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CMYK RED HERRING PROSPECTUS Dated February 2, 2006 Please read Section 60B of the Companies Act, 1956 100% Book Building Issue K SERA SERA PRODUCTIONS LIMITED (Originally incorporated as ‘Garnet Paper Mills Limited’ on 6th September 1995 with Registrar of Companies, Mumbai under the Companies Act, 1956, subsequently name was changed to ‘K Sera Sera Productions Limited’ on 23rd October 2002) Registered Office: Versova Shree Darshan Co-operative Housing Society Limited, Ground Floor, Plot No.15, R.D.P – 2, Sardar Vallabhbhai Patel Nagar, Near Versova Telephone Exchange, Andheri (West), Mumbai – 400 053. Tel No: +91 22 5696 3035; Fax No: +91 22 5696 3037; Website: www.kserasera.com; Email: [email protected] Contact Person: Ms. Amruta Paranjape, Company Secretary Public Issue of 5,000,000 Equity Shares of face value Rs. 10/- each issued at a price of Rs. []/- per share for cash, at a premium aggregating Rs. [] million (hereafter referred to as ‘the Issue”) comprising reservation of 250,000 Equity Shares for Eligible Employees on a competitive basis; Net Offer to Public of 4,750,000 Equity Shares. The ‘Net Offer to Public’ would constitute 24.34% of the fully diluted post-issue paid-up equity capital of K Sera Sera Productions Limited. THE PRICE BAND WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (BRLMs) WHICH WILL BE ANNOUNCED AND ADVERTISED ATLEAST ONE DAY PRIOR TO THE BID/ISSUE OPENING DATE. ISSUE PRICE IS [] TIMES OF THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND [] TIMES OF THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND In case of revision in the Price Band, the Bidding/Issue Period shall be extended for three additional working days, subject to the Bidding/ Issue Period not exceeding ten working days. Any revision in the Price Band, and the revised Bidding/Issue Period, if applicable, shall be widely disseminated by notification to Bombay Stock Exchange Limited (BSE) and to The National Stock Exchange of India Limited (NSE), whose online IPO System will be available for bidding, by issuing a press release and also by indicating the change on the websites of the Book Running Lead Managers and the terminals of the Syndicate. The Issue is being made through 100% Book Building Process wherein up to 50% of the Net Offer to Public shall be allocated to Qualified Institutional Bidders on a proportionate basis (including reservation of 5% for Mutual Funds), not less than 15% of the Net Offer to Public would be allocated to Non-Institutional Bidders and not less than 35% of the Net Offer to Public would be allocated to Retail Individual Investors on a proportionate basis, subject to valid bids being received from them at or above the Issue Price. GENERAL RISK Investment 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 Issuer 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 the SEBI guarantee the accuracy or adequacy of this document. Specific attention of the investors is invited to the statement of Risk Factors beginning on Page xi of this Red Herring Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY K Sera Sera Productions Limited, having made all reasonable enquiries accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to K Sera Sera Productions Limited and the Issue, which is material in the context of the Issue, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares of Our Company are listed on Bombay Stock Exchange Limited (BSE). The Equity Shares through this Issue are proposed to be listed on Bombay Stock Exchange Limited (BSE) (also the Designated Stock Exchange). The in-principle approval has been received from BSE for listing of the Equity Shares vide their letter dated November 16, 2005. BOOK RUNNING LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE B Bigshare Services Private Limited S SEBI Regn. No. INR000001385 S MAPIN No. UIN 100003467 UTI Securities Limited SEBI Regn. No.: INM000007458 E-2/3, Ansa Industrial Estate, Saki Vihar Road, MAPIN No.: 100000489 Saki Naka, Andheri (East), Mumbai – 400 072. 1st Floor, Dheeraj Arma, Anant Kanekar Marg Tel: 91-22-2847 0652/ 0653 Station Road, Bandra (East), Mumbai – 400 051. Fax: 91-22-2847 5207 Tel: 91-22- 5551 5801-815 Website: www.bigshareonline.com Fax: 91-22- 5502 3194 Website: www.utisel.com Email: [email protected] Email: [email protected] Contact Person: Mr. N V K Mohan Contact Person: Mr. V.S.Narayanan/Ms. Sujaya Shetty ISSUE PROGRAMME BID / ISSUE OPENS ON : 16TH FEBRUARY, 2006 BID / ISSUE CLOSES ON : 22ND FEBRUARY, 2006 CMYK TABLE OF CONTENTS TITLE PAGE NO. I. DEFINITIONS AND ABBREVIATIONS .............................................................................................................................. i II. RISK FACTORS .................................................................................................................................................................. x 1. Forward Looking Statements and Market Data ..................................................................................................... x 2. Risk Factors ............................................................................................................................................................ xi III. INTRODUCTION ................................................................................................................................................................ 1 1. Summary ................................................................................................................................................................. 1 2. Offering Details ....................................................................................................................................................... 3 3. Summary of Consolidated Financial Data ............................................................................................................ 4 4. General Information ................................................................................................................................................ 6 5. Capital Structure ................................................................................................................................................... 14 6. Objects of the Issue .............................................................................................................................................. 24 7. Basis of Issue Price .............................................................................................................................................. 30 8. Tax Benefits .......................................................................................................................................................... 32 IV. ABOUT US ....................................................................................................................................................................... 38 1. Industry Overview ................................................................................................................................................. 38 2. Business Overview ............................................................................................................................................... 45 3. History and Corporate Structure .......................................................................................................................... 56 4. Our Management .................................................................................................................................................. 60 5. Promoters and their background ......................................................................................................................... 73 6. Currency of Presentation ..................................................................................................................................... 78 7. Dividend Policy ..................................................................................................................................................... 79 V. FINANCIAL STATEMENTS ............................................................................................................................................ 80 1. Financial Information of our Company ................................................................................................................ 82 2. Financial Information of Subsidiary & Group Companies ............................................................................... 126 3. Changes in Accounting Policies during the last three years ..........................................................................