corporate benefits (including dividend), if any, declared by the Company after the date of allotment.

Face Value And Issue Price

The Equity Share with a face value of Rs. 10/-each are being offered at the Issue Price is Rs. 27 per Equity Share, which is 2.7 times of the Face Value.

Rights of The Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights: • Right to receive dividend, if declared; • Right to attend general meetings and exercise voting powers, unless prohibited by law; • Right to vote on a poll either in person or by proxy; • Right to receive offers for rights shares and to be allotted bonus shares, if announced; • Right to receive surplus on liquidation; • Right of free transferability; and Such other rights, as may be available to a shareholder of a listed public company under the Companies Act.

Market Lot

In terms of Section 68B of the Companies Act, the Equity Shares of the Company shall be allotted only in dematerialized form. In terms of existing SEBI Guidelines, the trading in the Equity Shares of the Company shall only be in dematerialized form for all investors.

Since trading of the Equity Shares will in dematerialized mode, the tradable lot is one equity share. Allocation and allotment of Equity Shares through this Issue will be done only in electronic form in multiple of one Equity Share subject to a minimum allotment of 200 Equity Shares.

Jurisdiction

The jurisdiction for the purpose of this Issue is with competent courts / authorities in Indore, Madhya Pradesh.

Nomination Facility To The Investor

108 Brahma Interactive Limited

In accordance with Section 109A of the Companies Act, the sole or first bidder, along with other joint bidder, may nominate any one person in whom, in the event of the death of sole bidder or in case of joint bidders, death of all the bidders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the equity share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to equity share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Company’s Registered / Corporate Office or to its Registrar and Transfer Agents.

In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, shall upon the production of such evidence as may be required by the Board, elect either:

• to register himself or herself as the holder of the equity shares; or • to make such allotment of the equity shares, as the deceased holder could have made.

Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to allot the equity shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the equity shares, until the requirements of the notice have been complied with.

Since the allotment of Equity Shares in the Issue will be made only in dematerialized mode, there is no need to make a separate nomination with the Company. Nominations registered with respective DP of the applicant would prevail. If the investors require changing the nomination, they are requested to inform their respective DP.

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of cheques having being returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after the company becomes liable to pay the amount, the Company shall pay interest prescribed under Section 73 of the Companies Act, 1956.

The Lead Manager to the Issue shall ensure that the requirement of “Minimum Subscription” is satisfied both jointly and severally.

If the company does not receive the minimum subscription in the issue the company shall refund the entire subscription received.

Period of Subscription

The subscription list for public issue shall remain open for atleast 3 working days and not more than 10 working days.

Subscription By NRIs and FIIs on repatriation basis

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As per the current provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, there exist a general permission for the NRIs/ FIIs/Foreign Venture Capital Fund registered with SEBI/Multilateral and Bilateral Development Financial Institutions to invest in the shares of an Indian company by way of subscription in a public issue. However, such investments would be subject to other investment restrictions under RBI and/or SEBI regulations as may be applicable to such investors. Based on the above provisions, it will not be necessary for the investors to seek separate permission from the FIPB/RBI for this specific purpose. However, it is to be distinctly understood that there is no reservation for non-residents, NRIs, FIIs and Foreign Venture Capital Funds registered with SEBI and Multilateral and Bilateral Development Financial Institutions and all applicants will be treated on the same basis with other categories for the purpose of allocation.

By virtue of Circular No.14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs)” have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, OCBs shall not be eligible to subscribe to the Equity Shares. Thr RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non- resident entities. Thus, OCBs desiring to participate in this issue must obtain prior approval from RBI. On providing such approval to the Company at its registered office, the OCB shall receive the Prospectus & the Application Form.

Arrangements For Disposal Of Odd Lots

The Company’s shares will be traded in dematerialized form only and therefore the marketable lot is 1 share. Therefore there is no possibility of odd lots. Therefore no arrangements are required for disposal of odd lots.

Restrictions, If Any, On Transfer And Transmission Of Shares And On Their Consolidation / Splitting

For detailed description in respect of restrictions, if any, on transfer and transmission of shares and on their consolidation / splitting, please refer sub – heading “Main Provisions of the Articles of Association of Brahma Interactive Limited appearing on page [•] of this prospectus

110 Brahma Interactive Limited

2. ISSUE PROCEDURE:

Authority For The Present Issue

Present Issue of Equity Shares has been authorized by shareholders vide a Special Resolution passed at the Annual General Meeting of the Company held on 30th September 2005. The Board of Directors of the Company had approved the present Issue of Equity Shares vide a resolution passed at their meeting held on 30th July 2005. Futher, vide a resolution dated 30th September 2005; the Board of Directors of the Company determined the number of Equity Shares to be issued for cash Prospectus.

Principal Terms And Conditions Of The Issue

The Equity Shares being offered are subject to the provisions of the Companies Act, Memorandum and Articles of the Company, the terms of this Prospectus, Application Form, and other terms and conditions as may be incorporated in the Letters of Allotment/Equity Share Certificates or other documents that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws, guidelines, notifications and regulations relating to the Issue of capital and listing of Equity Shares offered from time to time by SEBI, Government of India, Stock Exchanges, RBI, Registrar of Companies and/or other authorities, as in force on the date of the Issue and to the extent applicable.

Availability Of Prospectus And Application Form

The Memorandum Form 2A containing the salient features of the Prospectus together with Application Forms and copies of the Prospectus may be obtained from the Registered Office of the Company, Lead Manager to the Issue, Registrar to the Issue, Underwriters to the Issue and at the collection centres of the Bankers to the Issue, as mentioned on the Application Form.

NRIs / FIIs / Indian Mutual Funds & Indian and Multilateral Development Financial Institutions can obtain the Application Form from the registered office of the Company.

Option To Subscribe

As on the date of this document, there are no pending options to subscribe to Equity Shares or convertible instruments pending conversion into Equity Shares of any kind. The investor shall have the option to subscribe to Equity Shares to be dealt with in a depository.

Investors should note that Equity Shares would be allotted to successful applicants only in the dematerialized form. Applicants will not have the option of allotment of equity shares in physical form. The equity shares on allotment shall be traded only in the dematerialized segment of the Stock Exchanges.

Application may be made by: a) Indian Nationals, who are resident in India and are Adult Individuals and are not lunatic, in single name or joint names (not more than three) b) Hindu Undivided Families through the Karta of the Hindu Undivided Family c) Companies, Bodies Corporate and Societies registered under the applicable laws in India and authorised to invest in the Shares d) Indian Mutual Funds registered with SEBI e) Indian Financial Institutions & Banks

111 f) Indian Venture Capital Funds / Foreign Venture Capital Funds registered with SEBI subject to the applicable RBI Guidelines and Approvals, if any. g) State Industrial Development Corporations h) Insurance Companies registered with Insurance Regulatory and Development Authority i) Provident Funds with minimum corpus of Rs.2500 Lacs j) Pension Funds with minimum corpus of Rs.2500 Lacs k) Trusts or Societies registered under the Societies Registration Act, 1860 or any other applicable Trust Law and are authorised under its constitution to hold and invest in Equity Shares of a Company l) Commercial Banks and Regional Rural Banks. Co-operative Banks may also apply subject to permission from Reserve Bank of India m) Permanent and Regular employees of the Company n) Non-Resident Indians (NRIs) on repatriation / non-repatriation basis o) Foreign Institutional Investors (FIIs) on repatriation / non-repatriation basis

Applications not to be made by: a) Minors b) Partnership firms or their nominees c) Foreign Nationals (except NRIs) d) Overseas Corporate Bodies (OCBs)

Applications By Hindu Undivided Families (HUF)

Applications may be made by Hindu Undivided Families (HUF) through the Karta of the (HUF) and will be treated at par with individual applications.

Instructions for applications by NRIs/FIIs on repatriable basis

1) As per Notification No. FEMA 20 / 2000 - RB dated 3rd May 2000, as amended from time to time, under automatic route of Reserve Bank, the Company is not required to make an application for Issue of Equity Shares to NRIs/FIIs with repatriation benefits. 2) However, the allotment / transfer of the Equity Shares to NRIs/FIIs shall be subject to prevailing RBI Guidelines. Sale proceeds of such investments in Equity Shares will be allowed to be repatriated along with the income thereon subject to the permission of the RBI and subject to the Indian tax laws and regulations and any other applicable laws. 3) In case of application by NRIs on repatriation basis, the payments must be made through Indian rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance. Payment will not be accepted out of Non-Resident Ordinary (NRO) Account of Non-Resident Subscribers applying on a repatriation basis. Payment by bank drafts should be accompanied by bank certificate confirming that the bank draft has been issued by debiting to NRE or FCNR account. 4) In case of application by FIIs on repatriation basis, the payment should be made out of funds held in Special Non-Resident Rupee Account along with documentary evidence in support of the remittance like certificates such as FIRC, bank certificate etc. from the authorised dealer.

112 Brahma Interactive Limited

Payment by bank drafts should be accompanied by bank certificate confirming that the bank draft has been issued by debiting to Special Non-Resident Rupee Account. 5) Duly filled Application Forms by NRIs / FIIs will be accepted at designated branches of the Bankers to the Issue. 6) Refunds/dividends and other distributions, if any, will be payable in Indian Rupees only and net of bank charges / commission. In case of applicants who remit their application money from funds held in NRE / FCNR accounts, such payments shall be credited to their respective NRE / FCNR accounts (details of which shall be furnished in the space provided for this purpose in the Application Form), under intimation to them. In case of applicants who remit their money through Indian Rupee Drafts from abroad, such payments in Indian Rupees will be converted into U.S. Dollars or any other freely convertible currency as maybe permitted by RBI at the exchange rate prevailing at the time of remittance and will be dispatched by registered post, or if the applicants so desire, will be credited to their NRE / FCNR accounts, details of which are to be furnished in the space provided for this purpose in the Application Form. The Company will not be responsible for loss, if any, incurred by the applicant on account of conversion of Foreign Currency into Indian Rupees and vice versa. 7) Applications in this category may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under this category. It is to be distinctly understood that there is no reservation for NRIs & FIIs registered with SEBI and all NRI & FII registered with SEBI will be treated on same basis with other categories for the purpose of allotment.

Investment Limits For Mutual Funds / Venture Capital Funds

No Mutual Fund scheme shall invest more than 10% of its Net Asset Value in the Equity Shares or Equity related instruments of any company provided that the limit of 10% shall not be applicable for Investments in Index Funds or sector or Industry specific Fund. No Mutual fund should own more than10% of any Company’s paid up capital carrying voting rights.

The SEBI (Venture Capital) Regulations 1996 and the SEBI (Foreign Venture Capital) Regulations 2000 prescribe Investment restriction on Venture Capital Fund and Foreign Venture Capital Investors registered with SEBI, Accordingly holding by any Venture Capital Fund and Foreign Venture Capital Investor should not exceed 25% of the corpus of Venture Capital Fund and Foreign Venture Capital Investor.

Minimum And Maximum Application Size

Applications should be for minimum of 200 Equity Shares and in multiples of 200 Equity Shares thereafter.

Applications Under Power Of Attorney

In case of applications under Power of Attorney or by Companies, Bodies Corporate, Societies registered under the applicable laws, trustees of trusts, Provident Funds, Superannuation Funds, Gratuity Funds; a certified copy of the Power of Attorney or the relevant authority, as the case may be, must be lodged separately at the office of the Registrar to the Issue simultaneously with the submission of the application form, indicating the serial number of the application form and the name of the Bank and the branch office where the application is submitted.

The Company in its absolute discretion reserves the right to relax the above condition of simultaneous lodging of the Power of Attorney along with the Application Form subject to such terms and conditions as it may deem fit.

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Terms Of Payment

The entire Issue price of Rs. 27/- per share is payable on application only. In case of allotment of lesser number of Equity Shares than the number applied, the Company shall refund the excess amount paid on application to the applicants.

Pre-Issue Advertisement

A statutory advertisement will be issued by the Company after the filing of the Prospectus with the RoC. This advertisement will contain the information that has to be set out in the statutory advertisement. Any material updates, if any, between the date of filing of Prospectus with RoC and the date of release of this statutory advertisement will be included in the statutory advertisement.

General Instructions For Applicants 1) Applications must be made only on the prescribed Application Form and should be completed in BLOCK LETTERS in English as per the instructions contained herein and in the Application Form, and are liable to be rejected if not made so. The prescribed application forms will have the following colour:

Category Colour of Application Form Net Offer to Public including NRIs / FIIs on White non-repatriation basis and non repatriable basis NRIs/FIIs on repatriation basis Blue

Eligible Employees Pink

2) Thumb impressions and signatures other than in English/ Hindi or any other language specified in the Schedule to the Constitution of India, must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under his/ her official seal. 3) Bank Account Details of Applicant The name of the Applicant, Depository Participant’s name, Depository Participant’s Identification (DP ID) number and the Beneficiary number provided by the Depository participant must be mentioned correctly in the Application Form at the appropriate place. The Registrar will obtain the Demographic details such as Address, Bank account details and occupation from the depository participants. The refunds, if any, will be printed with the Bank details as given by the Depository participant. 4) Applicants should write their names and application serial number on the reverse of the instruments by which the payments are being made to avoid misuse of instruments submitted along with the applications for Equity Shares. 5) Applications by NRIs on non-repatriation basis can be made using the Form meant for Public out of the funds held in Non-Resident Ordinary (NRO) Account. The relevant bank certificate must accompany such forms. Such applications will be treated on par with the applications made by the public.

Payment Instructions

For Resident Individuals

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1) Payments should be made in cash or cheque or bank draft drawn on any Bank (including a Co-operative Bank), which is situated at and is a member or a sub-member of the Bankers’ “Clearing House”, located at the Centers (indicated in the Application Form) where the Application is accepted. However, if the amount payable on application is Rs. 20,000/- or more, in terms of section 269SS of the Income-Tax Act, 1961; such payment must be effected only by way of an account payee cheque or bank draft. In case payment is effected in contravention of the conditions mentioned herein, the application is liable to be rejected and application money will be refunded and no interest will be paid thereon. 2) Money orders, postal orders, outstation cheques or bank drafts, cheques / draft drawn on Banks not participating in the “clearing” will not be accepted and applications accompanied with such instruments may be rejected. 3) A separate cheque / bank draft must accompany each application form. 4) All cheques / bank drafts accompanying the application should be crossed “A/c Payee Only” and made payable to the Bankers to the Issue and marked “(Name of the bank– A/c Brahma Interactive Limited – Public Issue”: For Applications made by NRIs / FIIs on a Repatriable Basis 1) All cheques / bank drafts accompanying the application from NRIs / FIIs on a repatriable basis must be made payable to the bankers to the issue with whom the application forms are lodged should be crossed “A/c Payee Only” and be marked “(Name of the bank – A/c Brahma Interactive Limited – NR”: 2) Investors will not have facility of applying through stockinvest instruments as RBI has withdrawn the stockinvest scheme vide notification no. DBOD.NO.FSC.BC.42/24.47.001/2003-04 dated 5/11/2003. Submission of completed application forms:

All applications duly completed and accompanied by cash/ cheques/ bank drafts shall be submitted at the branches of the Bankers to the Issue (listed in the Application Form) before the closure of the Issue. Application(s) should not be sent to the office of the Company or the Lead Manager to the Issue.

Applicants residing at places where no collection centers have been opened may submit / mail their applications at their sole risk along with application money due there on by Bank Draft to the Registrar to the Issue, Intime Spectrum Registry Limited, superscribing the envelope “Brahma Interactive Limited – Public Issue” so as to reach the Registrar on or before the closure of the Subscription List. Such bank drafts should be payable at Mumbai only. The Company will not be responsible for postal delays and loss in transit. The Company will not entertain any claims, damage or loss due to postal delays or loss in transit.

No separate receipts will be issued for the application money. However, the Bankers to the Issue or their approved collecting branches receiving the duly completed application form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each application form. The acknowledgement of receipt of application moneys given by the collection agents shall be valid and binding on the issuer company and other persons connected with the issue. Applications shall be deemed to have been received by the Company only when submitted to the Bankers to the Issue at their designated branches or on receipt by the Registrar as detailed above and not otherwise.

Acceptance of Applications

The Company reserves the right to accept or reject, any application, in whole or in part, without assigning any reason thereof. If the application is rejected in full, the whole of the application money received will be refunded by Registered Post to the applicant. If the application is

115 accepted in part, the excess application money after adjusting for the amount payable on allotment will be refunded to the applicant. Such refund, if any, will carry interest @ 15% p.a. after 30 days from the closure of the Issue for the period of delay beyond 30 days.

Other Instructions

1) Joint Applications in case of Individuals: Applications may be made in single or joint names (not more than three). In case of Joint Applications, refund, pay orders, dividend warrants etc. if any, will be drawn in favour of the first applicant and all communications will be addressed to the first applicant at her/his address as stated in the application form.

2) Multiple Applications: An applicant should submit only one application form (and not more than one) for the total number of Equity Shares applied for. Two or more applications in single or joint names will be deemed to be multiple applications if the sole and/ or first applicant is one and the same. In case of application by Mutual Funds, a separate application can be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such application will not be treated as multiple applications provided that the application made by the Asset Management Trustees / Custodian clearly indicate their intention as to the scheme for which the application has been made. The Company reserves the right to accept or reject, in its absolute discretion, any or all-multiple applications. Unless the Company specifically agrees in writing with or without such terms and conditions it deems fit, a separate cheque/ draft must accompany each application form.

3) PAN / GIR Number Where application(s) is/are for Rs. 50,000 or more, the applicant or in the case of an application in joint names, each of the applicants, should mention his/her Permanent Account Number (PAN) allotted under the IT Act. The copy of the PAN card or PAN allotment letter is required to be submitted with the application form. Applications without this information and documents will be considered incomplete and are liable to be rejected. It is to be specifically noted that applicants should not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. In case the sole/first applicant and joint applicant(s) is/are not required to obtain PAN, each of the applicant(s) shall mention “Not Applicable” and in the event that the sole applicant and/or the joint applicant(s) have applied for PAN, which has not yet been allotted, each of the applicant(s) should mention “Applied for” in the Application Form. Further, where the applicant(s) has mentioned “Applied for” or “Not Applicable”, the sole/first applicant and each of the joint applicant(s), as the case may be, would be required to submit Form 60 (form of declaration to be filed by a person who does not have a permanent account number and who enters into any transaction specified in Rule 114B), or, Form 61 (form of declaration to be filed by a person who has agricultural income and is not in receipt of any other income chargeable to income-tax in respect of transactions specified in Rule 114B), as may be applicable, duly filled along with a copy of any one of the following documents in support of the address: (a) Ration card (b) Passport (c) Driving license (d) Identity card issued by any institution (e) Copy of the electricity bill or telephone bill showing residential address (f) Any document or communication issued by any authority of the Central Government, State Government or local bodies showing residential address (g) Any other documentary evidence in support of address given in the declaration. It may be noted that Form 60 and Form 61 have been amended vide a notification issued on December 1, 2004 by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance. All applicants are requested to furnish, where applicable, the revised Form 60 or Form 61 as the case may be.

4) Equity Shares in Demat Form with NSDL or CDSL In the year 2000, to enable all shareholders of the Company to have their shareholding in electronic form, the Company had signed the following tripartite agreements with the Depositories and the then Registrar and Share Transfer Agent, Intime Spectrum Registry Limited:

116 Brahma Interactive Limited a) An agreement dated [y] with CDSL and Intime Spectrum Registry Limited, Registrar to the Issue. b) An agreement dated [y] with NSDL and Intime Spectrum Registry Limited, Registrar to the Issue.

The Company’s shares bear an ISIN no. [y]

Instructions: a) An applicant applying for shares must have at least one beneficiary account with any of the Depository Participants (DPs) of NSDL or of CDSL, registered with SEBI, prior to making the application. b) The Applicant must necessarily fill in the details (including the Beneficiary Account no. and DP ID no.) in the Application Form. c) Equity Shares allotted to an applicant in the electronic mode will be credited directly to the respective Beneficiary Accounts (with the DP) d) Name(s) in the Share Application Form should be identical to those appearing in the account details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository. e) The Registrar to the Issue will directly send non-transferable Allotment Letters/ Refund Orders to the Applicant. f) Application will be liable to be rejected if incomplete or incorrect details are given under the heading ‘Request for shares in electronic form’ in the Application Form. g) The applicant is responsible for the correctness of the Applicant’s demographic details given in the Application Form vis-à-vis those with his/ her DP. h) It may be noted that Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity with NSDL and CDSL. Both the Stock Exchanges where the Equity Shares of the Company are proposed to be listed are connected to NSDL and CDSL. i) Trading in the Equity Shares of the Company would be in only dematerialised form for all investors.

5) Investors can contact the Compliance Officer in case of any Pre-Issue related problems. In case of Post-Issue related problems such as non-receipt of letters of allotment / share certificates / credit of securities in depositories beneficiary account / refund orders, etc., Investors may contact Compliance Officer or Registrar to the Issue.

Note: Applicants are requested to write their names and application serial number on the reverse of the instruments by which the payments are being made to avoid misuse of instruments submitted along with the applications for Equity Shares.

For further instructions regarding application for the Equity Shares, investors are requested to read the application form carefully.

Grounds For Technical Rejections

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Applicants are advised to note that applications are liable to be rejected among others on the following technical grounds: 1. Amount paid does not tally with the number of Equity Shares applied for; 2. Age of first applicant is not given; 3. Application by minor; 4. PAN or GIR number not given if application is for Rs. 50,000/- or more; 5. Application for Equity Shares which are not in multiples of 200; 6. Multiple applications; 7. In case of application under Power of Attorney or by limited companies, corporates, trust etc., relevant documents are not submitted; 8. Signature of the sole and/or joint applicants missing 9. Applicants depository account details not provided; 10. Applications by OCBs.

Disposal of Applications and Application Money

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

The sum received in respect of the issue will be kept in separate bank accounts and Company will not have any access to the funds unless approval of Bombay Stock Exchange Limited, Mumbai, the designated Stock Exchange is obtained for the basis of Allotment and listing approval from the Stock Exchanges where listing is proposed or exists.

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

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies Act, 1956, which is reproduced below:

“Any person who: A. makes in a fictitious name, an application to a Company for acquiring or subscribing for, any shares therein,

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

Interest on Excess Application Money

Payment of interest at rate of 15% per annum on the excess application money, after adjusting the amount due on allotment and unpaid calls will be made to the applicants, if the refund orders are credited electronically or not dispatched within 30 days from the date of closure of the subscription list.

Basis of Allotment

A) Net Offer to Public In the event of the Issue being oversubscribed, the Allotment will be on a proportionate basis subject to market lots as explained below:

118 Brahma Interactive Limited a. A minimum 50% of the net issue to the Indian public will be made available for allotment in favour of those retail individual applicants who have applied for Equity Shares of or for a value not more than Rs. 1,00,000/-. This percentage may be increased in consultation with the Designated Stock Exchange depending on the extent of response to the Issue from investors in this category. In case allotments are made to a lesser extent than 50% because of lower subscription in the above category, the balance Equity Shares would be added to the higher category and allotment made on a proportionate basis as per relevant SEBI Guidelines. The Executive Director / Managing Director of The Stock Exchange, Mumbai along with the Lead Manager and the Registrars to the issue shall be responsible to ensure that the basis of Allotments finalized in a fair and proper manner in accordance with the guidelines. b. The balance of Net issue to Indian Public shall be made available to investors including corporate bodies/ institutions and individual applicants who have applied for Equity Shares for a value more than Rs.1, 00,000/-. c. The Unsubscribed portion of the net issue to any of the categories specified in (a) or (b) shall be made available for allotment to applicants in the other category, if so required. d. Applicants will be categorized according to the number of equity shares applied for. e. The total number of equity shares to be allocated to each category as a whole shall be arrived at on a proportionate basis i.e. the total number of shares applied for in that category (number of applications in the category multiplied by the number of equity shares applied for) multiplied by the inverse of the over subscription ratio. f. Number of equity shares to be allocated to the successful allocatees will be arrived at on a proportionate basis i.e. total number of equity shares applied for by each applicant in that category multiplied by the inverse of the over subscription ratio. g. In all the applications where the proportionate allotment works out to less than 200 equity shares per applicant, the Allotment shall be made as follows: (i) Each successful applicant shall be allotted a minimum of 200 equity shares, and (ii) The successful applicants out of the total applicants of that category shall be determined by draw of lots in such a manner that the total number of equity shares allotted in that category is equal to the number of equity shares worked out as per (b) above. (iii) The draw of lots (where required) to finalise the Basis of allotment, shall be done in the presence of a public representative on the Governing Body of the BSE. The basis of allotment shall be signed as correct by the Governing Body of The Stock Exchange Mumbai and the public representative (where applicable) in addition to the Lead Manager and the Registrars to the Issue. The Allotment shall be on proportionate basis within the specified categories, rounded off to the nearest integer subject to a minimum allotment being equal to the minimum application size which is 2000 shares

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

In the event of over subscription, in the process of rounding off to ensure allotment in marketable lots, the Company may make such adjustments in the basis of allotment, as may be necessary, in consultants

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B) Employee Reservation

a) Applications received from the Eligible Employees of the Company shall be grouped together to determine the total allotment under this category.

b) If the aggregate demand in this category is less than or equal to 5,00,000 Equity Shares, full allotment shall be made to the Employee Reservation Category to the extent of their demand category and unsubscribed portion will be added back to the "Net offer tothe Public" category.

c) If the aggregate demand in this category is greater than 5,00,000 Equity Shares, the allotment shall be made on proportionate basissubject to minimum applicaton being equal to minimum application size of 200 Equity Shares.

Issue of Certificates

In terms of Sec 68B of the Companies Act, 1956, the Company will not issue any share certificates. Instead, the Company shall give credit to the beneficiary account with Depository Participant within 3 working days of finalizaton of allotment of shares.

Letters of Allotment or Refund Orders

In accordance with The Companies Act, 1956 and the requirement of stock exchanges, the Company shall pay interest @ 15 percent per annum on the entire amount if the Allotment of the Equity Shares has not been made within 30 days from the date of closure of the Offer. This interest will be paid from the 31st day from the closure of the Offer until the actual date of Allotment. Alternatively, in case of any delay in the dispatch of refund order’s beyond 30 days from the closure of the Offer, interest @ 15 percent per annum, will be paid on the refund amount from the 31st day from the closure of the Offer until the date of dispatch of the refund orders.

The Company shall ensure dispatch of refund orders of value up to Rs. 1,500 under certificate of posting / Allotment advice and/ or regret letters together with refund orders over Rs. 1,500 by Registered Post only.

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

Despatch of Refund Orders

The company shall ensure dispatch of refund orders by following mode: a) In case of applicants residing at Ahmedabad, Bangalore, Bhubneshwar, Kolkatta, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvanthapuram – refunds shall be credited through electronic transfer of funds by using ECS (Electronic Clearing Service), Direct Credit, RTGS (Real Time Gross Settlement) or NEFT (National Electronic Funds Transfer); b) In case of applicants residing at places other than those specified in (a) above and where the value of refund order is Rs. 1500/- or more, refund orders will be dispatched to the applicants by registered post only at the sole or First Bidder’s sole risk; c) In case of applicants residing at places other than those specified in (a) above and where the value of refund order is less than Rs. 1500/-, refund orders will be dispatched under certificate of posting only at the sole or First Bidder’s sole risk.

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

The Company agrees that as far as possible allotment of Equity Shares offered to the public shall be made within 30 days of the closure of Public Issue. The Company further agrees that it shall pay interest @15% per annum if the allotment is not made, refunds are not electronically transferred and refund orders are not dispatched, to the applicants within 30 days from the date of the closure of the Issue.

Scope of activities of the Registrar to the issue

The Registrar to the Issue shall also be the Share Transfer Agent and wouls also be responsible for all the post issue activities pertaining to this offer.

Undertaking by the Company

The Board of Directors of Brahma Interactive Limited undertakes that: - a. that the complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily; b. that all steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the equity shares are to be listed are taken within 7 working days of finalization of the basis of allotment; c. The Company shall apply in advance for the listing of equity shares d. that the funds required for dispatch of refund orders / allotment letters / certificates by registered post shall be made available to the Registrar to the Issue by the Company; e. that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 15 days of closure of issue, giving details of the bank where refunds shall be credited alongwith the amount and expected date of electronic credit of refund; f. that the certificates of the equity shares/refund orders to non-resident Indian applicants shall be dispatched within specified time; g. that no further issue of equity shares shall be made till the equity shares offered through this Prospectus are listed or till the application moneys are refunded on account of non-listing, under-subscription, etc. h. Disclosures made in this prospectus are in compliance with the provisions of SEBI (DIP) Guidelines 2000

Utilisation of Issue Proceeds

The Board of Directors of the Company certifies that: a. all monies received against this issue shall be transferred to separate bank accounts in a schedule bank as referred to in sub-section (3) of section 73; b. details of all monies utilized out of the issue referred to in sub-item(a) shall be disclosed under an appropriate separate head in the balance-sheet of the company indicating the purpose for which such monies had been utilized; and

121 c. details of all unutilized monies out of the issue of shares, if any, referred to in sub-item(a) shall be disclosed under an appropriate separate head in the balance-sheet of the company indicating the form in which such unutilized monies have been invested. d. The Utilisation of monies received under the promoters’ contribution shall be disclosed under an appropriate head in the balance sheet of the company indicating the purpose for which such monies have been utilized. e. The details of all monies unutilized out of the funds received under promoters’ contribution shall be disclosed under a separate head in the balance sheet of the company indicating the form in which the unutilized money has been invested.

The Board of Directors of the Company also certify that: i) The utilization of monies received from firm allotments and reservations shall be disclosed under an appropriate head in the balance sheet of the company indicating the purpose for which such monies have been utilized. ii) The details of all unutilized monies out of the funds received under firm allotments and reservations shall be disclosed under a separate head in the balance sheet of the company indicating the form in which such unutilized monies have been invested.

The Company undertakes that it shall not access the money raised in the Issue till finalisation of basis of allotment or completion of offer formalities.

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SECTION IX: DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY:

The Articles of Association of the Company, inter alia, includes the following clauses

SHARE CAPITAL 5. “The authorized share capital of the Company shall be of two kinds namely :

Equity Share Capital of Rs. 10,55,00,000/-(Ten crore fifty five lakhs) divided into 1,05,50,000/-(One crore five lakhs fifty thousand) Equity shares of Rs. 10 (ten) each.

10% redeemable preference share capital of Rs. 45,00,000 (forty five lakhs) divided into 4,50,000 (four lakh fifty thousand) redeemable preference shares of Rs. 10 (ten) each.

The above capital can be increased or decreased with the Company’s regulations and statutory provisions for the time being in force in this behalf and with power to convert any paid-up shares into stock and to re-convert any stock into paid-up shares of any denomination, consolidation and division of existing or any of them into shares of larger amount than its present value, sub-divide existing or any of them or increased shares into smaller amount than presently fixed by the Memorandum & Articles of Association, subject nevertheless, to the provisions of Section 94 of the Companies Act, 1956, cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person.”

Board’s right to convert unissued shares, if any

6. a) The Board may, at its discretion, convert the unissued Equity shares into preference shares or Redeemable preference shares and vice versa and the Board may issue any part or parts or the unissued shares upon such terms and conditions and with such rights and privileges annexed thereto as the Board at its discretion and subject to the provision of section 86 of the Act thinks fit, and in particular may issue such shares with such preferential or qualified right to dividends and in the distribution of the assets of the Company as the Board may subject to the aforesaid sections determine.

b) The Board may, at its discretion issue any portion of the preference shares not already issued, as redeemable preference shares which are at the option of the Company liable to be redeemed and subject to the provision of Section 80 of the Act, on such terms as to dividends, preferential payment or return of the amount paid up thereon and as to conditions and terms of redemption as the Directors may deem fit.

Allotment return

7. The Board shall duly comply with the provisions of Section 75 of the Act, with regard to all allotment of shares from time to time.

8. 1. The Board may, at any time increase the subscribed capital of the Company by issue of new shares out of the unissued part of the Shares Capital in the original or subsequently created capital, but subject to Section 81 of the Act and the following provisions namely.

a) Where the offer and allotment of such shares are made within two years from the date of incorporation of the Company or within one year from the first allotment of Shares made after incorporation, whichever is earlier, the Board shall be at liberty to offer the shares and allot the same to any person or persons at their discretion.

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b) In respect of offers and allotments made subsequent to the date set out in clause(a) above, the Directors shall subject to the provisions of Section 81 of the Act and of sub- clause.

c) hereunder observe the following conditions. i) such new shares shall be offered to the persons who at the date of the offer, are holders of the Equity shares of the Company, in proportion as nearly as circumstances admit, to the capital paid up on those shares at that date.

ii) the offer aforesaid shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days from the date of the offer within which to offer if not accepted will be deemed to have been declined.

iii) the offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person and the notice referred to in clause(ii) shall contain a statement of this right.

iv) after the expiry of the time specified in the notice aforesaid or earlier intimation from the person to whom such notice is given that he declines to accept the shares offered the Board may dispose of them in such manner as it thinks most beneficial to the Company.

d) The Directors may with the sanction of the Company in General Meeting offer and allot shares to any person at their discretion provided that such sanction is accorded either by.

i) a special resolution passed at any General Meeting, or ii) by an ordinary resolution passed at a General Meeting by majority of the votes cast and with the approval of Central Government in accordance with section 81 of the Act.

2. Nothing in this clause shall apply to the increase in the subscribed capital of the Company caused by the exercise of an option attached to debentures issued or loans raised by the Company. i) to convert such debentures or loans into shares in the Company, or ii) to subscribe for shares in the Company. Provided that the terms of issue of such debentures or the terms of such loans include a term providing for such option and such terms. a) has been approved by a Special resolution passed by the Company in General Meeting before the issue of the debentures or the raising of the loans and also. b) either has been approved by the Central Government before the issue of the debentures on the raising of the loans or is in conformity with the rules, if any, made by the Government in this behalf. 3. option or right to call of shares shall not be given to any persons except with the sanction of the Company in General Meeting.

Power to General Meeting to offer shares to such persons as the Company may resolve 9. In addition to and without derogating form the powers for that purpose conferred on the Board under Article 8 the Company in General meeting may determine that any shares (whether forming part of the original capital or of any increased capital of the Company) shall be offered to such person(whether Member of holder of debentures of the Company or not) in such proportions and on such terms and conditions and either at a premium or at par, or(subject to compliance with the provisions of Section 79 of the Act) at a discount , as such General Meeting shall determine and with full power to give to any person (whether a

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member or holder or debentures of the Company or not) the option to call for or be alloted shares of any class of the Company either at a premium or at par, or (subject to compliance with the provisions of Section 79 of the Act) at a discount, such option being exercisable at such times and for such consideration as may be directed by such General Meeting of the Company in General Meeting may make any other provisions whatsoever for the issue, allotment or disposal of any shares.

9 (A) “Subject to the provisions of Section 80, any preference shares may, with the sanction of an ordinary resolution, be issued on the terms that they are, or at the option of the company are liable to be redeemed on such terms and in such manner as the company at the time of issue of such shares may determine.

The rights attached to any class of shares may, subject to the provisions of Sections 106 and 107 and whether or not the company is being bound up, be varied with the consent in writing of the holders of three fourths of the issued share of that class or with the sanction of a special resolution passed at a separate meeting of the holders of that class.

To every such separate class meeting, the provisions of these Articles, as applicable and as relating to the general meetings shall, mutatis mutandis, apply, but so that the necessary quorum shall be two persons at least holding or representing by proxy one third of the issued shares of the class in question except in the case that there is or there remains, at any time during the currency of the class of such shares, only one share holder of that class where the quorum shall be presence of the holder of such shares in person or by proxy.

The rights conferred upon the holders of the shares of such Class, shall not, unless otherwise expressly provided as per the terms of the issue of such shares, be deemed to be varied by the creation of or issue of further shares ranking parri-passu therewith.”

Variation of rights 10. The rights attached to each class of shares (unless otherwise provided by the terms of issue of the share of that class) may, subject to the provision of Section 106 and 107 of the Act, be varied with the consent in writing of the holders of 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 shares of that class. To every such separate meeting the provisions of these Articles relating to General Meeting shall mutatis mutandis apply, except that the necessary quorum shall be two persons atleast holding or representing by proxy one tenth of the issued shares or that class.

Issue of further shares pari passu shall not effect the right of shares already issued 11. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided for by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

No issue with disproportionate rights 12. The Company shall not issue any shares, not being Preference Shares which carry rights in the company as to dividend, capital or otherwise which are disproportionate to the rights attached to the holders of other shares not being preference shares.

Commission for placing shares, debentures etc. 13. 1) Subject to the provisions of Section 76 of the Act, the Company may at any time pay a commission to any person for subscribing or agreeing or subscribe (whether absolutely or conditionally) for any shares, debentures or debenture-stock of the Company or procuring or agreeing to procure subscriptions (whether absolute or conditional) for shares, debentures or debenture-stock of the Company but so that the statutory conditions and requirements shall be observed and complied with the amount of rate of

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commission shall not exceed five percent of the price at which the shares are issued and in case of debentures the rate of commission shall not exceed two and-a-half percent of the price at which the debentures are issued. 2) The Company may also, on any issue, pay such brokerage as may be lawful.

Issue other than for cash 14. The Directors may allot and issue shares in the Capital of the Company as payment or part payment for any property sold or transferred goods or machinery and appliances supplied or for services rendered to the Company in or about the formation or promotion of the Company or the acquisition and/or conduct of its business and any shares which may be so allotted, may be issued as fully paid up shares and if so issued, shall be deemed to be fully paid up shares.

2) The said power vested in the Board by this Article shall not be exercised except by the unanimous consent of all the Directors or with the previous sanction of a special resolution passed at a General Meeting of the Company.

15. Where two or more persons are registered as joint holders on any share they shall be deemed to hold the same as joint tenants with benefit of survivorship, subject to the following provisions. a) The person whose name stands first on the register in respect of such share shall alone be entitled to delivery of certificate thereof b) Any one of such persons may give effectual receipts for any dividend, bonus or return of capital payable in respect of such share and such joint holders shall be severally, as well as jointly, liable for payment of all instalments and calls due in respect of such share/shares. c) Any one of such persons may vote at any meeting either personally or by proxy in respect of such shares, as if he was solely entitled thereto, and if more than one of such joint holders be present at any meeting personally or by proxy, that one of the said persons so present whose name stands in first on the register n respect of such shares shall along be entitled to vote in respect thereof, Several executor or administrators, of a deceased member in whose name any share stands shall for the purpose of this Article, be deemed joint holders, thereof. d) In case of death of any one or more of such joint holders, the survivors shall be the only persons, recognized by the Company as having any title to or interest in such share, but the Directors may require such evidence of death as they may deem fit, and nothing herein contained shall be taken to release the estate of a deceased joint holder from any liability on shares held by him jointly with any other person. e) All notices directed to be given to the members shall be given to whichever such persons is named first in the registers and notice so given shall be sufficient notice to all holders of such shares.

SHARES CERTIFICATES

Issue of Shares Certificates 16. Every certificate of title to shares shall be issued under the seal of the Company, Every share certificate and every document of title to the shares whether in renewal of an existing share certificate or other document of title or issued for the first time shall be issued under the authority of the Board of Directors and in accordance with provisions of the Companies (issue of Share Certificates) Rules, 1960 or any modification thereof and in accordance with the provisions of law or other rule having the force of law applicable thereto.

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SHARE AND DEBENTURE CERTIFICATES

Rights to Certificate 17. 1) Every person whose name is entered as a member in the Register shall be entitled to receive without payment: a) One certificate for all his shares; or b) Where the shares so allotted any one time exceed the number of shares fixed as marketable lot in accordance with the usage of the Stock Exchange, than at the request of the share holders, several certificates one each per marketable lot and one for the balance.

2) The Company shall within three months after the allotment or within Two months after application for the registration of the transfer of any shares or debentures delivered shall be the certificates for all the shares and debentures so allotted or transferred unless the conditions of issue of the said shares of debenture otherwise provide.

3) Every certificate shall be under the seal and shall specify the shares or debentures to which it relates and the amount paid up thereon.

4) The provisions of clauses (2) & (3) above shall apply mutatis mutandis to debenture and debenture stock allotted or transferred.

5) No fee shall be charged for the issue of a new share certificate either for sub-division of the existing share certificates or for the consolidation of several share certificates into one or for issue of fresh share certificates in lieu of share certificates on the back of which there is no space for endorsement for transfer or for registration of any probate. Letters of Administration, Succession Certificate or like document or for registration of any Power or Attorney Partnership deed, Memorandum and Articles of the Companies or other similar documents.

One certificate for joint holders 18. In respect of any share held jointly by several persons, the Company shall not be bound to issue more than one certificate for the same share and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders subject as aforesaid the joint holders shall be entitled to apply for several certificates each for one or more shares held by them in accordance with Article 17 above.

Endorsement of Transfer 19. In respect of any transfer of shares registered in accordance with the provision of these Articles, the Board may, at their discretion, direct an endorsement of the transfer and the name of the transferee and other particulars, on the existing share certificate and authorize any Director or Officer of the Company to authenticate such endorsement on behalf of the Company or direct the issue of a fresh share certificate, in lieu of and in cancellation of the existing certificate, in the name of the transferee.

Renewal of Certificate 20. If a certificate be worn out, defaced destroyed, or lost or if there is no further space on the back thereof for endorsement of transfer, it shall if requested, be replaced by a new certificate free of charge provided however that such new certificate shall not be granted except upon delivery of the worn-out or defaced or used up certificate for the purpose of cancellation, in accordance with the Companies(issue of Share Certificates) Rules, 1960 or upon proof of destruction or loss and on such indemnity as the Board may require in the case of he certificate have been destroyed or lost. Any duplicate certificate shall be marked as such.

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Company’s lien on shares 21. The Company shall have a first and paramount lieu upon all the shares (other than fully paid up shares) registered in the name of each member (whether solely, or jointly with others) and upon the proceeds of sale thereof for all moneys whether presently payable or not called or payable at a fixed time in respect of such shares and no equitable interest in any shares shall be created except upon the footing and condition that this Article will have full effect. Unless otherwise agreed the registration of a transfer shall operate as a waiver of the company’s lien if any on such shares. The Directors may, at any time declare any shares wholly or in part to be exempt from the provisions of this clause.

Enforcing of lien by sale 22. For the purpose of enforcing such lien, the Board may sell the shares subject thereto in such manner as they think fit but no sale shall be made until the expiration of 14 days after a notice in writing stating and demanding payment of such amount in respect of which the lien exists has been given to the registered holder of the shares for the time being, or to the person entitled to the shares by reason of the death or insolvency of the registered holder.

Authority to transfer 23. To give effect to such sale, the Board of Directors may authorize some person to transfer the shares sold to the purchaser thereof and the purchaser shall be registered as the holder of the shares comprised in any such transfer. The purchaser shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the droceedings in reference to the sale.

Application of proceeds of sale 24. 1)The net proceeds of any such shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable. 2)The residue, if any, shall, subject to the like lien for sums, not presently payable as existed upon the shares before the sale, be paid to the persons entitled to the shares at the date of the sale.

Application of any money due to a shareholder 25. Any money due from the company to a shareholder, may without the consent of such shareholder, be applied by the Company in or towards payment of any money due from him, either alone or jointly with any other person to the Company in respect of calls or otherwise.

CALLS ON SHARES Calls 26. Subject to the provisions of section 91 of the Act, the Board of Directors may from time to time make such calls as they think fit upon members in respect of all money unpaid on the shares held by them respectively and not by the conditions of allotment thereof made payable at fixed times and each member shall pay the amount of every call so made on him to the person and at the dates times and places appointed by the Board of Directors.

Call when deemed to be made 27. The Board of Directors may, when making a call by resolution determine the date on which such call shall be deemed to have been made not being earlier than the date of resolution making such call and there upon the call shall be deemed to have been made on the date so determined and if no such date is fixed the call shall be deemed to have been made on the dates on which the resolution of the Board making the call was passed.

Notice for Call 28. Not less than fourteen days’ notice of any call shall be given specifying the date, time and place of payment provided that before the time for payment of such call, the Directors may, by notice in writing to the members, extend the time for payment thereof.

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Sums payable at fixed date to be treated as calls 29. If by the terms of issue of any share or otherwise any amount is made payable at any fixed date or by installments at fixed dates whether on account of the share or by way of premium, every such amount or installment shall be payable as if it were a call dulymade by the directors and of which due notice had been given and all the provisions herein contained in respect of call shall relate to such amount or installment accordingly.

Calls to carry interest 30. 1) If the sum called in respect of the shares is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest upon the sum at such rate fixed by the Board of Directors from the day appointed for the payment thereof to the time of the actual payment, but the Board of Directors shall be liberty to waive payment of that interest wholly or in part 2) The provisions of this Article as to payment of interest shall apply in the case of Non- payment of any sum which by the terms of issue of a share becomes payable at a fixed date, whether on account of the amount of the share or by way of premium, as if the same had become payable by virtue of a call duly made and notified.

Payment on call in advance 31. The Board of Directors may, if they think fit, receive from any member willing to advance the same, all or any part of the moneys uncalled and unpaid upon any share held by him and upon all or any part of the moneys so advanced, may (until the same would, but for such advance, become presently payable) pay interest at such rate not exceeding (without the sanction of the Company in General Meeting) nine percent per annum as may be agreed upon between the member paying the sum in advance and the Board of Directors but shall not in respect of such advances confer a right to the dividend or to participate in profits or to any voting rights.

Partial Payment not to preclude forfeiture 32. Neither a judgement nor a decree in favour of the company, for call or other moneys due in respect of any share nor any part payment or satisfaction thereunder, nor the receipt by the Company of a portion of any money which shall, from time to time be due from any member in respect of any share either by way of principle or interest, nor any indulgence granted by the Company in respect of the payment of any such money, shall preclude the company from thereafter proceeding to enforce a forfeiture of such shares as hereinafter provided.

33. If, by the conditions of allotment of any share, the whole or part of the amount or issue price thereof shall, be payable by installments, every such installment shall, when due, be paid to the Company by the person who for the time being and from time to time shall be registered holder of the share or his legal representative or representatives if any.

TRANSFER AND TRANSMISION OF SHARES Procedure as to transfer of shares 34 1) The instrument of transfer of any shares in the Company shall be executed both by the transferor and the transferee and the transferor shall be deemed to remain holder of the shares until the name of the transferee is entered in the register of members in respect thereof only one class of share and should be in the form prescribed under Section 108 to the Act.

2) The Board of Directors shall not register any transfer of shares unless a proper Instrument of transfer duly stamped and executed by the transferor and the transferee has been delivered to the company along with the certificate relating to the shares and such other evidence as the company may require toprove the title of the transfer or his right to transfer the shares.

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Provided that where it is proved to the satisfaction of the Board of Directors that an instrument of transfer signed by the transferor and transferee has been lost , the company, may, if the board of Directors think fit, on an application in writing made by the transferee and bearing the stamp required on an instrument of transfer, register the transfer on such terms as to indemnity, as the Board of Directors may think fit.

3) An application for the registration of the transfer of any share or shares may be made either by the transferor or by the transferee provided that where such application is made by the tranferor no registration shall in the case of partly paid shares be effected unless the Company gives notice of the application to the transferee and the company shall unless objection is made by the transferee, within two weeks from the date of receipt of the notice, enter in the register the name of the transferee in the same manner and subject to the same conditions as if the application was registration was made by the transferee.

4) For the purpose of subclass (3) notice to the transferee shall be deemed to have been duly given if dispatched by prepaid registered post to the transferee at the address given in the instrument of transfer and shall be deemed to have been delivered in the ordinary course of post.

5) Nothing in clause (4) shall prejudice any power of the board to register as a shareholder any person to whom the right to any share has been transmitted by operation of law .

6) Nothing in this article shall prejudice the power of the Board of Directors to refuse to register the transfer of any shares to the transferee, whether a member or not.

Form of Transfer 35. The shares in the company shall be transferred by instrument in writing in the prescribed form duly stamped and in the manner provided under the provisions of section 108 of the Act and any modification thereof and the rules prescribed thereunder.

Board’s right to refuse to register 36. Subject to the provisions of Section 111 of the Act & Section 22-A of the securities Contracts (Regulations) Act, 1956 the Board may at any time in their absolute discretion and without assigning any reasons decline to register any transfer of or transmission by operation of law of the right to a share, whether fully paid-up or not and whether the transferee is a member of the Company or not and may also decline to register any transfer of shares on which the company has a lien.

Provided further that the registration of transfer shall not be refused on the ground of the transferor being alone or either jointly with any other person or persons indebted to the Company on any account except a lien on the shares.

Intimation of Refusal 37 1) If the board refuses to register any transfer or transmission of right, they shall within 1 month from the date on which the instrument of transfer or the intimation of such transmission was delivered to the Company send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be giving reasons for such refusal. 2) In case of such refusal by the board, decision of the board shall be subject to the right of appeal conferred by Section 111 of the Act. 3) The provisions of this clause shall apply to transfers of stock also.

Endorsement of transfer and issue of certificate 38. 1) Every endorsement upon the certificate of any share in favour of any transferee shall be signed by the Managing Director or by some other person for the time being duly authorised by the Managing Director in this behalf. In case any transferee of a share shall

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apply for a new certificate in lieu of the old or existing certificate he shall be entitled to receive a new certificate in respect of which the said transfer has been applied for and upon his delivering upto cancelled every old or existing certificate which is to be replaced by a new one. 2) Notwithstanding any other provisions to the contrary in these presents, no fee shall be charged for any of the following, viz.

a) for registration of transfers of shares and debentures, or for transmission of shares and debentures. b) for subdivision and consolidation of share and debenture certificates and for subdivision of letters of allotment and split, consolidation, renewal and pucca transfer receipts into denominations corresponding to the market units of trading. c) for sub-division of renounceable Letters of Right. d) for issue of certificate in replacement of those which are old decrepit or worn out, or where the pages on the reverse for recording transfers have been utilised. e) for registration of any power of attorney, probate, letters of administration or similar other documents

Register of Members 39. The Company shall keep a book to be called the Register of Members and therein shall be entered the particulars of every transfer or transmission of any shares and all other particulars of shares required by the Act to be entered in such register.

Custody of Transfer deeds 40. The instrument of transfer, shall, after registration, remain, in the custody of the company. The Board may cause to be destroyed all transfer deeds lying with the company for the period of 6 years or more.

Closure of Register of members 41. The Board of Directors may after giving not less than 7 days previous notice by advertisement in some newspapers Circulating in the district in which the Registered office of the Company is situate close the Register the members or the Register of Debenture holders for any period or periods not exceeding in the aggregate 45 days in each year but not exceeding 30 days at any one time.

Transmission of Registered Shares 42. 1) The executors or administrators of deceased member (not being one of several joint holders) shall be the only person recognised by the company as having and title to the shares registered in the name of such member and in the case of death of any one or more of the joint holders of any registered shares, the survivors shall be only persons recognised by the company as having any title to the share registered in the name of such members and in the case of death of any one or more of the joint holders of any registered shares, the survivors shall be only persons recognized by the Company as having any title to or interest in such shares.

Provided that if the member should have been a member of a joint Hindu family the Board on being satisfied to that effect and on being satisfied that the shares standing in his name in fact belong to the joint family may recognize the survivors or the Karta there-of as having title to the shares registered in the name of such members. Provided further in any case it shall be lawful for the Board in their absolute discretion to dispense with the production of probate or letters of administration or other legal representation upon such terms as to indemnity or otherwise as the Board may deem just.

2) Nothing in clause (1) shall release the estate of a deceased joint holder from any liability in respect of any shares which were jointly held by him with other persons.

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Rights and liabilities of legal representatives 43. 1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time be required by the Board and subject as hereinafter provided, elect either;

a) to be registered himself as holder of the shares; or b) to make such transfer of the shares as the deceased or insolvent member could have made.

2) The Board shall, in either case, have the same right to decline or suspend registration as they would have had, if the deceased or insolvent member had transferred the shares before his death or insolvency.

DEVOLUTION OF RIGHTS Notice of Election by legal representatives 44. 1) If the person so becoming entitled shall elect to be registered as holder of the shares himself, he shall deliver or send to the Company a notice in writing by him stating that he so elects.

2) if the person aforesaid shall elect to transfer the share he shall testify his election by executing a transfer of the share.

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

4) A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holderof the share except that he shall not before being registered as a member in respect of the share be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company. Provided that the Board may at any time give notice requiring any such person to elect either to be registered himself or transfer the share, and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share, until the requirements of the notice have been complied with.

Company’s rights to register by apparent legal owner 45. The Company shall incur no liability or responsibility whatever in consequence of their registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the Register) to the prejudice of persons having or claiming any equitable right, title or interest to or in the same shares not withstanding that the Company may have had notice of such equitable rights or referred thereto in any books of the Company and the Company shall not be bound by or required to regard or attend to or give effect to any notice which may be given to if of any equitable rights, title or interest or be under any liability whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in the books of the Company, but the Company shall nevertheless be at liberty to have regard and attend to any such notice and give effect thereto, if the Board shall think fit.

If call of installment not paid notice may be given 46. If a member falls to pay any call or installment of a call on the day appointed for the payment thereof, the Board of Directors may at any time thereafter during such time as any part of such a call or installment remains unpaid serve a notice on him requiring payment

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of so much of the call or installment as unpaid, together with any interest which may have accrued.

Form of notice of forfeiture 47. The notice shall name a further day (not earlier than the expiration of fourteen days from the date of service of the notice), on or before which the payment required by the notice is to be made, and shall state that, in the event of non payment on or before the day named, the shares in respect of which the call was made will be liable to be forfeited.

Board’s right to forfeit if requirement of notice are not complied with 48. If the requirements of any such notice as aforementioned are not complied with, any share in respect of which the notice has been given nay at any time thereafter before the payment required by the notice has been made, be forfeited by a Resolution the Board of Directors to that effect, such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.

Sale of forfeited shares 49. A forfeited shares may be sold or otherwise disposed of on such terms and in such manner as the Board of Directors may think fit, and at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the Board of Directors may think fit.

Liability after forfeiture 50. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited share but shall notwithstanding remain liable to pay and shall forthwith pay the Company all moneys which at the date of forfeiture were presently payable by him to the Company in respect of the shares but his liability shall cease if and when the Company received payment in full of the nominal amount of shares whether legal proceeding for the recovery of the same had been barred by limitation or not.

Declaration of forfeiture 51. A duly verified declaration in writing that the declarant is a Director of the Company and that a share in the Company has been duly forfeited on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the shares and that declaration and receipt of the Company for the consideration if any given for the shares on the sale or disposition thereof shall constitute a good title to the shares, and the person to whom the shares is sold or disposed of shall be registered as the holder of the share and shall not be bound to see to the application or the purchase money (if any) nor shall his title to the share be effected by way of irregularity or invalidity in the proceedings reference to the forfeiture sale or disposal of the share.

Non-payment of sums payable at fixed times 52. The provisions of these Regulations as to forfeiture, shall apply in the case of non payment of any sum which by the terms of issue of a share, become payable at a fixed time, whether on account of the amount of the share or by way of premium or otherwise as if the same had been payable by virtue of a call dully made and notified.

CONVERSION OF SHARES INTO STOCK Conversion of shares 53. The Company may by ordinary resolution convert all or any of its fully paid up shares of any denomination into stock and vice versa.

Transfer of stock 54. The holders of stock may transfer the same or any part thereof in the same manner as, and subject to the same regulations under which the shares from which the stock arose might before the conversion have been transferred, or as near thereto as circumstances admit Provided that the Board may, from time to time, fix the minimum amount of stock

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transferable, so however that such minimum shall not exceed the nominal amount of the shares from which the stock arose.

Right to Stock Holders 55. The holders of stock shall, according to the amount of stock held by them, have the same rights, privileges and advantages as regards dividends, voting at meetings of the Company, and other matters; as if they held the share from which the stock not arose; but such privileges or advantages except participation in the dividends and profits of the Company and in the assets on winding up shall be conferred by any amount of stock which would not, if existing in shares, have conferred that privilege or advantage.

Regulations applicable to shares(paid up) apply to stock or stockholders 56. Such of the regulation contained in these presents(other than those relating to the share warrants) as are applicable to paid up shares shall apply to stock and the words ‘share’ and ‘shareholder’ in these presents shall include ‘stock’ and ‘stockholder’ respectively.

ALTERATION OF CAPITAL Alteration and consolidation of Capital 57. The Company may from time to time but subject to the provisions of Section 94 of the Act, alter the conditions of its Memorandum as follows:-

a) Increase its share capital by such amount as it thinks expedient by issuing new shares; b) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; c) Convert all or any of its fully paid up shares into stock, and reconvert stock into fully paid up shares of any denominations; d) Sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the Memorandum, so however, that in the subdivision the proportion between the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which shares is derived. e) Cancel any shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled. f) The resolutions whereby any share is sub-divided may determine that as between the holders of the shares resulting from such subdivision one or more of such shares shall have some preference or special advantage as regards dividend, capital, voting or otherwise over or as compared with the others.

Application of provision to new shares 58. The new shares shall be subject to the same provisions with reference to the payment of calls, lien, transfer transmission, forfeiture, and otherwise as the shares in the original share capital.

Reduction of Capital etc. by Company 59. The Company may subject to confirmation by the court by Special Resolution, reduce n any manner and with, and subject to, any incident authorized and consent required by law: a) its share capital b) any capital redemption reserve account or c) any share premium account.

SHARE WARRANTS Issue of Share Warrants 60. 1)The Company may issue share warrants subject to and in accordance with provision of Sections 114 and 115 of the Act and accordingly, the Board may in their discretion, with respect to any shares registered as fully paid up, on application in writing signed by the person registered as holder of the share and authenticated by such evidence, if any, as the

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Board may, from time to time, require as to the identity of the person signing the application, and on receiving the certificate if any of the share and the amount of the stamp duty of the warrant and such fee as the Board may from time to time prescribe, issue a share warrant and may provide by coupons or otherwise for the payments of the dividends on the shares specified in the share warrant.

2) A share warrant shall entitle the bearer to the shares included in it and the shares shall be transferred by the delivery of the share warrant and the provisions of the Articles of the Company with respect to transfer and transmission of shares shall not apply thereto.

3) The bearer of a share warrant shall on surrender of the warrant to the Company for cancellation and on payment of such fees as the Board may from time to time prescribe, be entitled to have his name entered as member in the Register of Members in respect of the shares included in the warrant.

Requisition of Meeting by Bearer of share warrants 61. 1) The bearer of a share warrant may at any time deposit the warrant at the Registered Office of the Company and so long as the warrant remains so deposited the depositor shall have the same right of signing a requisition for calling a meeting of the Company and of attending and voting and exercising the other privileges of a member at any meeting held after the expiry of two clear days from the time of deposit as if his name were inserted in the Register of Members as the holder of the shares included in the deposit warrant.

2) Not more than one person shall be recognized as depositor of the share warrant.

3) The Company shall on two days written notice return the deposited share warrant to the depositor.

Disabilities of holders 62. 1. Subject as herein otherwise expressly provided, no person shall as bearer of a share warrant sign a requisition for calling a meeting of the Company or attend or vote or exercise any other privileges of a member at meeting of the Company, or be entitled to receive any notice from the Company.

2. The bearer of a share warrant shall be entitled in all other respects the same privileges and advantages as if he was named in the Register of members as the holder of the shares included in the warrant and he shall be member of the Company.

Renewal 63. The Board may from time to time make rules as to the terms on which if they shall think fit, a new warrant or coupon may be issued by way of renewal in case of defacement, loss or destruction of the original warrant or coupon.

STATUTORY MEETING Statutory Meeting 64. 1) The Company shall within a period of not less than one month nor more than six months from the date at which the Company is entitled to commence business hold a General Meeting of the members of the Company which shall be called the Statutory Meeting. 2) The Board of Directors shall, not less than 21 days before the date on which meeting is held, forwarded report called the Statutory Report to every member of the Company Provided that if the Statutory Report is forwarded later than is required above, it shall, notwithstanding the fact, be deemed to have been only forwarded if is so agreed to by all the members entitled to vote at the meeting.

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3) The Board of Directors shall comply with the provision of section 165 in connection therewith.

GENERAL MEETINGS Annual General Meeting 65. The Company shall in addition to other meetings hold a general meeting which shall be styled as its Annual General Meeting at intervals and in accordance with the provision specified below :

a) The first Annual General Meeting of the Company shall be held within eighteen months of its incorporation.

b) Thereafter an Annual General Meeting of the Company shall be held once in every calendar year within six months after the expiry of each financial year, subject however, to the power of the Registrar of Companies to extend the time within which such a meeting can be held for a period not exceeding three months and subject thereto not more than fifteen months shall elapse form the date of one annual general meeting and that of the next.

c) Every Annual General Meeting shall be called for a time during the business hours on a day that is not a public holiday and shall be held either at the registered office of the Company or at some other place within the city town or village in which the registered office of the Company is situate.

d) Notice calling such meetings shall specify them as the Annual General Meetings.

e) All other meetings shall be referred to as Extra ordinary General Meetings.

Extra-ordinary General Meetings 66. The Board of Directors may whenever they think fit, convene an Extra-ordinary General Meeting at such time and at such places as they deem fit, Subject to such directions, if any, given by the Board, the Managing Director or the Secretary may convene an Extra-ordinary General Meeting.

Extra-ordinary General Meeting by requisition 67. a) The Board of Directors shall on the requisition of such number of members of the Company as is specified below proceed duly to call an Extra-ordinary General Meeting of the Company and comply with the provision of the Act in relation to meetings on requisition

b) The requisition shall set out matters for consideration of which the meeting is to be called, shall be signed by the requsitionists and shall be deposited at the registered office of the Company or sent to the Company by registered post addressed to the Company at its registered office.

c) The requisition may consent of several documents in like form each signed by one or more requisitionists.

d) The number of members entitled to requisition a meeting with regard to any matter shall be such number of them as held at the date of the deposit or dispatch to the registered office of the requisition, not less than 1/10th of such of the paid-up capital of the Company as at that date carries the right of voting in regard to the matter set out in the requisition.

e) If the Board of Directors do not, within twenty one days from the date of deposit of requisition with regard to any matters, proceed duly to call a meeting for the

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consideration of these matters on a date not latter than forty five days from the date of the deposit of the requisition the meeting may be called by the requisitionists themselves or such of the requisitionists as represent either majority in value of the paid-up share capital held by all of them or of not less than 1/10th of such paid-up capital of the Company as is referred to in sub-clause(d) above.

Length of notice for calling meeting 68. A General Meeting of the Company may be called by giving not less than 21 clear day’s notice in writing, provided that a General Meeting may be called after giving shorter notice if consent thereto is accorded in the case of the Annual General Meeting by all the members entitled to vote there at and in the case of any other meeting by members of the Company holding not less than 95% of that part of the paid-up share capital which gives the right to vote on the matters to be considered at the meeting provided that where any members of the Company are entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others those members shall be taken into account for purpose of this Article in respect of the former resolution or resolutions and not in respect of the latter.

Accidental omission to give notice to invalidate meeting 69. The accidental omission to give notice of any meeting to or the non-receipt of any such notice by any of the members shall not invalidate the proceedings of or any resolution passed at such meeting. Special Business 70. a) All business shall be deemed special that is transacted at an Extra-ordinary General Meeting and also that is transacted at the Annual General Meeting with the exception of business relating to

i) The consideration of the accounts Balance Sheet, Report of the Directors and Auditors;

ii) The declaration of dividends;

iii) The appointment of Directors in the place of those retiring; and

iv) The appointments and fixing of the remuneration of the Auditors.

b) Where any items of business to be transacted at the meeting are deemed to be special as aforesaid, there shall be annexed to the notice of the meeting a statement setting out all material facts concerning each such item of business, including in particular the nature of the concern or interest if any therein of every Director, and the Managing director, if any, where any item of business consist of the according of approval to any document by the meeting, the time and place where such document can be inspected shall be specified in the statement aforesaid.

Provided that where any item of special business as aforesaid is to be transacted at the meeting of the Company relates to or affects any other Company, the extent of share holding interest in that other Company of every Director and Managing Director of the Company, shall also be set out in the statement if the extent of such shareholding interest is not less than 20% of the paid-up share capital of that other Company.

PROCEEDINGS AT GENERAL MEETINGS Quorum 71. Five members personally present shall be a quorum for a general meeting and no business shall be transacted at any general meeting unless the requisite quorum is present at the commencement of the business.

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If quorum not present when meeting to be dissolved and when to be adjourned 72. If within half an hour from the time appointed for the meeting a quorum is not present the meeting if called upon by the requisition of members, shall be dissolved, in any other case, it shall stand adjourned to the same day in the next week at the same time and place or such other day and at such other time and place as the Board may determine and if at the adjourned meeting, a quorum is not present within half an hour from the time appointed for the meeting the members present shall be a quorum.

Chairman of General Meeting 73. The chairmen, if any, of the Board of Directors shall preside as chairman at every General Meeting of the Company.

When chairman absent, choice of another to take the chair 74. If there is no such Chairman, or if at any meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as Chairman, the Directors present shall choose another Director as Chairman and if no Directors be present or if the Directors decline to take the chair then the members present shall choose some one of their number to be Chairman.

Adjournment of Meeting 75. The Chairman may with the consent of any meeting at which a quorum is present (and shall, if so directed by the meeting ), adjourn that meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place when a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as nearly as may be in the case of original meeting. Save as aforesaid it shall not be necessary to give any notice of adjournment or of the business to be transacted at an adjourned meeting.

Question at General Meeting how decided 76. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded in accordance with the provision of Section 179 of the Act. Unless a poll is so demanded, a declaration by the chairman, that a resolution, on a show of hands, been carried unanimously or by a particular majority or lost and an entry to that effect in the book of the proceedings of the Company shall be conclusive evidence of the fact without proof of the number of proportion of the votes recorded in favour of, or against that resolution.

Taking of poll of the Act 77. If a poll is duly demanded in accordance with the provisions of Section 179, it shall be taken in such a manner as the Chairman in accordance with the provisions of the Act and Section 184 & 185 of the Act direct and the result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken.

Chairman to have casting vote 78. In the case of an equality of vote, the Chairman shall, both on a show of hands and on a poll, have casting vote n addition to the vote or votes to which he may be entitled to as a member.

In what case poll taken without adjournment 79. A poll demanded on the election of Chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time not being later than 48 hours from the time when demand was made, as the Chairman may direct.

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VOTE OF MEMBERS Voting right of Members 80. 1) Every member holding any equity shares shall have a right to vote in respect of such shares on every resolution placed before the meeting. On a show of hands every such member present in person shall have one vote on a poll, his voting right in respect of his equity shares shall be in proportion to his shares of the paid up capital in respect of the equity shares.

2) In the event of the Company issuing any preference shares the holders of such preference shares shall have the voting right set out in that behalf in section 87 of the Act.

Business may proceed notwithstanding demand for poll 81. A demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than on which a poll has been demanded. The person who made the demand may withdraw the demand for a poll at any time.

Voting rights of joint holders 82. In the case of joint holders the vote of the first named of such joint holders who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders.

Voting by members of unsound mind 83. A member of unsound mind or in respect of whom an order has been made by any court having jurisdiction in lunacy may vote, whether on a show of hands or on a poll, by his committee or other legal guardian and any such committee or guardian may, on a poll, vote by proxy.

No member entitled to vote while call due to Company 84. No member shall be entitled to vote in any general meeting unless all calls or other sums presently payable by him in respect of his shares in the Company have been paid.

Proxies permitted on poll 85. On a poll, votes may be given either personally or by proxy.

Proxies 86. Any member entitled to attend and vote at a meeting of the Company shall be entitled to appoint any person whether a member or not as his proxy to attend and vote instead of himself, but the proxy so appointed shall not unless he be a member have any right to speak at the meeting and shall not be entitled to vote except on a poll.

Instrument of proxy 87. 1) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorized in writing or if the appointer is a Corporation either under the common seal or under the hand of an office or attorney so authorized. Any person may act as proxy whether he is member or not.

2) Corporate body (whether a Company within the meaning of the Act or not) may, if it is a member or a creditor or a debenture holder of the Company, by the resolution of its Board of Directors or other governing body authorize such person as it thinks fit to act as its representative at any meeting of the Company or at any meeting of any class of members of the Company or at any meeting of the creditors of the Company held in pursuance of the provisions contained in any Debentures or Trust Deed as the case may be. The person so authorized by resolution as aforesaid shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf the body corporate which he

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represents, as that body could exercise if it were an individual member, creditors or holders of debentures of the Company.

3) So long as an authorization under clause (2) above is in force, the power to appoint proxy shall be exercised only by the person so appointed as representative.

Proxy to be deposited at the office 88. The instrument appointing a proxy and the power of attorney if any, under which it is signed or a notarially certified copy of that power or authority, shall be deposited at the registered office of the Company not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument propose to vote or in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll; and in default the instrument of proxy shall not be treated as valid.

Validity of vote by proxy 89. A vote given in accordance with the terms of an instrument of proxy shall be valid, notwithstanding the previous death of the principal or the revocation of the proxy or the transfer of the share in respect of which the proxy is given. Provided that no intimation in writing of the death, revocation or transfer shall have been received at the registered office of the Company before the commencement of the meeting or adjourned meeting at which the proxy is used.

90. Every instrument appointing a proxy shall be retained by the Company and shall be in either of the forms specified in Schedule IX of the Act or a form as near thereto as circumstances will admit.

Chairman’s rulling regarding votes final 91. Subject to the provisions of the Act, the Chairman of a General Meeting shall be the sole and absolute judge of the validity of every vote tendered at such meeting, or at a poll demanded at such meeting, and may allow or disallow any vote tendered, accordingly as he shall be of opinion that the same is or is not valid.

DIRECTORS Number of Directors 92. Unless otherwise determined by a General Meeting the number of Directors shall not be less than three and not more than twelve including all kinds of Directors.

Present Directors 93. The persons hereinafter named shall become and be the present Directors of the Company 1. Mr. Sudhir Bindal 2. Mr. Yashveer Bindal 3. Mr. Bharat Bindal 4. Mr. Barmanand Bindal

94. Any person whether a member of the Company or not may be appointed as a Director and no qualification by way of holding share shall be required of any Directors.

Director’s power to fill up casual vacancy 95. Any casual vacancy occurring in the Board of Directors may be filled up by the Directors, and the person so appointed shall hold office upto the date which the Director in whose place he is appointed would have held office if it had not been vacated as aforesaid.

Additional Directors 96. The Board of Directors shall have power at any time, and from time to time, to appoint one or more persons as additional Directors, provided that the number of Directors and additional Directors together shall not exceed the maximum number fixed. Any additional

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Director so appointed shall hold office up to the date of the next annual general meeting, but he shall be eligible for election by the Company at that meeting.

Alternate Directors 97. The Board of Directors may appoint an alternate Director to act for a Director (hereinafter called the original Director) during the absence of the original directors for a period of not less than three months from the State in which the meetings of the Board are ordinarily held. All alternate Director so appointed shall vacate office if and when the original Directors return to the State in which meeting of the Board are ordinarily held. If the term of the original Directors is determined before he so returns to the State aforesaid, any provisions for the automatic reappointment of retiring Director in default of another appointment shall apply to the original, and not to the alternate Director.

Remuneration of Directors 98. Every Director other than Managing Director &/or whole-time Director (including the Ex- Officio Directors) shall be paid a sitting fee of RS 250/- or such higher amount as may be prescribe by the Act or the Central Government for each meeting of the Board of Directors or of any committee thereof attended by him and shall be paid in addition thereto all travelling, hotel and other expenses properly incurred by him in attending and returning from the meetings of the Board of Directors or any committee thereof or General Meeting of the company or in connection with the business of the Company to and from any place.

Remuneration for extra services 99. If any Director being willing shall be called upon to perform extra services or to make any special exertions in going or residing away from the town in which the registered office of the Company may be situated for any purposes of the company or in giving special attention to the business of the Company or as a member of the Board, then, subject to Sections 198, 309, 310, and 314 the Board may remunerate the Directors so doing either by a fixed sum or by a percentage of profits or otherwise and such remuneration may be either in addition to or in substitution for any other remuneration to which he may be entitled.

Continuing Directors may act 100. The continuing Directors may act notwithstanding any vacancy in the Board but if and so long as their number is reduced below three the continuing Director or Directors may act for the purpose of increasing the number of Directors to three or of summoning a General Meeting of the Company but for no other purposes.

Vacation of Office of Director 101. The Office of a Directors shall be vacated, if,

a) he is found to be of unsound mind by a court of competent jurisdiction ; or

b) he applies to be adjudicated or is adjudged an insolvent : or

c) he fails to pay dues made on him in respect of shares held by him within six months from the last date fixed for the payment of the call unless the Central Government has by notification in the official gazette, removed the disqualification incured by such failure; or

d) he is convicted by a Court of any offence involving moral turpitude and sentenced in respect therof to imprisonment for not less than six months:or

e) he absents himself form three consecutive meetings of the Board or from all the meetings of the Board for a continuous period of three months whichever is longer ,without obtaining leave of absence from the Board; or

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f) he ( whether by himself or by any person for his benefit or on his account ) or any firm in which he is a partner or any private company of which he is a Director accepts a loan, or any guarantee or security for a loan from the Company in contravention of section 299,or

g) he acts in contravention of section 295;or

h) he becomes disqualified by an order of court under section 203;or

i) he is removed in pursuance of section 284,or

j) having been appointed a Directors by virtue of his holding any office or other employment in the company, he ceases to hold such office or other employment in the company.

Provided that notwithstanding anything in sub-clause (b),(d) and (h) above the disqualification referred to in those clauses shall not take effect;

a) for thirty days from the date of the adjudication, sentences or order.

b) Where any appeal or petition is preferred within the thirty days aforesaid against the adjudication, sentence or convication resulting in the sentences or order until the expiry of seven days from the date on which such appeal or petition is disposed of; or

c) Where within the seven days aforesaid, any further appeal or petition is preferred in respect of the adjudication, sentences, conviction or order and the appeal or petition, if allowed would result in the removal of the disqualification, until such further appeal or petition is disposed of.

Director may contract with Company 102. 1) Subject to the provisions of the Act, the Directors including the Managing Director if any shall not be disqualified by reason of their office as such from contracting with the company either as any contract or arrangement entered into by or on behalf of the company with any Directors or the Managing Directors or with any company on partnership of or in which any Directors or the Managing Directors shall be a member or otherwise interested be avoided nor shall any Directors or the Managing Directors so contacting or being such member or so interested be liable to account to the company for any profit realised by such contract or arrangement by reason only of such Directors or the Managing Directors holding that office or of the fiduciary relation thereby established but the nature of the interest must be disclosed by him or them at the meeting of the Board at which the contract or agreement is determined on, if the interest then exists or in any other case at the meeting of the Board after the acquisition of the interest.

Provided nevertheless that no Directors shall take part in the discussion of or vote as a Directors in resect of any contract or arrangement in which he is so interested as aforesaid and if he dose so his vote shall not be counted, but he shall be entitled to be present at the meeting during the transaction of the business in relation to which he is precluded from voting although he shall not be counted for the purpose of ascertaining whether there is quorum of Directors present. The provisions shall not apply to any contract by or on behalf of the company to give to the Directors or the Managing Directors or any of them any security by way of indemnity against any loss which they or any of them suffer by becoming or being sureties for the company or to any contract or arrangement or to be entered with a public company, or a private company which is a subsidiary of a public company, in which the interest of the Directors aforesaid consists solely in his being a Directors of such company and the holder of not more than shares of such number of value therein as is requisite to qualify him for appointment as a Director

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thereof , he having been nominated as such Directors by the company or in his being a member holding not more than 2% of its paid up share capital.

2) A general notice that any Directors is a Directors or a member of any specified company or is a member of any specified firm and is to be regarded as interested in any subsequent transaction with such company or firm shall as regards any such transaction be sufficient disclosure under this Article and after such general notice it shall not be necessary to file any special notice relating to any particular transaction with such company or firm. 3) A Director may be or become, a Director or member of any company promoted by his company or in which this company may be interested as vendor, shareholder or otherwise and no such Directors shall be accountable to the company for any benefits received as a Director or member of such Company.

Equal power to Directors 103. Except as otherwise provided in these Articles all the Directors of the company shall have in all matters equal rights and privileges and be subject to equal obligations & duties in respect of the affairs of the company.

NOMINEE DIRECTORS Appointment of Nominee Directors 103. A) Notwithstanding anything to the contrary contained in the Articles so long as any monies remain owing by the company to the industrial Finance Corporation of India, industrial Credit & investment Corporation of India, Industrial Development Bank of India or any financial institution owned or controlled by the central government or State Government or the Reserve Bank of India or by two or more of them or by the Central Government or State Government by themselves (each of the above is herinafter referred to as the “Corporation”) and out of any loans/debenture assistance granted by them to the company or so long as the corporation holds or continues to hold debenture/shares in the company as a result of underwriting or by direct subscription or private placement or on long as any liability of the company arising out of any guarantee furnished by the corporation on behalf of the company remains outstanding, the corporation shall have right to appoint from time to time any persons as the Director or Directors, whole-time or non- whole time (which Director/Directors is /are hereinafter referred to as Nominee Director(s) on the Board of the company and to remove from such office any person or persons so appointed and to appoint any person or persons in his or their place/s.

Rights of Nominee Directors B) The Board shall have no power to remove from office the Nominee Director/s no the option of the Corporation and such Nominee Director/s shall not be required to hold any share qualifications in the company. Also on the option of the Corporation such Nominee Director/s shall not be liable to retirement by rotation of Directors subject as aforesaid the Nominee Director/s shall be entitled to the same rights and privileges and be subject to the same obligations as any other Director of the company.

Terms of Nominee Directors C) The Nominee Director/s so appointed shall hold the said office only so long as the corporation holds or continues to hold Debentures/shares in the company as a result of underwriting or by direct subscription or private placement or the liability of the Company arising out of the guarantee is outstanding and the Nominee Director/s so appointed in exercise of the said power shall, ipso facto, vacate such office immediately the moneys owing by the company to the corporation are paid off or on the corporation leasing to hod Debentures/shares in the company or on the satisfaction of the liability of the company arising out of the guarantee furnished by the corporation.

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Nominee Directors to attend meetings D) The Nominee Director appointed under this Article shall be entitled to receive all notices of and attend all General Meetings, Board Meetings, and Meetings of the Committees of which the Nominee Director/s is/are member/s as also the minutes of such meetings. The Corporation shall be entitled to receive all such notices and minutes.

Remuneration to Nominee Directors E) The Company shall pay to the Nominee Directors sitting fees and expenses to which the other Directors of the company are entitled but if any other fees, commission, of the company, the fees, commission, moneys or remuneration in any form is payable to the Directors of the company, the fees, commission, moneys and remuneration in relation to such Nominee Director/s shall accrue to the corporation and the same shall accordingly be paid by the company directly to the corporation. Any expenses that may be incurred by the corporation on such Nominee Director/s in connection with their appointment or Directorship shall also be paid or reimbursed by the company to the Corporation or, as the case may be, to such Nominee Director/s

Provided that if any such Nominee Director/s is/are on officer/s or the Corporation, the sitting fees in relation to such Nominee Director/s shall also accure to the Corporation and the same shall accordingly be paid by the company directly to the corporation.

Provided also that in the event of the Nominee Director/s being appointed as whole-time Director/s such Nominee Director/s shall exercise such powers and duties as may be approved by the corporation and have such rights as are usually exercised or available to a wholetime Director in the management of the affairs of the company Such whole-time Director/s shall be entitled to receive such remuneration, fees, commission and moneys as may be appointed by the Corporation.

104. Not less than one-third of the total number of the Directors of the Company for the time being holding office shall be Directors whose period of office is liable to be determined by retirement by rotation and shall be appointed by the Company in General Meeting.

Retiring Directors eligible for re election 105. A retiring Director shall be liable for re election and the company at the Annual General Meeting at which a Director retires in the manner aforesaid may fill up the vacated office by electing a person thereto.

Retiring Directors to remain in office till successors appointed 106. Subject to the provisions of section 256 of the Act if at any meeting at which an election of Directors ought to take place the place of the vacating Directors is not filled up and the meeting has not expressly resolved not to fill up the vacancy, the meeting shall stand adjourned till the same day in the next week at the same time and place or if that day is a public holiday till the next succeeding day which is not a public holiday at the same time and place, and if at the adjourned meeting the place of retiring Directors is not filled up and the Meeting has also retiring Directors or such of them as have not had their places filled up shall be deemed to have been re-appointed at the adjourned meeting

Power to General Meeting 107. Subject to the provisions of sections 252, 255 & 259 of the Act the Company in General Meeting may by ordinary resolution increase or reduce the number of its directors within the limit fixed by Article 92.

Power to remove to Directors by ordinary resolution. 108. Subject to the provisions of Section 284 of the Act the Company may by any ordinary resolution in General Meeting remove any Directors before the expiration of his period of office, and may by an ordinary resolution appoint another person instead; the person so

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appointed shall be subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last elected as Director.

Right of persons other than retiring Directors to stand for Directorship 109. A person not being a retiring Director shall be eligible for appointment to the office of a Director at any General Meeting if he or some other member intending to propose him as a Director not less than 14 days before the meeting has left at the office of the Company a notice in writing under his hand signifying his candidature for the office of the Director of the intention of such member to propose him as a candidate for that office as the case may be alongwith a deposit of five hundred rupees which shall be refunded to such person or as the case may be to such members if the person succeeds in getting elected as a Director.

PROCEEDINGS OF THE BOARD OF DIRECTORS Meeting of the Board 110. The Board of Directors shall meet at least once in every three months for the dispatch of business, adjourn and otherwise regulate its meetings and proceedings as it thins fit provided that at least for such meetings shall be held in every year.

Calling of Board Meeting 111. The Managing Director may at any time summon a meeting of the Board and the Managing Director or a Secretary on the requisition of a Director shall at any time summon a meeting of the Board. Notice in writing of every meeting of the Board shall be given to every Director for the time being in India, and at his usual address in India to every other Director.

Quorum 112. The quorum for a meeting of the Board shall be one third of the total strength (any fraction contained in that one third being rounded of as one) or two Directors whichever is higher provided that where at any time the number of interested Directors is equal to or exceeds two third of total strength, the number of 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 time. The total strength of the Board shall mean the number of Director actually holding office as Directors on date of the resolution or meeting that is to say, the total strength of Board after deducting therefrom the number of Directors, if any, whose places are vacant at the time.

Questions how decided 113. 1) Save as otherwise expressly provided in the Act, a meeting of the Board for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the regulations of the Company for the time being vested in or exercisable by the Directors generally and all questions arising at any meeting of the Board shall be decided by a majority of the Board.

2) In case of an equality of votes, the Chairman shall have a second or casting vote in addition to his vote as a Director.

Election of Chairman of Board 114. 1) The Board may elect from their body of directors a chairman of its meeting and determine the period for which he is to hold office.

2) If on such Chairman is elected, or if at any meeting the Chairman is not present within five minutes after the time appointed for holding the meeting the Directors present may choose one of their number to be Chairman of the meeting.

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Delegation of powers 115. 1) The Board may, subject to the provisions of the Act, delegate any of its powers to committees consisting of such member of members of its body as it thinks fit. 2) Any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the Board.

Election of Chairman of Committee 116. 1) If the chairman of the Board is a member of the Committee, he shall preside over all meetings of the committee of the Chairman is not a member of the Company may elect a chairman of its meeting. If no such Chairman is elected, or if at any meeting the Chairman is not present with in five minutes after the time appointed for holding the meeting, the members present may choose one of their numbers to be Chairman of the Meeting.

2) The quorum of a Committee may be fixed by the Board of Directors and until so fixed if the Committee is of a single member or two members, shall be one and if more than two members, shall be two.

Questions how determined 117. 1) A Committee may meet and adjourn as it thinks proper. 2) Questions arising at any meeting of a Committee shall be determined by the sole member of the committee or by a majority of votes of the members present as the case may be and in case of an equality of vote, the Chairman shall have a second or casting vote in addition to his vote as a member of the Committee.

Validity of Acts done by Board or a Committee 118 All acts done be any meeting of the Board or of a Committee thereof or by any person acting as a Director shall notwithstanding that it may be afterwards discovered that there was some defect in the appointment of any one or more of such Directors or any person acting as aforesaid or that they or any of them were disqualified be as valid as if every such Director or such person had been duly appointed and was qualified to be a director.

Resolution by Circulation 119. Save as otherwise expressly provided in the act, a resolution in writing circulated in draft together with the necessary papers if any, to all the Director or to all the members of the committee than in India not being less in number than the quorum fixed for the meeting of the Board or the Committee as the case may be, and to all other Directors or members at their usual address in India and approved by such of the Directors as are than in India or by a majority of such of them as are entitled to vote on the resolution shall be valid and effectual as if it had been a resolution duly passed at a meeting of the Board or Committee duly convened and held.

POWERS AND DUTIES OF DIRECTORS General powers of Company vested in Directors 120. The Business of the Company shall be managed by the Board of Directors, who may exercise all such powers of the Company as are not by the Act or any statutory modification thereof for the time being in force, or by these presents required to be exercised by the Company in General Meeting, subject nevertheless to any regulations of these presents, to the provisions of the said Act, and to such regulations being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in General Meeting, but, no regulation made by Company in General Meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made.

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Further powers of Directors 121. Without prejudice to the generality of the foregoing, it is hereby expressly declared that the Directors shall have the following powers that is to say power. 1) To carry on and transact the several kinds of business specified in clause III of the Memorandum of Association of the Company.

2) To draw, accept, endorse, discount, negotiate and discharge on behalf of the Company, all bills of exchange, promissory notes cheques, hundies, draft, railway receipts, clock warrants, delivery orders Government promissory notes other Government instruments, bonds, debentures or debenture stock or Corporation Local Bodies Port Trust Improvement Trusts or other Corporate Bodies and to execute transfer deeds for transferring stock, shares or stock certificates of the Government and other local or corporate bodies in connection with any business or any subject of the company

3) At their discretion, to pay for any property, rights, or privileges acquired by or service rendered to the Company, either wholly or partially in cash or in shares bonds, debentures or other securities of the Company, and any such shares may be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed upon; and any such bonds, debentures or other securities may be either specifically charged upon all or any of the property of the company or not so charged.

4) To engage and in their discretion to remove, suspend, dismiss and remunerate bankers, legal advisers accountants, cashiers, agents, commission agents, dealers, brokers, foremen, servants employees of every description and to employ such professional or technical or skilled assistants as from time to time may in their option be necessary or advisable in the interest of the Company and upon such terms as to duration of employment, remuneration or otherwise and may be required security in such instances and to such amounts as the Directors think fit.

5) To accept from any member on such terms and conditions as shall agreed, a surrender of his shares or stock or any part thereof.

6) To secure the fulfillment of any contracts or agreements entered into by the Company by mortgage or charge of all or any of the property of the Company or in such other manner as they may think fit.

7) To institute conduct, defend, compound or abandon any actions, suits and legal proceedings by or against the Company or its officer or otherwise concerning the affairs of the Company and also to compound or compromise or submit to arbitration the same actions, suits and legal proceedings.

8) To make and give receipts, releases and others discharges for money payable to the Company and for the claims and demands of the Company.

9) To determine who shall be entitled to sign on the Company’s behalf bills of exchanges, pronotes, dividend, warrants cheques and other negotiable instruments, receipts, acceptance, endorsements, releases, contracts, deeds and documents.

10) From time to time to regulate the affairs of the Company abroad in such manner as they think fit and in particular to appoint any person to be the attorneys or agent of the Company either abroad or in India with such powers including power to sub-delegate and upon such terms as may be thought fit.

11) To invest and deal with any moneys of the Company not immediately required for the purpose thereof upon such securities as they think fit.

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12) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur any personal liability for the benefit of the Company such mortgage of the Company’s property (present and future) as they think fit and any such mortgage may contain a power of sale and such other powers, convenants and provisions as shall be agreed upon.

13) To give to any person employed by the Company a commission on the profits, or any particular business or transactions or a share in the general profits of the Company, and such commission or such share of profits shall be treated as part of the working expenses of the Company.

14) From time to time to make, vary and repeal bye-laws for the regulations of the business of the company, its officers and servants.

15) To enter into all such negotiations and contracts, and rescind and vary all such contracts and execute and do all such acts deeds and things in the name and on behalf of the Company as they may consider expedient for in relation to any of the matters aforesaid or otherwise for the purpose of the Company.

16) To pay gratuities, bonus, rewards, presents and gifts to employees or dependents of any deceased employees to charitable institution or purposes to subscribe for provident funds and other associations for the benefit of the employees.

Powers to delegate to Committee 122. Subject to the provisions of Section 292 of the Act and other provisions of the Act, the Board may delegate from time to time and at any time to a Committee formed out of the Directors all or any of the powers authorities and discretions for the time being vested in the Board and any such delegations may be made on such terms and subject to such conditions as the Board may think fit.

Attorney of the Company 123. The Board may appoint, at any time and from time to time by a power of attorney under the Company ‘s seal any person to be the attorney of the Company for such purpose and with such powers, authorities and discretions not exceeding those vested in or exercisable by the Board under these Articles and for such period and subject to such conditions as the Board may from time to time think fit and any such appointment may, if the Board thinks fit, be made in favour of the members or any of the members of any firm or Company or the members, Directors, nominees or manufacturers of any firm or Company or otherwise in favour of any body or persons whether nominated directly or indirectly by the Board, and any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the Board may think fit.

Power to authorise sub-delegation 124. The Board may authorise such delegate or attorney as aforesaid to sub-delegate all or any of the powers, authorities and discretions for the time being vested in it.

Duty to maintain Registers etc. and records of minutes 125. 1) The Board shall duly comply with the provisions of the Act and in particular with the provisions in regard to the registration of the particulars of mortgage and charges affecting the properties of the Company or created by it and to keeping a Register of the Director and to sending to the Registrar an annual list of member and a summary of particulars of shares and stocks and copies of special resolutions and other resolutions of the Board as are required to be filed with the Registrar under Section 192 of the Act, and a copy of the Register of Directors and notification of any change therein.

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2) The Company shall comply with the requirements of Section 193 of the companies Act. In respect of keeping of the minutes of all proceedings of every General Meeting and of every meeting of the Board or any Committee of the Board.

3) The Chairman of the meeting may exclude at his absolute discretion such of the matters as are or could reasonably be regarded as defamatory of any person, irrelevant or immaterial to the proceedings or detrimental to the interests of the Company.

Secretary 126. The Board shall have power to appoint as the Secretary a person possessing the prescribed qualification and fit in their opinion for the said office for such period and on such terms and conditions as regards remuneration and otherwise as they may determine. The Secretary shall have such powers and duties as may, from time to time, be delegated or entrusted to him by the Directors.

Powers as to commencement of business or branch business. 127. Any branch or kind of business which by the Memorandum of Association of the Company or these presents is expressly or by implication authorized to be undertaken by the company may be undertaken by the Board at such time or times as they shall think fit and further may be suffered by them to be in abeyance whether such branch or kind of business may have been actually commenced or not so long as the Board may deems it expedient not to commence or proceed with such branch or kind of business.

Delegation of powers 128. Subject to the provisions of Section 292, the Board may delegate all or any of their powers to any Directors jointly or separately or to any one Director at their discretion.

BORROWING Borrowing 129. 1) The Board of Directors may from time to time but with such consent of the company in General Meeting as may be required under Section 293 raise any moneys or sums of moneys for the purpose of the Company, provided that the moneys to be borrowed by the Company apart from temporary loans obtained from the company’s bankers in the ordinary course of business shall not without the sanction of the Company at a General Meeting exceed the aggregate of the paid up Capital of the Company and its free reserves, that is to say reserve not set apart for any specific purpose and in particular, but subject to the provisions of Section 292 of the Act, the Board may from time to time at their discretion raise or borrow or secure the payment of any such sum of money for the purpose of the Company, by the issue of debenture perpetual or otherwise, including debenture convertible into shares of this or any other company or perpetual annuities and in security of any such money so borrowed, raise or receive, mortgage, pledge or charge the whole or any part of the property, assets or revenue of the Company present or future, including its uncalled capital by special assignment or otherwise or to transfer or convey the same absolutely or in trust and to give the lenders powers of sale and other powers as may be expedient and to purchase redeem or pay off any such securities.

Provided that every resolution passed by the Company in General Meeting in relation to the exercise of the Powers to borrow as stated above shall specify the total amount up to which moneys may be borrowed by the Board of Directors. Debentures, debenture stock, bond or other securities with a right to allotment of or conversion into shares shall not be issued except with the sanction of the company in General Meeting.

2) The Directors may by a resolution at a meeting of the Board delegate the above powers to borrow money otherwise than on debenture to a Committee of Directors or the Managing Director if any within the limits prescribed.

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3) Subject to the provisions of the above sub clause, the Directors may, from time to time, at their descretion, raise or borrow or secure the repayment of any sum or sums of money for the purpose of the Company, at such time and in such manner and upon such terms and conditions in all respect as they think fit, and in particular by promissory notes or by opening current accounts or by receiving deposits and advances with or without security, or by the issue of bonds, perpetual or redeemable debentures or debenture- stock of the Company (both present and future) including its uncalled capital for the time being or by mortgaging or charging or pledging any lands, buildings, goods or other property and securities of the Company, or by such other means as to them may seem expedient.

Assignment of Debentures 130. Such debentures, debenture stock, bond or other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

Terms of debenture issue 131. a) Any such debentures, debenture-stock, bond or other securities may be issued at a discount, premium or otherwise, and with any special privileges as to redemption, surrender, drawings, allotment of shares of the Company, appointment of Directors or otherwise debentures, debenture stocks, bonds or other securities with a right of conversion into or allotment of shares shall be issued only with the sanction of the Company in General Meeting.

b) Any trust deed for securing of any debenture stock and or any mortgage deed and/or other bond for securing payment of moneys borrowed by or due by the Company and/or any contract or any agreement made by the Company with any person, firm, body corporate, Government or authority who may render or agree to render any financial assistance to the Company by way of loans advanced or by guaranteeing of any loan borrowed or other obligations of the Company or by subscription to the share capital of the Company or provide assistance in any other manner, may provide for the appointment, from time to time, by any such mortgager, lender, trustees or holders of debentures or contracting party as aforesaid, of one or more persons to be a Director or Directors of the Company. Such trust deed, mortgage deed bond or contract may provide that the person appointing a Director as aforesaid may from time to time remove any Director so appointed by him and appoint any other person in his place and provide for filling up of any casual vacancy created by such person vacating office as such Director. Such power shall determine and terminate on the discharge or repayment of the respective mortgage loan or debt or debentures or on the termination of such contract and any person so appointed as Director under mortgage or bond or debenture trust deed or under such contract shall cease to hold office as such Director on the discharge of the same, Such appointment and provision in such document as aforesaid shall be valid and effective as if contained in these presents.

132. The Director or Directors so appointed by or under a mortgage deed, debenture trust deed or other bond or contract as aforesaid shall be called “Nominated Directors” The words “Nominated Director” shall mean the Director appointed as aforesaid and for the time being holding such office. The Nominated Director shall not be liable to retire by rotation or to be removed from office by the Company. Such mortgage deed or bond or trust deed or contract may contain such auxiliary provisions as may be a ranged between the Company and mortgage lender, trustee or contracting party as the case may be and all such provisions shall have effect notwithstanding any of the other provisions herein contained but subject to the provisions of the Act.

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133. The Directors shall cause a proper register to be kept, in accordance with the Act, of all mortgages and charges specifically affecting the property of the Company and shall duly comply with the requirements of the Act in regard to the registration of mortgages and charges therein specified.

Subsequent assignees of uncalled capital 134. Where any uncalled capital of the Company is charged all persons taking any subsequent charge thereon shall take the same, subject to such prior charge and shall not be entitled by notice to the share holders or otherwise to obtain priority over such prior charge.

Charge in favor of Director for indemnity 135. If the Directors or any of them or any other person, shall become personally liable for the payment of any sum primarily due from the Company, the Board may execute or cause to be executed any mortgage charge or security over or effecting the whole or any part or the assets of the Company by way of indemnity to secure the Directors or other persons so becoming liable as aforesaid from any loss in respect of such liability.

Powers to be exercised by Board only at Meeting 136. 1) The Board of Directors shall exercise the following powers on behalf of the Company and the said powers shall be exercised only by resolution passed at the meeting of the Board: a) Power to make calls on shareholders in respect of moneys unpaid on their shares: b) Power to issue debentures; c) Power to borrow moneys otherwise than on debentures; d) Power to invest the funds of the Company; e) Power to make loans.

2) The Board of Directors may by a meeting delegate to any Committee of the Directors or to the Managing Director the powers specified in sub-clauses (c), (d) and (e) above.

3) Every resolution delegating the power set out in sub-clause (c) above shall specify the total amount upto which moneys may be borrowed by the said delegate.

4) Every resolution delegating the power referred to in sub-clause(d) above shall specify the total amount upto which the funds may be invested and the nature of the investments which may be made by the delegate.

5) Every resolution delegating the power referred to in sub-clause(e) above shall specify the total amount up to which the loans may be made by the delegate, the purpose for which the loans may be made and the maximum amount of loans which may be made for such purpose in individual cases.

MANAGING DIRECTORS/WHOLE-TIME DIRECTORS Appointment of Managing Directors/whole time Directors 137. a) The Board may from time to time with such sanction of the Central Government as may be required by law, appoint one or more of their body to the office of the Managing Director or Managing Directors or whole time Director(s). b) The Directors may from time to time resolve that there shall be either one or more Managing Directors or Whole time Directors. c) In the event of any vacancy arising in the office of a Managing Director or Whole time Directors, if the Directors resolve to increase the number of Managing Directors or whole time Directors, the vacancy shall be filled by the Board of Director and the Managing Director or whole time Director so appointed shall hold the office for such period as the Board of Directors may fix. d) If a Managing Director or whole time Director ceases to hold office as Director he shall ipso facto and immediately cease to be a Managing Director /whole time Director.

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e) The Managing Director or Whole time Director shall not be liable to retirement by rotation as long as he holds office as Managing Director or Wholetime Director.

Powers and duties of Managing Director or Wholetime Director. 138. Managing Director/wholetime Director shall subject to the supervision control and direction of the board and subject to the provisions of the Act, exercise such powers as are exercisable under these presents by the board of Directors as they may think fit and confer such powers for such time and to be exercised for such objects, purposes and upon such terms and conditions and with such restrictions as they may think expedient and they may confer such power either collaterally with or to the exclusion of any such substitution for all or any of the powers of the Board of Directors in that behalf and may from time to time revoke, withdraw, alter or vary all or any of such powers. The Managing Directors/Wholetiem Directors may exercise all the powers entrusted to them by the Board of Directors in accordance with Board’s direction.

Remuneration of Managing Directors/Wholetime Director. 139. Subject to the provisions of the Act and subject to such sanction of the Central Government as may be required for the purpose, the Managing Directors/Wholetime Directors shall receive such remuneration (whether by way of salary, commission or participation in profits or partly in one way and partly in another) as the Company in General Meeting may from time to time determine.

Reimbursement of expenses 140. The Managing Director/Wholetime Director shall be entitled to charge and be paid for all actual expenses if any, which they may incur for or in connection with the business of the Company. They shall be entitled to appoint part time employees in connection with the Management of the affairs of the Company and shall be entitled to be paid by the Company any remuneration that they may pay to such part time employees.

Business to be carried on by Managing Director/Wholetime Director 141. 1) The Managing Director/Wholetime Director. Shall have subject to the supervision control and discretion of the Board , the management of the whole of the Business of the Company and of all its affairs and shall exercise all powers and perform all duties in relation to the Management of the affairs and transaction of the Company, except such powers and such duties as are required by law or by these presents to be exercised or done by the Company in General Meeting or by the Board of Directors and also subject to such conditions or restrictions, imposed by the Act or by these presents.

2) Without prejudice to the generality of the foregoing and subject to the supervision and control of the Board of Directors, the business of the company shall be carried on by the Managing Director/Wholetime director and he shall have and exercise all the powers set out in Article 124 above, except, those which are by law or by these presents or by any resolution of the Board required to be done by the Company in General Meeting or by the Board.

3) The Board may, from time to time, delegate to the managing director or wholetime Director such of their powers and duties and subject to such limitations and conditions as they may deem fit. The Board may from time to time revoke, withdraw, alter or vary all or any of the powers conferred on the Managing Director or wholetime Director by the Board or by these presents.

COMMON SEAL Common Seal 142 The Board shall provide a common seal for the Company and they shall have power from time to time to destroy the same substitute a new seal in lieu thereof, and the common seal

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shall be kept at the Registered Office of the Company and committed to the custody of the Managing Director or the Secretary if there is one

Seal how affixed 143. The seal not be affixed to any instrument except by authority of a resolution of the Board or of committee and unless the Board otherwise determine every deed or other instrument to which the seal is required to be affixed shall, unless the same is executed by duly constituted attorney for the Company be signed by one Director at least in whose presence the seal shall have been affixed and countersigned by the Managing Director, Secretary or such other person as may from time to time be authorized by the Manaing Director or by the Board provided nevertheless that any instrument bearing the seal of the Company and issued for valuable consideration shall be binding on the Company notwithstanding any irregularity touching the authority to issue the same.

Right to dividend 144. a) The profits of the Company, subject to any special rights relating thereto created or authorised to be created by these presents and subject to the provisions of these presents, as to the Reserve Fund shall be divisible among the members in proportion to the amount of capital paid-up on the shares held by them respectively on the last day of the year of account in respect of which such dividend is declared and in the case of interim dividends on the close of the last day of the period in respect of which such interim dividends is paid.

b) Where capital is paid up on any shares in advance of calls, upon the footing that the same shall carry interest, such capital shall not, whilst carrying interest, confer a right to participate in profits.

Declaration of dividends 145. The Company in Annual General Meeting may declare dividends but no dividend shall exceed the amount recommended by the Board.

Interim dividends 146. The Board may from time to time pay to the members such interim dividend as appear to them to be justified by the profit of the Company.

Dividends to be paid out of profits only 147. No dividend shall be payable except out of the profits of the year or any other undistriubuted profits or out of capital reserves except as provided by Section 205 of the Act.

Reserve Funds 148.1) The Board may before recommending any dividends set aside out of the profit of the company such sums as it thinks proper as a reserve or reserves which shall at the discretion of the Board, be applicable for any purpose to which the profits of the Company may be properly applied including provisions for meeting contingencies or for equalizing dividends and pending such application may, at the like discretion either be employed in the business of the Company or be invested in such investment(other than shares of the Company) as the Board may, from time to time, think fit.

2) The Board may also carry forward any profits when it may think prudent not to divide, without setting them aside as Reserve.

Deduction for arrears 149. The Board may deduct from any dividend payable to any members all sums of money, if any, presently payable by him to the Company on account of call or otherwise in relation to the shares of the Company

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Adjustment of dividends 150. Any General Meeting declaring a dividend or bonus may make a call on the members of such amount as the meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may if so arranged between the Company and the member be set off against the call.

Payment by cheque or warrant 151. 1) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through post direct to the registered address of the holder or in the case of joint holders to the registered address of that one of the joint holders who is first named on the register of members or to such person and to such address as the holder or joint holders may in writing direct. 2) Every such cheque or warrant shall be made payable to the order of person to whom it is sent. 3) Every such cheque or warrant shall be posted within forty two days from the date of declaration of dividends.

Receipt of joint holders 152. Any one or two or more joint holders of a share may give effectual receipt for any dividends, bonuses or other moneys payable in respect of such shares.

Notice of dividends 153. Notice of any dividend that may have been declared shall be given to the persons entitled to share-thereto in the manner mentioned in the Act.

Dividends not to bear interest 154. No dividend shall bear interest against the Company.

155. 1) Where dividend has been declared by the Company but has not been paid or the warrant in respect thereof has not been posted within forty two days from the date of declaration to any share holder entitled to the payment of dividend, the Company shall within 7 days from the date of expiry or the said period of forty two days transfer the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted within the said period of forty two days to a special account to be opened by the Company in that behalf in any scheduled Bank.

2) Any money transferred to the unpaid dividend account of the Company in pursuance of sub-clause (1) which remains unpaid or unclaimed for a period of 3 years from the date of such transfer shall be transferred by the Company to the General Revenue Account of the Central Government but a claim to any money so transferred to the General Revenue Account may be preferred to the Central Government by the person to whom the money is due and shall be dealt with as if such transfer to the general revenue account had not been made, the order if any for payment of the claim being treated as an order for refund or revenue.

3) The Company shall when making any transfer under clause (2) to the general revenue account of the Central Government any unpaid or unclaimed dividend furnish to such officer as the Central Government may appoint in this behalf a statement in the prescribed from setting forth in respect of all sums included in such transfer the nature of the sums, the names and last known addresses of the person entitled to receive the sum, the amount to which such person is entitled to and the nature of his claim thereto and such other particulars as may be prescribed.

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4) The Company shall be entitled to a receipt from the Reserve Bank of India for any money transferred by it to the general revenue account of the Central Government and such receipt shall be effectual discharge of the Company in respect thereof.

5) No unclaimed or unpaid dividend shall be forfeited by the Board unless the claim thereto becomes barred by law.

Deposit of Dividend in Special Account Pending Transfer. 156. “The dividend on shares, in respect of which instrument of transfer of shares has been delivered to the Company for registration and the transfer of shares has not been registered by the company, shall be transferred to Special Account referred to in section 205A and 205B of the Act, pending transfer, unless the company is authorised by the registered holder of such shares, in writing, to pay such dividend to the transferee specified in such instrument of transfer.

CAPITALISATION OF PROFITS

157. 1) The Company in General Meeting, may on recommendation of the Board, resolve.

a) That it is desirable to capitalise any part of the amount for the time being standing to the credit of the Company’s reserves including capital reserves or to the credit of the profit and loss accounts or otherwise available for distribution; and b) That such sum be accordingly set free for distribution in the manner specified in sub- clause (2) amongst the members who would have been entitled thereto if distributed by way of dividend and in the same proportion.

2) The sum aforesaid shall not be paid in cash but shall be applied subject to the provisions containing in sub clause (3) either in or towards. i) Paying up any amounts for the time being unpaid on shares held by such members respectively. ii) Paying up in full unissued shares of the Company to be allotted and distributed, credited as fully paid up, to and amongst such members in the proportion aforesaid; or. iii) Partly in the way specified in sub clause (i) and partly in that specified in sub-clause (ii).

3) A share premium account and a capital redemption reserve fund may, for the purpose of this regulation only, be applied in the paying up of unissued shares to be issued to members of the Company as fully paid bonus shares.

4) The Board shall give effect to the resolution passed by the Company in pursuance of this regulation.

Powers to Directors of declaration of bonus 158. A) 1. Whenever such a resolution as aforesaid shall have been passed the Board shall. a) Make all appropriations and applications of the undivided, profits resolved to be capitalised thereby and all allotments and issues of fully paid shares, if any, and.

b) Generally do all acts and things required to give effect thereto.

2) The Board shall have full power: a) To make such provision, by the issue of fractional certificates or by payments in cash or otherwise as it thinks fit, in the case of shares or debentures becoming distributable in fraction and also.

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b) To authorise any person to enter on behalf of all the members entitled thereto into an agreement with the Company providing for the allotment to them respectively credited as fully paid up of any further shares or debentures to which they may be entitled upon such capitalisation or (as the case may require) for the payment of by the Company on their behalf by the application thereto of their respective proportion of the profits resolved to be capitalised of the amounts or any part of the amounts remaining unpaid on the shares. 3) Any agreement made under such authority shall be effective and binding on all such members.

B) 1. The Company in General Meeting, may on recommendation of the Board resolve. a) to declare dividends out of its capital Reserve; or b) to issue Bonus Shares out of its Capital Reserve; or c) to pay-up any amounts out of its Reserves for the time being unpaid on shares held by members.

ACCOUNTS Books of account to be kept 159. 1) The Board of Directors shall cause true accounts to be kept of all sums of money received and expended by the Company and the matters in respect of which such receipts and expenditure take place, of all sales and purchases of goods by the Company, and of the assets, credits and liabilities of the Company.

2) If the Company shall have a Branch Office, whether in or outside India proper books of account relating to the transactions effected at that office shall be kept at that office, and proper summarised returns, made uptodate at intervals of not more than three months shall be sent by the Branch Office to the Company at its Registered Office or to such other place in India, as the Board thinks fit, where the main books of the Company are kept.

3) All the aforesaid books shall give a fair and true view of the affairs of the Company or of its branch office, as the case may be, with respect to matters aforesaid and explain its transactions.

Where books of Account to kept 160. The Books of Accounts shall be kept at the Registered Office or at such other place in India as Directors think fit.

Inspection by members 161 The Board of Directors shall from time to time determine whether and to what extent and at what time and places and under what conditions or regulations the accounts and books and documents of the Company or any of them shall be kept open for the inspection of the members and no member (not being a Director) shall have any right of inspecting any account or books or documents of the Company except as conferred by statute or authorised by the Directors or by a resolution of the Company in general meeting.

Statement of accounts to be furnished to General Meeting 162. The Board or Directors shall by before each Annual General Meeting Profit and Loss Account for the financial year of the Company and a Balance Sheet made up as at the end of Financial year which shall be a date which shall not precede the day of the meeting by more than six months or such extended period as shall have been granted by the Registrar under the provisions of the Act.

Form of Balance Sheet and Profit & Loss Account 163. 1) Subject to the provisions of Section 211 of the Act every balance sheet and profit and loss account of the Company shall be in the forms se t out in parts I & II respectively of Schedule VI of the Act or as near thereto as circumstances admit.

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2) So long as the Company is holding Company having a subsidiary, the Company shall conform to Section 212 and other applicable provisions of the Act.

Authentication of Balance Sheet & Profit & Loss Account

164. 1) Every Balance Sheet and every Profit & Loss Account of the Company shall be signed on behalf of the Board by Secretary, if any and by not less than two Directors of the Company one of whom shall be the Managing Director where there is one. Provided that when only one Director is for the time being in India the Balance Sheet and Profit and Loss Account shall be signed by such Director and in such a case there shall be attached to the Balance Sheet and the Profit and Loss Account a Statement signed by him explaining the reason of non compliance of sub-clause (1)

2) The Balance Sheet and the Profit and Loss Account shall be approved by the Board or Directors before they are signed on behalf of the Board in accordance with the provisions of this Article and before they are submitted to the Auditors for their report thereon

Profit & Loss Account to be annexed and Auditors Report to be attached to the Balance Sheet. 165. The Profit and Loss account shall be annexed to the Balance Sheet and the Auditors Report shall be attached thereto.

Board’s Report to be attached to balance sheet 166. 1) Every Balance Sheet laid before the Company in General Meeting shall have attached to it a report by the Board of Directors with respect to the state of the company’s affairs, the amounts, if any, which it proposes to carry to any Reserves in such Balance Sheet and the amount, if any, which it recommends to be paid by way of dividend, material charges and commitments if any affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the Balance Sheet relates and the date of the Report.

2) The Report shall, so far as it is material for the appreciation of the state of the Company’s affairs by its members and will not in the Board’s opinion be harmful to the business of the Company or of any its subsidiaries, deal with any changes which have occurred during the financial year in the nature of the Company’s business carried on by them and generally in the classes of business in which the Company has an interest.

3) The Board’s report shall also include a statement showing the name of every employee of the Company who if employed through out the financial year was in receipt of remuneration for that year which in the aggregate was not less than amount as may be prescribed or if employed for part of the financial year was in receipt of remuneration for any part of that year at a rate which in the aggregate was not less than amount as may be prescribed per month. The statement shall also indicate whether any such employee is relative of any Director or Manager of the Company and if so the names of such directors and such other particulars prescribed.

4) The Board shall also give the fullest information and explanation in its report in case falling under the provision to Section 222 in an addendum to that report, on every reservation, qualification or adverse remark contained in the Auditors Reports.

5) The Board’s Report and addendum (if any) thereto shall be signed by the chairman if he is authorised in that behalf by the Board; and where he is not so authorised shall be signed by such number of Directors as are required to sign the Balance Sheet and the Profit and Loss Account of the Company by virtue of sub-clauses (1) and (2) of the Article 164.

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6) The Board shall have the right to charge any person being a Director with the duty of seeing that the provisions of sub-clauses (1) to (3) of this article are complied with.

Appointment and Removal of Auditor/Auditors 167. Auditor/Auditors shall be appointed and their rights and duties regulated in accordance with Section 224 and 231 of the Act.

168. The first Auditor or Auditors of the Company shall be appointed by the Board within one month of the date of registration of the company and the Auditor or Auditors so appointed shall hold office until the conclusion of the First Annual General Meeting.

169. The Company may at a General Meeting remove any such Auditor or all or such Auditors appointed by the Board under Article No. 168 above, and appoint in his or their place any other person or persons who have been nominated for appointment by any member of the Company not less than fourteen days before the date of the meeting.

170. 1) If the Board fails to exercise power under Article No. 168 above the company in General Meeting may appoint the First Auditor or Auditors.

2) Every Auditor or Auditors, subject to the above Article, shall be appointed by the shareholders/members in the Annual General Meeting, who shall hold the office till the conclusion of the next Annual General Meeting. When any appointment of such Auditor or Auditors is made by the Company at any General Meeting a written certificate shall be obtained by the Company from the Auditor or Auditors proposed to be so appointed to the effect that the appointment or appointments if made will be in accordance with the limits specified in sub-section 1.B of section 224 Every Auditor so appointed shall within 30 days of the receipt from the Company of the intimation of his appointment shall inform the Registrar of Companies in writing that he has accepted or refused to accept the appointment.

3) Subject to the provisions of Section 224 1-B and section 224 A at any Annual General Meeting a retiring Auditor, by whatsoever authority appointed,shall be reappointed unless.

a) He is not qualified for re-appointment. b) He has given the Company notice in writing of his unwillingness to be re-appointed; c) A resolution has been passed at that meeting appointing somebody instead of him or providing expressly that he shall not be reappointed or. d) Where notice has been given of an intended resolution to appoint some other person in the place of a retiring Auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons, as the case may be the resolution cannot be proceeded with.

4) Where at an ‘Annual General Meeting, no Auditors are appointed, the Central Government may appoint a person to fill the vacancy.

5) The company shall within seven days of the Central Government‘s power under sub- clause (4) becoming exercisable, give notice of that fact to the Government.

6) The Directors may fill any casual vacancy in the office of an auditor, but while any such vacancy continues, the remaining Auditor or Auditors (if any) may act, where such a vacancy is caused by the resignation of an Auditor, the vacancy shall only be filled by the Company in General Meeting.

7) A person, other than a retiring Auditor, shall not be capable of being appointed at an Annual General Meeting unless special notice of a resolution of appointment of that

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person to the office of Auditor has been given by a member of the Company not less than fourteen days before the meeting in accordance with the provisions of Section 190 of the Act and the Company shall send a copy of any such notice to the retiring Auditor and shall give notice thereof to members in accordance with the provisions of Section 190 and all the other provisions of Section 225 of the Act shall apply in the matter The provisions of this sub-clause shall apply to a resolution that a retiring auditor shall not be re appointed.

8) The persons qualified for appointment as Auditors shall be only those referred to in Section 226 of the Act.

9) None of the persons mentioned in Section 226 of the Act as are not qualified for appointment as Auditors shall be appointed as Auditors of the Company.

10) The Company or its Board of Directors shall not appoint or re-appoint any person or firm as its Auditors if such person is at the date of such appointment or re-appoint holds appointment as Auditor of the specified number of Companies or more than the specified number of companies provided that in the case the firm of auditors specified number of Companies shall be construed as specified number of companies per partner of the firm provided further that where any partner of the firm is also a partner of any other firm of auditors the number of companies which may be taken into account by all the firms together in relation to such partner shall not exceed the specified number in the aggregate . Provided also that where any partner of a firm of auditors is also holding office in his individual capacity as auditor of one or more companies the number of companies which may be taken into account in his case shall not exceed the specified number in the aggregate. Specified number means in the case of a person or firm holding appointment as auditor of a number of companies each of which has a paid up share capital of less than Rs.25 lacs 20 companies and in any other case 20 companies out of which not more than ten shall be companies each of which has a paid up share capital of Rs. 25 lacs or more.

Audit of Branch Office 171. The Company shall comply with the provisions of sanction 228 of the Act in relation to the audit of the accounts of Branch office of the Company.

Remuneration of Auditors 172. The remuneration of the Auditors shall be fixed by the Company in General Meeting except that the remuneration of any Auditor appointed to fill any casual vacancy may be fixed by the Board.

173. 1) Every Auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of his duties as Auditor.

2) All notices of, and other communications relating to any General Meeting of the Company which any member of the Company is entitled to have sent to him shall also be forwarded to the Auditor and the Auditor shall be entitled to attend any General Meeting and to be heard at any General Meeting which he attends on any part of the business which concerns him as Auditor.

3) The auditor shall make a report to the members of the Company on the accounts examined by him and on every Balance Sheet and Profit and Loss Account and on every other document declared by this Act to be part of or annexed to the Balance Sheet or Profit and Loss Account which are laid before the Company in General Meeting during his tenure of office, and the report shall state whether, in his opinion and to the best of

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his information and according to the explanations given to him, the said accounts give the information required by the Act in the manner so required and give a true and fair view.

i) in the case of the Balance sheet of the state of the company’s affairs as at the end of its financial year; and

ii) in the case of the Profit and Loss Account of the profit or loss for its financial year.

4) The Auditors Report shall also state: a) Whether he has obtained all the information and explanations which to the bast of his knowledge and belief were necessary for the purpose of his audit;

b) Whether in his opinion, proper books of account as required by Law have been kept by the Company so far as appears from his examination of those books, and proper returns adequate for the purposes of his audit have been received from branches not visited by him;

c) Whether the report on the accounts on any branch office audited under Section 228 by a person other than the Company’s Auditor has been forwarded to him as required by clause(c) of sub-section (3) of Section 228 of the Act and how he has dealt with the same in preparing Auditors’ Report: and

d) Whether the company’s Balance sheet and profit and loss account dealt with by the report are in agreement with the books of account and returns.

5) Whether any of the matters referred to in item (I) and (ii) of subclause (3) above or in items (a), (b), (c) and (d) of sub-clause (4) above is answered in the negative or with a qualification, the auditor’s report shall state reasons for the answer.

6) The accounts of the Company shall not be deemed as not having been properly drawn up on the ground merely that the Company has not disclosed certain matters if.

a) Those matters are such as the company is, not required to disclose by virtue of any provisions contained in the companies act or any other act ; and

b) those provisions are specified in the balance sheet and profit and loss account of the company.

7) The auditors report shall be read before the company in general meeting and shall be open to inspection by any member of the company.

Accounts when audited and approved to be conclusive except as to errors discovered within three months 174. Every account of the company when audited and approved by a general meeting shall be conclusive except as regards any error discovered therein, within three months next after the approval thereof. Whenever any such error is discovered within that period the account shall forthwith be corrected and shall henceforth be conclusive.

SERVICE OF DOCUMENT AND NOTICE

Service of documents on the company 175. A document may be served on the company or an officer thereof by sending it to the company or officer at the registered office of the company by post under a certificate of posting or by registered post, or by leaving at its registered office.

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How documents is to be served on members 176. 1) A document (which expression for this purpose shall be deemed to include and shall include any summons notice, requisition, process, order, judgement or any other documents in relation to or in the winding up of the company) may be served or sent by the company on or to any member either personally or by sending it by post to him to his registered address or (if he has no registered address in India) to the address, if any, within India supplied by him to the company for the giving of notice to him.

2) All notices shall, with respect to any registered shares to which persons are entitled jointly, be given to whichever of such persons is named first in the Register and notice so given shall be sufficient notice to all the holders of such shares.

3) Where a document is sent by post.

a) service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the notice, provided that where a member has intimated to the company in advance that documents should be sent to him under a certificate of a posting or by registered post without acknowledgement due and has deposited with the company a sum sufficient to defray the expenses of doing so, service of the documents shall not be deemed to be effected unless it is sent in the manner intimated by the member; and

b) Unless the contrary is proved, such services shall be deemed to have been effected.;

i) In case of notice of a meeting, at the expiration of Forty eight hours after the latter containing the notice is posted; and ii) In any other case, at the time at which the letter would be delivered in the ordinary course of post.

Members to notify address in India 177. Each Registered holder of shares shall from time to time notify in writing to the Company some place in India to be registered as his address and such registered place of address shall for all purposes be deemed his place of residence.

Service on Members having no registered address 178. If a member has not registered an address in India, and has not supplied to the company an address within India, for giving of notice to him, a document advertised in a news paper circulating in the neighbourhood of Registered office of the company shall be deemed to be duly reserved on him on the day on which the advertisement appears.

Service on persons acquiring shares on death or insolvency of members 179. A document may be served by the Company on the persons entitled to a share in consequence of the death or insolvency of a member by sending it through the post in a prepaid letter addressed to them by name or by the title or representatives of the deceased or assignees of the insolvent or by any like description or at the address (if any) in India supplied for the purpose by the persons claiming to be so entitled, or (until such an address has been so supplied) by serving the document in any manner in which the same might have been served if the death or insolvency had not occurred.

Persons entitled to notice of General Meetings 180. Subject to the provisions of the Act and these articles, Notice of General Meeting shall be given ; i) To the members of the company as provided by the Articles in any manner authorised by Articles 179 and 181 as the case may be or as authorised by the Act. ii) To the persons entitled to a share in consequence of the date or insolvency of a member as provided by Article 182 or as authorised by the Act

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iii) to the Auditor or Auditors for the time being of the company, in the manner authorised by Article 179 as in the case of any member or members of the company.

Notice by advertisement 181. Subject to the provisions of the Act any document required to be served or sent by the company on or to the members or any of them and not expressly provided for by these presents, shall be deemed to be duly served or sent if advertised in the news paper circulating in the District in which the registered office is situated.

Members bound by document given to previous holders 182. Every person who by the operation of law, transfer or other means whatsoever shall become entitled to any shares shall be bound by every document in respect of such share which, previously to his name and address being entered on the Register, shall have been duly served on or sent to the person from whom derived his title to such share.

183. Any notice to be given by the Company shall be signed by the Managing Director or by such Director or officer as the Director may appoint. The signature to any notice to be given by the Company may be written or printed or lithographed.

AUTHENTICATION OF DOCUMENTS Authentication of documents and proceedings 184. Save as otherwise expressly provided in the act or these Articles, a document or proceeding requiring authentication by the Company, may be signed by the Director, the Managing Director, the Manager, the Secretary or an authorised officer of the Company and need not be under its seal.

WINDING UP Application of assets 185. Subject to the provisions of the Act as to preferential payments the assets of the Company shall on its winding up be applied in satisfaction of its liabilities paripassu and, subject to such application shall be distributed among the members according their rights and interests in the Company.

Division of assets of the Company in Specie among members 186. If the Company shall be wind up whether voluntarily or otherwise, the liquidators may, with the sanction of a special resolution, divide among the contributories in specie or kind any part of the assets of the Company in trustees upon such trusts for the benefit of the contributories or any of them, as the liquidators with the like sanction shall think fit, in case any shares to be divided as aforesaid invoice a liability to calls or otherwise any persons entitled under such division to any of the said shares may within 10 days after the passing of the special resolution by notice in writing direct the liquidators to sell his proportion and pay him the net proceeds and the liquidators shall, if practicable, act accordingly.

INDEMNITY AND RESPONSIBILITY Directors and other right to indemnity 187. a) Subject to the provisons of the Section 201 of the Act, the Managing Director and every Director, Manager, Secretary and other Officer or Employee of the Company shall be indemnified by the Company against any liability and it shall be the duty of Directors out of the funds of the Company to pay, all costs and losses and expenses (including travelling expenses) which any such Director, officer or employee may incur or become liable to by reason of any contract entered into or act or deed done by him as such Managing Director, Director, officer or Employee or in any way in the discharge of his duties.

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b) Subject as aforesaid the Managing Director and every Director, Manger, Secretary, or other officer of Employment of the Company shall be indemnified against any liability incurred by them or him in defending any proceedings whether civil or criminal in which judgement is given in their or his favour or in which he is acquitted or discharged or in connection with any application under Section 633 of the Act in which relief is given to him by the court.

Not responsible for acts of others 188. 1) Subject to the provisions of Section 201 of the Act no Director or other officer of the Company shall be liable for the acts, receipts, neglects or defaults of any other Director or Officer, or for joining in any receipt or other act for conformity or for any loss or expense happening to the Company through insufficiency or deficiency of title to any property acquired by order of the Director for or on behalf of the Company or for the insufficiency or deficiency or any securities in or upon which any of the moneys of the company shall be invested, or for any loss or damages arising from the bankruptcy, insolvency or tortuous act of any person, Company or Corporation with whom any moneys, securities or effects shall be entrusted or deposited or for any loss occasioned by any error of judgement or oversight on his part, or for any other loss or damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation, thereto, unless the same happen through his own willful act or default.

2) Without prejudice to the generality of foregoing it is hereby expressly declared that any filling fee payable of any document required to be filed with the Registrar of Companies in respect of any act done or required to be done by any Director or other officer by reason of his holding the said office, shall be paid and borne by the company.

SECRECY CLAUSE Secrecy 189. No member or other person ( not being a Director) shall be entitled to inspect, examine the company’s premises or properties without the permission of the Director, or Managing Director, or to require discovery of any information respecting any detail of the company’s trading or any matters which is or may be in the nature of a trade secret, mystery of trade of secret process which may relate to the conduct of the business of the company and which in the opinion of the directors it will be inexpedient in the interest of the members of the company to communicate to the public.

Duties of officers of observe secrecy 190. Every Director, Managing Director, Manager, Secretary, Auditor, Trustee, Member of a Committee, Officer, Servant, Agent, Accountant or other person employed in the business of the Company, shall if so required by the Directors before entering upon his duties, or at any time during his term of place, sign a declaration pleading himself to observe strict secrecy respecting all transaction of the company and the state of accounts and in matters relating thereto, and shall be such declaration, pledge himself not to reveal any of the matter which may come to his knowledge in the discharge of his duties except when required so to do by the Directors or any meeting or by a court of law or by the person to whom such matters relate and expect so far as may be necessary in order to comply with any of the provisions of these Articles of Law.

Opinion or right to call shares 191. The option or right to call of shares shall not be given to any person except with the sanction of the company in general meeting.

Issue of Debenture/Bonds 192. Debenture/Bonds with the right to allotment or conversion into share shall not be issued without the sanction of the company in general meeting and/or the Government as the case may be.

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193. Fee for issue of new share certificates the company agrees not to charge any fees exceeding those which may be agreed upon with the Stock Exchange.

a) for issue of new certificate in replacement of those that are torn, defaced lost or destroyed.

b) for sub division and consolidation of shares and debentures certificates and for subdivision of letters of allotment, split, consolidation renewal or pakka receipt into denominations other than those fixed for market units of trading.

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SECTION X: OTHER INFORMATION

1. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTIONS

The following Contracts and agreements referred to below (not being contracts entered into in the ordinary course of business carried on by the Company or entered into more than two years before the date of this Prospectus) which are/or may be deemed to be material have been entered into by or on behalf of the Company. These Contracts, copies of which have been attached to the copy of this draft prospectus, delivered to the Registrar of Companies, located at Gwalior, Madhya Pradesh for registration and also the documents for inspection referred to hereunder, may be inspected at the registered office of the Company from 10.00 a.m. to 4.00 p.m. on any working day from the date of filing the draft prospectus with SEBI to until the date of Closing of the Issue.

A) Material Contracts:

1. Letter of appointment of M/s. Centrum Capital Limited as Lead Manager dated 1st August 2005 2. Memorandum of Understanding entered into with M/s. Centrum Capital Limited dated 2nd December 2005 to act as Lead Manager to the Issue. 3. Memorandum of Understanding dated 4th October 2005 entered into with M/s. Intime Spectrum Registry Limited to act as Registrar to the Issue. 4. Copy of tripartite agreement among NSDL, the Company and the Registrar, M/s. Intime Spectrum Registry Limited dated [•]; 5. Copy of tripartite agreement among CDSL, the Company and the Registrar, M/s. Intime Spectrum Registry Limited dated [•];

B) Material Documents 1. Memorandum and Articles of Association of the Company as amended from time to time; 2. Certificate of incorporation dated 3rd January 1995 issued by the Registrar of Companies, Madhya Pradesh 3. Copy of the resolution passed at the meeting of the Board of Directors held on 30th September 2005 and resolution passed under section 81(1A) of the Companies Act, 1956 at the Annual General Meeting of the Company held on 30th September 2005 authorising the issue. 4. Resolution dated 5th November 2005 for borrowing powers. 5. Power of Attorney(s) executed by the Directors for signing and making correction in the draft prospectus on their behalf. 6. Copies of Annual reports of the Company for the years ended 31st March 2001, 2002, 2003, 2004, 2005 and half year ended 30th September 2005; 7. Resolution of the members of the company passed at the Ninth Annual General meeting held on 30th September 2005 re-appointing M/s O. T. Gandhi & Co., Chartered Accountants as the statutory auditors. 8. Report of the Auditor M/s O.T. Gandhi & Co., Chartered Accountants, dated 29th July 2005 as mentioned in the Prospectus. 9. Letter dated 18th November 2005 from the auditors of the company M/s O.T. Gandhi & Co., Chartered Accountants confirming tax benefits as mentioned in the Prospectus.

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10. Sanction Letter dated 24th December, 2005 by State Bank of Indore and Sanction Letter dated 10th January, 2006 by State Bank of Hyderabad which has sanctioned Term Loan to part finance the proposed project. 11. Consent letter dated 22nd November 2005 from M/s O.T. Gandhi & Co, Chartered Accountants for inclusion of his reports on accounts and tax benefits in the form and context in which they appear in the Prospectus. 12. Certificate from M/s O.T. Gandhi & Co., Chartered Accountants dated 30th December 2005 regarding the sources and deployment of funds and amount committed. 13. Copy of the Board Resolution dated 30th December, 2005 regarding appointment of the Company Secretary. 14. Copy of the Board Resolution dated 30th December, 2005 regarding appointment of the Compliance Officer. 15. Consents of Auditors, Bankers to the Company, Lead Manager, Legal Advisors, Directors, Company Secretary, Compliance Officer and Registrars, to include their names in the Prospectus to act in their respective capacities. 16. Resolution of the meeting of the board of directors held on 30th December 2005 for the formation of the company’s audit committee, Investor Grievances Committee. 17. In principle listing approvals from BSE and NSE dated [•] and [•] respectively; 18. Due Diligence Certificate dated 3rd February, 2006 to SEBI from M/s. Centrum Capital Limited. 19. SEBI observation letter No. [•] dated [•] and reply of the Lead Manager to the same dated [•].

Any of the contracts or documents mentioned in this Draft Prospectus may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders subject to compliance of the applicable laws.

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2. DECLARATION

This is to confirm that all the relevant provisions of the Companies Act, 1956 and the guidelines issued by the Government have been complied with and no statement made in this Prospectus is contrary to the provisions of the Companies Act, 1956 and rules made there under. All the legal requirements connected with the said Issue as also the guidelines; instructions etc., issued by SEBI, the Government and any other competent authority in this behalf have been duly complied with.

We, the Directors of Brahma Interactive LImited declare and confirm that no information/material likely to have a bearing on the decision of the investor in respect of the equity shares offered in terms of this Prospectus have been suppressed/withheld and/or incorporated in a manner that would amount to misstatement/misrepresentation and in the event of it transpiring at any point of time till Allotment/refund, as the case may be, that any information/material has been suppressed/withheld and/or amounts to misstatement/misrepresentation, we undertake to refund the entire application moneys to all the subscribers within seven days thereafter, without prejudice to the provisions of Section 63 of the Act.

Since the date of last financial statement disclosed in this Prospectus, there have been no circumstances that materially and adversely affects or is likely to affect the profitability of the Company or the value of its assets or its ability to pay off its liabilities within a period of next twelve months.

The Directors of the Company and Mr. Yashveer Bindal, Chairman of the Company certify that all disclosures made in the Prospectus are true and correct.

SIGNED BY

Sr. Name of the Director Signature No. 1 Mr. Yashveer Bindal 2 Mr. Bharat Bindal 3 Mr. Manish Trivedi 4 Mr. Ashok Mehta 5 Mr. Alkesh Bothra 6 Mr. Rahul Modi

Signed by (Compliance Officer)

G. Muralidharan Pillai

Place: Indore Date: 3rd February 2006

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